Government Approach In Tackling Poverty and Inequality Problems In Nigeria

poverty in nigeria

The government, the world over is seriously worried and concerned about the increase in the global poverty rate most especially in the developing countries. This is because the sole aim of any rational government is to maximize the welfare of its people. Nigeria been one the global community is not left out in the issue of poverty hence the three (3) tiers of government of Nigeria keep making a concerted effort towards the alleviation of poverty in Nigeria.

Poverty is a multi – dimensional and highly complex phenomenon. Therefore, any attempt or struggle for its alleviation requires a thorough understanding of its characteristics and the manifestation of its underlying causes. For a long period now, economists have been preoccupied with the distribution of wealth and the improvement of individual well-being. However, since the 1980s, all these issues have taken the central position due to their importance, especially in the face of persistent poverty across the global economy (Abdullahi, 2008).


As an old phenomenon, poverty has always assumed different forms. Indeed, it is generally inconvenient to be poor. Consequently, the need to tackle the problem and had led to many governments across the globe to apply all kinds of solutions, unfortunately, all these solutions have tended to fail to lower the rate of poverty especially in the Less Developed Countries (LDCs). At the global level, for instance, the approach to poverty had also varied over time. At one time, the objective was to move people above the “poverty line”, i.e. to provide the minimum subsistence to people who would not have had even that bare minimum. The present period is however geared towards the goal of inadequacy in some developed countries (Gusau and Abdullahi, 1995), while that of alleviating absolute poverty is still the goal in most LDCs.

In Nigeria today poverty seems to have assumed a monstrous dimension hence has taken a central position in almost every household. This has created a serious cause of concern for all and sundry. Thus, the recognition that poverty is bad and so could be alleviated is a general view. However, what differs is the approach towards its minimization. Over the year some countries have used the market system, others use government guarantee while still others used a combination of these social and political organization to actualize these objectives.

Conceptual and Theoretical Issues

Poverty has been defined differently; Balogun (1999) define poverty is absolute sense, as a situation where a population or a section of the population is able to meet only its base subsistence essentials to maintain a minimum standard of living. This definition requires that a yardstick is set which can be used to assess living standard so as to determine who is poor and who is not. This led to the emergence of the concept of poverty line base on the level of per – capita income or consumption to individuals or households within a region or country. This is usually defined as the cut – off living standard level below which a person is classified as poor.

The World Development Report (1990) used a lower poverty line of $370 income (in 1985 purchasing power parity dollar) per – capita as a cut off for absolute poverty. People whose consumption levels fall below that level are considered poor and those below US$275 as very poor. Englama and Bamidele (1997) cited in Balogun (1999) summarized the definition of poverty in both absolute and relative terms as a “state when an individual is not able to cater adequately for his/her basic needs of food, clothing, and shelter meet social and economic obligations; lack gainful employment, skills, assets and self – esteem; and has limited access to social and economic infrastructures and sanitation, and as a result has limited chance of advancing his/her welfare to the limit of his/her capabilities.

Oludunni (1999) define poverty in terms of insufficient income for securing the basic necessities of life such as food, potable water, clothing, and shelter. She also said that poverty may be viewed in terms of the consequences such as the deficient provision of goods and services, deprivation and lack of right such as it affects the girl – child due to male child preference, insufficient capability as well as social and economic exclusion mechanisms.

Poverty may be absolute, relative, chronic, transient, mass or localized. Absolute poverty is a lack of physical minimum requirement for a person or household’s existence. On the other hand, relative poverty refers to a situation where a person or households is/are with the provision of goods and services which are lower than that of another person(s) or group. Consequently, poverty is defined simply as a condition in which an individual does not have enough food to eat; poor drinking water; sanitation; nutrition, shelter; high infant mortality rate; low life expectancy, energy, low consumption, educational opportunities; lack of productive participation in decision making process either as it affects the individuals or; in national arena be it management or political (Sabo and Igwo, 2007).


Awoseyila (1999) defines relative poverty as a condition in which households over time, fall short at the resources to maintain their standard of living. Applying the concept of poverty to Nigeria, Awoseyila (1999) states that those classified as poor included household below the poverty line like those lacking access of to basic economic and social services, rural dwellers with the lack of essential infrastructure, the unemployment among others. Measured in absolute and relative terms, poverty in Nigeria is generally more severe in rural communities and among vulnerable groups in urban centers. The incidence differs with household size, gender, educational, age and occupational distribution of household’s heads.

Measures of Poverty

Balogun (1999) identified some measures of poverty to include:

  • Income Distribution Cluster below the Poverty Line: the line measures the poor below the poverty line measures the degree of severity of the problem. A cluster around the poverty line is less severe than a distribution where large numbers of people have income (or consumption) far below the poverty threshold. It is the convention in the literature to limit the threshold to an upper and lower poverty line of US$370 and $275 respectively, interpreted as poor and very poor.
  • The Head Count Index: this is defined as the proportion of the population whose measure of standard of living (consumption) is less than the poverty line. It simply captures the incidence of poverty as it is usually insensitive to the difference between individuals in the depth or severity of their poverty.
  • The Poverty Gap Index: which is the difference between the poverty line and the mean income of the poor, expressed as a ratio of the poverty line? While this measure gives a good indication of the depth of poverty, it does not capture its severity.
  • Lorenz Curve: a graph depicting the variance of the size distribution of income from perfect equality. This is simply a measure of the level of income (per capita) of the rich and the very poor.
  • Gini Coefficient: defined as an aggregate numerical measure of income inequality ranging from zero (perfect equality) to one (perfect inequality. it is graphically measured by dividing the area between the perfect equality lines in the Lorenze diagram. The higher the value of the coefficient the higher the inequality of income distribution and the lower it is the more equitable the distribution of income. Distribution Sensitive Measures, these measures go beyond counting poor people, to reflect the distribution of living standards among the poor. They are usually composite indices which incorporate or combine some of the simple indices among them are;
  • The Sen Poverty Index: which incorporates the head count index, the poverty gap index and the Gini coefficient to reflect not only the number of the poor but also both the extent of immiserization and the distribution of income among the poor? The major drawback is that it is most sensitive to improvement in the head count index, thus, suggesting that the efficient way to reduce poverty is to help the least needy first and the neediest’ last which is against the principle of egalitarianism.
  • Foster – Greer – Thorbecke Index: which measures the mean of the individual poverty gaps raised to a power that reflects the social valuation of different degrees of poverty. Assuming the society places a greater value on helping the poorest, the measure is weighted to reflect the extent that individual (or household) income falls below the poverty line. The greater the weight used for the poorest in relation to the not – so – poor, the more sensitive is the measure of severe poverty.
  • Physical Quality of Life Index (PQLI): which uses qualitative measures of social well – being rather than income per – capita to determine the quality of life. This is defined as the average of relative indices of infant mortality life expectancy and literacy. Its major drawback is that it says little about income disparity.
  • Augmented Physical Quality of Life Index: which is a more inclusive measure than the preceding one. It is an equal – weighted index of social progress which measures the differential levels of human deprivation and suffering experienced by people living anywhere in the world, using 10 social indicators. Viz: education, health status, women’s status, the defense effort economic, demography, political participation, cultural diversity, and welfare effort (Estes, 1984).
  • The Human Development Index (HDI): which measures the relative extent of deprivation in a country compared to the global standard incorporating both income and no – income factors (UNDP, 1990). Generally, the HDI is a simple average of three relative deprivation indices, viz: longevity represented by life expectancy, knowledge, a weighted average of illiteracy rate and mean years of schooling index, and income data. The extent of deprivation is computed for a country for each of the indexes in the ith period defined as the country’s index with regard to the global maximum and that of the difference between the global maximum and the country’s minimum. The HDI is defined as one less the average of these indices. This suggests that the index views achievement relative to the best country in the sample.
  • Dominance Measures: which permits assessment of the trend in poverty over time with and without some policy change, regardless of the poverty line or poverty measure selected. It is based on a comparison of cumulative income distributions at two times. According to the World Bank (1993), if the cumulative distributions of income for the latter date lie nowhere above that for the former date, then poverty has unambiguously fallen. This is called the first order dominance condition. If the cumulative distribution’s across the issue is more complicated. But remains a first order dominance, if the cross – over is at or above the poverty line. But if the cross – over comes at an income level below the poverty line, the question is which distribution has the larger cumulative frequency. This is called the second order dominance condition. In general, these measures can be calculated using various statistical methods. However, the World Bank (1993) indicated that a software package known as estimate the various poverty measures from basic distribution data, which permits sensitivity tests, for example with respect to the poverty line and simulations.
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Causes of Poverty in Nigeria

That Nigeria is bedeviled by the menace of poverty is no longer in doubt. Also not in doubt is the fact that various regimes have tried to curb the problem using different measures, but all such efforts seem to result in Woeful failures (Husseinatu, 2008). One is, therefore, tempted to ask; what is it that causes poverty and while have the problem remain protracted and exclusive in Nigeria? Thus, Abdullahi (1995) identify the following as some of the specific causes of poverty in Nigeria, they are:

  1. Inconsistent government policies
  2. Gender discrimination
  3. Hoarding
  4. Smuggling
  5. Black marketing
  6. Corruption
  7. Fraud
  8. Embezzlement
  9. Bribery etc.

Read Also: Cause Of Poverty In Developing Countries

Poverty Indicators

There are basic indicators of social welfare which help to track poverty over time as well as allow for inter country comparison. Among such are:

Income indicators: which show the incomes and living standards of the poor or selected subgroups, such as the urban or rural poor? Other measures for assessing the income earning opportunities of the poor are:

  • Rural Terms of Trade defined as the ratio of average rural producer prices to urban wholesale prices.
  • Earning Capacity of Informal Sector or non–employed especially of the rural and urban poor.
  • Lower Income Consumer Price Index.

Social Indicators are:

  • A share of Social Sector Public Expenditure in total public spending as well as GDP. The higher it is relative to others the more the tendency that the poor are being catered for.
  • Net Primary School Environment, Supplemented by other indicators such as literacy rates, completion rates, student teacher – ratios, drop out rates, the number of students per school, and public expenditure levels and trends for education.

Children in development, capturing data on their health and nutritional status such as:

  • Immunization
  • Malnutrition

Women in development, which measures the status of women in the society because of the key role they play in the following family well – being. Among such indicators are:

  • Female/Male Life Expectancy at Birth ratio
  • Total Fertility Rate
  • Maternal Mortality.

Empirical Analysis of Data

Here, the eclectic approach is adopted which involves the use of existing or readily accessible information as a basis for poverty analysis.

Nigeria is classified as the twenty poorest countries in the world. The poverty situation in Nigeria has reached an alarming stage as more than 45% of the population lives below the poverty line while 67.95 of the poor are extremely poor (Oladunni, 1999); CBN/World Bank (1999) place Nigeria with human development index ranking of 137, and 141 out of 175 countries, with a real GDP per – capita (PPP$) of 1014.00 and 1351.00 in 1996 and 1997 respectively. The ranking even places Nigeria below some African countries such as; Comoros, Lesotho, Kenya, Cameroon, Ghana, Congo, etc.

In the area of special distribution, Oladunni (1999) observed that not only the greater proportion of the poor are in rural areas, poverty has been consistently rising over the years.

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The overall dependents per 100 gainfully employed persons, in the rural areas, it is 286 dependents per 100 workers, while in the urban center it is 219 dependents per 100 workers. Labour force aged between 15 and 64 years dependent ratio is 259 dependents per 100 workers nationwide. It is 302 and 222 dependents per 100 workers in the rural and urban centers respectively. This means that an average Nigerian employee bears the heavy economic burden of more than 2 non-workers.

The implication of the rise in poverty in Nigeria is that Nigerians are becoming increasingly impoverished. This is anchored on their lack of basic choice and opportunities to live long and healthy life and to enjoy a decent standard of living. In terms of depth and severity, the rural areas were also worse off than the urban centers. This is because there is a dearth of social infrastructural facilities in the rural areas. In general, the pattern of development indicates that the urban or modern sector is more favored with growth and development incentives than the traditional rural sector.

Efforts at Alleviating Poverty in Nigeria

The concern over poverty and the need for its alleviation, as a means of improving the standard of living especially of the rural people, led to the establishment of various institutions and programs. Poverty alleviation is a broad spectrum activity, therefore, covers the following sectors. Agriculture, health, education, water resources, transport, housing, finance, industry, employment generation, rural and urban development etc. the institutions and schemes set up for the reduction of poverty in Nigeria include National Agricultural Land Development Authority (NALDA), National Primary Health Care Scheme, National Agency for Mass Literacy, The Peoples Bank, National Directorate of Employment, Better Life/Family Support Programme, Low Cost Housing Programme, Federal Urban Mass Transit Agency, Nigerian Agricultural and Cooperative Bank, Family Economic Advancement Programme, Petroleum Special Trust Fund, Poverty Eradication Programme etc.

These agencies/programs or schemes were put in place as a means of breaking the vicious circle of poverty nationally but most especially in the rural sector. However, these efforts have not yielded the desired results of alleviating poverty in Nigeria since the issue is not only economic but also social and political. Nevertheless, there is a lot of room for improvement through economic empowerment for the benefit of all especially with regard to women and youths.

Conclusion and Recommendations

The review above indicated that poverty has become an intractable problem in Nigeria since it is common to both rural and urban areas. Thus, concerted efforts are needed from individuals, community-based and of course the three (3) tiers of government to fight the evil of poverty to enable Nigerians to have access to the basic needs of life. These include food, portable water, good sanitation, clothing, shelter, basic health services and nutrition. Others are basic education, communication facilities and guaranteed respect for fundamental human rights as a means of improving the standard of living of the poor in the nation. Various attempts at its alleviation have been noted to yield varying degrees of success but still, leave a lot of room for improvement.

For the purpose of alleviating poverty the following recommendations are hereby made:

  1. Improvement in the quality of life via enhanced national basic infrastructure, such as roads, electricity, safe – drinking water and sanitation, communication, transportation etc.
  2. Improvement in the quality of life of the poor via enhanced national food security.
  3. Attainment of basic education for all irrespective of location, sex, religion or tribe.
  4. Facilitation of access to basic health service for all as a means of improving the health status of the nation.
  5. Improved access to credit facilities productive resources and employment opportunities for all irrespective of sex, creed, location or tribe.
  6. Improved access to decent and affordable shelter for all.
  7. Achievement of a broad base and diversified economy that can absorb the millions of unemployed and underemployed citizen.
  8. Enhanced ability of the poor to participate in decision making via economic and educational empowerment.
  9. Respect for fundamental human rights and human dignity.


Sabo A. M. and O. B (2007); Introduction to the History and Structure of Nigerian Economy. Maina – Sara Printing and Pub.Co.Ltd Keffi.

Abdullahi h. (2008); History and Structure of the Nigerian Economy. A Publication of the Department of Economics, Usmanu Danfodiyo University Sokoto.

Cookey A. E. (2008); Other Economies and Ours. Abbot Books Ltd Onitsha.

Anyanwu J. C. et al (1997) The Structure of the Nigerian Economy (1960 –1997). Joanee Publishers Onitsha.

Ekpo A. H. (1992); Nigerian Economy at the Crossroads: Policies and their Effectiveness, Benin. Gabumo Publishers Co.

Englama A and Bamidele A (19970; “Measurement Issues in Poverty” The 1997 NES Conference Proceedings 141 – 156.

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