Many Nigerians are expected to fall into the poverty trap amid rising unemployment in the country, the Nigerian Economic Summit Group (NESG) said on Friday.
“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward”, according to the NESG.
In the NESG economic report for the first quarter of 2021, the private sector-led think-tank noted that the country’s economic growth in the period under review was relatively weak.
“Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s”, according to the report.
Continuing, the report noted that “While the Nigerian economy recovered from recession in Q4 of 2020, unemployment spiked to its highest level ever at 33.3 per cent in the same quarter.
“This corresponds to a rise in headcount poverty ratio to 44.1 per cent in 2020 from 40.1 per cent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.
According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.
According to the NESG, to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.
“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.