Sunday 2 March 2014

Nature, Demension and Causes of poverty in Nigeria


INTRODUCTION
In Nigeria, widespread and severe poverty is a reality. It is a reality that depicts a lack offood, clothes, education and other basic amenities. Severely poor people lack the mostbasic necessities of life to a degree that it can be wondered how they manage to survive.There are several effects and deficiencies associated with poverty in Nigeria. One of themain effects of poverty is poor health, as is reflected in Nigeria’s high infant mortalityand low life expectancy. Poor people in Nigeria face several health issues as they lackbasic health amenities and competent medical practitioners. Most children do not havethe opportunity of being immunized and this leads to certain physical defects in some ofthe children. Their health has become low priority and as they have little or no choices,they live with whatever they are provided with, whether healthy or not.This article focuses on some of the key factors that contribute to poverty in Nigeria: unemployment, especially among young graduates; corruption, especially amongpolitical office holders; non-diversification of the economy; income inequality; laziness, especially among those who come from wealthy households; and a pooreducation system. Some of these could also be considered to be causes of poverty. Whilethe distinction between causes and effects of poverty is fuzzy, our discussion below willshow that these factors seem more likely to be causes than effects of poverty in Nigeria.Some of the more obvious effects or dimensions of poverty in Nigeria are provided in theSection on empirical background.
DEFINITION OF TERMS
Defining Poverty
Any discussion about poverty, and poverty eradication, needs to begin with agreement on the definitions, or discourse, being used. This is very crucial to establishing criteria of success or failure of any poverty-eradication strategy. Yet, definitions of poverty vary widely and are often used interchangeably.
Most commonly, poverty is defined as “state of being in which we are unable to meet our needs” (Watt, 2000:15). However, the concept of ‘needs’ itself is defined very differently across different cultures and generations, as technology and changing values alter perceptions of the pre-requisites of an acceptable standard of living. This indicates that the concept of ‘needs’ includes the notion of what is conventionally regarded as necessary to lead one’s life as an integrated member of a particular society. Thus, in his The Wealth of the Nations, the eighteenth century Scottish economist, Adam Smith, recognized the importance of this point when he defined the ability to appear in public “without shame” as a major criterion of individual human welfare (Smith, 1986).
Baratz and Grisgby (1972) defined poverty as a “condition involving some deprivations and adverse occurrences that are closely (but not necessarily exclusively) associated with inadequate economic resources”. Some see poverty as “inadequacy of income to support a minimum standard of living” (Edozien: 1975:35). Closely connected to this is the use of “Basic Needs” indicators such as food, clothing, shelter, etc. to define the concept.
NATURE OF NIGERIA POVERTY
The issue of Poverty in Nigeria is so complex and myriad that one may consider it as equal to the whole problem of Nigeria. The worst part of the case is that, the rich grows richer and the poor grows poorer that is “poverty for majority and wealth for minority”(World Bank 2001)
Poverty in Nigeria remains significant despite high economic growth it first started sometime during the British Empire. Nigeria has one of the world's highest economic growth rates (averaging 7.4% over the last decade), a well-developed economy, and plenty of natural resources such as oil. However, it retains a high level of poverty, with 63% living on below $1 daily, implying a decline in equity.(World Bank 2008)
Poverty in Nigeria can be also caused by the political instability of the country. However, these programs have largely failed to overcome the three reasons for this persistent poverty: income inequality, ethnic conflict, and political instability.
DIMENSION OF NIGERIA POVERTY
Nigeria is a West African country with about 152 million people (as of 2008). It is by farthe most populous country in the whole of Africa. Although Nigeria’s GDP per capita hasbeen increasing through the course of time in nominal US dollar terms (see Figure 1),many Nigerians are still living in poverty. Obviously, the average income per capita doesnot give the real picture due to Nigeria’s high income inequality, which will be discussedin more details in the next section. According to the World Resources Institute’senvironmental resource portal Earth Trends, about 71 percent of Nigerians live on less than $1 a day and about 92 percent live on less than $2 a day.(World Bank 2001)
Poverty in Nigeria was first measured in 1980 by the Federal Office of Statistics (FOS), when 27.2 per cent of the population, or 18 million people, were classified as poor. By 1985, the Federal Office of Statistics estimated that about 46 per cent of Nigerians live below poverty level but it dropped to 43 per cent by 1992. This rate surged to 66 per cent in a 1996 survey and the total number of poor nearly quadrupled, to 67 million (UNDP 1986). Estimates put the poverty rate today at close to 70 per cent, or 90 million people. Perhaps 40 per cent of these people are the '‘core' poor”, so impoverished that they cannot meet their basic food needs, and indeed, the stunting rate for young Nigerian children, a measure of chronic nutritional deprivation and food insecurity, stands at 42 per cent (world bank 2008),
The phenomenon of poverty appears to be more concentrated in the rural than in the urban areas of the country. The number of rural poor, according to the 1999 World Bank Report, is roughly twice that of the urban poor. Of the extremely poor, 85 per cent live in the rural areas and more than two-thirds lived on farms. The distribution of poverty is also inequitable on a geographic basis. Regionally the North-West geopolitical zone has the largest proportion of its population living in poverty, and the three northern geo-political zones have 65 per cent of the nation’s population but account for only 35 per cent of GDP. The 1997 National Consumer Survey indicated that the average family expenditure per month for the contry was N4,058.00. Out the country’s six geo-political zones, the North West zone had the least figure N2.941. The Eastern zone had the highest figure of N5,194.00, almost double the figure for the North-West zone. Also, the North West zone recorded the lowest figure of household income (N3,769), while the highest figure of N7,213 came from the South Eastern zone. The level of poverty in the zone is striking indeed. About 54.2 per cent of the inhabitants of the zone live below the poverty line. The North-West came second only to North-east which recorded 55.8 per cent on the poverty scale (World Bank, 2001). No part of the country is exempt from poverty, however, and severe poverty is also experienced in the Southern regions. Lack of formal education, large household size, living in a rural area and pursuing an agricultural livelihood are strongly associated with poverty.The headcount measure of poverty in Nigeria declined from 43 to 34% between 1985 and 1992, primarily due to a 34% increase in mean per capita household expenditures. The benefits of growth were not shared equally throughout the country. The bottom 18% of the income distribution had a lower standard of living in 1992 compared with 1985 by any measure. However, all other income groups had a higher standard of living in 1992. Household expenditure growth was fastest in the southern and middle zones of the country, but it was much slower in the northern zone. Poverty in Nigeria, in addition to its overwhelmingly rural and regional characteristics, is also strongly influenced by education, age and the nature of employment.
Nigeria’s prevalence of undernourished iswith about 10 percent of the population over the last decade inconsistent with 70 percentof the people living below the poverty line, especially as the prevalence ofundernourished in Sub-Saharan Africa is given to be at around 30 percent over the lastdecade.Anyway, it is clear that given the rich natural resources, the level of poverty in Nigeria isremarkably high. While data on Nigeria’s poverty over time remains scattered, there issome evidence that Nigeria’s poverty has actually increased over time.5 Nigeria alsoranks third in the world for the most people living with HIV/AIDS and has the thirdhighest death rate as a result of HIV/AIDS

CAUSES OF POVERTY IN NIGERIA
According to Garcia, Kohl, Ruengsorn andZislin (2006), Nigeria’s main challenges include, reducing poverty, diversifying its economy from the oil and gas sector towards more labor intensive sectors, and improving health and education. The oil has increased economic volatility and inflation while those living in poverty being most vulnerable to volatility and inflation. To add to it, instability of government revenues and a crowding out of agriculture (which provides the source of income to the poor) have made the situation worsen. The oil industry does not employ a sizeable number of unskilled workers, thereby contributes little to reducing poverty.
Nnadi (2008) discusses the various impacts of globalization on the Nigerian economy. These impacts have resulted to social and economic problems in the country such as inequality, the emergence of a social underclass and low development. He also states that globalization has affected Nigeria’s economic growth through a decline of foreign direct investment and that for unemployment,  poverty and inequality to be alleviated  Nigeria’s economic policies need to be changed. The causes of poverty in nigeriaInclude:
Unemployment
Unemployment is a major factor contributing to poverty in Nigeria. There is a strongcorrelation between unemployment and poverty. When people are unemployed, theirsource of livelihood depletes over time. The cost of living becomes high and the standardof living goes down. There are many people in Nigeria who lack the opportunity of beingemployed. The formal unemployment rate in Nigeria as estimated by the World Bank in2007 was 4.9 percent and Nigeria ranked 61st across the worlds countries. As reported by Teshome (2008), the then newly released African Development Indicatorsreport of the World Bank showed that “education, once seen as the surest, undisputedgateway to employment, no longer looks so certain.” This is very true in the case ofNigeria. The fact that you are an educated Nigerian is no guarantee that you will beemployed. Furthermore, according to the World Bank report, unemployment in Africa ishigher among those who have attained a higher education of some kind, and also those inwealthy households because they depend solely on the wealth of their families and do notconsider employment a priority.Many graduates in Nigeria wander the streets without anything reasonable to do for aliving.
Corruption
Transparency International defines corruption as “the abuse of entrusted power forprivate gain.”6 This has become a common act in Nigeria and it has destabilized thepolitical system drastically. Government funds are being misappropriated on a daily basisby the leaders, who only put the interest of their family and friends at heart whileignoring the masses. The corruption has eaten so deeply into the government andeconomy that everyone seems to be blinded by it. Corruption has almost become anaccepted way of life in Nigeria.
In Nigeria, the government’s income is generated mostly from natural resource revenues.
This income, instead of being used for developmental purposes, is then circulated amongthe political office holders and their families, leaving the rest of the people to wallow inpoverty. Political leaders practically ignore the affairs and wellbeing of their people who elected them into office. They mismanage and embezzle funds. There are several issuesinvolved with bad governance in Nigeria, use of wrong policies, adaptation to wrongpolicies and implementation of those wrong policies. In any case, it is clear that Nigeria’scorruption has increased poverty and inequality as well as contributed to high crime rates.
Non-Diversification of the Economy – Oil Over-Dependency
While Nigeria’s poverty has been identified to be caused by many factors, Nigeria’s no diversification of the economy can be seen as a major factor. Before 1970, the Nigerianeconomy was driven by the agricultural sector. The oil sector which only constituted one percent of the country’s export revenue in 1958 rose to 97 percent by 1984 and has sincethen not gone below 90 percent. In 2008, the oil and gas sector constituted about 97.5percent of their export revenues, 81 percent of government revenues and about 17 percentof GDP.(World bank 2008),
In Nigeria, those in power have practically ignored other sources of income, and today,Nigeria depends heavily on exporting oil. This dependency on natural resources is oftenreferred to as “Dutch disease”, whereby natural resources make a country lesscompetitive. Excluding the few working in the oil sector, the majority of the people havebeen impoverished as their products have become irrelevant. The agricultural sector,which was their major means of income before the discovery of oil, is considered almostuseless.
Beyond the Dutch disease, Nigeria’s abundance of a natural resource has led to what isknown as a resource course, which is reflected in the “Niger Delta Crisis (reflecting theregion of the country where most of the oil is coming from). The people in this region arefighting for resource control as they claim the government is not fulfilling their promiseof giving them the large part of the oil revenues. The wealth from natural resources inNigeria is supposed to be working with the derivation policy, but this policy is notfunctional in any way, as the oil-producing states are still impoverished and this policy issupposed to work in a way such that these states with these natural resources should beable to get a large part of the countries revenue as they contribute a lot to the nationalwealth.According to Collier (2007), resource wealth sometimes contributes to a conflict trap andthe surplus from natural resource exports reduces growth. He goes on to discuss the caseof Nigeria in the 1970s, when other exports of the country like agriculture became nonprofit abledue to increase oil revenues. He explains how the Dutch disease can damagethe growth process by closing out on the exports in other promising sectors of theeconomy. The first half of the 1980s gave rise to a huge oil boom in Nigeria and also ledto excessive government borrowing and investment on wasteful projects that made thecorruption in the country more apparent. As the world price of oil crashed in 1986,
Nigeria’s oil revenues reduced drastically and Nigeria’s external debt increaseddrastically. The introduction of the structural adjustment program (SAP) was one of thegovernment reforms advocated by the international financial institutions to reduceNigeria’s oil dependency. Despite increased national output in non-oil sectors, povertyand social indicators worsened as most of the revenues generated were used for servicingNigeria’s external debt. Nigerians have blamed the soaring poverty level despite theincrease in output to the introduction of the reforms and policies introduced during thelate 1980s. Nigerians hence came to the conclusion that there was a conspiracy by worldfinancial institutions to take their country down.
Inequality
Inequality implies a concentration of a distribution, whether one is considering income,consumption or some other welfare indicators or attributes (Oyekale, Oyekale andAdeoti, 2007). There was an increase in income disparity after the economic growthwhich Nigeria experienced between1965-1975, and this income inequality has increasedthe dimension of poverty in the country (Oluwatayo, 2008, p. 1). The income inequalitybetween the people in rural and urban areas in Nigeria is remarkably high, as those wholive in the rural areas base all their income on agriculture which is today not a thrivingsector in Nigeria as oil has taken over the economy. They do not invest their money toacquire skills as people in the urban areas would and this makes them more vulnerable topoverty and leads to some social and economic problems such as violence, corruption andso on (Oluwatayo, 2008, p. 2).
A more equal distribution of Nigeria’sincome would go a long way in reducing the rate of poverty, but because it is typicallythe rich people who hold political offices or are related to those holding political office,income remains concentrated among the rich.
Laziness
Laziness is a common disease which is virtually suffered by many Nigerians today,especially those from wealthy households. Everyone wants to be comfortable but they arenot ready to work towards it. This often leads to greed where people will do whatever they can to keep the family wealth for themselves. In most families, everyone depends onthe bread winner, who works so much to keep the family going and when he dies thefamily is likely to become poor because of mismanagement of funds. In most Nigerianfamilies, the death of the bread winner means the death of the whole family fortunes;because everyone was depending on him/her to provide everything.
Poor Education System
Education can play a major role in reducing poverty. According to the World Bank,education is central to development. It promotes economic growth, national productivityand innovation, and values of democracy and social cohesion. In Nigeria, the populationwith no education account for most of the poor. The education system in Nigeria can beregarded as a failure compared to other countries in the world. The United NationsUniversal Declaration of Human Rights8 states that “everyone has the right to aneducation.” This right to education has been denied to many Nigerians, of which many ofthem can be considered invisible to the society now. This deprivation of educationapplies more to females than males, because they are considered the inferior sex. Henceeducating them is seen as unnecessary as they are expected to marry as early as possible.
The under-utilization of labour resources during the farming season resulting from: The inability of many poor farmers to farm on a scale which matches their labour resources, andrudimentary nature of the system of farm-labour employment; and Also the dire shortage of working capital, which severely limits the scale and productiveness of farming especially where cultivation of manure farmland is the preferred agronomic system.
Political Instability: The failure to successfully actualize political transition programmes, result in social and economic unrest domestically and internationally. Productive ventures are unable to flourish with a restricted and market for sales, investments are withdrawn, jobs are insecure, and the general citizenry faces economic insecurity.
WAYS TO CURB POVERTY IN NIGERIA
According to Garcia, Kohl, Ruengsorn and Zislin (2006), Nigeria’s mainchallenges include, reducing poverty, diversifying its economy from the oil andgas sector towards more labor intensive sectors, and improving health andeducation. The oil has increased economic volatility and inflation while thoseliving in poverty being most vulnerable to volatility and inflation. To add to it,instability of government revenues and a crowding out of agriculture (which provides the source of income to the poor) have made the situation worsen. Theoil industry does not employ a sizeable number of unskilled workers, thereby contributes little to reducing poverty.
Development of rural areas
Nigeria’s approach has been to pursue industrial development in the cities with the hope that the increased wealth and raw materials demand will trickle to the rural areas.Indonesia has pursued to good effect a different approach by developing the rural areas- providing basic amenities e.g. electricity, water and promoting the establishment of agro-based industries in rural areas.As a result that nation has been able to stem rural-urban migration, curtail crime and spread wealth more equitably amongst its people.Most of the Nigerian poor are in rural areas and neglecting them is what is responsible forNigeria’s poor rating in several national well-being indices e.g. maternal and infant mortality, access to information and communication technology, access to pipe borne water etc.If national policies are not directed to helping the poor majority in rural areas, how then can the national averages in well-being indicators improve?Science schools should be established in rural areas so that rural kids can develop local technologies to help improve the output from local occupations.Technology should be adopted in conjunction with foreign experts, who will reside in the rural areas to ensure technology transfer.
Remove hunger from poverty and poverty is reduced (Yoruba Proverb)
With the use of technology in local occupations especially in agriculture, output will increase, spoilage will reduce and prices of foodstuffs in the cities will drop and become more affordable to the urban poor. Focus should also be on building good linkage roads between rural areas and the cities so as to ensure access to local and international markets for rural dwellers. This will improve their incomes and socioeconomic status. Focusing development in rural areas will reduce rural-urban migration, reduce overpopulation in the cities, reduce poverty in the villages and cities, reduce crime because more people will return to the villages and since these communities are more closely knit and traditional, incentives to commit crime will be non-existent.
Foreign Trade
Europe especially England became very wealthy because of their imperialistic nature from the 17th to the mid 20thcentury. The USA although proclaiming an appearance of peace is in fact very war like and imperialistic and it has not hesitated to find markets for its businesses through diplomatic, coercive and often violent means. By aggressively and subtly selling its culture through the pop media, it has ensured that whole nations cannot do without American styled clothes, American branded cosmetics and food and American music. As a result their nation has prospered exceedingly. True that Dangote, Nollywood and the banks have done well for Nigeria in foreign markets but Nigeria needs to develop more markets for other sectors especially in Africa i.e. pharmaceuticals, commodities e.g. cement, food etc.
Family Planning
Children are a gift from God but are a boon only for a country whose national wealth is increasing.For a nation whose national wealth is stagnant or declining, these children and their mothers face immense suffering. As of the 18th century, Adam Smith observed that ‘luxury seems to weaken and frequently to destroy altogether the powers of generation’ and this may perhaps explain why the elite just like rich nations have fewer children.While a poor Nigerian woman may have a s many as seven children or more, many rich women have one or two kids. This may suggest higher rates of barrenness in the upper class but in truth this is not so.Low birth rates amongst elite women is due to better education that has enabled them to assert their independence and reproductive rights better than poor women who often are dependent on their husbands and have no say. Rich women do not have less sex than poor women; they only know better how not to get pregnant.Maternal mortality is low amongst rich women because better family planning reduces complications and ensures they are in better health when they have a subsequent pregnancy. It is therefore important that the Nigerian government empowers the Nigerian female through education. It is also important to realize that high infant mortality among the poor due to inadequate health facilities is responsible also for their high birth rates. Therefore the government must take it as a priority to build, equip and properly staff maternal and child care centers in all local government areas in the country to address this.(Smith, 1986),
Increase the minimum wage
Since the population is made up more of the laboring poor, would making them happy by improving their wages not bode well for the entire nation?While employers may dislike this given their fears that increased wages may make the people lazy and reduce profit margins, these fears are unjustified.In fact when workersare better paid and if the payment pattern is such that the rewards increase in proportion to expended labor, employers will discover that a well-motivated staff work even harder and are more productive.As to the reduction in profit margins, this also is unjustified fear. When wages are increased, the amounts available to the society for discretionary spending increases and as a result demand for goods and services increase.Production capacities become fully utilized and total overall costs drop leading to marginal increase in profit margins.
Tangible Breakthrough: poverty can be self-induced or circumstantial. In the first categorization, the victim of poverty has done very little or nothing in his life to confront social and economic challenges with a view to securing a tangible breakthrough in life. The person starts to find faults to substantiate or justify why-he/she are in the sorry-state. Such a person is very look warm within his or friends-hood to take actions or programs that will generate long-termed returns. They doubt strategic game-plans. They are also too spiritual in their rationalization.
CONCLUSION
Poverty is multi-dimensional and even though it is difficult to separate the various dimensions of poverty from the various causes of poverty, in the case of Nigeria, we haveshown that unemployment, corruption, the non-diversification of Nigeria’s economy,inequality, laziness, and a poor education system are some of the key determinants ofpoverty. These determinants are many times related to each other and also enforce eachother. For example, unemployment, poor education and poverty can be seen as viciouscycle. Today, people who are not educated lack the opportunity of being hired for goodjobs, and the poor masses today still cannot afford to go to school which makes them thepoor unemployed masses tomorrow. Hence, all these factors are correlated and must allbe tackled together if any progress wants to be made.
When it is said that Nigeria has no business being poor, what is actually being implied is that the Nigerian people ought not to be destitute and want nothing of the good things of life; and that even those who may be poor in monetary terms should not lack access to good health facilities, basic amenities and livable lodges. Yes Nigeria may be poor but with the reorientation of our national culture and the enthronement of good governance, even if poor Nigerians remain, these must never be destitute or enslaved in their own land.

REFERENCES
Collier, Paul (2007) The Bottom Billion: Why the Poorest Countries are Failing andWhat Can Be Done About It (Oxford and New York: Oxford University Press).
Baratz, N.S. and W.G. Grisby (1972), “Thoughts on Poverty and its Implementation: in Journal of Social Policy, Vol.6, April.
Edozien, E.O. (1975), “Poverty: Some Issues in Concept and Theory”, in Rural Poverty in Nigeria (Op.cit.).
Garcia, Rose Mary; Richard Kohl; Ann Ruengsorn; and Julia Zislin (2006) Nigeria:Economic Performance Assessment (Washington, DC: United States Agency forInternational Development (USAID), February);

Nnadi, Stanley E. (2008) “The Impact of Globalization on the Nigerian Economy”,Minneapolis, Minnesota: Walden University, Dissertation;

Oluwatayo, I. B. (2008) “Explaining Inequality and Welfare Status of Households inRural Nigeria: Evidence from Ekiti State”, Humanity & Social Science Journal,Vol. 3, No. 1, pp. 70-80;

Oyekale, A. S.; T. O. Oyekale; and A. I. Adeoti (2007) “Regression-Based Approach toIncome Inequality Decomposition in Rural and Urban Nigeria”, InternationalJournal of Economic Perspectives, Vol. 1, No. 2, pp. 45-54
Smith, A. (1986), The Wealth of Nations, Harmondsworth: Pengium.

Teshome, Mekonnen (2008) “Multi-sectoral Approach to Cope with African YouthUnemployment”, waltaINFO of Tuesday, December 9, 2008;
Watt, P. (2000), Social Investment and Economic Growth: Strategy to Eradicate Poverty, Oxford: Oxfam G.B.
World Bank (2001) World Development Report 2000/2001—Attacking Poverty (NewYork: Oxford University Press).56

World Bank (2008) “Nigeria at a Glance”, Washington, DC: The World Bank; World Bank (2008) World Development Indicators 2008, CD-Rom (Washington, DC:The World Bank









TABLE OF CONTENT
INTRODUCTION
THE NATURE OF NIGERIA POVERTY
THE DIMENSION OF NIGERIA POVERTY
CAUSES OF NIGERIA POVERTY
POSSIBLE SOLUTION TO NIGERIA POVERTY
CONCLUSION AND RECOMMENDATION
REFERENCES/BIBLIOGRAPHY

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