Nigeria’s misery index and how Osun makes the good grade
Osun has been ranked the second less miserable and poverty-ridden state in 2017 in line with the objectives of the International Monetary Fund (IMF) and the World Bank recommendations. Osun State has shared the same goal of raising living standards of its people. Its approaches to poverty reduction are complementary, with the IMF focusing on macroeconomic issues and the World Bank concentrating on long-term economic development and poverty reduction. The implication of this ranking on the Misery Index is clearly desirable. The implication is good living standard of Osun citizens.
The state was placed the second wealthiest among the 36 states of the federation, according to a report released few days ago. The Financial Derivatives Company, which released the report, in its presentation, titled: “How the States Performed in 2017,” by its Managing Director Bismark Rewane, said in one of the top three economic analysts in Nigeria, Osun had the lowest net Federal Account Allocation Committee (FAAC) allocation but was not delinquent in the payment of salary arrears. The report showed that Osun is the second best in the measured “Misery Index” with a 16.37 per cent inflation rate, which also sums up with the rate of under-employment and unemployment, when Nigeria’s misery index has risen to an all-time high of 47.7 per cent.
The report noted that despite the financial quagmire states experienced in the last financial year, the ingenuity of the Modulated Salary Structure by the Osun State government yielded positive results. The report also outlines the core indices of a structurally balanced, growing and diverse economy, which is coming for the second time in six months from veritable and independent sources – the first from the United Nations (UN) Multi-Dimensional Poverty Index 2016 and now the FDC Misery Index 2017.
Financial experts say the conclusion is that the state government, under Governor Rauf Aregbesola’s watch with deliberate investments in infrastructure, education, social services, human capacity development and sincere political leadership, created an economy with under-employment, unemployment and inflation well below national averages and diverse. Osun Social Protection Initiative makes the case for child-sensitive social protection and the need for expansion of inclusive, integrated social protection systems as an effective approach for achieving greater equity for children and contributing to broader human and economic development
The United Nations’ Global Multi-Dimensional Poverty Index which ranked Osun State second richest state has three measurements and 10 indicators in evaluating Overall Poverty. Every measurement is similarly weighted; every indicator within a measurement is additionally weighted, and included. It uses 10 indicators to measure poverty in three dimensions: education, health and living standards. The United Nations Global multi dimensional poverty index published a report based on the poverty rate of Nigerian states that ranked Osun State second richest state. According to the Federal Bureau of Statistics, quality and functional education are panacea to poverty eradication, Osun State as part of its commitment to education is building many elementary schools, middle schools and 11 high schools to equip children with skills to eradicate poverty.
Osun education under Governor Aregbesola has developed human capabilities in areas such as health, education, agriculture, finance, transportation, commerce and governance that are needed to eradicate poverty. Osun elementary, middle and high education empowered people to improve their social, cultural and economic status. Huge investment in education and skills acquired increased opportunities for economic growth and is therefore a key prerequisite for poverty eradication.
The priority that Aregbesola’s administration gives to the development of education in Osun has inspired many initiatives that have brought marked differences to the grooming of minds.
The Misery Index figures also showed that aside Taraba, Ogun and Lagos states, are key players in Nigeria’s Industrial Base, but still have huge poverty index with a definite number of its citizens living below the normal living standards as set by the World Bank and the International Monetary Fund (IMF).
Nigeria’s misery index, which has risen to an all-time high of 47.7 per cent, has sparked Nigerians panic about the state of the economy. The implications of a high ranking on the Misery Index are foreboding and clearly undesirable. Key, among these implications, is poor living standard of citizens. According to the United Nations Development Programme (UNDP), many Nigerians are living on less than US$1 a day, while poverty, hunger and inflation are making life miserable for them.
Misery index is a measure of economic well-being for a specified economy, computed by taking the sum of the unemployment rate and the inflation rate for a given period. An increasing index means a worsening economic climate for the economy, and vice versa. Inflation, unemployment and underemployment are three “evils” that no economy wants to tackle simultaneously. Sadly for Nigeria, the country has to deal with the three issues simultaneously. The three indicators, when summed up make up the broader definition of the misery index. This is because each of them has a negative impact on the well being of the average person. So a misery index tries to capture how economically well off the citizens of a country are. It is the sum of the unemployment, underemployment and inflation rates of at any particular period. A rise in the misery index, which could be triggered by a rise in any of the indicators, usually indicates that all is not well with the people. And sadly that has been the case with Nigeria in the last few months.
The Misery Index is an indicator of the economic well-being of citizens of a specified economy, computed by taking the sum of inflation, unemployment and lending rates, minus year-on -year(y-o-y) per capita Gross Domestic Product (GDP) growth. A higher ranking on this index indicates a worsening economic climate in any country. Nigeria’s ranking on this index in August, 2016 was 47.7 per cent, according to NBS data. With inflation now at all-time high 19 per cent, lending rate at about 30 percent, unemployment at 13.9 per cent, underemployment at 19 percent and poverty level, 62.6 per cent, it is not surprising that it has now spiraled to 49.5 per cent.
The rising inflation, lending rate and unemployment levels that are pushing up Nigeria’s ranking on the Misery Index are not only a threat to the economy, they are also threatening the very existence of the citizens, as well as their ability to contribute to the development of the country and attain their own potentials.
Aregbesola has implement sound management of resources and effective implementation of policies. He is addressing market contraction due to the decline in consumer purchasing power, the decreasing profitability of many commercial organisations and the revamping of some of them. Osun government is delivering on its promise to revamp the economy. It has also increased the delivery of public infrastructure, such as the roads, public schools, etc. There is much optimism on the all-important sector of the economy in Osun.
Donald wrote from Benin City.
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