art and science

International Journal of Business and Social Science

Vol. 2 No. 15; August 2011

ECONOMIC GROWTH AND POVERTY REDUCTION IN NIGERIA
GAFAR .T. IJAIYA
MUKAILA. A. IJAIYA
RAJI .A. BELLO
MICHAEL .A. AJAYI

Abstract
Studies on economic growth indicates that economic growth is essential for poverty reduction, especially when it leads to increase in employment and improvement in opportunities for productive activities among the people that are poor. Using a multiple regression analysis this paper therefore examines the impact of economic growth on poverty reduction in Nigeria by taking into consideration a time subscript and a difference-in-difference estimator that describes poverty reduction as a function of changes in economic growth. The result obtained indicates that the initial level of economic growth is not prone to poverty reduction, while a positive change in economic growth is prone to poverty reduction. To therefore improve and sustain the rate of economic growth in Nigeria from which poverty could be reduced measures, such as, stable macroeconomic policies, huge investment in agriculture, infrastructural development and good governance are suggested.

Keywords: Nigeria, Economic growth, Poverty reduction, Difference-in-difference
1. Introduction
In most cases the growth in the economy of any nation is a clear indication of an improvement in the socioeconomic well-being of its people. A deterioration in the growth rate as shown in most developing countries is thus a manifestation of the fall in the standard of living of the people that cumulates into poverty. The experience (in recent times) is pathetic having witnessed a fall in its Gross Domestic Product (GDP) from an annual average rate of 10.5 percent in 1985 to 3.2 percent in 2007 (ADB 2008). Subsequently, the country also witnessed a decline in its per capita income from US $1600 in 1980 to US $1160 in 2008 (ADB
2010) One of the consequences of these declines is the rate of

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