Table of Contents
- 1 BACKGROUND
- 2 CONCEPTUAL AND THEORETICAL ISSUES
- 3 MEASURES OF POVERTY
- 3.1 Income Distribution Cluster below the Poverty Line:
- 3.2 The HeadCount Index:
- 3.3 The Poverty Gap Index:
- 3.4 Lorenz Curve:
- 3.5 Gini Coefficient:
- 3.6 Distribution Sensitive Measures,
- 3.7 Physical Quality of Life Index (PQLI):
- 3.8 Augmented Physical Quality of Life Index:
- 3.9 The Human Development Index (HDI):
- 3.10 Dominance Measures:
- 4 POVERTY INDICATORS
- 5 Empirical analysis on poverty incidence in Nigeria
- 6 EFFORTS AT ALLEVIATING POVERTY IN NIGERIA
- 7 METHODOLOGY AND DATA ANALYSIS
- 8 CONCLUSION AND RECOMMENDATIONS
- 9 REFERENCES
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 is not left out in the issue of poverty hence the three (3) tiers of government of Nigeria keep making effort towards the alleviation of poverty in Nigeria.
Poverty is a multidimensional and highly complex phenomenon. Therefore, any attempt for its alleviation requires a thorough understanding of its nature and the manifestation of its underlying causes. Over time 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.
As an old and recurrent phenomenon, poverty has always assumed different forms. Indeed, it is generally inconvenient to be poor. Consequently, the need to tackle it had led to many governments in the world to apply all kinds of solutions. Unfortunately, all these solutions have to no avail lower the rate of poverty especially in the Less Developed Countries (LDCs). The present period is however geared towards the goal of inadequacy in some developed countries, while that of alleviating absolute poverty is still the goal in most LDCs.
In Nigeria today poverty seems to have assumed a dynamic dimension hence has taken a central position in almost every household. This has created a serious cause of concern for all. 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. 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 having the problem remain protracted and exclusive in Nigeria?
CONCEPTUAL AND THEORETICAL ISSUES
Balogun (1999) define poverty in an 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. 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.
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. 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 other people(s) or group. 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
Income Distribution Cluster below the Poverty Line:
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.
The HeadCount 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 median 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.
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.
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.
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 defence 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 non–income factors (UNDP, 1990).
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.
There are basic indicators of social welfare which help to track poverty overtime as well as allow for inter-country comparison. Among such are:
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 unemployed especially of the rural and urban poor.
- Lower Income Consumer Price Index.
Social Indicators are:
- The 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, 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:
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 on poverty incidence in Nigeria
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 68 of the poor are extremely poor; CBN/World Bank (1999) place Nigeria with human development index ranking 141 out of 175 countries, with a real GDP per – capita (PPP$) of 1351.00 in 1997. The ranking even places Nigeria below some African countries such as; Comoros, Lesotho, Kenya, Cameroon, Ghana, Congo, etc.
The overall dependents per 100 gainfully employed persons, in the rural areas; it is 286 dependents per 100 workers, while in the urban centre 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 centres 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 centres. 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 favoured 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 programmes. 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/programmes 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.
METHODOLOGY AND DATA ANALYSIS
For the success of this very term paperwork, the hypothesis has been set so as to ascertain or rather get an information consist of the success of government policies on poverty reduction. The following are the two;
Ho: the government has not played a significant role in poverty reduction in Nigeria.
H1: the government has played a significant role in poverty reduction in Nigeria.
CHI-SQUARE ANALYSES OF DATA
Let A represent the question “Have NAPEP/ other programmes reduced poverty incidence in Nigeria?”
And B represents the question “In your own view, has government play a significant role in poverty reduction in Nigeria.
Source: Field survey, 2012
Formula X2 = (fo-fe)2
Where fe= Observed or actual sample of frequency
fe= expected sample frequency.
Expected frequency = Row total * column total
Now we find the expected value
Fe1-1 = 90*116 = 45
Fe1-2 = 90*116 = 45
Fe2-1 = 142*116 = 71
Fe2-2 = 141*116 = 71
Table 1.1: Contingency table
Source: Own computation, 2012
X2 = 0.29 as calculated value
Degree of freedom (Df) = (R-1) (C-1)
Where R= Number of rows
C= Number of columns
Df = (R-1) (C-1)
= (2-1) (2-1) = (1) (1) = 1
At 5% level of significance = 3.84, one tail
At 5% level of significance = 5.02 two tails
Since the calculated value 0.29 is less than the critical value 3.84 and 5.02 one tail and two tail respectively, therefore we accept the null hypothesis which says government has not play significance role on poverty reduction in Nigeria and government has play significance role on poverty reduction in Nigeria.
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 has 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:
- Improvement in the quality of life via enhanced national basic infrastructure, such as roads, electricity, safe – drinking water and sanitation, communication, transportation etc.
- Improvement in the quality of life of the poor via enhanced national food security.
- Facilitation of access to basic health service for all as a means of improving the health status of the nation.
- Improved access to credit facilities productive resources and employment opportunities for all irrespective of sex, creed, location or tribe.
- Achievement of a broad base and diversified economy that can absorb the millions of unemployed and underemployed citizen.
- Enhanced ability of the poor to participate in decision making via economic and educational empowerment.
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- Englama A and Bamidele A (19970; “Measurement Issues in Poverty” The 1997 NES Conference Proceedings 141 – 156.
- Dimensions of Poverty in Nigeria
- Government Approach In Tackling Poverty and Inequality Problems In Nigeria