Poverty in Nigeria

Nigeria had one of the world's highest economic growth rates, averaging 7.4% according to the Nigeria economic report that was released in July 2019 by the World Bank. Following the oil price collapse in 2014–2016, combined with negative production shocks, the gross domestic product (GDP) growth rate dropped to 2.7% in 2015. In 2016 during its first recession in 25 years, the economy contracted by 1.6%. Nationally, 43 percent of Nigerians (89 million people) live below the poverty line, while another 25 percent (53 million) are vulnerable. For a country with massive wealth and a huge population to support commerce, a well-developed economy, and plenty of natural resources such as oil, the level of poverty remains unacceptable. However, poverty may have been overestimated due to the lack of information on the extremely huge informal sector of the economy, estimated at around 60% more, of the current GDP figures. As of 2018, the population growth rate is higher than the economic growth rate, leading to a slow rise in poverty. According to a 2018 report by the World Bank, almost half the population is living below the international poverty line ($2 per day), and unemployment peaked at 23.1%.
Nigeria had one of the world's highest economic growth rates, averaging 7.4% according to the Nigeria economic report that was released in July 2019 by the World Bank. Following the oil price collapse in 2014–2016, combined with negative production shocks, the GDP growth rate dropped to 2.7% in 2015. In 2016 during its first recession in 25 years, the economy contracted by 1.6%. Many individuals are faced with limited financial opportunities, extreme information poverty and unemployment, a lack of access to information technology resources, and other uniquely debilitating environmental circumstances as poverty.
However, these programs have largely failed to overcome the three reasons for this persistent poverty: income inequality, ethnic conflict, and political instability with corruption. The impact of COVID-19 has been disastrous to the economy with inflation on food items on the rise, markets were disrupted by the increase in prices of things and purchasing power.
As of 2010, the Gini coefficient of Nigeria is rated medium, at 0.43. However, there are more rural poor than urban poor. This is correlated with differential access to infrastructure and amenities. This results from the composition of Nigeria's economy, especially the energy (oil) and agriculture sectors. Oil exports contribute significantly to government revenues; it contributes 9% to the GDP, and employs only a fraction of the population. Agriculture, however, contributes to about 17% of GDP, and employs about 30% of the population.
This incongruence is compounded by the fact that oil revenue is poorly distributed among the population, with higher government spending in urban areas than rurally. High unemployment rates render personal incomes even more divergent. Moreover, the process of oil extraction has resulted in significant pollution, which further harms the agricultural sector. Additionally, agriculture growth has slowed down because of farmer-herdsmen clashes, revolts in the north-east, and floods. The majority of Nigeria's better paying jobs are in capital-intensive sectors, but they are very scarce and limited. Only the places striving with economic activity and are very capital-intensive, possess law firms, small local businesses, and the governing powers.
Nigeria has historically experienced much ethnic conflict. With the return to civilian rule in 1999, militants from religious and ethnic groups have become markedly more violent. While this unrest has its roots in poverty and economic competition, its economic and human damages further escalate the problems of poverty (such as increasing the mortality rate). For instance, ethnic unrest and the displeasure to local communities with oil companies has contributed to the conflict over oil trade in the Niger Delta, which threatens the productivity of oil trade. Civil unrest might also have contributed to the adoption of populist policy measures which work in the short-run, but impede poverty alleviation efforts.
Poverty by Zone
The people living in the Northern region and rural areas of Nigeria were confirmed to be the poorest according to research. Poverty has also been increasing in the North and Northwest areas of the country as they account for 87% of poor people in Nigeria as of 2016. The Governor of Borno state Kashim Shettima expressed during one of his press conference that "In Nigeria, poverty wears a northern cap, if you are looking for a poor man, get somebody wearing a northern cap."
Poverty by State
Most Southern states had the lowest percentage while Sokoto state had a very high one as of 2019.
Nigeria's large population and historic ethnic instability has led to the adoption of a federal government. The resultant fiscal decentralisation provides Nigeria's state and local governments considerable autonomy, including control over 50% of government revenues, as well as responsibility for providing public services.
The lack of a stringent regulatory and monitoring system has allowed for rampant corruption. This has hindered past poverty alleviation efforts to a large extent, since resources which could pay for public goods or directed towards investment (and so create employment and other opportunities for citizens) are being misappropriated.
Nigerian corruption and poverty are interrelated and encourages each other. When looking at human development, Nigeria is at the bottom of the scale and corruption scores highest. Its existence is in all levels in the government – Local, State and even in the national departments. As a result of extreme corruption, even the poverty reduction programs suffer from no funding and have failed to give the needed remedy to this country. One of the reasons for the continued success of corruption is the encouragement that it receives from the government. Critics have blamed the Buhari led government for encouraging corruption in Nigeria by not dealing with defaulters and not showing fairness and openness in the fight against corruption in Nigeria. Government shows tolerance towards corruption and corrupted officials to the extent that the officials facing indictment are pardoned and accepted into the society. Is there a remedy to eradicate corruption? The answer lies in the hands of Nigeria's federal government. They must get involved more and implant stronger reduction programs and ensure that it is being followed by all the officials and the departments. Just by eradication corruption, Nigeria could come out of poverty. Taking care of corruption is taking care of poverty.
The management of oil revenues impacted the economy and the level of poverty in Nigeria by a considerable amount, leading up to 1985. As a result of the profiting oil businesses, much of the oil revenues were spent expecting that the oil prices would continue to increase. This aggressive spending led to the rise of per capita income from N1,200 in 1972 to nearly N2,900 in 1980, according to 1987 prices (In $US at the time from $280 to $1,100). So when the oil revenue crumbled the real capital income decreased heavily and Nigeria's economy took a big hit. During this shift to a focus on the oil boom, the agricultural sector, where the majority of people made a living, had a sharp drop occur. Throughout this oil boom period, naira (Nigerian currency) increased, and agricultural exports dropped by almost half the value and half the volume. Non-agricultural wages dropped massively as the labor workers increased in non-agricultural jobs because of the steady migration to more urban areas. As these wages decreased, agriculture prevailed temporarily but eventually ended up declining as well. As a result, the gap created by the oil boom of agricultural and non-agricultural profits finally stabilized. The economy began to decline in the 1980s due to a sharp decline in oil prices in 1982 and agriculture continued to deteriorate. As a result, wages continued to decline and unemployment grew further in the mid-1980s. In recent times, there have been investigations into reckless spending of revenues gotten from oil sales. This loses would have been used to generate employment for Nigerian if they are being invested into the public sector for the growth and development of the country.
Poverty is the lack of, or the inability to achieve socially acceptable standard of living. Officially, there is no poverty line put in place for Nigeria but for the sake of poverty analysis, the mean per capita household is used. So, there are two poverty lines that are used to classify where people stand financially. The upper poverty line is ₦395.41 per person annually, which is two-thirds of the mean value of consumption. The lower poverty line is ₦197.71 per person annually, which is one-third of the mean value of consumption. If you fall under the lower poverty line you are considered extremely poor, while if you fall under the upper poverty line are considered moderately poor.Thus defined, the poverty line is less than the minimum wage of labor workers in 1985.
People that are presently not in poverty and those currently in poverty are both considered 'vulnerable to poverty'. Household vulnerability is determined by the chances or risk that a household will either fall under the poverty line or if already poor, remain in poverty. If a household has 50% or more odds of falling into poverty or staying in poverty, they are considered to be vulnerable to poverty. The three groupings of vulnerability to poverty are the permanent poor due to temporary abnormal events occurring, those becoming poor because of predictable events, and those who become poor because of damage to the economy that affected the household's profits. The three main terminologies adopted to classify poverty are Vulnerability as Expected Poverty (VEP), Vulnerability as Low Expected Utility (VEU), and Vulnerability as Uninsured Exposure to Risk (VER). In Nigeria, those most at risk of poverty and financially insecure are widows (specifically ones without adult children), orphans, the physically challenged, and migrants. The likeliness of poverty in rural areas of Nigeria is higher with those of household characteristics such as the number of people living in a household, education level, and production. Another determining factor of vulnerability to poverty is food poverty, which is sometimes considered the root of all poverty. The vulnerability of food poverty varies across the urban/rural and geopolitical zones throughout Nigeria. Altogether, 61.68% of Nigerians are vulnerable to food poverty, so measures should be taken to increase food production and food distribution.
One of the terrible effects of Nigeria's poverty problems is the result of child poverty. A study made in 2001 from the Harmonized Nigeria Living Standard Survey (HNLSS) and the 2011 Multiple Indicator Cluster Survey (MICS) indicates that 23.22% of children are currently in extreme poverty and 70.31% of children in the country are in overall child poverty. Education, health, nutrition, water, and sanitation are classified as child deprivation in Nigeria. Similarly to the main concentrations of extreme poverty in Nigeria, the majority of child poverty takes place in rural areas rather than urban areas. Action was taken on this problem when rule switched to democratic to fight child poverty and deprivation from the Child Rights Act in 2003, which was intended to guarantee welfare and basic living standards for children in Nigeria. However, the fact that many children are still in poverty and are suffering, the Child Rights Act wasn't as successful as it seemed to be.
There have been attempts at poverty alleviation, most notably with the following programmes: