Is Nigeria’s Poverty Overrated?
I have a group of friends I discuss all kinds of topics with. Occasionally, but not nearly enough compared to our discussions on other matters like space technology, engineering and philosophy, we talk about the Nigerian economy.
One of the sticking points is a discussion on the purchasing power of the average Nigerian.
There are people who say that the level of poverty in Nigeria is exaggerated. That it's not possible for 82 million Nigerians to live below the poverty line of 137,430 naira (as stated by The National Bureau of Statistics).
When I hear that, I almost always discover that that person lives in the city, especially Lagos.
An earlier research by the World Bank estimated that 64 per cent of all poor live in rural areas. In contrast, the poverty rate in urban areas is at 16 per cent. That's four times!
So it's forgivable for a person who doesn't know rural areas in Nigeria to scoff at the statistics.
As a believer in the power of markets, I also use the market to gauge poverty. I particularly like to use the public reports by the FMCGs.
These Fast Moving Consumer Goods companies like Unilever, Cadbury and Nestlé reach the nooks and crannies of the country. There are places in Nigeria that election materials don't reach but you will see Gala. That's how ubiquitous they are. They have a breathtaking reach of the hinterlands. Fortunately enough, many of them publish quarterly and annual reports. These reports give us a picture of how affordable household products like Premier Soap, Lipton, Royco, Vaseline, Omo, baby foods, etc. are to Nigerians.
Unilever is one of such companies. Like Cadbury, NBC, Nestlé and NB, Unilever has not being reaching its marks in Nigeria.
In November 2019, the company’s global Chief Executive Officer, Alan Jope, told CNBC Africa that Unilever’s commitment to Africa is driven by the opportunities it sees in places like South Africa, Ghana, and Ethiopia.
In his words,
“We see a very bright future for Africa. In fact, I can tell you South Africa is one of Unilever’s biggest and best companies around the world. And in particular, at the moment places in east Africa and North-East Africa are some of the fastest-growing parts of Unilever.”
About Nigeria, the report says, the performance has being underwhelming.
The informal sector in Nigeria is exaggerated, and in my estimate, is shrinking alarmingly. The informal sector keys into products by the FCMG, yet its impact has largely not being felt by them.
There is no need for illusions about where we are.