Cheta Nwanze, Head of Research, SBM Intelligence
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Subjects of Interest
- Fiscal Policy
- Geopolitical Analysis
2018 FIFA World Cup and reflections on poverty in Nigeria 23 Jul 2018
I was at the 2018 FIFA World Cup in Russia primarily as a fan to support the Super Eagles in their ultimately ill-fated attempt to bring some happiness to longsuffering Nigerians. I also took the opportunity to fulfil a lifelong dream to visit the largest country in the world without experiencing some of the travel restrictions it is well known for.
While I was in Russia, I did something else. I conducted a completely random survey through conversations and interviews of fans I met at the stadiums, fan parks, tourist sites and transport hubs I visited. It was the kind of research work that would make my colleagues back in Lagos cringe because of its patent lack of scientific rigour.
In my unscientific survey, in which I polled people from various countries that I encountered in Moscow, Volgograd and St. Petersburg, most fans I encountered whose nationalities were Western countries were about 15 years younger than my age of 38. Most fans from Latin America were between five and 10 years younger than me.
Many of the younger Nigerian fans that attended the tournament live in Western countries, while too many of the Nigerian fans that came from the home country were able to attend because some benefactors, often politicians, paid for their trip.
Most of the ‘home-based’ Nigerians I met stayed in relatively high-end hotels. Aside from a short time in St. Petersburg, I stayed in hostels all through my Russia adventure. For example, in my Volgograd hostel, my roommates were two Peruvians, a Pakistani and a Nigerian who lives in another country. In Moscow, my mates were another foreign resident Nigerian, two Aussies and an American.
For me, this showed that my roommates and survey respondents who had to spend their own money were sensitive to cost. Meanwhile, those (like most Nigerians who made the trip) who were sponsored to the tournament could afford to splurge.
Another observation was that Nigeria did not have enough people – whether it was those who self-funded their own trips or the contingent that was sponsored – with enough passion to lift the morale of the Super Eagles. In the two matches I attended, we were vastly outnumbered in the stands. The stadiums were a sea of either Icelandic or Argentinian blue, and they drowned out the Nigerian support. The Viking clap, more impressive when experienced in person than in high-definition, easily swallowed our Afrobeat drums and diss songs. I saw the Argentinian fans lift their team with their "Vamos Argentina" song. I hope it does not come across as sacrilegious when I say that I love that song.
My personal poll in Russia and the relative age and number of attendees from various countries reaffirmed what is already known, which is that Nigeria is a poor country. It will take a lot more than platitudes for us to be competitive on the global stage. To become really good at anything, football inclusive, you need passion. But you also need money, pure and simple. If we are passionate about football, our poverty has suppressed the competitive expression of the passion.
Utilising analytical tools far more superior to mine, a group of distinguished researchers at one of the most influential think-tanks, half a continent and an ocean away from my Moscow hotel, came to the same conclusion about Nigeria’s disturbing poverty situation.
A new report by the Brookings Institution, which gained some currency last month, says Nigeria now has the highest number of extremely poor people, effectively overtaking India. “According to our projections, Nigeria has already overtaken India as the country with the largest number of extreme poor in early 2018, and the Democratic Republic of the Congo could soon take over the number 2 spot,” the report reads, inter alia.
The report shows that at the end of May 2018, Nigeria had about 87 million people living in extreme poverty, compared with India’s 73 million people below the poverty line. Some of its conclusions are jarring. For example, 14 out of the 18 countries in the world where the number of the extreme poor is rising are in Africa; perhaps more relevant to our discussion – six Nigerians slip into poverty every minute. The report concludes by saying that by the end of 2018, in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty than there are as I write this article in June.
A few years ago, there used to be much talk about Nigeria’s growing middle class. This class of Nigerians were expected to be the ones with discretionary funds to afford relative luxuries like attending the World Cup. But the Nigerian middle class is now hollowed out and in decline. The Brookings report says nothing about the country’s middle class.
As I went through the fan parks around Russia and saw our small contingent, vis-a-vis those of the Egyptians, Moroccans, Senegalese and the Tunisians, it was hard not to agree that Nigeria’s socioeconomic condition has become perilous.
Aso Rock was distinctly unimpressed by the Brookings report’s findings. Trade and Investment Minister, Okechukwu Enelamah, said the report was no cause for alarm. He told journalists that the Brookings report “may have [been] written when we were in a recession.” For him, the administration’s infrastructure and social welfare programmes, as well as improving business conditions will eventually make a dent on the rising poverty rate.
Mr. Enelamah may debate the finer points of socioeconomic analysis but it is worth stating that the Brookings report was based on new data points fed into the World Poverty Clock, a web tool produced by Austria-based World Data Lab and updated twice yearly in April and October to take into account new household surveys. (An additional 97 surveys were conducted this past April by the Austrian firm). In other words, this is one of the most comprehensive databases available that specifically looks at the subject of poverty.
The fact that Nigeria just overtook a country six times more populous than it, in absolute number of people living in extreme poverty, should worry us. Besides, deflecting from the report’s findings because it might be based on dated data points is moot. Nigeria came out of a recession barely four economic quarters ago and the country’s growth, which has been anaemic, has been fuelled by the rise in the price of our chief export – crude oil – rather than by some fundamental reshaping of the economy.
Indeed, the economic indicators show Nigeria is trending positively. But this is little comfort when progress cannot be perceived in practical situations like employment, wages or financial safety nets. In essence, this is very much a jobless growth.
The lessons are clear – the latest poverty figures provide further evidence that the administration is failing to lift Nigerians out of poverty and has also failed to diversify government revenue sources. The recession, which Mr. Enelamah refers to, was seen in some quarters, my organisation inclusive, as a crisis that could spur the diversification of government revenues away from oil and gas. In hindsight, it is now clear that the administration's main strategy was to wait for a rebound in oil prices. The fundamentals of the Nigerian economy remain unchanged in a world in which oil is of increasing diminishing strategic value. This means that Africa’s biggest economy remains vulnerable to global oil price shocks.
The administration has tried to position agriculture as the go-to sector in its efforts at economic diversification. But the country’s agricultural base remains too subsistence-oriented and rain-fed, with a very low-value addition chain that has hampered its ability to drive a significant boost in employment or ensure food security for that matter.
Given the growing impoverishment of Nigerians, a spike in the social consequences of poverty is also certain to ensue. For instance, there has been a rise in the levels of rural and urban crime as well as conflict.
Finally, it is important to keep an eye on our population growth, which is almost twice the rate of economic growth now. For poverty figures to trend downward, economic growth has to outpace population growth and remain above it. If poverty diminishes, it would be expected that other socioeconomic factors would also improve.
When the young are comfortable in the security of their future, they can channel their energy into other things that are seemingly esoteric – what Americans may refer to as the ‘pursuit of happiness.’ China is currently in the middle of the most significant poverty alleviation reduction in human history; one in which it has prioritised economic access, education and social spending for its poor as well as enacting painful structural reforms – things we are barely talking about in Nigeria.
Nigeria simply has to do better at lifting its poor out of the economic miry clay. Failing to achieve this will have dire political and social implications.
Cheta Nwanze is Head of Research at SBM Intelligence.