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 Report15-17 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 21

st

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.