Poverty, Growth and Inequality in Nigeria: A Case Study

Abstract

Major economic reform policies were introduced by the government of Nigeria in mid 1986.These reforms were expected to revitalize the economy's growth.Growth in turn was expected to contribute noticeably to improved equity in the country.Some earlier studies suggested that poverty actually declined in the first seven years of the reforms, but debate raged about the effect of the reforms.To contribute to the debate, this study investigated the inequality and poverty profile in Nigeria during the period 1985-1997, using data for the 1985/86, 1992/93 and 1996/97 national household income surveys conducted by the Federal Office of Statistics.Households are classified by sector (urban/ rural), gender and region (geopolitical zones).The central objective was to examine how far poverty has been reduced by the policies introduced during the period, and particularly the pattern of growth these policies engendered.The food energy intake (FEI) method, a variant of the absolute poverty approach, was used.The issue of polarization in income distribution was also examined.The study found evidence of worsening inequality and poverty in spite of economic growth.It was found also that male-headed households seem to have fared worse, and that poverty is more pronounced in rural areas and in the northern regions (zones).The poor policy stance during the period is found to have contributed to increased poverty.4 RESEARCH PAPER 102defining the poverty line.The limitations of this approach in tracking welfare are now well known.For example, having a particular level of income/expenditure is not a sufficient indicator of the level of welfare to define the poverty line.More important is how that amount is spent in determining the level of welfare and ability to undertake economic activity.Recognition of this fact has led to adoption of consumption-based approaches to defining the poverty line.The present study is the first, to the author's knowledge, to apply the food energy intake (FEI) variant of the consumption-based method in poverty analysis in Nigeria.This approach relies on actual food consumption expenditure and the calorie content of the goods consumed.The issue of the disappearing middle class and how this explains the incidence of inequality and poverty is also examined, an issue so far neglected in the literature on Nigeria, and indeed much of sub-Saharan Africa.In this respect, the study contributes to knowledge on poverty in Nigeria.The issue of gender inequality and poverty seems to attract much attention.Evidence remains inconclusive.Some suggest that women fared worse than men during adjustment (e.g., World Bank, 1996a; Ngeri-Nwagha, 1996), while some suggest the reverse (e.g., Canagarajah et al., 1997).There is therefore need for further investigation of the issue.The study will be at two levels.At the first level is analysis of inequality and the incidence, depth and severity of poverty among identified socioeconomic groups, particularly among males and females, and the contribution of each group to overall poverty.The second level involves analysis of the impact of growth and distribution on changes in poverty between 1985 and 1997.Considering the perception that members of the middle class in Nigeria generally feel that their position has been largely eroded since the adjustment period, the issue of polarization in income distribution will be specifically investigated and its influence on poverty will be inferred.This would constitute a major contribution of the study.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 114 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.