Addressing inequality: Why efforts are falling short globally
The United Nations’ Sustainable Development Goal to eradicate poverty by 2030 appears increasingly unattainable, especially in light of the World Bank’s recent report. Despite concerted global efforts, nearly 700 million people are still living on less than $2.15 per day. Projections for 2030 indicate that around 7.3 percent of the world’s population may continue to exist in extreme poverty, casting doubt on our ability to meet this critical goal.
The report highlights that poverty is disproportionately concentrated in countries with low economic growth and high fragility, with sub-Saharan Africa being a significant contributor to these alarming statistics. Addressing the root causes of poverty in these regions is essential to implement effective solutions and foster long-term stability.
Currently, about 44 percent of the global population—approximately 3.5 billion people—survives on less than $6.85 per day, the poverty line for upper-middle-income countries. This stagnation in reducing poverty rates since 1990 reveals the complexity of the issue; while some regions have made progress, many continue to struggle against overwhelming challenges. Countries like Argentina, Botswana, and China, classified as upper-middle-income economies, still have substantial segments of their populations trapped in poverty, unable to meet basic needs.
Inequality remains a pervasive issue, with the percentage of people living in countries marked by high inequality stable at 22 percent. This problem is particularly acute in regions like Latin America, the Caribbean, and sub-Saharan Africa. In Nigeria, the recent removal of fuel subsidies has further exacerbated poverty, pushing an estimated 40.7 percent of the population below the poverty line by the end of the year, according to World Bank projections.
Economic pressures in Nigeria are intensified by soaring inflation and a rapidly depreciating currency. The naira has seen dramatic declines, trading at an average of N1,700 per dollar, up from N460 in May 2023. This financial instability is compounded by rising interest rates, which have surged from 11 percent to 26.75 percent over the past two years, placing additional strain on manufacturers and the broader economy. Meanwhile, insecurity from conflicts—including the Boko Haram insurgency and various forms of banditry—has displaced millions, disrupting agricultural production and exacerbating food insecurity.
Since 2018, Nigeria has held the unfortunate title of the global capital of extreme poverty, with 86.9 million Nigerians living on less than $1.90 a day, according to the World Poverty Clock. This crisis is particularly severe in rural areas, where over half of the population endures extreme poverty. The persistence of these conditions is often attributed to decades of poor governance, economic mismanagement, and systemic corruption. While external factors like the COVID-19 pandemic and the Russia-Ukraine War have undoubtedly impacted the economy, the primary responsibility lies with successive leaders who have failed to implement effective policies.
Many people trapped in extreme poverty work in the informal economy, where they are unregistered and lack protection under labour laws. They often endure hazardous working conditions and long hours, struggling to earn enough to support themselves and their families. Nigeria’s poverty crisis is largely self-inflicted; despite abundant natural and human resources, successive federal administrations have been marred by inefficiency and corruption, hindering productive economic growth.
At the local level, the situation is often even worse, with state and local governments exhibiting wastefulness and a lack of accountability. Instead of fostering self-sufficient economies, many rely on a flawed revenue-sharing system that perpetuates dependence on central government allocations from crude oil sales.
To combat poverty effectively, both federal and state governments must adopt robust policies that leverage the country’s resources to create jobs and stimulate wealth generation. Reforms to the 1999 Constitution are necessary to decentralise power and encourage local economic initiatives.
Rather than misallocating billions on corruption-driven cash transfers, funds should be directed towards supporting micro, small, and medium enterprises (MSMEs), agriculture, emergency job programs, and youth entrepreneurship initiatives. A successful example can be seen in Brazil, where Ignacio Lula DaSilva’s Bolsa Familia program was complemented by support for small farmers and comprehensive labour reforms, significantly reducing the country’s extreme poverty rate from 12 percent to 4.8 percent and lifting 20 million people out of poverty.
Reviving the Nigerian economy requires strategic stimulus spending, creating a conducive environment for both domestic and foreign investment, and enhancing security through decentralised law enforcement. Improving power supply, investing in agriculture, rural infrastructure, mining, and supporting startups and MSMEs are critical steps toward economic recovery.
President Tinubu should prioritise a strategic initiative to combat insecurity, as conflict is a significant driver of poverty. Ensuring that farmers can safely return to their lands is crucial for diminishing poverty and creating jobs.
To make a meaningful difference, we must increase access to basic resources and services, support communities affected by conflict and climate-related disasters, and promote inclusive and sustainable economic growth. Global cooperation and a strong commitment to eradicating poverty are essential. The Sustainable Development Goals serve as a call to action; it is time for us to respond.
The World Bank’s report serves as a wake-up call, reminding us that ending poverty requires more than lofty goals and aspirations. It demands collective action, effective strategies, and a sustained commitment to creating a more equitable world. Without decisive action, the vision of a world free from poverty will remain a distant dream, prolonging suffering for billions.
