Six weeks after President Goodluck Jonathan declared a hike in the price of petrol which led to mass rallies of Nigerians at home and abroad, the National Bureau of Statistics (NBS) has made it official: poverty in Nigeria has doubled over the past decade.
Over 100 million Nigerian were living in “absolute poverty”— less than a $1 a day—in 2010, the NBS said in a new report. That doubles the 1996 figure of 67.1 Nigerians in that category. The figure was 68.7 in 2004, when President Obasanjo famously declared that he knew no poor people of that description in Nigeria.
The news comes six weeks ahead of a report that the cost of electricity in the country will almost double next April before the privatization of 18 state-run power generation, distribution and transmission companies that is supposed to make power available and affordable.
The harder times to come are in the face of greater luxury living for Nigeria’s political elite as Nigerians learned, over the weekend, that their 109 Senators will this week start to receive expensive new Toyota Land Cruiser sport utility vehicles (SUVs) purchased by the National Assembly at a cost of over N16million each. The Senators will spend over N1.7 billion on the item before shipping, taxes and insurance, and the cars will add to other choice toys in the Senatorial fleets.
In a report yesterday, The Nation on Sunday said it was told that the National Assembly Service Commission (NASC) handled the purchase of the vehicles directly, without the use of a contractor, opting to buy directly from the manufacturer “to reduce cost.”
The vehicles will arrive just in time to consolidate the high profile lifestyle of the Senators, the furnishing of whose offices also commences this week. The NASC, unwilling to be troubled with the “minor” local business of supplying refrigerators, computers and other office equipment, contracted it to some lucky outside contractors.
While the Senators settle back into the comfort of their $100,724 brand new Land Cruisers so they do not have to worry about suffering discomfort on Nigeria’s horrendous roads, ordinary Nigerians will have to prepare to dig deeper if they wish to enjoy electricity.
According to the report in the Financial Times, the new pricing structure for electricity will see price tariffs rise of 25-88 per cent, but most customer classes will see a 50 per cent increase in their bills, and the return of the s-word, “subsidy.”
“We are making sure that the urban poor and rural dwellers be provided a subsidy so that they don’t see a significant increase in tariff, Professor Bart Nnaji, the Minister of Power, told the newspaper in Abuja. “The rest should be able to pay for it.”
The government’s strategy, said the newspaper, is that cushioning the blow for the poorest consumers – a policy said to be absent during the fuel subsidy removal – will ensure that there is no repeat of January’s mass rallies against the abrupt hike in the price of fuel.
This means that the government will structure the electricity tariffs to try to bribe the poorest people to take no interest in any further mass protests. It is a gamble that is unlikely to work because imbalances in the Nigerian economy suggest that whatever the ordinary people may benefit from so-called “subsidized” electricity they are certain to lose in other areas, such as higher food and transportation costs.
The government calculates, for instance, that the biggest consumers of electricity, wealthy individuals and businesses, will pay the highest rates for electricity. While this is in principle aimed at “cross-subsidizing the less well-off,” there is nothing in the character of the government to suggest that those businesses and individuals will not manipulate the system to their own benefit, or pass their burdens to consumers in terms of highest prices.
Under the arrangement, the government will provide N60bn subsidy this year, and the tariff for the poorest customers will be fixed at N3.3.
“The calculus continues to avoid the obvious: corruption in Nigeria,” said an analyst in Abuja today. “As long as the government and its highest officials and friends refuse to renounce corruption, this is all simply a dance around the camp fire, and anyone who is not close to the fire will enjoy no warmth.”
Said another analyst, “So, the government will pay N60 billion in electricity subsidies this year. The question now is, who will the new electricity cabal be, and how much more will the government pay next year, and in the year just before the next big election?”
The NBS predicts in its report that the trend towards absolute poverty in Nigeria will continue. Absolute poverty is measured by the number of people who can afford only the bare essentials of shelter, food and clothing.
Nigeria’s population in poverty
• 1980: 17.1 million
• 1985: 34.7 million
• 1992: 39.2 million
• 1996: 67.1 million
• 2004: 68.7 million
• 2010: 112.47 million
Source: National Bureau of Statistics