[
AN APPRAISAL OF POVERTY REDUCTION
STRATEGIES IN NIGERIA
BY
Dr. Fidelis O. Ogwumike
1. Introduction
The reduction of poverty is the most difficult challenge facing any country in the
developing world where on the average majority of the population is considered poor.
Evidences in Nigeria show that the number of those in poverty has continued to
increase. For example, the number of those in poverty increased from 27% in 1980 to
46% in 1985; it declined slightly to 42% in 1992, and increased very sharply to 67%
in 1996. By 1999 when the present administration came to power, estimates had it
that more than 70% of Nigerians lived in poverty. That was why this government
declared in November 1999 that the N470 billion budget for year 2000 was “to
relieve poverty.” Before the National Assembly even passed the 2000 budget, the
government got an approval to commit N10 billion to poverty alleviation programme.
In the 2001 budget, the government has increased the allocation to poverty alleviation
programme by 150%. This idea of poverty alleviation was received with high hopes
especially given the speed with which this present administration tackled the fuel
problem as soon as it came to power. Poverty alleviation was seen as a means
through which the government can revamp the battered economy and rebuild selfesteem in majority of Nigerians who had been dehuma nized through past military
regimes. The present paper assesses not only the efforts of the current administration
in poverty reduction, but also the role played by past administrations so as to
identify a more pragmatic approach to poverty reduction in Nigeria.
•
Dr. Fidelis O. Ogwumike is of the Department of Economics, University of Ibadan,
Ibadan – Nigeria.
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
The next section looks at a poverty profile in Nigeria with a view to identifying some
of the salient issues.
Section III, examines the various approaches to poverty
reduction. Section IV appraises poverty reduction in Nigeria. Section V, offers some
suggestions on poverty reduction in Nigeria.
II.
Poverty Profile in Nigeria
This section discusses data generated from the National Consumer Survey
conducted by
the Federal Office of Statistics in 1980, 1985 and 1992 and
1996. Poverty is measured here as two – third of mean per capita household
expenditure.
2.1
Urban/Rural
In 1980, poverty was largely a rural phenomenon. For example, 28 per cent of
rural people compared with 17 per cent of urban people lived below poverty line.
By 1985, poverty has become pervasive in both rural and urban areas. Urban
poverty incidences more than doubled as it rose sharply from 17 per cent in 1980 to
38 per cent in 1985. The incidence of rural poverty equally increased remarkably
from 28 per cent to 51 per cent during the period. This high incidence of urban
poverty is not surprising given the high rural urban migration that accompanied the
impetus to development generated by oil revenues. Moreover, the collapse of oil
exports income, and the massive importation of food to meet the declining
production capacity in the agricultural and ind ustrial sectors, may have severely
affected the urban dwellers.
In 1992, Urban poverty headcounts remained almost unchanged at 37.5 per cent,
while rural poverty declined from 51 per cent in 1985 to 46 per cent in 1992.
However, both Urban and rural poverty rates increased between 1992 and 1996,
from about 37 per cent to 59 per cent and 46 per cent to 72 per cent for Urban and
Rural areas respectively. These findings are consistent with earlier studies, which
tend to suggest that poverty was more pronounced among rural than Urban people
(World Bank 1996; Canagarajah et al, 1996; Aigbokhan 1998; FOS 1998, 1999
Ogwumike 1998 and Okojie et al, 1999). However, it is obvious from the trends
between 1980 and 1996 that Urban poverty is becoming an increasing problem in
Nigeria.
2.2
Geopolitical Zones
Also, table 1 shows pronounced regional differences in poverty rates. 1in 1980, 38
per cent, 36 per cent, and 32 per cent of the people in the north west, north east, and
central lived below moderate poverty line respectively. The southern part of the
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
country was relatively less affected by poverty in 1980 as about 13 per cent of the
people in the south east, south west, and south –south lived below the poverty line.
By 1985, poverty became pervasive in all the zones with the northern zones still
maintaining a higher share of poverty. Headcount indexes varied from 30.4 per
cent in the south east to 54.9 per cent in the north east.
Particularly surprising is the rising level of poverty in the south: south – south
(45.7 per cent); south west (38.6 per cent); and south east (30.4 per cent).
The distribution of poverty incidences by zone in 1992 showed a mixed pattern.
Poverty headcounts remained largely at the same level in the north east zone, but
declined from 52 per cent to 37 per cent in the north west, and from 51 per cent to
46 per cent in the central. The south east zone experienced a sharp increase in
poverty headcounts from about 30 per cent in 1985 to 41 per cent in 1992. In the
southwest, it increased slightly from about 39 per cent to 43 per cent, while in the
south – south, it declines from about 46 per cent to 41 per cent over the same
period. By 1996, poverty not only became intensified but its distribution showed
very little variation among the zones. Poverty headcounts varied from 68 per cent
in the North West and south east respectively to 67 per cent in each of north east,
south west, and south – south. The least was central with 66 per cent.
2.2
Gender of Household Head
The table also shows the trend in poverty rates classified by other characteristics of
household head. First, we observe that poverty headcount were higher for females
than males in 1980, while it was lower for females than males in 1996. Generally
poverty estimates increased for both gender between 1980 and 1985, 1985 and 1996
and 1992 and 1996.
2.4
The Sector of Employment of Household Head
Further, table 1 shows the poverty estimates for various employment characteristics
of household head for the period 1980 –85. According to the table, poverty
headcount was highest among households heads engaged in administration work
(45 per cent) followed by agriculture (31 per cent) and Production/Transportation
(23 per cent). In 1985, the highest headcount of
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
poverty was recorded among households with their heads in agriculture (53 per cent),
followed by Production/Transportation (46 per cent). This situation changed slightly in
1992 to agriculture (48 per cent) and apprentice/student (43 per cent). By 1996,
agriculture still retained the sector with the highest headcount of poverty, and now
followed by Production/Transportation (46 per cent). It is curious to note that
administrative workers which had about 45 per cent of the households headed by them as
poor in 1980 had only 6 per cent of households under them as poor in 1996. The
grouping of occupation into farming and none farming showed that fa rming or agriculture
had the highest incidence of poverty in both 1980 and 1996.
2.5
Educational level of Household Head
According to Table 1 poverty incidence by educational level of household head tended to
show a consistent pattern over the years. The lower the educational level the higher the
poverty rates tended to be. In addition, poverty rates increased for all educational
groupings between 1980 and 1985, 1985 and 1996, 1980 and 1996. Households headed
by those with no formal education were consistently the major contributors to total
poverty in Nigeria for the period under study. Their contributions however declined
slightly but consistently over the years (Ogwumike and Aromolaran, 2000). This
generally declining trend of contributions over the years is also partly true for households
headed by primary school graduates. In contrast, the years between 1980 and 1996 has
witnessed a sustained growth in the level of contributions of households headed by
secondary and post secondary school graduates to poverty in Nigeria. Thus, it can be
concluded that the general increase in poverty level between 1980 and 1996 was
accounted for more by households headed by secondary and post secondary school
graduates.
2.6
Household Size.
The aggregate picture on poverty rates by household size is presented in Table
3.29. Generally, the estimates of poverty rates show that for all the four survey
periods, poverty incidence, gap and severity seem to be positively correlated to
size of households. In terms of trends in individual size groups, all groups
experienced an increase in poverty rates between 1980 and 1996 and 1985 and
1996. Between 1980 and 1985 all groups with the exception of the size group “20
and above” persons experienced an increase in poverty rates.
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
Table 1:
Nigerian Poverty Profile 1980/1996
National
Sector – Urban
Rural
Zone – Northeast
Northwest
Central
Southeast
Southwest
South – South
Household Head – Male
Female
Occupation – Professional /Tech.
Administration
Clerical
Sales worker
1980
27
17
28
36
38
32
12
13
13
27
29
17
45
10
15
1985
46
38
51
55
52
51
30
39
46
47
39
36
25
29
36
1992
42
37
46
54
37
46
41
43
41
43
40
35
22
34
33
1996
67
59
71
67
68
66
68
67
67
68
60
28
6
35
30
Services
Agriculture
Production/Transportation
21
31
23
38
53
46
38
48
41
34
73
47
Manufacture
Apprentice/Student
Others
Occupation – Farming
Non – Farming
Education – None
Primary
Secondary
Post Secondary
Household Size – 1
2–4
5 –9
10 –14
15 – 19
20 and above
12
2
15
31
16
30
25
19
21
0.2
9
30
48
61
81
31
37
40
53
37
51
50
41
26
2.5
27
59
75
84
75
33
42
43
48
36
46
43
30
26
2.8
19
45
63
81
93
26
33
24
73
58
74
61
54
48
13
52
75
88
94
95
Source: Computed from FOS (1999); and Okojie, Anyanwu, Ogwumike and Alayande (2000).
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
111.
(a)
Approaches to Poverty Alleviation
Economic Growth Approach – Given the low labour absorption capacity of the
industrial sector, broad based economic growth should be encouraged. This
should focus on capital formation as it relates to capital stock, and human capital.
Human capital formation has to do with education, health, nutrition and housing
needs of labour. This is obvious from the fact that investment in these sources of
human capital improves the quality of labour and thus its productivity. Hence to
ensure growth that takes care of poverty, the share of human capital as a source of
growth in output has to be accorded the rightful place.
(b) Basic Needs Approach – This calls for the provision of basic needs such as food,
shelter, water, sanitation, health care, basic education, transportation etc. Unless there is
proper targeting, this approach may not directly impact on the poor because of their
inherent disadvantage in terms political power and the ability to influence the choice and
location of government programmes and projects.
112. Rural development Approach – This approach sees the rural sector as a unique
sector in terms of poverty reduction. This is because majority of the poor in developing
countries live in this sector. In addition, the level of paid employment in this sector is
very minimal. Hence, traditional measures of alleviating poverty may not easily work in
the rural sector without radical changes in the assets ownership structure, credit structure,
etc. Emphasis in this approach to development has focused on the integrated Approach
to Rural development. This approach recognizes that poverty is multi – dimensional and
therefore, requires a multi – pronged approach. The approach aims at the provision of
basic necessities of life such as food, shelter, safe drinking water, education, health care,
employment and income generating opportunities to the rural dwellers in general and the
poor in particular. One basic problem with this approach to poverty reduction is that it is
difficult to focus attention on the real poor given that poverty in the rural area is
pervasive. In other words it makes targeting of poverty reduc tion programmes very
difficult.
(a)
Target Approach – This approach favour the directing of poverty alleviation
programme to specific groups within the country. This approach includes such
programmes as Social Safety Nets, Micro Credits, and School Meal programme.
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
This approach requires proper identification of the target group so as to minimize
leakages.
IV
Poverty Reduction Strategies in Nigeria
In Nigeria, the poverty alleviation measures implemented so far have focused more on
growth, basic needs and rural development approaches.
4.1
The Pre -SAP Era
During this era, poverty reduction was never the direct focus of development planning
and management. Government only showed concern for poverty reduction indirectly.
For example, the objectives of the first National Development Plan in Nigeria included
the development of opportunities in health, employment and education as well as
improvement of access to these opportunities. These objectives, if achieved could no
doubt lead to poverty alleviation. Similarly, the Fourth National Development Plan,
which appeared to be more precise in the specification of objectives that are associated
with poverty reduction, emphasized increase in real income of the average citizen as well
as reduction of income inequality, among other things (see Ogwumike, 1987 and 1998).
During this era national development plans, many of the programmes which were put in
place in Nigeria by the government (either wholly or in association with international
agencies) had positive effects on poverty reduction although the target population for
some of the programmes were not specified explicitly as poor people or communities
(Ogwumike, 1995 and 1998). For instance, the River Basin Development Authorities
(RBDA), the Agricultural Development Programmes (ADP), the Agricultural Credit
Guarantee Scheme (ACGS), the Rural Electrification Scheme (RES), and the Rural
Banking Programme (RBP). Most of these programmes were designed to take care of
such objectives as employment generation, enhancing agricultural output and income,
and stemming the tide of rural – urban migration, which no doubt affected poverty
reduction. Despite some significant degree of success made by some of these
programmes, most of them could not be sustained. In fact, with time, many of them
failed as a result of diversion from the original focus. For instance, the Rural Banking
and the Agricultural Credit Guarantee Scheme at many stages failed to deliver the desired
credit for agricultural and rural transformation because a lot of savings were mobilized in
the rural areas only to be diverted to urban areas in form of credits/investments.
Other notable poverty reduction related programmes that were put in place in
Nigeria before the advent of the Structural Adjustment Programme (SAP) include
Operation Feed the Nation (OFN) set up in 1977. Free and Compulsory primary
Education (FCPE) set up also in 1977, Green Revolution established in 1980, and Low
Cost Housing Scheme. Both OFN and Green Revolution were set up to boost
agricultural production and improve the general performance of the agricultural sector
among other things. These programmes made some laudable impacts; they enhanced the
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
quality of life of many Nigerians. But the programmes could not be sustained due to lack
of political will and commitment, policy instability and insufficient involvement of the
beneficiaries in these programmes (CBN Enugu Zone, 1998).
4.1
The SAP Era
Conscious policy effort by government towards poverty alleviation began in
Nigeria during the era of Structural Adjustment Programme (SAP). The severe economic
crisis in Nigeria in the early 1980s worsened the quality of life of most Nigerians.
The government made determined effort to check the crisis through the adoption of SAP.
However, the implementation of SAP further worsened the living conditions of many
Nigerians especially the poor who were the most vulnerable group. This made the
government to design and implement many poverty alleviation programmes between
1986 and 1993. Also under the guided deregulation that spanned the period 1993 to
1998, more poverty reduction programmes were put in place by government. A summary
of various anti – poverty programmes which the government of Nigeria had put in place
since 1986 is presented in table 2.
Table 2: Anti – Poverty Programmes by the Government of Nigeria
Programme
Year
Target Group
Nature of
Establis
Intervention
hed
Directorate for Food,
1986
Rural Areas
Feeder Roads, rural
Roads and Rural
water supply and
Infrastructures
rural electrification.
(DFRRI)
National Directorate of 1986
Unemployed youths Training, finance
Employment (NDE)
and guidance.
Better Life Programme 1987
Rural women
Self – help and rural
(BLP)
development
programmes, skill
acquisition and
health care.
People’s Bank of
1989
Underprivileged in
Encouraging savings
Nigeria (PBN)
rural and urban
and credit facilities
areas
Community Banks
1990
Rural residents,
Banking facilities
(CB)
micro enterprises in
urban areas
Family Support
1994
Families in rural
Health care delivery,
Programme (FSP)
areas
child welfare, youth
development, etc.
Family Economic
1997
Rural areas
Credit facilities to
Advancement
support the
Programme (FEAP)
establishment of
cottage industries.
Source: Oladeji and Abiola, (1998).
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
Many of these programmes had varied impact on poverty alleviation. For example, the
establishment of the Directorate of Food, roads and Rural Infrastructure (DFRRI)
was not only a radical departure from the previous programmes, but also recognized the
complementaries associated with basic needs such as food, shelter, potable water, etc.
DFRRI had tremendous impact on the rural areas. For instance, between the time of
inception in 1986 and 1993, DFRRI had completed over 278,526 km of roads. Over
5,000 rural communities benefited from its rural electrification programme (See CBN
Annual Reports).
This integrated approach to rural development, no doubt, provided for the necessary basic
infrastructures that can stimulate the growth of agro – allied small – scale enterprises in
rural areas. Furthermore, DFRRI impacted positively on food production. For instance,
there was a steady and significant rise in agricultural output as shown by the index of
agricultural production between 1986 and 1993 (CBN, Statistical Bulletin, December
1998). However, DFRRI could not achieve many of its objectives due to many factors
which include lack of standards for project harmonization and effective mechanisms for
co-ordination among the three tiers of government and between DFRRI and the levels of
government (CBN Bauchi Zone; and Enugu Zone, 1998). Hence, with time DFRRI
could not sustain the tempo with which it started, and it ended up not living up to
expectation and became defunct (National Planning Commission, 1994)
The National Directorate of Employment (NDE) was the main organ for employment
creation during this period. The objectives of NDE include: to design and implement
programmes to combat mass unemployment; and articulate policies aimed at developing
work programmes with labour intensive potentials. Given that poverty manifests itself in
the form of unemployment and underemployment, the schemes/Programmes of NDE
could be said to have poverty alleviation focus. For instance the directorate has four
main programmes that not only creates jobs but also enhances the productivity and
income earning potentials of the youths and other beneficiaries. These programmes
include; the Vocational Skills Development Programme (VSD), the Special Public works
Programme (SPW), the Small Scale Enterprises Programme (SSE) and the Agricultural
Employment Programme.
Available evidence shows tha t NDE has achieved remarkable progress in respect of its
various programmes. Some of these include:
The training of over 766,783 persons (including the disabled) in the National
Open Apprenticeship Scheme between 1987 and 1996.
Those who have benefited from the Resettlement scheme were over 106, 854 at
the end of 1996.
-
The School on Wheels Scheme had engaged youth 15,317 unemployed youths as
at the end of 1994
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
- The Special Public Works Programme has created jobs for over 154,910
persons between 1987 and 1996 (see Central Bank Annual Reports, 1992 –
1996). Besides, NDE as one of the institutions that survived the SAP era, has continued
to articulate development policies and programmes with labour intensive potentials aimed
at solving the unemployment problems in the country. However, the Directorate has not
been adequately funded. Thus it has not been possible for NDE to cope with the needs of
the ever increasing number of job applicants in the country.
The Better Life Programme (BLP) was set up to enhance the quality of life of rural
women, among other objectives. Poverty in Nigeria is a rural phenomenon and the rural
women are worst hit by the dreadful malady of poverty; this is due to lack of basic skill
and education necessary for gainful employment. The targeting of women in the fight
against poverty will no doubt reduce significantly aggregate level of poverty in the
country. The Better Life Programme, therefore, tried to harness the potentials of rural
women and thereby impacted positively on their economic activities and incomes The
BLP improved the quality of life of many women through the distribution of various
inputs, granting of easy credits, and the establishment of various
educational/enlightenment programmes. Based on available evidence, Ogwumike (1988)
concluded that the BLP made tremendous impact with regard to poverty alleviation. In
specific terms, the achievements of BLP include the following : formatio n of 11,373
women cooperatives by 1993; the establishment of 3,613 processing mills as well as the
distribution of farms inputs such as fertilizer to women who ordinarily would not have
had access to such inputs though they carry out the bulk agricultural activities. However,
the success of the programme was short – lived. The programme was not only hijacked
by position – seeking individuals but the resources set for the programme were diverted
and used for personal enrichment.
The People’s Bank of Nigeria (PBN) was set up to encourage savings and provide credit
facilities for the underprivileged in both urban and rural areas, Also, Community Banks
(CB) were established to provide banking facilities for rural dwellers as well as to
support micro – enterprises in urban areas (Oladeji and Abiola, 1998). These two banking
schemes were established in recognition of the indispensable role of finance in poverty
alleviation. Although the two banking schemes had some success, many of their goals
and objectives were never realized. The schemes have been bedevilled with many
adverse factors including corruption and gross mismanagement. For instance, late Tai
Solarin resigned as Chairman of peoples Bank because of alleged corruption/executive
rascality that characterized the management of the bank.
The Family Support Programme (FSP) was set up to provide health care
delivery, child welfare, youth development, and improved nutritional status to families in
rural areas. Also, the Family Economic Advancement Programme (FEAP) was
established to provide credit facilities to cooperative societies to
support the establishment of cottage industries in both rural and urban areas. The
programme was also designed to create employment opportunities at ward levels,
encourage the design and manufacture of appropriate plants, machinery and equipments,
and provide opportunities for the training of ward – based business operators. (Oladeji
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
and Abiola, 1998). In a nutshell, both FSP and FEAP were designed and set up to
improve the quality of life of rural dwellers. Although the FSP recorded several
remarkable achievements such as the establishment of many nursery and primary schools,
construction of many public toilets and the setting up of many vocational schools. Many
of these projects were not properly executed and could not be sustained and many of the
poor in several communities did not actually benefit from these projects while they
lasted.
Nevertheless, it is important to note that most of the poverty alleviation strategies
adopted in Nigeria were well focused on rural areas and on the agricultural sector. This
is because poverty in Nigeria is largely a rural phenomenon with agriculture accounting
for the highest incidence over the years. Besides, poverty reduction depends to a large
extent on the agricultural sector, because the sector not only provides food for
consumption as well as raw materials for manufacturing activities, it is the main
employer of labour especially in the rural areas.
Other several programmes such as National Agricultural Land Development
Authority (NALDA), the Agricultural Development Programmes (ADP), and the
Strategic Grains Reserves Programmes (SGRP) have one way or the other impacted
positively on the agricultural sector and by implication reduced poverty.
Similarly, in the health, education and housing sectors there are several poverty
reducing programmes which were implemented. For example, the Primary Health Care
Scheme and the Guinea Worm Eradication Programme. Although the guinea worm
eradication programme recorded a tremendous success, the effectiveness of the primary
health care programme was grossly reduced due to inadequate funding, lack of
equipment, essential drugs and trained manpower (see Egware, 1997).
In the housing sector, the National Housing Policy has brought about the national
housing fund managed by the Federal Mortgage Bank of Nigeria. The Federal Housing
Authority and various state governments have been involved in the direct construction of
housing units. However, despite the efforts put in place in the housing sector, it is a
common knowledge that many Nigerians do not have decent accommodation. Many
people live in congested rooms. Indeed, many Nigerians lack adequate accommodation
and some are homeless as they sleep under bridges at night in many parts of the country
(like Lagos) due to lack of adequate housing facilities or high cost of accommodation.
The National housing scheme needs to be re-focused so as to make it accessible to
majority of Nigerians.
We can go on and on appraising various poverty alleviation programmes in
Nigeria. As stated earlier, on the whole, poverty alleviation programmes/efforts in
Nigeria failed to produce the desired results. The major reasons for the failure of poverty
reduction related programmes in Nigeria include programme inconsistency, poor
implementation, corruption of government officials and public servants, poor targeting
mechanisms and failure to focus
directly on the poor (see Kankwenda et al, 2000 Ogwumike, 1998; and Egware, 1997).
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
56.1
The Democratic Era
At the inception of the current democratic government, many Nigerians were meant to
believe that poverty alleviation is the ultimate goal of the present government. The
Government embarked on Poverty Alleviation Programme (PAP), which aimed at job
creation. However, at the end of 2000 budget implementation, many Nigerians were yet
to feel the impact of government poverty alleviation programme, like the monster called
fuel shortage, poverty seems to have defied the efforts of the current regime. Several
reasons may be responsible for this, including the failure to identify the poor and the
nature of their poverty. There is no doubt that unemployment is a major problem in
Nigeria today. But poverty is not synonymous with unemployment. Some of the poor
are employed and some are unemployable. Sustainable poverty reduction will therefore
require not only the proper identification of the poor (including their characteristics and
survival strategies), but also a multi – pronged approach given the multidimensional
nature of the poverty problem.
The present government has already taken steps to rationalize the various
agencies whose activities impact on poverty alleviation. There is still need to examine
the laws that give rise to or perpetuate poverty. This will require radical review of
ownership of assets, access to social services with particular emphasis on education and
health.
The government has also tried to reduce poverty in recent time through upward
review of salaries and wages. For example, those who were pushed into temporary or
transitory poverty, especially in the civil service and during SAP, are gradually being
moved out of poverty through this process. However, the inflationary trends which often
accompany such increases in wages need to be checked by ensuring that aggregate supply
of goods and services is increased. This calls for incentive structures that can encourage
adequate investment in the real sectors of the economy.
Although poverty reduction in the 2001 budget seems to focus on that aspect of
the budget allocated for the programme. However, many other aspects of the budget in
terms of projects even though not deliberately designed to tackle poverty, could have
tremendous impact on poverty reduction if properly implemented. Based on the
information available via the budget, the following areas could be seen as having to do
with poverty reduction.
•
Agricultural and rural development constitute an important factor in
alleviating poverty in any economy where poverty is a rural phenomenon like
in Nigeria. A successful agricultural sector should provide the bulk of food
requirement, supply agricultural raw materials to the manufacturing sector, and
provide adequate employment and income to the farmers.
•
Basic Education can lay the foundation for human capital formation
through the process of skill acquisition.
•
Basic Health Services can enhance the health status of the populace and
hence their participation in the production process.
•
Water and Sanitation are basic to healthy life. Time wasted in searching for
water by women and children can be saved and diverted to others uses.
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
•
Adequate and affordable housing can facilitate calm and healthy life and thus
enhance productivity.
The effect of these aspects of the budget on poverty reduction will depend on the ability
of the government to set priorities in its expenditure on water resources, health,
education, agriculture, rural development and transport. The focus should be to minimize
leakages when and wherever subsidy is to be applied.
In order to achieve effective poverty reduction in Nigeria, we should first and foremost
identify who the poor are and the nature of their poverty. Available evidence shows that
the poor are located mainly in rural areas with increasing proportion of them found in the
urban areas. The poor are mainly engaged in agriculture, and female – headed
households tend to have a high incidence of poverty. Also poverty incidences are not
evenly distributed across the states/zones, hence poverty reduction must emphasize these
differences in order to be effective. Cooperative movement in some parts of the country
such as south west is currently making a lot of impact on poverty reduction among their
members. We must closely examine some of these organizations and borrow a leaf from
them in our bid to effectively reduce poverty especially among the employed and the
underemployed.
V
Recommendation and Conclusion
Poverty reduction will have to adopt a holistic approach involving both the government
(all tiers) and the civil society for it to achieve a sustainable reduction
in poverty incidence. Given the nature of the social structure in the urban areas,
government, NGOs, international agencies, organized private sector and ho useholds
(including individuals) could play active part in the provision of basic social services.
The establishment of the poverty Alleviation Fund once proposed by Mr. President is
well overdue.
The Institutional Framework for poverty alleviation in the country need to be revisited.
Although the present government had done a lot in this direction by rationalizing some of
the institutions involved. There is still need to look at the various laws and regulations
governing assets ownership, access to the labour markets and government social
programmes in education and health in particular.
This will pave the way for equal opportunities to all in these major aspects of poverty
reduction process.
Sustainable poverty reduction strategy should not focus narrowly on Social Welfare
Measures. Rather asset redistribution and creation of incentive structures that can
enhance the rate and pattern of economic growth should be seen as essential
component. The present efforts of government and international agencies like UNDP,
UNICEF etc. aimed at employment creation, provision of credits, skill acquisition,
enhancing income earning opportunities of the vulnerable groups among others are very
germane to poverty reduction. But they need to be properly focused on the poor. This as
we have said earlier requires proper identification of the poor and their unsatisfied needs.
The data generation agencies should aim at generating panel data that can enable
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
government monitor the beneficiaries of social programmes and know when such people
no longer qualifies to benefit from such programmes. The need for national identification
cards as well as proper population count can therefore, not be over emphasized.
Creation or Pro ductive Employment:
The primary aim here should be to eliminate underemployment of human and material
resources; and provide sustainable employment to those who are openly unemployed and
the underemployed. While the rate of growth is important to poverty reduction the
pattern of growth is even more important. The participation of all (including the poor)
in the growth process should be the goal of government. Improving the access of the
household to the labour market will also create new employment for additional members
of the household and this will augment the income of most households and enable them
to meet their basic needs. But the present effort of Government through its Poverty
Alleviation Programme (PAP), now known as Women and Youth Employment Scheme
(W-YES) needs to be properly focused to create sustainable employment.
The institutional framework for this programme deserves further attention. More over
the laws that affect the upward mobility of the poor in the labour market needs to be
reviewed. Employment creation/generation should also become the focus of our higher
institutions as they strive in their human capital development.
Social Sector Expenditure: Provision of basic amenities such as water, sanitation and
health services will promote good health, which will invariably increase people’s
productivity (Since man days lost due ill health will be reduced). Moreover, government
expenditure on the social sector needs to be more focused on social priority areas that
affect the poor. This calls for budget restructuring in favor of basic social services; the
share of administration (including defence and security) in public expenditure needs to be
critically examined and changed. For example, Administration (Presidency and National
Assembly) accounted for 8.3% of total recurrent expenditure. If we include
defence and police (15.9%), total share of recurrent budget is 24.2% or 10.7% of total
expenditure (recurrent and capital). There is also need to ensure that actual budget
allocatio ns are used for the purposes stipulated in the budget. A case in point is the Local
government level, where most basic amenities closest to majority of the poor are in a very
sore state and yet allocation to this tier of government has improved remarkably during
this current administration.
Skill Development: Provision of adequate vocational training centers to equip youths in
particular for self-employment, and facilitate maintenance of community level projects.
The activities of NDE need to be constantly appraised and effort should be made to link
up more with both the informal sector where apprenticeship activities are carried out
without proper basic structure of sustaining the apprentice when they finish learning the
job, and the formal school system where individuals could acquire these skills as part of
their educational programme.
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
Incentives Structures: In addition, efforts of government to facilitate poverty reduction
in Urban and rural areas should also focus on the provision of basic inputs that can
enhance people’s livelihood, productivity and incomes e.g agricultural input, machines,
credit facilities, training programmes to develop skills, markets, road networks, adequate
wages and salary etc. Some segment of the population may continue to receive
government subsidy. It is not wrong for the government to grant subsidy to the poor.
But the mode of implementation should be properly coordinated and focused on the poor
so as to discourage leakages. Government should on the long run come up with social
welfare programme that will be directed at the poor which can be funded by all tiers of
government and implemented nationwide.
Programme/Project Idea: Poverty reduction programmes and projects sho uld not be
supply driven, effort should be made to integrate the views of the poor into
developmental efforts in order to address the actual needs of the poor and thus make
development planning and management sensitive to their needs. This calls for bottom up
approach to development especially with respect to project choice.
This requires that the household’s or communities unsatisfied needs be identified in
conjunction with them. This approach has the potent of mobilizing the general public to
give adequate support to priority development programmes and project that affect their
welfare.
Community Based Initiatives: Poverty reduction especially in rural areas will require
strengthening the management capabilities of community based initiatives such as
community based organizations and community development associations through
seminars and workshops to enable them participate effectively in poverty reduction
activities at that level. This will require the involvement of sub national governments
(especially local councils) in the formulation and execution of such poverty alleviation
programmes. This also calls for effective coordination and avoidance of duplication of
efforts especially in states/local governments where the ruling political party is not in
control.
Decentralisation of Social Expenditure: There is need for the federal government to
relinquish most of its responsibility in the social sector to the state and local
governments. This will give the state and local councils more autonomy to evolve and
execute poverty alleviation programmes/projects that will take their peculiar
circumstances into consideration. This also calls for the decentralization of the
institutions involved in poverty alleviation. For instance, the proposed poverty
alleviation fund can through this process serve as a veritable source for
states and local councils to obtain conditional grants that can enable them alleviate
poverty in their respective areas of jurisdiction through effective social expenditure
programme. Moreover, all tiers of government will therefore feel concerned and
committed to not only obtaining finance from the poverty alleviation fund, but also
contributing towards that fund either from their internal sources or through external
sourcing.
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
In conclusion, this paper has provided an appraisal of poverty and poverty reduction in
Nigeria, although not exhaustively, it provides some basics for further discussion on the
issue of strategies for poverty alleviation. There is need to shift emphasis to target
approach to poverty reduction in Nigeria. This will require several inputs including
alternative measures of poverty that are based on minimum standards either in terms of
food , income or other basic needs to which minimum standards could be applied. When
poverty groups are identified on the basis of such acceptable minimum standards, it
makes it easier to address their poverty problems since policies and programmes could be
targeted to them based on those aspects of need that constitute the acceptable minimum
standards.
Given the interest that poverty research has generated in the country especially in
the last few years, there is need to ensure that this momentum is not only sustained, but
should be used as a vehicle to meaningfully reduce poverty in Nigeria within the first
decade of this 21st century.
REFERENCES
Aigbokhan, B. E., 1998, Poverty, Growth and Inequality in Nigeria: A case
study, Final Report Presented at the AERC Workshop, Nairobi, Kenya,
1998.
December,
Archibong, P. E. (1997) “Nigeria: Towards a Realistic and Integrated AntiPoverty Strategy”. In Poverty Alleviation in Nigeria, Selected Papers for
the 1997 Annual Conference of Nigerian Economic Society.
Canagarajah, S., J. Ngwafon and S. Thomas, 1997, The Evolution of Poverty and
Welfarein Nigeria, Policy Research Working Paper N0. 1715, World Bank.
Central Bank of Nigeria (Various Years), Annual Report and Statement of
Accounts, Lagos and Abuja.
Central Bank of Nigeria, Enugu Zone (1998) A Profile of Regional/Zonal Poverty
in Nigeria: The Case of Enugu Zone. In Measuring and Monitoring
Poverty in Nigeria, Proceedings of the Seventh Annual Conference of the
Zonal Research Units.
Central Bank of Nigeria, Bauchi Zone (1998) A Profile of Regional /Zonal
Poverty in Nigeria: The Case of Bauchi Zone. In Measuring and Monitoring Poverty in
Nigeria, Proceedings of the Seventh Annual Conference of the Zonal Research Units.
Central Bank of Nigeria, Kano Zone (1998) A Profile of Regional/ Zonal/ Poverty
in Nigeria: The Case of Kano Zone. In Measuring and Monitoring Poverty in Nigeria,
Proceedings of the Seventh Annual Conference of the Zonal Research Units.
Central Bank of Nigeria, Ibadan Zone (1998) A profile of regional Zonal /Poverty
CBN ECONOMIC & FINANCIAL REVIEW, VOL. 39 N0. 4
in Nigeria: The Case of Ibadan Zone. In Measuring and Monitoring Poverty in Nigeria,
Proceedings of the Seventh Annual Conference of the Zonal Research Units.
Egware, L (1997) “Poverty and Poverty Alleviation: Nigeria’s Experience”. In Poverty
Alleviation in Nigeria, Selected Papers for the 1997 Annual Conference of Nigerian
Economic Society.
Federal Office of Statistics (1999) Poverty Profile for Nigeria: 1980 – 1996
Ogwumike, F. O. (1987) Poverty and Basic Needs: An Approach to Development
in Nigeria. Unpublished Ph.D Thesis, Department of Economics,
University of Ibadan
Ogwumike, F. O. (1995) “The Effects of Macro- level Government Policies on
Rural Development and Poverty Alleviation in Nigeria” Ibadan Journal of
the Social Sciences, Vol. 1, N0. 1, pp. 85 – 101.
Ogwumike F. O. (1998) “Poverty Alleviation Strategies in Nigeria”. In
Measuring and Monitoring Poverty in Nigeria, Proceedings of the Seventh Annual
Conference of the Zonal Research Units of CBN
Ogwumike, F. O. and Aromolaran, A. B. (2000) Poverty Dynamics in Nigeria.
Okojie, C. E. Anyanwu, J. C, Ogwumike, F. O. and Alayande, B. A. (2000)
Poverty in Nigeria: An Analysis of Gender Issues, Access to Social
Services and the Labour Market. AERC Report.
Oladeji, S. I. and Abiola A. G. (1998) “Poverty Alleviation with Economic
Growth Strategy: Prospects and Challenges in Contemporary Nigeria” In
Nigerian Journal of Economic and Social Studies (NJESS), Vol. 40, N0. 1.
World Bank (1996) Nigeria: Poverty in the Midst of Plenty, The Challenge of
Growth with Inclusion, A World Bank Poverty Assessment, World Bank,
Washington, D. C.
World Bank (2000), World Development Report 2000/2000: Attacking Poverty, World
Bank, Washington, D. C.