THE IMPACT OF ECONOMIC GROWTH IN POVERTY ALLEVIATION IN NIGERIA
- Project Research
- 1-5 Chapters
- Quantitative
- Regression
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
Background Of The Study
The history of Nigeria's economic growth has been somewhat turbulent. According to the research that has been done, the economy initially functioned as a single-crop economy, with agriculture serving as the primary contributor. After the discovery of oil in sufficient quantities for commercial use in 1956, sector was reduced to a secondary position, despite its agricultural illustrious status (Abdulraheem, 2011). Despite the fact that the agricultural sector is growing at a slower pace, Nigeria's GDP growth rate surged until only recently, when the country entered a period of recession in the previous two years. According to Ekpo and Umoh's (2015) findings, during the years 1960 and 1970, the Gross Domestic Product (GDP) saw an average yearly growth rate of 3.1 percent. They went on to say that during the time of the oil boom, which lasted approximately from the 1970s through the 1978, the GDP increased at an astounding growth of 6.2% per year. On the other hand, throughout the 1980s, GDP growth rates were negative. The Gross Domestic Product (GDP) showed a favorable response to economic adjustment measures by growing at a pace of 4.0 percent throughout the period of 1988-1997, which comprises the period of structural adjustment and economic liberalisation. According to the Central Bank of Nigeria (CBN), the growth rate of real Gross Domestic Product (GDP) reached 6.66% in 2009, up from 5.98% in 2008. This was reported by the CBN in 2010. The poverty rate in Nigeria has continued to skyrocket (Salami, 2011), despite the fact that the country's GDP has been growing at a positive rate. According to Aiyedogbon and Ohwofasa (2012), Nigeria is the most populous country in Africa and the eighth most populous country in the world, with a population of over 140 million people according to the 2006 census. It is the second biggest economy in Africa, behind only South Africa, with a nominal GDP of $207.11 billion and a per capita income of $1,401. Despite the outstanding figures that have been shown so far, Nigeria is still considered to be among the poverty's most impoverished nations.
As a direct result of this, the poverty profile in Nigeria started to trend. For instance, the percentage of the population living in poverty in Nigeria increased from 28.1% in 1980 to 46.3% in 1985. In 1992, it was 42.7%, but then it jumped all the way up to 65.6% in 1996, and then it dropped all the way down to 54.4% in 2004. (Omadjohwoefe, 2011). It is estimated that there were around One Hundred and Twenty Million individuals living in poverty between the years 2004 and 2010, out of a total population of approximately One Hundred and Sixty Million people (160 million) (NBS, 2012). Despite the efforts of the government to combat this growing trend of poverty, it has continued to worsen.
Omadjohwoefe (2011) listed a few of the government programs that have been implemented in Nigeria in order to combat the effects of poverty. A few examples of these are the Agricultural Development Projects (ADP), the River Basin Development Authority, Operation Feed the Nation (OFN), the Green Revolution (GR), the Family Economic Advancement Programme (FEAP), the Family Support Programme (FSP), the National Poverty Eradication Programme (NAPEP), and the National Empowerment and Development Strategy (NEEDS). After that came the Millennium Development Goals (MDGs), which were presented as a new global collaboration to address the issue of poverty, which is the primary obstacle to global development. Despite the fact that the Millennium Development Goals (MDGs) came to an end in 2015 and the Sustainability Development Goal (SDG) was introduced, there has been no response to the increasing incidence of poverty in Nigeria. On the other hand, some people believe that economic growth may help reduce poverty. Son and Kakwani (2004) . On the other hand, things are backwards in Nigeria. According to Son and Kakwani (2004), the alleviation of poverty may be accomplished via the promotion of economic growth and/or by the equitable distribution of income. When the rate of economic growth is contrasted with the degree of poverty in Nigeria, a paradox of growth in the face of poverty and inequality is revealed. As a result, it is necessary to investigate the influence that growth has on a variety of macroeconomic poverty indicators. This is significant since having this knowledge will assist in the process of establishing policies that would assist in putting up a robust battle against poverty and reducing it.
1.2 Statement Of The Problem
The increasing rate of poverty in Nigeria served as a motivating factor for this investigation (Orajaka and Okoli, 2018). According to Orajaka and Okoli (2018), despite the abundant agricultural resources and oil riches of Nigeria, poverty is pervasive across the nation and has been steadily increasing since the late 1990s. This trend was first seen in Nigeria. Seventy percent of the population of Nigeria survives on a daily income of less than $1.25 USD. IFAD (2012) and Orajaka and Okoli (2018) went on to state that poverty is especially severe in rural areas, where up to 80 percent of the population lives below the poverty line, and where social services and infrastructure are limited. This is because rural areas tend to have fewer resources available for construction and maintenance of buildings. As was said before, successive governments in Nigeria have made significant attempts to battle poverty by implementing one kind of poverty reduction government or another. However, judging by the increasing poverty level in Nigeria, it seems that these efforts have been ineffective at best. At this time, the struggle against poverty in has drawn the attention of people all around the world. According to Adigun and Omonona (2011), the adoption of the Millennium Development Goals has established the alleviation of poverty as a primary goal of development. Over the last several years, there has been a rise in interest about the influence that economic development has on levels of poverty. The reduction of severe poverty by half by the year 2015 is the first target of the Millennium Development Goals, and it is perhaps the most important one as well. Poverty is becoming an increasingly significant problem on a worldwide scale (MDGs). Despite the fact that the Millennium Development Goals (MDGs) were supposed to be accomplished by 2015 and instead the Sustainable Development Goals (SDGs) were introduced, the number of people living in poverty has only increased. It is assumed that an increase in GDP would, perceptibly, bring about a reduction in the degree of poverty. This is due to the fact that investments in actual sectors (such as agriculture, industry, and service) contribute to real growth in GDP. Additionally, it is anticipated that it will result in an increase in income and job opportunities, hence reducing levels of poverty. Previous research, which Son and Kakwani (2004) mention, shows that a rise in per capita income generally leads to an alleviation of poverty (Fields, 1989; Roemer and Gugerty, 1997; World Bank, 1999). According to another piece of work that Son and Kakwani (2004) mention, a change of one percent in per capita income may create a one percent shift in the number of people living in poverty. Using cross-country regressions based on a sample of 62 developing countries, it was discovered 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. This discovery was made possible by the fact that a 1 percent increase in per capita income led to a reduction in the proportion of people living in extreme poverty (Ravallion and Chen, 1997). However, despite the fact that the government is investing in industries that are driving growth, the poverty rate in Nigeria is still on the increase (Diao et al., 2010; Okpe and Abu, 2009; Orji, 2005). In light of this, it may be concluded that the growth elasticity of poverty in Nigeria has not been responsive. The non-responsiveness of Nigeria's growth-poverty nexus calls for an empirical investigation to help bridge the apparent literature gap.
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