Why IMF and World Bank are wrong on poverty: The devil is in the data — by Tope Fasua

I have cautioned in the media a number of times that we should be careful not to use Nigeria’s poverty issues as a constant weapon, a blunt instrument, that only ends up worsening the issues rather than solve them.

How could the increased liquidity at state and local government levels, and the increasing empowerment of local governments designed to shift financial and political power closer to the people not count in reducing poverty in Nigeria? How could IMF/World Bank reports of more capital spending at the subnational level not count in reducing Multidimensional Poverty (which is fully a measure of how much infrastructure is done closer to the people)? How can the IMF and World Bank continue to judge Nigeria based on a 2022 Multidimensional Poverty Report when consistently our states have built a lot of infrastructure closer to the people since that time?

It’s been pure rage on social media since the day I decided to highlight the fact that some years ago many states owed salaries to civil servants for up to a year. Some owed salaries for 18 months. These were under the PDP governments of Presidents Jonathan, Yar’Adua and of course the government of President Buhari. I recall that I used to wonder how people could survive without their salaries for even two months. These were take-home pays that couldn’t take people home, as we say. Yet Nigerian civil servants were owed for months on end. When I made the post, of course insults and abuses, even curses tumbled in as they are wont to. Nigeria is not short of social media tigers – a lot of them cowards in real life – who can type the most despicable things that could almost make one give up on the goodness of humanity. Still, I believe that human beings are good, albeit the kind of evil thoughts that preoccupy the minds of Nigerians could make one think twice about that possibility.

Thanks to Artificial Intelligence, research has become a lot easier. I went on Gemini AI and asked how many states owed salaries to civil servants in 2014. It came up with a statement that the Nigeria Labour Congress stated that 22 states owed salaries for up to six months in 2014. This was the eve of the departure of the Jonathan government. I have nothing against President Jonathan and he also led at a time Nigeria could be considered fiscally lucky – with very high crude oil prices. Pundits also mention how we had the best economic management then because Professor Mrs Okonjo-Iweala was the coordinating minister for the Economy. I backtracked to 2011 and AI came out with same results. Salaries were owed for many months. Pensioners were on the streets protesting. Today, that is no longer the case.

Many excuses were given by the more reasonable commenters on my Facebook page. Some veered off to complain about the value of money. They questioned my statement on the basis that naira exchanged for ₦250 to ₦400 in that time period. Some asked what the price of fertiliser was at that time. Some railed about the price of cement. But I simply asked them how we could be speaking about the value of nothing. Admittedly, many states in that era paid half salaries to civil servants, some for years, when a person does not get his fair wages for a month, six months or one year, there is nothing to compare value with. Zero pay is zero value. Yet Nigerians survived that period and today we have totally forgotten what happened. Even if we’ve forgotten, should we become violent just because we are reminded? It is the toxic politics being played by some people in this country. They claim to want democracy, but they are the most virulent troglodytes one can encounter.

I think this fact should be given more wings everywhere by all lovers of democracy and at least the supporters of the Tinubu administration. We seem to be suffering from mass amnesia and some smart folks are capitalizing on this. How could we have forgotten? For those who say well, not everyone is a civil servant; valid statement. But the fact is that a lot flows from the inability of federal, state and local governments to pay civil servants. The private sector quickly takes a cue from that. Everyone will complain of the economy. Even now that we don’t have such a practice anymore as a result of Tinubunomics, some private sector folks – who have increased the prices of their goods and services several folds – still use the blanket excuse of a bad economy not to do right by their employees.

Also, once governments stop paying civil servants (in the past even policemen and soldiers were owed), you are simply calling for more corruption as well as violent crimes. Some policemen have been known to lend out their ammunition to people of the underworld – for a fee.

So, I believe that the current scenario caused by the tough reforms of President Tinubu has resulted in some good outcomes. For one, more funds have been made available to state and local governments (as should be the case in a growing presidential system). Everyone lives in a state and local government anyway. Nobody lives in the federal government. Even the Federal Capital Territory has its own governor. A policy that shifts more money to subnationals has also shifted more of the responsibility for the betterment of people’s lives to that level of government. This is very reasonable.

And our states are stepping up to the plate given World Bank and IMF’s own data that shows that considerable capital spending is going on at subnational level that outstrips what is done at the federal. I just returned from Ekiti State where I saw a transformation of that town, infrastructure-wise. A new bridge was opened in the busiest part of Ado-Ekiti; a road that hadn’t existed before was built connecting Ado-Iworoko with the Airport at Ijan Ekiti. The governor confirmed to me that the access roads into Ekiti from Ilawe axis and Akure axis had been fixed. Some of these were federal projects of course but as a responsible governor, Oyebanji sometimes gets proactive and settles the accounts later.

Therefore, as I was putting up this article to draw attention to the very fact that just a few years ago we had serious problems getting the basics done – paying salaries that were due to long-suffering civil servants; a situation which spilled to other workers in the public service and private sector – I was sad to see the latest IMF Report on Nigeria which stated inter alia that poverty had increased in Nigeria. What the report didn’t do though was to present elaborate research, on a triangulable basis, showing how this conclusion was reached.

Because the IMF supported every other action of government and ended up controverting its own conclusions. The IMF said yes, the Tinubu government got it right on all reforms. Tinubu was right with the naira; correct with the subsidy removal; spot on with even the tight monetary policy being operated under Mr Yemi Cardoso. The IMF, like the World Bank did earlier, recommended steadfastness in maintaining the reform trajectory. They urged that President Tinubu does not waver because the reforms are yielding results.

How could the increased liquidity at state and local government levels, and the increasing empowerment of local governments designed to shift financial and political power closer to the people not count in reducing poverty in Nigeria? How could IMF/World Bank reports of more capital spending at the sub-national level not count in reducing Multidimensional Poverty? How can the IMF and World Bank continue to judge Nigeria based on a 2022 Multidimensional Poverty Report when consistently our states have built a lot of infrastructure closer to the people since that time?

The Okeyinmi-Ajilosun Bridge commissioned in Ado-Ekiti, the Ekiti Knowledge Zone at Ijan Ekiti, and the Chief Fasoranti Bridge in Akure are examples of infrastructure that help reduce multidimensional poverty. All over Nigeria, roads, schools and over 4,000 refurbished primary healthcare centres point to deepening infrastructure investments. Why are these projects not showing in the data on Nigeria?

Well, the IMF also called for caution in the $5 billion swap deal that Nigeria is firming up with First Abu Dhabi Bank, suggesting instead that Nigeria bridge funding gaps with rather expensive Eurobonds. The Fund also indicated that Nigeria should prioritise giving cash transfers to the people, a policy which I most humbly disagree with because of the many boobytraps involved.

I have cautioned in the media a number of times that we should be careful not to use Nigeria’s poverty issues as a constant weapon, a blunt instrument, that only ends up worsening the issues rather than solve them. Everyone with half a platform likes to chime on about how poverty is killing many Nigerians despite evidence to the contrary. Most, if not all, these folks are not interested in solving the problem.

I conclude by bringing our attention once again to the data problem, or indeed, the data opportunity. Data is what will make or mar the journey of a nation to greatness. All levels of government, as well as the private sector, must take data seriously. Funding the process of data gathering, data capture, data cleansing, data storage and data analytics is a major priority at all levels in this age of Big Data, Artificial Intelligence, Robotics, Analytics and the Internet of Everything.

Tope Fasua is the Special Adviser to the President on Economic Matters.