CHAPTER ONE: INTRODUCTION
1:1 BACKGROUND TO THE STUDY
The growth pattern of the Nigerian economy has been quite sluggish over the last two decades. This fact is however connected to the highly increasing level of poverty, which is further exacerbated by the pandemic problem of inequality.
According to the UNDP Millennium Human Development Report (2001), "Nigerian economy has been suffering from severe and persistent regression since the mid-1980's. Its GDP, which was US $93.3bn in 1980 is now currently about one-quarter of what it was a quarter of century ago." The movement backward has been so fast, that Nigeria, which was ranked 20th in terms of size of its GDP currently ranked 57th.
Moreover, associated with this serious economic retrogression in terms of GDP, is the deepening level of poverty in the country. For example, according to NHDR (1998), it was estimated that 48.5 percent of the country's total population (i.e. about 55.0 million) live below the poverty line; current estimates put the percentage at between 66 and 70 percent (i.e. about 70 million people). It was also presented in the millennium report of the UNDP that the prevailing poverty situation in the country is further deepened and exacerbated by the persisting inequality as regard access to wealth, income and productive resources.
The situation is so worrisome that the relevance of the Nigerian economy at the global level is continuously shrinking. According to UNDP Human Development Report (2001), "Nigeria's current contribution to global GDP is rather infinitesimal 0.22 percent, whereas in the 1960's it was 0.55 percent." This fact, further portray Nigeria's declining economic performance, resulting in a lackluster growth pattern.
The above situation therefore, calls for an immediate policy effort to fine-tune the economy in the direction of a reduced poverty and inequality levels that will generate sufficient growth to revamp and bolster the economy.
According to Ayagi (1990), Orthodox theory of Economic Growth places much emphasis on the growth rate of Gross Domestic Product (GDP) per capita, so that it should give way to the paradigm of human development with emphasis on poverty reduction.
1:2 STATEMENT OF THE PROBLEM
Growth is a fundamental requisite to development. This informs why in Nigeria growth had continued to dominate the main thrust of government's paramount development objective. Essentially, economic growths are associated with policies of reduced poverty and inequality among the mass majority.
However, like many other countries, Nigeria was historically a colony of a centre called Britain. This colonial experience influenced Nigeria to pattern her pursuance of economic growth both substantively and procedurally inline with the colonial legacy. But this line of thinking resulted in almost complete negation of some of the major economic crisis in the country such as poverty and inequality. The low Gross National Product (GNP) reflects the existence of these problems at high rates.
According to World Development Report (WDR 1994), Nigeria was amongst the low-income countries with GNP per capita $310 in 1992. Similarly, the NHDR (2001) on the basis of 1999 data, ranks Nigeria 57th in terms of GNP, while on per capita GNP basis it ranks 187th. And on the basis of purchasing power parity (PPP $) it ranks 51st, while on per capita purchasing power parity (PPP $) it ranks 194th. Its human development ranking are equally very low. Human Development Index (HDI) in 2000 puts it at 151st position, whilst its Gender Development Index (GDI) is a little better at 124th position. Yet this is a country that ranks 6th and 7th as oil exporter and producer and ranks 10th as the most populous country in the world.
Further analysis as revealed by the Economic Policy Watch (2002) shows that the growth rate in Nigeria is sluggish; poverty and inequality are...