Eradicating extreme poverty by 2030: Implications for Nigeria
CONTINUED FROM LAST WEEK
THIS population would still be higher than the project population of Bulgaria.
However daunting these implications might sound, they are not insurmountable; especially with the unwavering commitments and persistent dedication of all of us. So, what must we do, as a country, to abate our frightening poverty level? I will touch three things I believe are of high importance in our battle against extreme poverty. In any case, if we can map every street on earth, then there is no hiding place for poverty; except in the hearts that believe it cannot be eradicated!
Review the faux pas in GDP computation:
With still focus on the goal, a first step in the right direction would be to redefine our measuring scale for equitable economic and financial growth. What this means is that we must devise new methods for measuring our economic productivity and profitability different from the traditional metrics; such as the Gross Domestic Products (GDP).
Drawing from my earlier definition of poverty or being poor, we must debase the monetary foundation for measuring the prosperity of countries. Since the advent of the GDP in the post-war reconstruction of world economy in 1944, in Bretton Wood, New Hampshire, our world has continued to race into social nothingness. While we seem to ascend the ladder of prosperity, social grounds beneath us continues to sink; faster than we climb. Consequently, in spite of the abundance of wealth, ills like rising rate of criminal activities continue to elude us. And this is one important area GDP has failed the world. It emphasizes our economic and financial throughput, but not the alarming heights of social decadence such as child abuse, and environmental degradation. It is phony how persistent increase in crime rate can fuel GDP rise as a result of unabated government expenditure on security.
While GDP already seem like a “perfect” approach of measuring national economic activities, we must devise another method that considers the economic impairment of poverty. The result of this method, measured negatively, should be netted with GDP to produce the final economic performance of nations. As an example, consider the 2014 GDP of Nigeria in answering questions on our collective standards of living. At $568.51 billion, Nigeria account for seven per cent of world’s poorest population. How incongruent?
Greater investment in the poor:
The easiest way to drag a people or countries out of poverty is to let them, the victims, do it. This is not to undermine the importance of supports and aids. Rather, it emphasizes the need to continually make the operational environments and the living conditions of poor people better at every leg. This effort must include investments in qualitative education and enlightenment programs. The bedrock of poverty alleviation is always education; particularly when it is entrenched in the early lives of poor children. Free and educated children hardly ever grow to become poor. In the absence of good jobs, they usually grow to create their own opportunities. Early adoption of information technology is an effective and sure way of trapping the attention of extremely poor children; after nutrition, shelter, good health care and security. All of these must also be provided in the early stages of their development. By education, I do not simply mean going to school to acquire reading and writing abilities. A mix of entrepreneurial acumen with conventional education is the standard that can accelerate poverty reduction. As seen in Nigeria today, many of our educated youths are said to be unemployable or misemployed; thereby adding to the already cataclysmic poverty scale.
Considerable investments must also be ploughed into economically viable skills’ acquisitions for the active youth demography of the poor. This singular action has the propensity to create more jobs, improve the relative income and consumption of the bottom 40 per cent of our wealth distribution. And as a result, it is capable of reducing extreme poverty on the long term. This is actually my own understanding of equitable wealth generation – a situation where everyone contributes gainfully to the national economic and financial output.
Deployment of Social safety nets:
Ordinarily, this is not a desirable solution in the final lap. Supposing there are no poor people in Nigeria, social safety nets would be totally out of question. However, since we have argued that it is practically impossible to completely eradicate poverty, especially in its extreme manifestation, social safety nets are as important as other conditions for eradicating extreme poverty in the next 15 years. As in the words of Ronald Reagan however, we should measure “social safety net” success by how many people leave; not by how many people are added. This will reflect the true measure of its impact as poverty reduces. This corroborates the earlier suggestion to devise a new method that nets negative social metrics with GDP to gauge the true economic and financial health of countries.
Safety nets assist the poor and vulnerable, redistribute the gains from growth, and contribute to growth by enhancing the ability of the poor and ultimately their children to benefit from economic development. Safety nets are not just about transferring resources in cash or kind from one segment of the society to another at a point in time, but more about investing in improving the capabilities of people over time and across generations. (GMR 2014/2015)
Programs such as helping poor children to acquire early education, and outright access to free health care would amount to safety nets; among others. The older population must not be neglected in all arrangements. This is an iota of my understanding of the WBG’s drive for equitable wealth distribution and shared prosperity. Major threats in this area would include discrimination of any form, political unrest, corruption, and dubieties of leaders in sensitive positions that this objective cannot be accomplished.
A few dosages of Information technology
Having elicited a few economic and social responses to combating extreme poverty, let us quickly examine a few IT initiatives that could catalyze this drive. Possibly, we could accomplish our goals faster than 2030.
When we talk about innovation, many conveniently think about the development of products that are metaphorically out of this world. Others focus on creating more with less, which on the long run, enforces or increases cost effectiveness and reduces the time to market. On stricter terms, these kind of innovations are either about sustenance or efficiency. While “Sustenance Innovation” focuses on replacing an old product with a newer/better one, “Efficiency Innovation” focuses on producing more with less. Neither of these kinds of innovation conventionally creates new jobs or markets.
Market-Creating innovation, on the other hand, is the kind of innovation that creates more jobs at the lower end of the economic ladder; thereby, deepening wealth creation and eventual distribution of same. This is the kind of innovation that are truly disruptive in nature; especially with their ability to alter market structures or even entirely rebirth them.
A very common example in this category is the Mobile Money Innovation of Safari origin. Do I need to say any more? This innovation eliminated the bureaucratic nature of the financial system by delivering services straight to commoners. Without the lumbering procedures of the banking industry, people with minimal income could participant in the financial system. The final gain is not just being financially included; the turnover of the entire banking industry for a population of 40 million people has continued to soar. The last time I checked, MPesa, the flagship product powered by Safaricom, does approximately fifteen million dollars in daily transactions. Converted to Naira, at the prevailing exchange rate of N197 per USD, that amounts to N2.955 billion daily. Records also show that over 70 per cent of the users of this platform in Kenya are common people. Wealth generation and distribution in Kenya, more than any developing country, is more equitable; as more purchasing power parity (PPP) of people within the lower 40 per cent of the national wealth distribution continue to rise.
This is a typical example of how market-creating innovation attacks poverty. All stakeholders and champions of the campaign against poverty through technology must pay attention to this.
. Non-Consumption Targeting
In fighting poverty, it is obvious that there are goods/services in every economy that are considered ostentatious, which must be reviewed, recreated, or revalued for the consumption of the 40 per cent in the lower echelon of the wealth distribution.
In this category, we must orchestrate technology to distribute social benefits amongst the poor using the purchasing power parity (PPP). Since we have stated that social advantages such as health, insurance and education elude the extreme poor demography, it is of essence, therefore, that we must adopt technology to redistribute these benefits amongst them. Some examples in this category would include the health and insurance policies “doled out” at stipends to the poor through some specific subscriptions. Without trying to promote any product in this space, it is important to state that the benefit of this service is that more poor people can access health and insurance policies. In past times, this is not something prevalent among the poor. As we open up more channels to such social services, poverty will reduce.
We must consciously create and promote more of such services in other spheres such as education, commerce, vocations, security and so on. Talking about educations, it is possible to have more people “educated” without attending the classrooms through this means. While I do not suggest that this should replace formal education, I believe that the scores of individuals that might be “educated” through this channel would reduce our burden on the schools and deepens our efforts to liberate more people from poverty.
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