Poverty alleviation and poverty generation: Spot the difference

Nigerians have been savouring the good news of the end of the recession that recently ravaged the economy. They have seen the good, bad and ugly. Indeed, Nigerians have seen decades of economic growth, especially of the variety described by Prof Jagdish Bhagwti as Immiserizing Growth – growth that made the people poorer. The question now is whether the end of recession would bring respite from the present hardshipor fizzle out like the massive growth of the last decade that put no bread on their tables. Many are already screaming “God forbid” that the end of recession be another paper work of no material significance.
There is even an added “God forbid” that the rebound of the economy couldbring back inflation and reverse the gains made by CBN in inflation targeting. The latest inflation figure shows a decline towards the single digit target of the CBN. This fear of inflation returning is not unfounded. There is a theoretically sound expectation that economic rebound is more likely to promote inflationary pressure than otherwise.This is why I voted, in absentia, with the Monetary Policy Committee to leaveinterest rate where it was, against the counsel of some “experts”.
Given what we have seenlately: the statistics from those who should know, especially the National Bureau of Statistics, the analyses by those who understand the economyand those who do not, but wear the toga of experts, and the current perceived positive trajectory of some economic indicators, the economy is not likely to relapse into another recession so soon. Moreover, the things that happen around election time in Third World countries (You may humour yourself by preferring “developing” to Third World countries)like Nigeria, do not support the possibility of a decline in consumer spending in an election year.
We are close to 2019, when all manner of cash, legal or illegal, printed or earned, stolen or relooted, will match forward,in Ghana-must-go bags, in the wee hours of the night, into the public financial space.Campaign finance laws are still largely non-existent here. Politicians are already spending their way into public office. The likelihood of a drop in consumer spending is therefore low. However, that is only theoretically speaking. We can still plunge ourselves into economic crisis notwithstanding. We did it before.
The end of recession and the resumption of growth is just but a small part of the story of poverty and deprivation in Nigeria.Less than a year ago, there was wide-spread gloom among Nigerians regarding the direction of the economy. This gloom was not a Nigerian phenomenon. It featured elsewhere, with many countries recording declining indices. No thanks to the Euro crises and the slow-down of China. We now have signs of a rebound not just in Nigeria, but across continents. Our rebound, which many agree is anchored largely onrising oil prices, is predicted to continue as oil prices head to record level of over a hundred dollars in 2019. The upward trend in oil prices also brought some stability in the foreign exchange market, which has doused inflation. The question now is: how is life in the average Nigerian family? Has anything changed? Perhaps, it is too early to ask if the improving economy has impacted the poorest and most vulnerable. The right answer is not likely to be a solid yes because we curb poverty with one hand and court it with another.
The problem of poverty and destitution in Nigeria, which have become so serious that a declaration of national emergency is not an extreme option, is rooted in our attitude to distribution – the distribution of the common patrimony of all Nigerians, including income, opportunities and wealth. Many poor countries are facing the same challenge whereby a few people corner the resources of all to the exclusion of the majority. Nothing good can come out of economic growth that is underlined by the massive greed of a few that control the national wealth. That is poverty generation.
As long as every leader has imperial tendencies funded by public funds, there is bound to be mass poverty among the rest. Unfortunately, the legislature, which should have made laws to reduce the current unjust reward system that generates poverty has become the main engine or poverty generator. Bad public policy is also a poverty generator. When a state governor boasts of his private properties acquired while still in office and a publicly names the litany of properties belonging to his familywhile still in office, with public utilities in shambles, that is poverty generation.
The Vatican recently released a communication on the need for distributional equity in world resources to ensure that her resources are used for the benefit of all and not just a few. Distributional equity or justice in the sharing of the wealth of the world, is the only basis of a successful fight against world poverty.It is hypocrisy to fight poverty in one direction and promote it on another. Discrimination in job opportunities has become public policy in Nigeria. Only those connected to powerful people get jobs and this seems to promote the problem of out of school children. There is no immediate incentive for education. Nepotism has overrun our public institutions – a violation of the constitution.
In our fight against poverty, it is important to avoid or at least minimize poverty-generating activities, especially on the part of governments. For instance, taxes are important to government but when taxation stifles the economic activity of the poor, it counter produces and works against any programme of poverty alleviation. The current strategy of internal revenue expansion whereby revenue consultants, motivated only by their share of the revenue, are set upon the already beleaguered citizens, will defeat the objective of taxation. Ultimately revenue drops. Some of the fines imposed by states are too high that they benefit only tax officials who collect brides that are much lower and more realistic than the fines. Even angels may be tempted to negotiate a bribe with revenue collectors when the fine is unreasonably high. Similarly, when tax and environmental control officials intimidate the citizens so badly that they no longer ply their trade, we accelerate rather than decelerate poverty.
Policy application must recognize the need to sustain the economic activity of the poor. In some states,urban renewal has been turned to a political weapon against everybody and not just the opposition. Demolish their shops; make wide ditches on both sides of high streets and walk away so that the shops get no patronage. Claim you are beautifying the place but be slow at work, after all you don’t even have the funds. Soon they become desperately hungry. By 2019 they will be too busy begging for food to have political opinion. Immiserize the people to get them to support unpopular programmes. In Imo, even the best friends of government have cried out at the rate people are being thrown into hardship under their urban renewal programme.That is poverty generation. Of course you may launch a microfinance programme that finances nobody. That is not poverty alleviation.

Emeka Osuji