CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Poverty problem in Nigeria is actually noted to be a growing phenomenon. However, unlike some African countries where the high prevalence of poverty can be attributed to their low profile of natural endowment; the Nigeria position is indeed a surprise. This is because despite the fact that the country is rich in oil, in fact biggest oil producer in Africa, yet it is ranked 159 out of 177 countries (UNDP, 2006) and considered one of the 20 poorest countries in the world, where 70 percent of the population is classified as poor with 35 percent living in absolute poverty (Global Action on Aging, 2008:1). The situation hence was captioned by World Bank (1996) as poverty in the midst of plenty.

In many developing countries, poverty is concentrated among people with certain level of deprivations which includes poor housing conditions, low education or without education, unstable employment/unemployment, low and unstable income, low status job, absence of savings and the likes. This is one of the most deplorable disabilities that can afflict a person or a nation.

Society as a whole has been alarmed by this phenomenon of growing poverty; without shadow of doubt, the problem of poverty in Nigeria remains a clog in the wheels of progress so desired by the nation’s citizens. But as bad as the scourge is, the effects-violence, kidnapping, terrorism, armed robbery and the likes, have been noted to be much worse, and inhibit the nation’s growth and development. Nigerian economy faces enormous challenges and a bleak future if fundamental steps are not taken to redress the legacies of the past, (Monoeconomy-undiversified Nigerian Economic Structure, lack of policy

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coherence, misallocation and mismanagement of resources-corruption and weak institution) the prediction being, with the existing trend of poverty, poverty worsens, engulfing as much as 80 percent of the population by 2030 (NEEDS, 2005).

The issue of poverty being an important discuss as it is, has led to the United Nation’s special summit in Copenhagen in 1992, besides its (U.N.) declaration of 1996 as the international year for the eradication of poverty and 1997-2006 as international decade for poverty eradication. Most notable international organization such as Economic Commission of Africa (ECA), Food and Agricultural Organization (FAO), International labour Organization (ILO), United Nations Development Programme (UNDP), United Nation educational Scientific and Cultural Organization (UNESCO), United Nation and Education Fund (UNICEF), World Food Programme (WFP), World Health organization (WHO), and the World Bank have also been noted to come out vigorously to address the issue of poverty (Sule Ahmed: 2002). Nigeria has joined the international community in the global fight against poverty. The country has initiated a number of programmes to fight poverty which includes Directorate for Rural, Reconstruction and Infrastructure (DFRRI, 1986), National Directorate of Employment (NDE, 1986), Family Economic Advancement Programme (FEAP, 1997) etc. (Ogwumike, 2001); the programme for poverty alleviation seem not to be making significant impacts on poverty alleviation in Nigeria.

The issue of non significant response of poverty trend to policies could be ascribed to previous researches on poverty that dwells on only income or level of consumption expenditure as the only proxy for poverty; this suffered from uni-dimensional limitation. They have also shared the traditional need to dichotomize the population into the poor and the non poor by means of poverty line. (Kojo Appiah-Kubi, et al, 2007), uni-dimensional poverty measures lead

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only to a partial understanding of poverty, hence bring about ineffective poverty reduction programmes. They fail to capture many aspects of deprivation, including lack of access to services essential for health and literacy as well as lack of political voice and legal protection. Consequently, the policy recommendations from such traditional analysis only concentrate on policies that alleviate poverty in the short run (Fusco, 2003), while leaving untouched the structure of socio-economic policies that could instead break the intergenerational reproduction mechanism of poverty in the long- tern (Dagum, 2002).

Meanwhile, conventional foster-Greer-Thorbecke (FGT), Head Count (HC) and Sen’s index which is also known as Sen’s composite index approach analysis has classified the population into two groups of poor and non poor, defined in relation to some chosen poverty lines based on household expenditure or income per capita. Most analysts in developing countries therefore, follow this conventional view of poverty, with focus on insufficient income for securing basic goods and services (Oyekale, et al, 2008:1). Recently, theoretical debate on measurement of poverty has made an impressive and substantial improvement by gradually shifting from the traditional uni-dimensional approach to the multidimensional approach, (Costa, 2002, 2003). Poverty is regarded as multi dimensional phenomenon of which income is only one aspect. The study of income variable must be besieged with the introduction of non monetary indices, determined by appropriately weighed indicators of deprivation which contributes to help our understanding over the different sources of those economic problems daily experienced by the households (Maggio, 2004).

Therefore, with multidimensional measurement of poverty, policy makers can understand the main causes of poverty and identify socio-economic

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policies to reduce its spread (Costa, 2002, 2003). The purpose of this study is therefore, to determine the multidimensionality of poverty in Nigeria.

1.2 Statement of the Problems

Poverty reduction has been one of the cardinal policies thrust in Nigeria since its inception in 1960 to date. This is one major problem facing this country despite its abundant resources which is enough to tackle this menace; yet positive and significant response to the anti-poverty programme seems to be a mirage. Presently, Nigeria even with the president Yar’Adua /Goodluck Jonathan seven point agenda (Food Security and Agriculture, Mass Transportation, Land Reforms, Security, Power and Energy, Good Education, Job Creation and Employment) which all primarily focused towards poverty reduction, though yet to be fully implemented and assessed but from the record prior now, is still rated at 70 percent level of poverty by UNDP (2006) and as well host the third largest number of poor people after China and India. Previous works on poverty have been uni-dimensional using incomes or consumption expenditure as the only proxy for poverty, for example Aigbokhan (1997), Aigbokhan (2000), Arinze (1995), Achime et al (1997), Canagarajah et al (2002), Obadan (1997), Ogwumike (2001), Okojie (1997), Okunmadewa. 1997, Ukoh, (1997) etc. Given all these past works, which were approached uni-dimensionally, each has on either level of income or level of expenditure as a measure of well being only, the policy adduced had limited impact, hence poverty level keep on increase. The policies adduced may not have appreciable effect on poverty level because income and expenditure hardly can be considered as the only cause of poverty.

Considering previous works as enumerated above, there existed varying reports, though it may be dependent on the period of the study. Some of these report are however consistent that Northern region and rural area in Nigeria are

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highly concentrated with poverty striken people and trait. At times, one wonders if it associate to the kind of work people do in their respective regions. These in fact are major issues of discuss. A multidimensional approach has also been used in certain work recently, though state analysis, example Oyekale et al (2008). One is yet to know which approach to be confined in for a plausible policy making and result oriented in Nigeria.

In view of these problems, the following questions readily come to mind.

1.     What constitutes the major correlates of poverty in Nigeria?

2.     Does poverty have regional characteristic?

3.     Does nature of one’s job increase the risk of poverty?

1.3 Objective of the Study

The broad objective of the research work is to study the multidimensionality of poverty in Nigeria using 2004 Nigeria living standard survey (NLSS), which is the latest comprehensive survey. The specific objectives are as follows:

i.                   To determine the major correlates of poverty in Nigeria

ii.                 To determine whether poverty in Nigeria is regionally concentrated.

iii.              To determine if poverty has occupational characteristic.