2 modest level of 51 percent in 1992. Comparison of literacy rates for countries such as Ghana, Cote d'Ivoire and Kenya in SSA, and Indonesia, a country similar to Nigeria in many respects, however, indicate Nigeria has fallen far behind.

The primary manifestation of poverty occurs at the household (individual) level, the understanding of which requires data at the same level of disaggregation. Unfortunately, economic and social statistics in Nigeria are limited and unreliable particularly for such microlevel analysis. Furthermore, data on income and expenditures are absent or outdated. Although attemptsl/ have been made to fill the gap in household level information through a series of studies and household surveys, published government sources are inadequate due to the lack of proper accounting of sources and uses of income, imprecision in definition and the lack of household distribution by income (expenditure) groupings.

This paper's objective is to document the evolution of household welfare and poverty in Nigeria in the period of 1985-92. The present exercise is the first which investigates the changes in and implications for household welfare and poverty. The Nigerian economy achieved an impressive growth performance over the years for which survey data are available (around 5 percent GDP growth rate per annum on average), which implies that the average living standards rose over the survey period. However, the benefits of economic growth were not distributed equally. The extent to which the poor benefited from economic growth (about 1.13 million people rose above the poverty line) is therefore an issue of considerable policy interest. This paper focuses on the sub-groups of population by social and economic breakdown to understand which groups of people benefited from the economic reforms and which groups did not. The welfare changes that have taken place in each household is decomposed to facilitate the analysis of policy consequences of the economic measure introduced. However, unlike some other studies, this analysis does not adopt a formal general equilibrium model; instead it tries to understand each issue in a partial equilibrium setting. Although this might have disadvantages in terms of deriving economy-wide relevant policy lessons, it has the advantage of enabling the data to be fully utilized for each policy consideration. It is hoped that this will provide policy makers with relevant information for assessing the impact of past policies and designing new policies towards reducing poverty.

For the analysis, detailed price indices were developed to be used in conjunction with the household expenditure data used in this study. The methodology used in this exercise is similar to one utilized in other countries (World Bank, 1990; Ravallion, 1993). Since the main redistributive feature of the adjustment process was a shift in the rural-urban terms of trade towards rural areas, the effects can be highlighted by disaggregating results along rural/urban and (geographical) regional dimensions. However, for policy relevant analysis, it is important to identify even further, where poverty and welfare effects were concentrated, by looking at who were the losers and gainers. As this study is concerned with understanding how the overall incidence, depth and severity of poverty has evolved, and what changes may have occurred in the 1/ See Appendix 4, for previous research on poverty in Nigeria.