POVERTY INCIDENCES IN NIGERIA: CAUSES AND CONSEQUENCES (1980-2008)

ABSTRACT

This study on the poverty incidences in Nigeria: causes and consequences, is an investigation into how the incidence of poverty has been in Nigeria over time specifically within the scope of 1980 to 2008. It examines the causes, consequences and measures of poverty.

A descriptive analysis was carried out within the given time frame (1980-2008) and the following data were considered to investigate the incidence of poverty in Nigeria and they include National Poverty trend, Relative Poverty Incidence by size of household in Nigeria, Contribution to poverty by size of Household, Relative Poverty Incidence by Educational level of Household head, Relative poverty incidence by occupation of household head, Aggregate living index in Nigeria, Education and social indicators. A major finding here is that with all these data, poverty incidence in Nigeria has increased overtime, rendering almost all the efforts of the Government futile; but with better policies, programmes, plans, especially perspective plans, structural change and implementation with effective monitoring and evaluation of outcome, this to a great extent will curb the havoc caused by poverty in Nigeria.

CHAPTER ONE

INTRODUCTION

1.1 Background of Study

Poverty has registered its presence among every people, nations and continents on the earth hence we say that poverty is a global phenomenon. Poverty has narrow and broad views, because it is partly a physical and partly a relative phenomenon. it is physical because its effect can be noted in different ways on those afflicted by it. And it is relative because a poor person in one country may not be sensed as such in another country. It is a multidimensional issue that transcends economic analyses and prescription. A holistic view and diagnosis of poverty must include political, cultural and social dimensions. Taking a cue from this perspective, poverty is said to be divided into two;

(1) Income poverty which sees poverty just as lack of minimally adequate income for the basic necessities of live. And

(2) Human poverty which is a new approach to the concept of poverty, it was introduced in 1997 by United Nations Development Programme (UNDP) in their human development report, and this focused on the denial of opportunities and choices most basic to human development, such as choice to lead a healthy live, to enjoy a decent standard of living, it also recognize freedom, dignity, self esteem and respect for others. And it is seen as a process not a condition and it sees the poorest people not as passive victims but as active actors working against the process of impoverishment.

Poverty is of different intensity and prevalence in different nations, with nations in sub-Saharan Africa, South Asia and Latin America presently occupying the place of the highest level of poverty, and sub-Saharan Africa holding an unenviable position of being the poorest region in the world. And poverty in these regions mentioned is coupled with serious unrest, violence of all sorts, insecurity of lives and property and a generally unacceptable low standard of living. According to Todaro and Smith absolute poverty is viewed as the number of people who are unable to command sufficient resources to satisfy basic needs, they are counted as the number people living below a specified minimum level of real income, that is an international poverty line of less than 1$ per day. And out of 6 billion people living in the world it is estimated that that 1.3 billion live in poverty (income poverty perspective). Also The Central Bank Of Nigeria (1999) define poverty as “a state where an individual is not able to cater adequately for his or her basic need of food, clothing and shelter; and is unable to meet social and economic obligations, lacks gainful employment, skills asset and self esteem; and has limited access to social and economic infrastructure such as education, health, portable water and sanitation; and consequently has limited chances of advancing his or her welfare to the limit of his or her capabilities(human poverty perspective).

The general view behind poverty measurement is that poverty exists when a group of people in a society can not attain a “minimum” level of wellbeing. The concept of poverty in human development economics has been extended beyond the issue of micro-dimension of living to include the performance of the social sector which includes Education, Health, Nutrition, access to portable water and sanitation. There has been a high level of poverty in Africa and especially in Nigeria since the implementation of structural adjustment programme in the 80’s (UNDP Nigeria, 1988; FOS 1999; World Bank (1999). Data from Federal Office of Statistics (FOS) on poverty profile in Nigeria (1999) showed that incidence of poverty increased from 28.1% in 1980 to 43.6% in 1985 but declined to 43.7% in 1992 and rose again to 65.6% in 1996. Since 1990, the country has been classified as a poor nation. The UNDP Human Development Index (HDI) for 2000 ranked Nigeria as the 142nd with HDI of 0.40 among the poorest countries. For the period 1980 to 1996, the population of poor Nigerians increased fourfold in absolute terms. The percentage of the core poor rose from 28.9% in 1992 to 36.3% in 1996.

The proportion of total income spent on food by the core poor and moderately poor was approximately 75% and 73%, while the non-poor category spent about 53% of their total income on food(FOS1999). The ultimate trigger of poverty as a major problem in Nigeria is the prevailing economic problems in the country prompted by the global economic crisis of 1980’s and the subsequent negative effect of structural adjustment programme (SAP) introduced by the government between 1982-1986 to rectify the problem. This poverty situation has undermined the country’s effort towards economics growth and development, thus causing a lot of hardship for the people. This hardship has subsequently resulted into a high scale of poverty. A look at the majority of people reveals a widespread misery because their living standard has deteriorated due to low income and hunger. Only few have access to education, healthcare services, good roads and adequate shelter. Poverty has also lead to increase in crime, child labor, child abandonment, high child and maternal mortality rates, and reduction in life expectancy of most adults and a very high level of corruption. With these situations in view, the incidence of poverty in Nigeria in 1992 was 34%, with 16% of the population suffering extreme poverty. Poverty incidence in rural was 36%, compared to 30 figures for extreme poverty being 15% and 11%. The incidence of poverty was highest in the northern agro-climate zone at 45%, compared with-the middle and southern zones, at 38% and 24%. (Fancies’ et al, 1996:6). It is in a view of all these that this paper tends to examine incidence of poverty in Nigeria.

1.2 Statement of problem

The World Bank (1996) regarded the situation of Nigeria as paradoxical because poverty abounds in the midst of plenty both in natural and human resources. The second alarming situation which calls for great concern and for both national and international intervention, is the huge human and material resources that has been devoted to poverty alleviation and reduction by successive government in Nigeria with no remarkable achievement from all of such efforts

Nevertheless, since poverty remains a development issues, it has continued to capture the attention of both national government and international government agencies for several decades. The lack of income and productive resources sufficient to ensure sustainable livelihood, hunger and malnutrition, ill health, limited or lack of access to education and other basic services increases morbidity and mortality from illness, homelessness, inadequate housing, unsafe and depredated environment, social discrimination among women and minority tribe, and exclusions are also causes of poverty in the country also the selfish ambitions of the several leaders Nigeria had had must not be overlooked when considering the causes of poverty in Nigeria and some other countries whether in the African continent or not. Urban poverty has also posed some problems such as overcrowding, congestion, contamination of water, bad sanitation, crime and additional social problems. Indeed since the mid 1980’s, reducing poverty has become a major policy for government and donor agencies in all poverty-stricken countries, Nigeria inclusive. Therefore, there is a need to empirically examine the causes and effect of poverty in Nigeria and to evaluate the appropriateness and effectiveness of several poverty alleviation strategies adopted in the country since independence or the 1980s.

1.3 Objectives of the study.

The major objective of this study is to empirically examine the level of poverty incidence in Nigeria 1980-2008

Specifically, the objectives of the study are;

1. To review the trend of poverty in Nigeria.

2. To examine the causes of poverty in Nigeria

3. To find out the perception of people on poverty level and it causes.

4. To review the effectiveness of poverty alleviation strategies in Nigeria.

5. To suggest more appropriate strategy for poverty alleviation in Nigeria.

1.4 Significance of study

Poverty is multidimensional. It is a socio economic phenomenon that affects all sector of the economy. The study of poverty is important because it makes us know the causes of poverty which are low income, unemployment, over population, corruption e.t.c. It also makes us aware of its consequences which are increase in crime, child labor, child abandonment, high child and maternal mortality rates, and reduction in life expectancy of most adults, corruption. Since corruption appears under both causes and consequences we can say that corruption is cause as well as a consequence of poverty. From this study we would be able to know the level of poverty in Nigeria. This study will also examine the effectiveness of previous poverty reduction strategies and proffer proven policies suggest to policy makers to reduce poverty in the country.

1.5 Statement of Hypotheses

The hypotheses to be tested in this research work are as follows;

H0: Poverty incidence is not very high in Nigeria.

H1: Poverty incidence is very high in Nigeria.

H0: Level of education of the heads of household has no relationship with poverty level in Nigeria.

H1: Level of education of the heads of household has a relationship with poverty level in Nigeria.

H0: Household size does not contribute to poverty level in Nigeria.

H1: Household size does contribute to poverty in Nigeria.

H0: Employment status of the heads of household does not have relationship with poverty level in Nigeria.

H1: Employment status of the heads of household does have relationship with poverty level in Nigeria.

H0: Health status of the citizenry of a nation has no relationship with the poverty level in Nigeria.

H1: Health status of the citizenry does have relationship with the poverty level in Nigeria.

H0: Level of corruption in Nigeria has no relationship with the level of poverty in Nigeria.

H1: Level of corruption in Nigeria has relationship with poverty level in Nigeria

1.6 Brief Methodology

The methodology for this study shall consist of both descriptive analyses and the use of survey. The descriptive analysis shall focus on the use of tables, charts and diagrams to examine the nature and level of poverty in Nigeria. The indicators of poverty to be examined are human development index, number of people living below $1 per day, poverty incidence, and some social indicators.

1.7 Source of Data

The data for this study shall consist of secondary data spanning 1980 to 2008. These data would be sourced from poverty profile for Nigeria (2005), Federal Bureau of Statistics (FBS), Central Bank of Nigeria (CBN) statistical bulletin and annual report, and the internet.

1.8 Scope of the Study

This study would focus on the Nigerian economy as a whole the whole attention would be based on examining the level of poverty incidence in Nigeria. The study would basically cover a period of 28years (1980-2008) would be covered in order to observe the trend and to obtain a better statistical result.

1.9 Limitation of Study

To conduct an effective research in Nigeria is always a tedious task, owing to people’s attitudinal disposition towards the release of information. Information is seen as ‘sacred’ and too confidential to release for the feeling that it is a way of assessing the giver.

Perhaps the most debilitating limitation of this study is the inadequacy of data in that data on poverty incidence in Nigeria by relevant authority was last updated in the social welfare survey carried out by the Federal Office of Statistics in 1996. It has been requested that the national poverty eradication programme should collaborate with the federal office of statistics to conduct an update survey.

There is also a limitation in terms of library facilities as it is only the World Bank, British council United Nations and Central Bank of Nigeria libraries that have materials related to the study.

1.10 Organization of Study

This study is organized as follows:

Chapter 1 is the introduction to the study,

Chapter 2 is a review of recent literature on poverty incidence in Nigeria, causes and consequences,

Chapter 3 is the methodology,

Chapter 4 describes the data, and

Chapter 5 is the conclusion and policy recommendation.