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Poverty In a Wealthy Economy: Nigeria

Poverty In a Wealthy Economy: Nigeria 

-Raheem S Ayeni

Nigeria is a rich country with a booming population of over 200 million people. While this richness is an
advantage, the country’s human development has, however, been severely impacted by multidimensional

In 2015, President Muhammadu Buhari inherited an economy that was depressed, a people in dire need,
and global poverty statistics that projected a steady descent into poverty. The government prioritised these
issues by launching two key interventions, among other initiatives: first, the National Social Protection Policy,
which serves as the guidebook for addressing inequalities, highlights the social benefits accruable to each
citizen, and provides insights on public policy issues of distribution and protection, especially for the poor and
vulnerable. The second was the establishment of the National Social Safety-Nets Project (NASSP), which has
in its custody the largest number of identified poor and vulnerable households in Nigeria.

Nigeria is a nation of riches and poverty splendid, wealth in the hands of few and extreme/abject poverty at the doorsteps of many. This study examined the role of economic growth, agriculture and quality of governance in explaining the wide differences in poverty level in Nigeria. The study used a 25-year period (1990 – 2015) time series secondary data. Data were analysed using Impulse Response Function (IRF) and Autoregressive Distributed Lag Model (ARDL). IRF revealed that there was a negative and positive response of POV to shocks in real GDP in Nigeria. ARDL showed that real GDP, inflation and unemployment are a key variables that can be used to enhanced poverty reduction and significant in both the short and long run. Similarly, education and agriculture value added also have a negative coefficient in the short run analysis which means the variables will lead to poverty reduction in the short run. The study recommended that pro poor policies should be designed for alleviating poverty and this should be cantered on diversifying the Nigerian economy with agriculture so that the benefits of economic growth will trickle down to the agro-based rural population that constitute a larger proportion of the poor people.

Poverty in the face of abundance is now the world’s greatest challenge and major developmental objective is the achievement of equality in the distribution of income and reduction of poverty. About 2.8 billion persons of the world’s population live on less than $2 a day, and 1.4 billion on less than $1 a day (World Bank, 2009).
According to the National Bureau of Statistics (2012) report, 112.519 million out of an estimated 163 million of Nigeria’s population live in relative poverty. Relative poverty is the comparison of the living standard of people living in a given society within a specified period of time. Apart from the relative poverty index, Nigeria failed all poverty tests using all poverty measurement standards: absolute poverty measure puts the country’s poverty profile at 60.9 percent; the dollar per day measure puts the poverty profile at 61.2 percent and the subjective measure puts the poverty profile at 93.9 percent (NBS 2012). The Human Development Index (HDI) of 0.423 also ranks Nigeria 142 out of 169 countries in
2010 with estimated GNI per capita of $2156, life expectancy at birth of 48.4 years, Multidimensional
Poverty Index (MPI) of 0.368 (UNDP, 2010).

The average Nigerian is a poor man. Nigeria is a nation of riches and poverty splendid, wealth in the hands of few and extreme/abject poverty at the doorsteps of many. The divergence between Nigeria’s economic indicators, macroeconomic variables and the reality is a source of concern. The reality is that people die because they cannot afford three square meals a day as well as access basic public healthcare.
As strange as this may sound, this goes on side-by-side with ostentatious display of wealth by the privileged few.
These problems are traceable to weak governance that the nation has experienced over the years, which are due to a combination of inefficient service delivery and inconsistent policy settings. In an attempt to proffer solution to the foregoing problems, it is therefore imperative to determine the role of economic growth, agriculture and quality of governance in explaining the wide differences in poverty in Nigeria. The role of governance in explaining poverty was accessed by introducing some indicators like education, infrastructure, corruption perception and absence of violence/political instability in the countries into the model. In additions to these, the role of agriculture was also assessed by introducing a variable on agriculture value added and agricultural land.

The MPI data in this report provide insightful information at national and state levels, placing at the disposal of actors and policymakers a tool to pinpoint levels of deprivations experienced by people up to senatorial districts, the kind of policy changes required for the reforms needed, and the need for State and private sector participation to move the needle with every targeted investment effort. The Nigeria MPI is thus positioned to play a pivotal role in the hands of discerning stakeholders: policymakers at various levels of government, academia, civil society and the public.
The Nigeria Poverty Map (NPM) has been created as a more user-friendly version of this report and visually presents the data findings for each indicator, State, senatorial district, and disaggregated analyses related to: children, gender, and people living with disabilities, among others.

Home to over 200 million people, Nigeria is the most populous country on the African continent and the seventh largest in the world. The United Nations forecasts that the population will double by 2050, making it the third largest country in the world (UNDESA, 2019). Given Nigeria’s size and growth potential, the pressure to safeguard and improve the lives of its citizens is significant. Nigeria was still recovering from its 2016 economic recession when another recession hit in 2020 due to the effects of the COVID-19 pandemic, further derailing its economic recovery. While the COVID-19 regulatory measures implemented in Nigeria helped to control the spread of the virus, many of these necessary and lifesaving measures had deleterious effects on livelihoods, health, human wellbeing, state–society relations and social harmony. The Nigerian economy has grown post-COVID, with the real Gross Domestic Product (GDP) growth rate rising from -1.92% in 2020 to +3.40% in 2021. Despite this economic recovery, the lingering impact of the 2020 recession has   undermined household welfare and exacerbated poverty and vulnerability.
In August 2019, the President of Nigeria committed to empowering an additional 100 million people to escape extreme poverty by 2030. This means that, on average, 10 million people must be lifted out of poverty each year, starting from  2020. With the adverse impact of COVID-19 on livelihoods, and unemployment, this challenge has become even more important.
It is within this context that the Nigeria MPI (2022) survey was conducted across the 109 senatorial districts, establishing a baseline for the local government area (LGA) survey due in 2023, and future two-yearly national surveys.

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