Project Topics

EXAMINATION OF THE CAUSES OF POVERTY IN AFRICA: THE NIGERIA EXPERIENCE

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Poverty is generally considered to be a natural occurrence that no nation can boast of having decisively defeated. The urgent need to address it has always been at the fore front of development goals of nations. While the poor nations are struggling to lift their heads from this murky water, the rich ones are making frantic efforts to evolve new strategies to make the welfare and quality of lives of their citizenry better. The issue of poverty is one that affects all nations irrespective of the mark they have attained on the development continuum.

As a matter of fact, poverty is a multifaceted phenomenon. One experiences it personally (Ekong, 2010). It is not only an expression of life condition, but a state of mind and a perception of self in the complex web of social relations. Economists tend to view poverty as a distance on a continuum toward zero purchasing power while its polar opposite – affluence, is a distance on the same continuum toward full purchasing power. Poverty refers to the inability of a household to attain a level of income which is necessary to purchase the range of goods and services considered as standard for those in a particular reference group to be sufficient for living (World Bank, 2011).

Poverty has also being defined as an inescapable commotion of physical want (life, 1992).The term poverty stems from the inability of an individual or society to acquire basic human needs to sustain existence and the inability to generate productive resources for the purpose of generating a desired level of output in order to enhance the realization of an appreciable income (Imodu, 1999; Olaitan, Onyemachi, Nwachukwu, 2000).

Poverty, in any way it may be stated, means an ugly picture of deprivation, a state of want, insufficiency and helplessness, which a person or group of persons are unable to provide the basic necessities of life such as food ,shelter, clothing, education, employment and health (Okeke 2011). Poverty is the worst plaque of mankind as it exposes individuals to mockery, ridicules and laughter. The menace of poverty though a global phenomenon is most excruciating in the third world Nations. In Nigeria as it applies to many other African countries, human conditions have grossly diminished over the time, most importantly, in the last few decades as: Disposable incomes or take home pays can no longer take people home.  The rate of malnutrition has continued unabatedly. Food production has not been in balance with the growing population. Life expectancy has drastically declined and good health care services and qualitative education are no longer within the reach of the greater populace, as it is now the exclusive preserve of the rich and the affluent political class.

The above condition has forced many of our youths and able bodied men and women into illicit activities and insecurity has become the order of the day (Ojo, 1995). Poverty in all its manifestation is a socio-economic threat and is anti-developmental in nature. Unemployment and hostile business environment are twin brothers to poverty. We therefore cannot talk of growth and development in Nigeria, when no urgent and meaningful action has been taken to arrest or at least reduce the level of poverty amongst the citizenry.

Poverty in Nigeria is persistent and the country has been considered to be a country of poverty amidst plenty. Although poverty has existed in Nigeria especially after the civil war in 1970, it became more prominent in the 1980’s following the collapse of world oil prices and a sharp decline in petroleum output. Rural poverty has steadily increased in Nigeria in terms of inadequate shelter, clothing and food. The implication of these socio-economic conditions is obvious. The assertion of the World Bank (1996) that Nigeria is a paradox aptly captures the magnitude of the problem of poverty in Nigeria. The Federal Republic of Nigeria has a population of more than 160 million – the largest in Africa – and a fast-growing economy (Okoroafor and Nwaeze, 2013).

There is always this difficulty in deciding where to draw the line between the poor and the “non poor”. To engender international comparability, however, two poverty lines are often used on purchasing power disparity. A population falling below a US Dollars per day is considered to be moderately poor while those falling below a US Dollars per person per day are considered to be extremely poor (Sarr, 2010). Poverty in Nigeria is prominent among four identifiable groups, namely, the rural landless, the small farmers, the urban under employed and the unemployed. The poor are predominantly located in the rural areas and slums in the urban areas (Tokunbo, 2008).

It is a truism that the paramount reason for creation of a nation-state is mainly to provide and create sustainable means of livelihood for a reasonable number of her citizenry. Since it may be practically difficult to reach everyone at the same time, it has become imperative that we make human capital development a basic and a national priority. Though the difference between economic growth and development is a discuss under the purview of public domain, their basic feature lies in the provision, promotion and sustenance of human welfare and the living standard of the people. In spite of the differences that may exist between them, growth and development connotes structural transformation, technological advancement, stability, sustainability and equity (Mohammed, 2008).

The divergence between Nigeria economic indicators, macro-economic variables and economic realities has become a source of concern and has raised so much argument between social and economic analysts and critics. The increases in these economic indicators have not translated into improved welfare packages for the people. The reality is that while many die in abject poverty, the affluent few spend their wealth on frivolities. The rising disparity in the distribution and acquisition of productive resources as well as lack of enabling environment for business has worsened the situation. Unemployment leads to low purchasing power availability which in turn leads to less consumption of goods and services. The cyclical trend of no money no purchase, greatly have negative effects on the level of economic development in the country. This is why this study aims to critically examine the causes of poverty in Africa with the Nigeria experience.

1.2       Statement of the Problem

            According to Okoroafor and Nwaeze (2013), the average Nigerian is poor. The divergence between Nigeria’s economic indicators, macroeconomic variables and the reality on ground is a source of concern. The truth is that people are dying due to their inability to afford three square meals in a day as well as their inability to access to basic public healthcare. This sounds strange but also goes on side-by-side with public display of wealth by the few privileged ones. The effects of poverty on the life of an average Nigerian has been reviewed overtime from the standpoint of economic growth and development. Nigeria’s economy is said to be growing and is projected to continue growing.

            The prevailing level of poverty is likely to get worse as the gap between the rich and the poor has continued to widen. Little wonder Kale (2012), posited that poverty in Nigeria is a paradox – that despite the fact that Nigeria’s economy has continued to grow, yet a large numbers of Nigerians are still living in poverty.

            Nigeria’s poverty index witnessed a slow but steady rise (A deterioration along the poverty line) between 1992 and 1997; thereafter it experienced a lull between 1997 and 2001, which degenerated into a peak in 2003 before a gradual descend in 2004 (A mark of improvement). This improvement continued till 2010 when it again looked up (Another bout of deterioration) and has never looked down. In concrete terms, poverty in Nigeria is rising with almost a 100 million of its population living on less than $1 per day despite a strong growth, as Africa’s second largest economy (Daniel, 2011). The proportion of Nigerians living in absolute poverty, these ones are categorized as those who cannot afford the normal basic food, shelter and clothing – increased to 60.9% in 2010 compared to 54.7% in 2004 (National Bureau of Statistics, 2011).

            Nigeria’s HDI value for 2014 stood at 0.514 — which put the country in the low human development category— positioning it at 152 out of 188 countries and territories. Between 2005 and 2014, Nigeria’s HDI value increased from 0.467 to 0.514, an increase of 10.1 percent or an average annual increase of about 1.07 percent (UNDP, 2015). As a matter of fact, the prevailing level of poverty in Nigeria is stifling her pace of economic development.

            Past governments have made some concerted efforts at poverty alleviation but that did not achieve the desired results. At this level; there is need for a significant change of this situation. We should now be more interested in the casual factors of poverty as opposed to its effects. A serious look at some key drivers of incidences of poverty in Nigeria revealed that while our rate of investments is almost stagnant, our National savings per capita is going down and the propensity to consume is on the increase.

There is no gain saying the fact that a problem is better solved if the causal factors are known. It is just when a disease has been clinically analyzed that the correct medicine could be directed. It is on this foundation that this study aims to critically examine the causes of poverty in Africa with the Nigeria experience.

1.3       Objectives of the Study

The objective of this study is to critically examine the causes of poverty in Africa with the Nigeria experience. However, the specific objectives are:

i)               To examine the reasons for the prevalence of poverty in Nigeria

ii)             To investigate the poverty reduction strategies and its effectiveness in Nigeria.

iii)           To understand the impact of poverty on the Nigerian economy

iv)            To find out the efforts of the Nigerian government towards alleviation of poverty in the country

1.4       Research Questions

The following questions were generated during the course of this study

i)               What are the reasons for the prevalence of poverty in Nigeria?

ii)             What are the poverty reduction strategies and its effectiveness in Nigeria?

iii)           What is the impact of poverty on the Nigerian economy?

iv)            What are the efforts of the Nigerian government towards alleviation of poverty in the country?

1.5       Research Hypotheses

The following hypotheses were formulated for this study:

i)               There is no significant relationship between the drivers of incidences of poverty and the prevailing level of poverty in Nigeria.

ii)             There is no significant relationship between low level investments, incomes, savings , productivity and demands on the prevailing level of poverty in Nigeria

1.6       Significance of the Study

Some of the significance of the study is that the study is generated by the statement of the study which can enrich the understanding of the causes of poverty in Nigeria. The results of the study show that there have been not significant reductions in the level of poverty in Nigeria.

1.7       Scope of the Study

This study is designed to cover every aspect that has to do with the causes of poverty in Africa, particularly in Nigeria. The scope of the study is therefore limited to Nigeria in which data regarding the causes of poverty were gathered.

1.8       Limitation of the Study

This research work is limit due to some factors:

Time factor: The time giving is too small for me to carry out the project work easily, although the research work was still carried out accurately.

Finance: This also restraints the researcher in carrying out this research work as being expected.

 1.9      Definitions of Terms

HDI: This refers to Human development Index which is a measure of longevity, knowledge and income. Longevity is measured solely by life expectancy at birth, while knowledge is measured by adult literacy rate.

Indicators of Poverty: Generally refer to measures of economic performance as well as the standard of living of the population. This normally combines the measures of income or purchasing power or consumption with those social indicators, which highlight availability and access to the basic necessities of life.

Poverty: As will defined elsewhere, is a state where an individual is not able to cater adequately for his or her basic needs of food, clothing and shelter; is unable to meet social and economic obligations, lacks gainful employment, skills for self reliance, assets and self esteem; and has limited access to social and economic infrastructure.

Poverty reduction: Means all formal activities geared towards lowering the rate and prevalence of poverty in the country.