TABLE OF CONTENTS
Title page ………………………………………………………. I
Approval page ………………………………………………….. ii
Dedication ………………………………………………………iii
Acknowledgement ……………………………………………….iv
Table of contents ……………………………………………….. VI
Abstract ………………………………………………………….. IX
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY………………………………1
1.2 STATEMENT OF THE PROBLEM………………………………5
1.3 OBJECTIVE OF THE STUDY……………………………………6
1.4 SIGNIFICANCE OF THE STUDY………………………………6
1.5 SCOPE AND LIMITATIONS OF THE STUDY………………….6
CHAPTER TWO: LITERATURE REVIEW
2.1 THEORETICAL LITERATURE………………………………….7
2.2 EMPIRICAL LITERATURE………………………………………19
CHAPTER THREE: METHODOLOGY
3.1 NATURE OF THE MODEL………………………………………24
3.2 MODEL SPECIFICATION………………………………………..24
3.3 ESTIMATION PROCEDURE……………………………………25
3.4 TECHNIQUES FOR EVALUATION OF THE RESULT……………..25
3.4.1 EVALUATION BASED ON STATISTICAL CRITERION…………….25
3.4.2 EVALUATION BASED ON ECONOMETRIC CRITERION……………26
3.5 DATA SOURCE………………………………………………………….27
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 PRESENTATION OF RESULTS…………………………28
4.2 INTERPRETATION OF RESULTS…………………………..29
4.2.1 ANALYSIS OF REGRESSION COEFICIENTS……………………29
4.2.2 ECONOMIC A PRIOR EXPECTATION…………………………….30
4.2.3 STATISTICAL CRITERIA (FIRST ORDER CONDITION)………….31
4.2.4 ECONOMETRICS TEST (SECOND ORDER TEST)………………….34
4.3 HYPOTHESIS TESTING ……………………………………………….38
CHAPTER FIVE: SUMMARY, POLICY RECCOMENDATIONS AND
CONCLUSION
5.1 SUMMARY ………………………………………………………40
5.2 POLICY IMPLICATION………………………………………..41
5.3 CONCLUSION………………………………………………..42
BIBLIOGRAPHY………………………………………………………43
ABSTRACT:
This research study by means of robust statistical analysis investigated the poverty
situation in Nigeria and how it affects the citizens and the economy at large. This
research was taken in a period of 25 years which is from 1985 – 2010. The
ordinary least square method was used to investigate this work.
The empirical analysis carried out showed that the Nigerian economy has changed
from a diversified economy to a mono economy because of the over dependence of
the oil sector and this has resulted to the increase of poverty in Nigeria
Using the ordinary least square regression we see that there is a positive
relationship between the per capital income and the GDP of the country, positive
relationship between government expenditure on health and GDP but a negative
relationship between government expenditure on education and unemployment and
the GDP of the country.
The Nigerian government in curbing this problem of poverty has introduced many
poverty alleviation policies and programmes but they have all been a failure
because the implementation of these policies did not take into cognizance the
masses that they are doing these policies for.
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Poverty has many aspects of perception. Some people or most people take
poverty as deprivation and deficiency. But poverty is a phenomenon which has
historical, social, psychological, cultural and international dimension, these
means that poverty’s definition depends on the angle the person looking at it
looks at it.
As there are variations in the living standard of people round the world the
same way the economic growth rates vary from one nation to another. Some
countries are poor; some are fairly well off while others are rich. However as
everything is relative so is poverty, what most people in the united states today
see as stark poverty would be seen as luxury in some parts of Asia and Africa.
The key variables by which the poor can be singled out are: food, income,
health, freedom, justice, equity etc. And all these variables mentioned above
are the key challenges facing our beloved country Nigeria today. But the key
challenge facing Nigeria and other developing countries is how the country can
sustainably feed her population and Nigeria’s population is over 140 million
people.
Although Nigeria has one of the world’s biggest economic growth rate
( averaging 7.4% over the last decade) and also blessed with plenty of natural
resources such as oil, but still it retains a high level of poverty with 63% living
below $1 daily. When one talks about poverty in Nigeria it knows no bound as
it is visible in all aspects and segments of the society. Poverty is not just
limited in the rural areas it is also evident in the urban areas slums in the
country.
As said earlier poverty is relative and also physical. It is physical because one
can note its effects on the people that are affected by poverty and it is relative
because what is regarded as poverty in some nations can be seen in other
nations as luxury.
The poor are those that have limited and insufficient food, poor clothing, live in
crowded and dirty shelter (Galbraith 1995), cannot afford medical care and
recreations, cannot meet family and community obligations and other
necessities of life. When we come home there is no precise definition or
explanation needed for an individual to know what poverty is, as many people
cannot afford decent food ,medical care, recreation, decent shelter and clothing
meet up with family obligations etc, no wonder poverty is regarded as a form
of oppression (UNDP conference Report,15-17 March 2011).
Poverty means more than been impoverished and more than just lacking
financial means, it is an overall condition of inadequacy, lack and scarcity,
deficiency of economic, political and social resources. These are a broader
perspective of poverty which reflects its true dimensions. Therefore someone
can be said to be in poverty if the person’s income and resources (material,
cultural and social) are so inadequate as to exclude them from having a
standard of living which is regarded as acceptable by the society generally.
Poverty is not a respecter of creed, race or educated and uneducated, it affects
all when it strikes. Nigeria is a country that enjoys the bountiful environment of
nature and yet cannot appropriate the natural resources to its advantage. It is
greatly ironic that at the last two decades Nigeria has received over $300
billion on oil and gas revenue and at the same time the population of the
critically poor has been doubled. Nigeria has been described as a paradox by
the World Bank (1996) in the sense that the poverty level in Nigeria contradicts
the country’s immense wealth. Nigeria retrogressed into been one of the 25
poorest countries at the threshold of the 21st century whereas she was among
the richest 50 in the early 1970s.
The big question is what are the causes of this poverty despite the country’s
immense wealth and natural resources? The shift in emphasis from agriculture
to oil exploration in the early 70’s is one of the causes. These shift transformed
the country’s economy to a mono economy making us to abandon other sectors
that give us revenue like agriculture. The fact that the resources generated by
oil are not been invested in the non oil part of the economy of which 90% of
Nigerians depend on for their livelihood is another issue. It has been estimated
that more than 80% of all poor live in the rural areas of which 92% of them live
in absolute poverty. And these poor people in the rural areas are mostly into
our abandoned agriculture, they are usually small scaled.
Many administrations have tried eradicating poverty in the wrong way, most
administration think that by enhancing growth and development of the cities
that it would subsequently promote the development of the rural communities
by way of “trickledown effect’’ but these rather created a wide gap between the
people in the cities and those in the villages. The villages became
disadvantaged, isolated, dull as the youth and able bodied men left the village
to escape the rural drudgery and also search for white collar jobs.
Nigeria has in its own way tried to eradicate poverty through many poverty
alleviation programmes which were geared towards reduction of poverty in the
country. The poverty alleviation and development plan started in year 1994, the
structural adjustment programme of 1986, the national accelerated food
production project, the poverty alleviation programme of early 2000 which
looked at employment and crime wave among the youths, the operation feed
the nation of 1976, USAID of 1975 but so far all these programmes have failed
to obtain their objective which is reduction of poverty.
1.2 STATEMENT OF THE PROBLEM
The problem of poverty in Nigeria is not to be entirely blamed on lack of sufficient
resources but also on the allocation and management of these resources that are
available for use.
Despite the fact that monetary measures is simple studies have shown that these
measures are deficient (Revallion 1996). Revallion argues that poverty is multi
faceted; therefore multi indicators are necessary including measures of real
expenditure per adult access to non market goods like health and education. Hence
for effective poverty measurement there is needed to go beyond money metric
measures. It is necessary to employ multi dimensional approach in which
expenditure on market goods is placed side by side with “non income goods’’ and
indicators of intra household distribution. These will help us to understand the
causes of poverty more so that better policies that can fight poverty can be
formulated.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study are to evaluate the performances of the Nigerian
economy. Specifically the study tends to examine
How the Nigerian economy had fared in the poverty trend
The effect of poverty on output.
1.4 HYPOTHESIS
There is no positive trend of poverty in Nigeria
There is no effect of poverty on output in Nigeria
1.5 SIGNIFICANCE OF THE STUDY
The study attempts to put together the poverty cases in the Nigeria economy and its
effects on the people. This study should serve as a document for those with power
strong enough to influence anti – poverty policies. It should be regarded as a guide
to policy matters in our country Nigeria and other third world countries.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
The scope of this study is to analyze the Nigerian economy on poverty. This duty
is limited to the Nigerian economy for the period of 1986 -2010.
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