A major objective for development is now to reduce poverty. It can be accomplished by either economic expansion or income distribution. In the 1990s, concerns about how growth helps the poor have taken center stage in development policy.

An emerging consensus is that growth alone is a rather blunt tool for poverty reduction. In conjunction with emphasis on poverty reduction, policies as to the redistribution of income and assets have become increasingly more important. A policy agenda that addresses both distributional concerns and poverty reduction could lead to enhancing both economic growth and equity.

The evidence suggests that rising per capita income in general leads to poverty reduction . Taking a step further, some studies have recently attempted to quantify the responsiveness of poverty in relation to economic growth through the idea of the growth elasticity of poverty. The poverty elasticity estimates the percentage change in poverty caused by a 1 percent change in per capita inc ome. In this connection, Ravallion and Chen (1997) carried out a study using cross-country regressions based on a sample of 62 developing countries.

They showed that on average, a 1 percent increase in per capita income led to a 3.1 percent reduction in the proportion of people living below the conventional $1 a day threshold. What is more, they also found that the growth elasticity was even higher for lower poverty lines, suggesting that while growth overall helps the poor, it helps the extremely poor more than the moderately poor.

This may be explained by the fact that different countries have different initial conditions. The countries vary with respect to their initial levels of economic development and income inequality. How do these initial conditions affect the extent of poverty reduction?

The World Bank’s recent release of the Logistics Performance Index (LPI) for 2023 has highlighted some of the clear reforms needed by Nigeria’s incoming government to boost the country’s business climate and economic competitiveness. Nigeria is the most populous nation in Africa. The difficult economic condition in the nation—caused by high unemployment, rising inflation, growing poverty, and decreased investment—has prompted the necessary changes. However, the focus of this paper is on how the criteria from the LPI book might offer a dynamic and affordable policy framework for raising Nigeria’s economic competitiveness.

The LPI is a methodology for measuring the efficacy of trade logistics in a nation in order to determine how simple it is to move goods across borders quickly and reliably, with a maximum score of 5.0 percent. Thus, the LPI serves as a framework for analyzing the state and easiness of a nation’s business climate. The rating on the LPI therefore turns into a true instrument for economic evaluation because the private sector is crucial to job creation and economic growth.

According to the study “Connecting to Compete 2023: Trade Logistics in an Uncertain Global Economy,” Nigeria ranked 88th out of 139 countries assessed, with South Africa emerging continental tops at 19th on 3.4 percent, Egypt at 57th with 3.1 percent, Botswana at 57th with 3.1 percent, Namibia 66th, Benin Republic at 66th, Djibouti 79th and Rwanda 73rd and Benin Republic at 66th, being the other major African countries that ranked higher than Nigeria. The Democratic Republic of Congo, Guinea Bissau and Mali, are the other African countries that shared the 88th position on the Index with Nigeria, with 2.6 percent performance score. And countries that rank positively on the LPI, also rank positively on the Human Development Index of the United Nations Development Programme.

The necessity for policy reforms by the incoming administration in Nigeria is underscored by the economic outcomes of the outgoing administration. Compared to 2015 when it assumed office, unemployment has risen from 9.9 percent to about 41 percent, inflation from 9 percent to 22.2 percent, number of poor people from 40 million to 130 million in multidimensional poverty and value of the Naira from 185 to the US 1 dollar to 750 to the US 1 dollar.

While public debt has risen from $10.32 billion to $103.11 billion, debt service now consumes 105 percent of national revenue! That public debt has significantly increased, and the country now spends more than it earns to service its debt, underscores the tight space for economic manoeuver, and therefore the prioritization of policies that have minimal financial implications.

Poverty reduction can be accelerated even with a moderate rate of economic growth. This indicates that even a moderate rate of pro-poor growth can have a greater impact on poverty reduction compared to a higher growth rate but not pro-poor. This is related to the growth-redistribution debate as to poverty reduction, of which its importance has often been overlooked.  A  country with a high level of initial inequality may not be able to achieve a faster reduction in poverty even with propoor growth policies. It also implies that an adverse impact of increase in inequality on poverty will be small when the country’s initial level of inequality is high.

For the other components of logistics performance, which are ease of arranging competitively priced shipments; competence and quality of logistics services such as transport operators and customs brokers; ability to track and trace consignments; and timeliness of shipments in reaching destination within the scheduled or expected delivery time, the low-cost policy options required to enhance Nigeria’s economic competitiveness are to be implemented in a few ministries, department and agencies (MDAs).

Similar to the trade facilitation orientation espoused for the head of Nigeria’s Customs, those appointed or allowed to serve as heads of Nigeria Shippers’ Council (NSC), Nigeria Ports Authority (NPA) and Nigerian Postal Service (NIPOST), should have met the trade facilitation orientation and track record. If that is done, shipping in Nigeria will be priced competitively, only competent logistics companies and customs brokers will be licensed to operate, the regulated and efficient licensed operators will allow for proper tracking and tracing of consignments, while shipments to Nigeria will arrive on schedule.

Before summarizing, it is important to stress that there is a precedence of cost-effective policy reforms in Nigeria, as exemplified by the telecommunications sector. The country’s ICT sector has grown from 3.08 percent of GDP in 2001, to 18.44 percent of GDP in 2022. A lot of this growth in the ICT sector is driven by the telecommunications sector, which has grown since the policy drive of further privatization of the sector, and auction of GSM licenses to private companies in 2001. That cost-free policy action also increased the number of active telephone lines from 450,000 to 222.2 million within the same period.

Therefore, reforms are essential for Nigeria’s present government. The incoming administration will be limited in its capacity to finance changes given the current economic conditions, which include high unemployment, high inflation, currency depreciation, and spending all revenue and more for debt payment. Because of this, policy changes with low or no financial cost are chosen.

The LPI offers a framework within which the government may put changes into place that strengthen Nigeria’s foreign trade and business climate for increased economic competitiveness. This should result in the development of jobs and more income so that the government can collect more taxes. The success of these reforms depends on the appointment of a leader for the Nigeria Customs Service who has experience and aptitude for trade facilitation. similar changes