Inclusive Poverty Reduction For Sustainable Development in Nigeria
Inclusive Poverty Reduction For Sustainable Development in Nigeria
Inclusive Poverty Reduction For Sustainable Development in Nigeria
1.0 INTRODUCTION On the other hand, Suleri, Javed, Ramay (2018) put forward
The dominance of poverty in the public space is a testament that intensified structural reforms by the Chinese government
to the gigantic nature of the problem of poverty in Nigeria. have been of great assistance in their landmark success to
Nigeria is a nation of riches and poverty splendid, wealth in alleviate poverty in urban and most importantly rural areas..
the hands of few and extreme/abject poverty at the doorsteps During the last four decades, China has made momentous
of many. The description of Nigeria as a paradox by the achievement in lessening poverty by instituting revolutionary
World Bank (1996) has continued to be confirmed by events structural reforms and trade policies. The country embraced
and official statistics in the country. The paradox is that the poverty elimination policies in 1978. The World Bank
poverty level in Nigeria contradicts the country’s immense concedes that as result of China’s effective poverty dismissal
wealth. Among other things, the country is enormously policies, around 700 million people raised out of arduous
endowed with human, agricultural, petroleum, gas, and large poverty by 2017. In this span of time, the poverty rate
untapped solid mineral resources (SEEDS, 2004). dropped from 88 per cent in 1981 to merely 2.1 per cent in,
Particularly worrisome is that the country earned over which is a groundbreaking achievement. Such incredible
US$300 billion from one resource – petroleum – during the development in plummeting poverty is guaranteed by the
last three decades of the twentieth century. But rather than steady and rapid economic growth escorted with coherent
record remarkable progress in national socio-economic political environment.
development, Nigeria retrogressed to become one of the 25 Whereas for Nigeria the reverse is the case, poverty
poorest countries at the threshold of twenty-first century alleviation programmes and policies have brought
whereas she was among the richest 50 in the early-1970s commensurate alleviation neither has it significantly drawn
(World Bank, 1996). people out of poverty. According to the United Nation
Corresponding Author: Abubakar, T. Hassanat Development Programmes Human Development Report
(2008-2017) which combined such components as; level of
*Cite this Article: Abubakar, T. Hassanat (2023). Inclusive
inequality, life expectancy at birth, standard of living and
Poverty Reduction for Sustainable Development in Nigeria.
access to knowledge, and education, between 2004 and 2016
International Journal of Social Science and Education
poverty in Nigeria has worsened from 0.43 to 0.49. This
Research Studies, 3(5), 888-896
shows that despite its vast resources, Nigeria still ranks
2.1.2 Dimensions of Poverty inherited from previous generations and pass on to another
i. Rural Poverty: Perhaps the most valid generation. If one is poor and have inadequate income to
generalizations about the poor are that they are sustain and train his children, the children may end up in the
disproportionately located in rural area, that they are same poverty situation and having nothing to offer their
primarily engaged in agricultural and associated activities, children (see the works of Omoniyi, 2018; Aigbokhan, 2008).
that they are more likely to be women and children than adult ii. Lack of Education: When one lacks certain ability
males, and that they are often concentrated among minority that is necessary to earn him a good job, due to his inability
ethnic groups and indigenous peoples (World Development to acquire the necessarily knowledge/development that
indicators, 2007). makes him fit for the job, he/she might end up poor-this also
It is interesting to note, in light of rural concentration of means lack of skill (see the studies of Omoniyi, 2018;
absolute poverty, that the largest share of most Less Fapohunda, 2012).
Developed Countries’ (LDCs) government expenditure over iii. Health Condition: Health condition can lead to
the past several decades has been directed toward the urban physical and mental illness. Bad health can result in stress,
area and especially toward the relatively affluence modern which in turn leads to a worsen poverty situation (see the
manufacturing and commercial sectors. In view of works of Omoniyi, 2016; Aku, Ibrahim & Bulus, 1997).
disproportionate number of the very poor who reside in rural iv. Distribution of Resources: For example land in
areas, any policy design to alleviate poverty must necessarily rural areas, and also unequal income distribution can also
be directed to a large extend toward rural development in result in poverty for low or no income earners (see the works
general and agricultural sector in particular (Todaro & Smith, of Omoniyi, 2018; Addae-Korankaye, 2014).
2009). v. Training for Skill: especially in rural areas when
ii. Urban Poverty there are no avenues to train for skills which can give or create
There has been mass movement of people from the rural areas work opportunities to the trainee (see the work of Omoniyi,
to urban areas this is in the view of escaping poverty. But after 2018).
all, these people end up more impoverished (or in a more vi. System of inheritance: In Africa and Nigeria in
severe poverty). Poverty in urban areas takes the forms of particular, inheritance system deprives women and children
stress on facilities, too few jobs hence high rate of of their heritage (wealth) and most of them ended up in
unemployment, homeless/lack of shelter. Also in the urban poverty. On the other hand substantial wealth is passed down
areas we have two sets, the rich and the poor having their from wealthy father to his child/children while the poor
individual setting or dwelling place. Most time it is difficult remain in their poverty (see the works of Omoniyi, 2018;
to tell whether rural or urban dwellers’ which is poorer Aigbokhan, 2008).
(Todaro & Smith, 2009). Vii. Location: Peoples location might lead to poverty
iii. Women and Poverty: Women make up a situation. Rural dweller easily end up being poor and jobless
substantial majority of the world’s poor. If we compared the while urban dweller are more exposed to chances of working
lives of the inhabitants of the poorest communities and become rich (Chimobi, 2010).
throughout the developing world, we would discover that
2.1.4 Effect of Poverty
virtually everywhere, women and children experience the
The causes are interrelated similarly the effects are also
harshest deprivation. They are more likely to be poor and
interrelated.
malnourished and less likely to receive medical services,
i Poverty and Education: Lack of education could
clean water, sanitation and other benefits. The prevalence of
deprive someone who is not educated from giving education
female-headed households, the lower earning capacity of
to his/her children and they may end up in child
women and their limited control over their spouses’ income
labour/poverty.
all contribute to this disturbing phenomenon. In addition,
ii Poverty and Environment: The effect of poverty
women have less access to education, formal sector
on environment may not be conclusive. The affluent person
employment, social security, and government programmes.
may generate waste on others through his activities similarly
This fact combines to ensure that poor women’s financial
the poor using wood to cook depletes the forest as well as
resources are meager and unstable relative to men’s (Asuru,
causing pollution on the environment.
2017).
iii Poverty and Terrorism: It is believed that
iv. Voluntary Poverty: Some religion favors
frustrated folks ended up in terrorism. But we cannot be
poverty, they believe that being poor brings one close to the
conclusive on that, as it can also result from bad
will of his creator and not living in sin. Hence, they
governance. But the poor can easily be lured into it courses.
voluntarily remain poor.
iv Child and Poverty: children of the poor might
easily end up poor as result of social and economic
2.1.3 Causes of Poverty
depravity. Poverty and crime: The poor has been viewed
i. Poverty be can caused by circumstance of birth.
as crime perpetuators, but findings have also revealed that
Using the circle of poverty as an example, poverty can be
the rich also engage in crime.
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Abubakar, T. Hassanat et al, Inclusive Poverty Reduction for Sustainable Development in Nigeria
v Poverty and women: Women constitute a substantial local governments. It is principally financed by local
majority of the world. Yet women and children experience governments but subsidized by central government when
the harshest deprivation. Women poverty has strong effect counties encountered financial restraint. In 2014, Dibao
on child poverty. Women plays a key role of rearing/raising contained 76% (42% rural and 34% urban) of the total
up children performing these roles without adequate expenditures allocated for social security net covering more
income might lead to the child ending up in similar poverty than 40% of total population. As an alternative to old social
situation (Oduro, 2015, 2009; Chimobi, 2010). security programme, it focuses the most vulnerable groups
with no ability to work and support of family and was set up
2.1.5 Indicators for Measuring Poverty Level
for “the new poor” who have capability to work but unable to
Poverty indicators are used as measures of poverty in
fulfil their basic needs due to no job opportunity (Gao, Yang
evidence and depth. They summarize the income, living
and Li, 2013). Dibao helped in addressing the inimitable
standard and social condition of the poor. But because
needs of ultra-poor by providing them supplementary
poverty is multi-dimensional, the type and range of indicators
assistance in four major areas, i.e. housing, health, education,
required to capture the overall degree of poverty are wide.
and temporary assistance for unexpected disaster (Liu, 2010).
They can however, be broadly categorized into income and
These assistance programmes are described below.
social types of indicators.
a. Low Rent Houses for the Poor
Income indicators: are often expressed in terms of
Housing assistance was first announced to provide low-rent
household income, income distribution and consumption
houses to poor families with mammoth housing needs.
patterns.
Funded by local and backed by the central government, this
Social indicators, which are used to compliment
programme was extended in 2007 by proposing renovation
income/consumption indicators generally, measure the
support to poor families having shabby or precarious houses
degree of access to social services and infrastructure. Key
(Xu, 2013).
social indicators include: life expectancy, infant mortality,
b. Targeted Health Reforms
nutrition, and access to such social amenities as drinking
Health assistance was directed to only rural area but later it
water, sanitation, and health services, education, transport,
was provided nationwide under Dibao and Wubao
decent shelter and so on. If possible all these income and
programmes. Medical succor was provided in the form of
social indicators may be captured by one measure of poverty
cash subsidies – majorly through reimbursement to avoid
threshold, which can be used to separate the poor from the
cash usage for other tenacities, including inpatient treatments,
non-poor. This threshold measures is the poverty line, which
insurance premiums and also doctor’s visits. In addition, a
is cut off level of living below which a person is regarded as
tailor-made insurance programme was also executed. Under
being poor. However, it is not easy to capture all the wide-
this programme, low cost medical insurance was provided to
ranging economic and social dimensions of poverty in one
low income people whereas free insurance facility was given
all-inclusive poverty line; hence poverty line is often
to the poor segment of population. This rationing in health
expressed simply as an income or expenditure threshold.
sector has enabled Chinese government to target deserved
people while excluding free riders.
2.2 Theoretical framework
c. Educational Emergency
The theoretical framework for the study will espoused the
Third pie of social assistance programme is the education
mode of intervention that the Chinese government have put
launched by Ministries of Civil Affairs and Education.
in place over the years tagged the Chinese Poverty
Funded by central and local governments, it provides support
Alleviation model aimed at ensuring that more persons are
for implementing policies by the non-government
drawn out of the poverty than any other nation on earth. Other
organizations (Aizer et al. 2014). Education remains the keen
nations of the world especially African countries have a lot to
focus of Chinese government on the rationale that it makes
learn from this model as this will form the basis for our
people independent. Education helps people in earning
analysis.
livelihood and improves their lives.
2.2.1 Targeted Interventions
d. Emergency Provision
Chinese government chalked out an enlarged programme to
Temporary support consisting of exigent aid for families
restraint poverty. The programme with its institutional
encountering sudden disasters, precarious diseases, startling
arrangements is discussed here for better understanding and
incidents or same kind of other hardships was first introduced
deducing results for policy intervention in Pakistan. In this
in 2007. These state interventions helped the government in
regard, Dibao was the biggest programme initiated in the
dealing with large-scale poverty in China, which ultimately
recent human history to eliminate poverty.
pulled the masses from poverty trap.
2.1. Dibao Programme
In the early 1990s, China went for a primary social security
2.3 Empirical Literatures
programme called Minimum Livelihood Guarantee (MLG) or
Umeji (2020) in his study, social inclusion: a poverty
Dibao that targeted poor in rural as well as urban areas. . The
reduction approach, using descriptive research method,
programme is regulated by central but implemented by the
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Abubakar, T. Hassanat et al, Inclusive Poverty Reduction for Sustainable Development in Nigeria
examines the relationship between social exclusion, social for financial accessibility. The findings reveal that
inclusion and poverty. It is amongst the findings of this study Automated teller machines inclusion channel and deposit
that social exclusion is not just a major cause of poverty but money bank credit to the rural populace have significant
a key factor in poverty severity. However, social inclusion, as positive effect on poverty reduction, whereas web
a means to ending poverty in Nigeria, can be achieved based/internet banking channel and microfinance credit exert
through creation of employment opportunities, access to negative impact on poverty reduction. Negative effects
education and skills acquisition as well as minimizing social ascribed to internet banking channel may not be unconnected
exclusion. with the low literacy level especially among the banking
Bakari, Donga, Idi, Hedima, Wilson, Babayo & Ibrahim public. Hence fewer percentage of adult banked population in
(2019) in their study carried out an examination of the Impact Nigeria use the web channels to access financial services
of Financial Inclusion on Poverty Reduction: An Empirical compared to the ATMs that have continued to attract wider
Evidence from Sub-Saharan Africa when they put forward usage and acceptance. The results of Johansen cointegration
that Sub-Saharan Africa has been regarded the home of test indicate the existence of long-run equilibrium
poverty, housing a large number of poorly, malnourish relationship between financial inclusion and poverty
leading to varied social vises. This study examine the impact reduction however, speed of adjustment based on the ECM
of financial inclusion on poverty reduction in forty nine Sub- shows that 71 percent of deviation from equilibrium path is
Saharan African countries using data spanning the period of corrected every quarter. Diagnostic tests confirm the stability
1980-2017, the study employ a static panel data model to and correctness of our model. We recommend that increase
analyze the data. It was found that savings, credits to the in alternative banking outlets should be accompanied by
private sector as percentage of GDP, access to ATM, access vigorous financial education so that the vast unbanked public,
to information Technology, Inflation, and Government whose economic prosperities are yet to be integrated into the
expenditure play a vital role in poverty reduction, explaining financial system, can be financially included.
32.5, 11.7, 27.4, 49.1, 96.1, and 25.2 percent poverty Olayinka, Olusegun and Babatunde (2015) empirically
reduction in the sub-region respectively. While interest rate examined the impact of entrepreneurship training and
and economic growth were found to increase poverty, education on poverty reduction in Nigeria. The researcher
explaining increase in poverty by 124 and 14.8 percent adopted a stratified random sampling technique, 500
respectively. On the bases of the findings, the study entrepreneurs and apprenticeships were chosen from six
concluded that financial inclusion is a viable tool for poverty recognized Local Government in Lagos State. The best linear
reduction strategy in Sub-Saharan African countries. It was unbiased estimator was used to test the relationship between
recommended that apex regulatory institutions should reduce entrepreneurship training and poverty reduction Nigeria. The
the policy rate in order to induce low income earners access result emanated from the findings suggests that there exist a
formal financial resources in addition to the re-introduction positive and significant relationship between
of rural banking scheme and affordable internet services in entrepreneurship and poverty reduction and this was
both urban and rural areas. confirmed by the value of R 2 the coefficient of
Gunarsih, Sayekti & Dawanti (2018), in Indonesia, determination. The study therefore recommends that the
investigated the impact of financial inclusion on poverty government should be wary of encouraging entrepreneurship
alleviation using descriptive statistic, reported that increase training in all level of government as well entrenching it
access to financial services has significant impact on poverty primary schools, tertiary institutions and inculcating it in the
alleviation, but the impact is more pronounce in the urban National University Commission curriculum.
areas than the rural areas because of the concentration of the Brown and park (2012) while studying, poverty in rural
financial services providers in the urban centers. China, using primary data collected on household and a
Ageme, Anisiuba, Alio, Ezeaku & Onwumere (2018) method of chi-square (x2 ) analysis, they established the
examine Empirical Assessment of the Effects of Financial hypothesis that discomfort index has significant negative
Inclusion on Poverty Reduction in Nigeria In recent time, effect on economic growth. This suggested that policy aimed
financial inclusion-poverty relation has been on the front at improving employment especially in agriculture and
burner of economic discourses. Most of the attempts in provision of social and economic infrastructure that
literature to examine the link between the two were largely encourages work will enhance positive economic growth.
based on theoretical exploration and thus far, only few works
applied empirical approach to the problem. In this study, our 3.0 INSTITUTIONAL FRAMEWORK
goal was to ascertain the effect of financial inclusion on China’s social security programme was structured to
poverty reduction in Nigeria using quarterly data from exterminate extreme poverty by bringing about structural
2009:Q1 to 2014:Q4. Moreover, this study is distinguished reforms switching partially from planned to open economy.
among existing literatures by choice of financial accessibility But, during early years of institutional reorganization,
parameters, which are based objectively on financial poverty stirred up instead of fading away. Cause of poverty
technological innovation and distinct bank-based channels upsurge was the lay-offs, as state-owned enterprises were