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
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 poverty which has increased from 28.1 percent in 1980 to about 88 percent in 2002 (FOS various issues). In spite of this pathetic situation, it is still apparent over time on poverty reduction using a
time subscript and a difference-in-difference estimator.
The rest of the paper is structured as follows: a conceptual and empirical overview of poverty, poverty reduction strategies and economic growth are discussed in section two. Section three provides the data source and the methodology. Section four presents and discusses the results. Conclusion and recommendations are contained in the last section.
2. Conceptual and Empirical Overview of Poverty, Poverty Reduction and Economic Growth 2.1. Poverty
a. Meaning, Measurement, Causes and Consequences
According to Encyclopedia Americana (1989) poverty can be seen from two dif
those who lack the opportunities and choices open to them and whose lives seem to them to be governed by
Aku, et. al (1997) saw poverty from five dimensions of deprivation: (i) personal and physical deprivation experienced from health, nutritional, literacy, educational disability and lack of self confidence; (ii) economic deprivation drawn from lack of access to property, income, assets, factors of production and finance; (iii) social deprivation as a result of denial from full participation in social, political and economic activities; Gafar. T. Ijaiya lectures in the Department of Economics, University of Ilorin, Nigeria (Corresponding Author: E-mail: firstname.lastname@example.org and email@example.com)
Mukaila . A. Ijaiya lectures in the Department of Entrepreneurship and Business Technology, Federal University of Technology, Minna.
Raji .A. Bello lectures in the Department of Economics, University of Ilorin, Nigeria Michael Ajayi lectures in the Department of Accounting and Finance, University of Ilorin, Nigeria
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(iv) cultural deprivation in terms of lack of access to values, beliefs,...
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