The Impact Of Economic Growth In Poverty Alleviation In Nigeria

Project and Seminar Material for Economics

The Impact Of Economic Growth In Poverty Alleviation In Nigeria


Abstract


This study examined the impact of economic growth on poverty alleviation in Nigeria. This study was informed by the rising poverty level in the country. it was argued that despite concerted efforts made by successive government through one form of poverty reduction programme and the other to combat poverty still soars in the country. in order to address the conundrum the study modelled selected macroeconomic variables (poverty, unemployment, population, mortality rate, life expectancy rate, corruption, consumption, per capita income, illiteracy rate) and Gross Domestic Product (GDP) in Nigeria using an econometric regression model of the Ordinary Least Square (OLS) to ascertain the effect and relationship in the country’s poverty-growth nexus. Findings revealed that there is significant effect and relationship between poverty, unemployment, mortality rate, consumption and Gross Domestic Product (GDP) in Nigeria. Based on the findings of this study, the following recommendations are made: Nigeria poverty reduction programmes should be designed to be measurable and realistic. By targeting the felt need and occupational engagement of the people. Supervised capacity building before and after the implementation of the programmes is imperative. This will help address the challenge of unemployment occasioned by failures of businesses supported by the government. The leadership should cultivate a decisive spirit of patriotism and nationalism which will reinforces itself in high level trust, mutual coexistence, stability and development that will permit accountability, transparency and openness which in the long run would help increase economic growth and reduce poverty. Continued investment in human capital as in use of ICT to educate the poor, can boost the living standards of households by expanding opportunities, raising productivity, attracting capital investment, and increasing earning power. Also, holistic effort should be made by governments to improve basic human welfare in both health and social infrastructure that will eventually reduce the high rate of child mortality as well as improve standard of living.


Chapter One


Introduction

1.1 Background of the Study

Nigeria economic growth has had a chequered history. As observed in the literature, the economy started as a monoculture economy with agriculture being the chief contributor. The discovery of oil in commercial quantity in 1956 relegated the prime role of the hitherto revered agricultural sector to the background (Abdulraheem, 2011). The declining rate of the agricultural sector notwithstanding, the GDP growth rate of Nigeria skyrocketed until recently when it went into recession in the last two years. According to Ekpo and Umoh (2015), in the period 1960-70, the Gross Domestic Product (GDP) recorded 3.1 per cent growth annually. They further stated that during the oil boom era, roughly 1970-78, GDP grew positively by 6.2 per cent annually – a remarkable growth. However, in the 1980s, GDP had negative growth rates. In the period 1988-1997 which constitutes the period of structural adjustment and economic liberalisation, the GDP responded to economic adjustment policies and grew at a positive rate of 4.0. According to Central Bank of Nigeria (CBN) (2010), from 5.98% in 2008, the growth rate of real Gross Domestic Product (GDP) registered 6.66% in 2009. Despite the positive growth rate of Nigeria GDP, poverty rate in Nigeria has continued to soar(Salami, 2011) and Aiyedogbon and Ohwofasa (2012) states that Nigeria is the most populous country in Africa and the eight in the world with a population of over 140 million people by 2006 census. With a nominal GDP of $207.11 billion and per capita income of $1,401 it has the second largest economy in Africa. The aforementioned impressive figures notwithstanding, Nigeria is still in the league of poverty stricken countries.
Consequently, poverty profile in Nigeria began to trend. For example, poverty level in Nigeria rose from 28.1% in 1980 to 46.3% in 1985. In 1992 it was 42.7% but it sky rocked to 65.6% in 1996 and later nosed down to 54.4% in 2004 (Omadjohwoefe, 2011). Between 2004 and 2010, with an estimated population of about One Hundred and Sixty Million people (160million), about One Hundred and Twenty Million people are reported to be poor (NBS, 2012). This poverty trend has continued to rise despite government efforts in attacking it.

Omadjohwoefe (2011) enumerated some of the government programmes aimed at fighting poverty in Nigeria. These include: Agricultural Development Projects (ADP), River Basin Development Authority, Operation Feed the Nation (OFN), Green Revolution (GR), Family Economic Advancement Programme (FEAP), Family Support Programme (FSP), National Poverty Eradication Programme (NAPEP), National Empowerment and DevelopmentStrategy (NEEDS). Then came Millennium Development Goals (MDGs), which was introduced as the a new global partnership to tackle poverty – the global development dilemma. Millennium Development Goals (MDGs) terminated in 2015 and Sustainability Development Goal (SDG) was launched but answer has not been given to the rising poverty incidence in Nigeria. However, it is argued that poverty can be alleviated through growth Son and Kakwani (2004) . But the reverse is the case in Nigeria. According to Son and Kakwani (2004), poverty alleviation can be achieved by economic growth and/or by the distribution of income. Juxtaposing economic growth and poverty level in Nigeria reveals a paradox of growth in the face of poverty and inequality, hence the need to investigate the impact of growth on various macroeconomic poverty indicators. This is important because knowing their impact will help in formulating polices that will help in giving poverty a tough fight and reduce it.


1.2 Statement of the Problem

This study was informed by the rising poverty level in Nigeria (Orajaka and Okoli, 2018). According to Orajaka and Okoli (2018), despite Nigeria’s plentiful agricultural resources and oil wealth, poverty is widespread in the country and has increased since the late 1990s. Some 70 per cent of Nigerians live on less than US$1.25 a day. IFAD (2012) and Orajaka and Okoli (2018) went further to state that poverty is especially severe in rural areas, where up to 80 per cent of the population lives below the poverty line, and social services and infrastructure are limited. As earlier stated, successive government have made concerted efforts through one form of poverty reduction programme or the other to combat poverty, but little or nothing has been achieved going by the rising poverty level in Nigeria. Presently, the fight against poverty in has attracted global attention. According to Adigun and Omonona (2011), the establishment of the Millennium Development Goals has set poverty alleviation as a fundamental objective of development. In recent years, there has been an upsurge of interest in the impact of development on poverty.

Poverty has increasingly become a major global issue, with halving extreme poverty by 2015 constituting the first, and perhaps the most critical, goal of the Millennium Development Goals (MDGs). Incidentally, MDGs have terminated in 2015 and SDGs launched yet poverty still soars. Perceptibly, improvement in GDP is expected to alleviate the level of poverty. This is because investments in the real sectors (like agricultural, manufacturing and service) contribute to the real growth of GDP. It is also expected to create employment, increase income and consequently reduce poverty. Previous studies, as cited by Son and Kakwani (2004), suggests that rising per capita income in general leads to poverty alleviation (Fields, 1989; Roemer and Gugerty, 1997; World Bank, 1999). Another work cited by Son and Kakwani (2004) presents that a percentage change in poverty is caused by a 1 percent change in per capita income. 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 (Ravallion and Chen, 1997). But despite government expenditure in the growth induced sectors, the Nigeria poverty level continues to rise (Diao et al., 2010; Okpe and Abu, 2009; Orji, 2005). Thus, indicating that the growth elasticity of poverty in Nigeria has not been responsive. The non-responsiveness of the growth-poverty nexus in Nigeria warrants an empirical probing bridge the perceived literature gap.


1.3 Objective of the Study

The overall aim of this study is to critically examine the impact of economic growth on poverty alleviation in Nigeria. Specifically, the study intends to determine the effect and relationship between selected macroeconomic variables (poverty, unemployment, population, mortality rate, life expectancy rate, corruption, consumption, per capita income, illiteracy rate) and Gross Domestic Product (GDP) in Nigeria.


1.4 Research Question

The study will be guided by the following questions;

  1. What is the impact of economic growth on poverty alleviation?
  2. What is the relationship between macroeconomic variables (poverty, unemployment, population, mortality rate, life expectancy rate, corruption, consumption, per capita income, illiteracy rate) and Gross Domestic Product (GDP) in Nigeria?

1.5 Significance of the Study

The outcome of this study will be most relevant to the Nigeria government and policy makers. Since the study tends to investigate the impact of growth on various macroeconomic poverty indicators, It will help in formulating polices that will help in giving poverty a tough fight and reduce it.

Additionally, subsequent researchers will use it as literature review. This means that, other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regards to the impact of economic growth on poverty alleviation in Nigeria.


1.6 Scope of the Study

The study is structured to examine the impact of economic growth on poverty alleviation in Nigeria, with all focus on macroeconomic variables (poverty, unemployment, population, mortality rate, life expectancy rate, corruption, consumption, per capita income, illiteracy rate) and Gross Domestic Product (GDP) in Nigeria. The study covers the period of 30years, from 1990 – 2020.


1.7 Limitations of the Study

Although the research has reached its aim, there were some unavoidable limitations. First because of time limit, this research was conducted using 1996-2004. Furthermore, insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection,More so, the researcher simultaneously engaged in this study with other academic work. As a result, the amount of time spent on research will be reduced.


1.8 Definition of Terms

Poverty

This is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. Poverty means that the income level from employment is so low that basic human needs can’t be met.

Economic Growth

The process by which a nation’s wealth increases over time.

Poverty Alleviation

This is a set of measures, both economic and humanitarian, that are intended to permanently lift people out of poverty.


Chapter Five


Summary, Conclusions and Recommendations

5.1 Introduction

This chapter summarizes the findings on the impact of economic growth on poverty alleviation in Nigeria. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the impact of economic growth on poverty alleviation in Nigeria. The study is was specifically set to determine the effect and relationship between selected macroeconomic variables (poverty, unemployment, population, mortality rate, life expectancy rate, corruption, consumption, per capita income, illiteracy rate) and Gross Domestic Product (GDP) in Nigeria.

The panel data used in this study were obtained from documentaries of the CBN Statistical Bulletins, and were analyzed using descriptive statistics and ordinary least squares regression analysis.


5.3 Conclusions

From the study the coefficient of determination (R2) is given as 0.704552, which shows that the explanatory power of the variables is high. This implies that 70.4% of the variations in the growth of GDPGR are being accounted for or explained by the variations in POVT, UNEMP, POPL, MORT, LER, CORP, CNSUM, PCI, and IILLTR. Also, the standard errors show that all the explanatory variables were all low. The low values of the standard errors in the result show that some level of confidence can be placed on the estimates. Again, from our analysis so far, this study discovered that the F-statistic conducted was found that there is significant impact between the dependent and independent variables in the model. It is also observed that all the variables except unemployment, consumption and illiteracy rate do conform to the theoretical or a priori expectation of the study. Whereas it is observed that population, life expectancy and per capita income have a positive relationship with GDP. This means that when population, life expectancy and per capita income are increasing, the increases will bring about more growth in the GDP. On the other hand, poverty rate, mortality rate and corruption were observed to have a negative sign which means that if poverty rate, mortality rate and corruption are falling, there will be increase in GDP.


5.4 Recommendation

With respect to the findings and the aim of this study, the researchers therefore recommend that;

  1. Nigeria poverty reduction programmes should be designed to be measurable and realistic. By targeting the felt need and occupational engagement of the people.
  2. Supervised capacity building before and after the implementation of the programmes is imperative. This will help address the challenge of unemployment occasioned by failures of businesses supported by the government.
  3. The leadership should cultivate a decisive spirit of patriotism and nationalism which will reinforces itself in high level trust, mutual coexistence, stability and development that will permit accountability, transparency and openness which in the long run would help increase economic growth and reduce poverty.
  4. Continued investment in human capital as in use of ICT to educate the poor, can boost the living standards of households by expanding opportunities, raising productivity, attracting capital investment, and increasing earning power.
  5. Also, holistic effort should be made by governments to improve basic human welfare in both health and social infrastructure that will eventually reduce the high rate of child mortality as well as improve standard of living.

The Impact Of Economic Growth In Poverty Alleviation In Nigeria


Project Material Download

3,000 Naira


The complete material will be sent to you in just 2 steps.

Quick & Simple…


Step One Purchase

Make payment of ₦3,000: through USSD Transfer, Bank Mobile App, ATM Transfer, or POS Transfer to:

Access Bank PlcAccount No.: 0811003731
Name: Samphina Academy
Account Type: Current

Or Click Here to pay with Debit Card

FOR CLIENTS OUTSIDE NIGERIA:
Click Here to pay with Debit Card ($15)
GHANA – Make Payment of 60 GHS to MTN MoMo, 0553978005, Douglas Osabutey 

  PAY WITH CRYPTOCURRENCY


Step Two Purchase

Send the following details through Text Message or WhatsApp Messenger | +234-8143831497

  • Payment Details 
  • Email Address 
  • The Impact Of Economic Growth In Poverty Alleviation In Nigeria

The complete material will be sent to your email address after receiving your payment information | T & C Apply


  Contact Our Help Desk


You may also like:

⚠️ Need a different topic? Perform a quick search



Get A Complete Business Plan For Any Business In Nigeria

Business Plan for Businesses in Nigeria

  Business Plans in Nigeria


Disclaimer


This research material “The Impact Of Economic Growth In Poverty Alleviation In Nigeria” is for research purposes and should be used as a guide in developing your research project / seminar work. For no reason should you copy word for word (verbatim) as samphina.com.ng will not be liable for any who copied the material.

The aim of providing this material is to reduce the stress of moving from one school library to another all in the name of searching for research materials. This service is legal because, all institutions permit their students to read previous projects, books, articles or papers while developing their own works. According to Austin Kleon “All creative work builds on what came before”.

samphina.com.ng is only providing this material “The Impact Of Economic Growth In Poverty Alleviation In Nigeria” as a reference for your research. The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own research. Use it as a guidance purpose only.

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.