Soludo's Poverty Statistics On Anambra - A Critical Look

It is no longer news that the former governor of the Central Bank Of Nigeria (CBN) and Professor of Economics, Charles Chukwuma Soludo is in a war of words with the Finance Minister, Ngozi Okonjo-Iweala over the state of Nigeria's economy where Soludo earlier scored the Jonathan administration F9. Within that same article, Soludo hinted that his state Anambra had been impoverished by the immediate past Governor Peter Obi. To back up his statement he quoted the National Bureau of Statistics 2010 report on poverty index per state where he stated that "...poverty rose under his (Obi's) watch in Anambra from 20% in 2004 (lowest in Nigeria then) to 68% in 2010 (a 238% deterioration!)". In the subsequent paragraphs we shall look at the merits and demerits of this statement vis a vis the state in question, Anambra. I was able to lay my hands on the Nigeria Poverty Profile Report 2010 compiled by the National Bureau of Statistics, with support from the world bank, DFID (UK) and UNICEF, and some other statistical data which we will discuss subsequently.

In computing poverty indicators worldwide, 4 major approaches are used or adopted. They are:
1. Relative Poverty Measurement Approach - In a layman's word, this basically refers to the standard of living of the majority in a given society and separates the poor from the non-poor. Households with greater than two-thirds of the total household per capita are classified as non-poor. Those with less than one third are classified as core-poor while those greater than one third but less than two thirds are classified as moderate poor. The moderate poor and core poor in relative poverty measurement are usually grouped together as poor. Income or Expenditure of households are usually employed in indicating relative poverty, and is adopted by most European countries to measure poverty index.

2. Absolute Poverty Measurement Approach - Absolute poverty simply means a situation in which the individual's basic needs are not covered. It is also known as food energy intake measure of poverty. The United States adopts this approach in measuring its poverty index.

3. Dollar per day measurement Approach - Refers to the Purchasing Power Parity (PPP) index, which defines poverty as the proportion of those living on less than US$1 per day.

4. Subjective Poverty Measurement Approach - This is usually based on self-assessment and sentiments from respondents interviewed.

The National Bureau of statistics (NBS) also includes another indicator called the Gini Coefficeient which is simply a measure of inequality and income distribution in a country. The Gini coefficient ranges between 0 and 1, where 0 corresponds to perfect equality (i.e everyone earns the same income) and 1 which corresponds to perfect inequality (where only 1 person earns all the income and others nothing). The NBS however usually adopts the Relative poverty measurement for monitoring poverty trends in the country and the 68% quoted by Soludo above for Anambra is actually the Relative Poverty Rate for the state in 2010. For the purpose of this discussion I will stick only to Relative Poverty.

I have already explained above that relative poverty has to do with standard of living of a people in a particular place at a particular time. It is usually socially defined i.e has to do with societal demands. To arrive at the figure, statisticians asked the respondents to state their expenses over a given period of time. The Relative Poverty line is N66,802.20. This line separates the poor from the non-poor. All persons whose per capita expenditure is less than the above are considered to be poor while those above the stated amount are considered to be non-poor. My first problem with this method of approach is that it cuts off the middle class. Let us look at the 2010 stats table again for Anambra. 32% was classified as non-poor while 68% was classified poor, which includes the moderate poor (i wish to call them middle class). What this means is that only 32% of Anambrarians are rich! Unbelievable.

Secondly, the relative poverty method...
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