Impact of  Government Policies on Poverty Eradication In Nigeria

CHAPTER ONE/INTRODUCTION

BACKGROUND TO THE STUDY

Prior to the commercial mining of fossil oil in Nigeria, the economy depended mainly on agricultural products for its domestic food supply and foreign exchange earnings. This situation however, changed as the advent of oil boom led to the neglect of the agricultural sector. In addition, the nation’s economic policies during the oil boom period paid little or no attention to the non-oil export sector. The result of this neglect was that Nigeria turned from being a major agricultural exporter and largely self-sufficient in food in the 1960s to a net food importer in the 1970s (Atoloye, 1997). The World Bank Report on Poverty and Welfare in Nigeria (World Bank, n.d.) which described the undesirable effects of developing one sector on the activities in other sector(s) of the economy provided a good illustration of the crisis in Nigeria.
The report revealed that though Nigeria has abundant land, oil and natural resources, many of her citizens are still very poor (World Bank, n.d.). The Bank observed that the country’s earnings of about
U.S. $200 billion between 1970 and 1990 from oil had impacted little on the welfare of the people, especially the poor, as the oil revenue had not been wisely invested in productive ventures to provide a sustainable stream of benefits to the poor.
The economic depression in the economy became glaring as the growth rates in the nation’s gross domestic product (G.D.P.) which averaged 10 percent between 1970 and 1973; and 8% between 1974 and 1980 did not only decline but became negative from 1980 with an average of -6% between 1980 and 1984 (Osagie, 1992). According to Central Bank of Nigeria and World Bank (1999), as from the late 1970s, the nation has had to contend with deteriorating terms of trade, excessive importation and debt over-hang, amidst adverse economic environment caused by oil shocks and world economic depression.
The Nigerian government in a bid to curb the depression adopted the Structural Adjustment Programme (S.A.P) in 1986. The cardinal objectives of S.A.P included: diversification of the productive base of the economy so as to curtail dependence on the oil sector and imports to achieve a fiscal and balance of payments viability over the medium term; laying a solid foundation for non-inflationary growth and lessening the importance of non-productive investments in the public sector efficiency; intensifying the growth potential of the private sector and attracting fresh foreign loans (Egwim, 1989).
During the implementation of the Structural Adjustment Programme, it was realised that unintended negative effects of the programme such as accentuation of income inequality, unequal access to food, shelter, education, health and other necessities of life became more prominent in the Nigerian state with the poor being the most affected group (National Planning Commission,1995). As pointed out by Demery and Addison (1988), adjustment policies could affect the poor adversely in two ways: First, in the short-run, adjustment policies may reduce the real income and consumption of poor groups. They cited a World Bank study as having compared such initial adverse effects to a ‘crossing of the desert’ in which those who were least able to cope with the crossing require some temporary relief to tide them over. Secondly, in the long run, some poor groups may not benefit from the processes put in place by the adjustment effort. To Demery and Addison (1988), adjustment policies shape development and influence the distribution of income for years into the future and will have different effects on the poor. This view has been buttressed by Atoloye’s (1997), who argued that marginalisation of the middle class in Nigeria’s economic growth process especially since the introduction of S.A.P. had disrupted the traditional economic link between the middle class and the low-income group (those mostly affected by poverty) by which the former complemented the latter. Hence, the problem associated with the Structural Adjustment Programme has gone beyond ‘crossing of the desert’ as the marginalization of the middle class, has, in addition to disruption of the economic link between this class and the low income group (the poor) led to the emergence of the new poor.
It is the realization of the adverse effects of S.A.P. on the poor that prompted the introduction of policies and programmes to alleviate poverty and provide safety-nets for the poor in the economy (National Planning Commission, 1995). These programmes include: the National Directorate of Employment (NDE); the People’s Bank; the Community Bank Scheme; the Better Life Programme (BLP)/Family Support Programme (FSP); Family Economic Advancement Programme (FEAP); the Directorate for Food, Roads and Rural Infrastructure (DFRRI); the Primary Health Care (PHC); the Federal Urban Mass Transit Scheme; the National Agricultural Land Development Authority (N.A.L.D.A); the Poverty Alleviation Programme (P.A.P) and now, the National Poverty Eradication Programme (N.AP.E.P).
According to Odejide (1997); Anyanwu (1997); Aku, Ibrahim and Bulus (1997), the following can be categorized as poor: (1)
 
 
 
illiterates, (2) wage earners, (3) households headed by older people and women whose nutritional needs are not being met adequately, (4) residents of isolated rural areas that lack essential infrastructure and
(5) those who fall below the poverty line and whose incomes cannot afford their basic needs. Others are urban squatters and ‘street’ children, ethnic minorities and all those who are not only marginalized and deprived but also suffer economic, political, social and cultural persecution; those who have lost their jobs and youths who have not been able to find employment as a result of economic reforms under the SAP.
Though most Nigerians are quick to attribute the causes of failures of policies and programmes to corruption and implementation bottlenecks, it is expected that the trickle down effects of these policies and programmes should have at least reduced poverty instead of the present situation where NPC (1995), Onibokun and Kumuyi (1996) opined that government policies and programmes have not only aggravated the level of mass poverty in Nigeria but that poverty has been continuous and worsening. This is affirmed by data from Federal Office of Statistics (1999). These data indicate that while no State in Nigeria had more than half of its population categorized as poor in 1980, by 1996, only one state (Rivers) had less than half of its
 
 
 
population categorized as poor. The nation’s general picture depicts a continuous rise in poverty incidence. While in 1980 only 27. 2% of the Nigerian population were said to be poor, the proportion increased to 46.3%, 65.6% and 80% in 1985, 1996 and 1998 respectively. Though the trend according to Ogwumike (2001) and World Fact Book (2004) declined to 70% and 60% in 1999 and 2000 respectively, the fact that over 50% of the Nigerian population was still categorized as poor implied in the words of Kwanashie (2000) that the level of poverty has remained unacceptable.
The high incidence of poverty in Nigeria has become a concern to policy makers and indeed all well-meaning Nigerians because, as argued by United Nations Development Programme (2001), it has not only increased from 27. 2% in 1980 to 80% in 1998 but it is estimated to be rising by 10% in every 3 years. In addition, despite several efforts by government, non-governmental organizations, international donor agencies, the nation’s poverty situation has become worse judging by different indices.
The nation’s pathetic poverty situation amidst rich resources endowment coupled with efforts to alleviate it has been summarized by Ali-Akpajiak and Pyke (2003:6) as follows:
 
 
 
 
 
 
all documentation, official or otherwise shows that poverty in Nigeria in all forms is rising at an increasingly fast pace. Nigeria’s social statistics rank it among the worst in south Saharan Africa even though it possesses the greatest natural resources… Given that Nigeria is the seventh largest exporter of oil in the world, these revelations are distressing… The poverty profile of Nigeria does indeed present a very sombre picture of a rich nation in decline.
 
The nation’s poverty situation becomes more disturbing when compared with nations that are similarly or even less endowed with resources as it has been described by Kwanashie (2000) as one of the poorest nations in the world despite its abundant resources.
Nigeria is world’s seventh largest exporter of oil, sixth largest producer in OPEC, Africa’s largest oil exporter and the fifth biggest source of United State’s oil imports. This enormous wealth is a good potential for effective alleviation or reduction and possibly eradication of poverty (National Planning Commission, 2004; Oil Statistics, n.d.; Thomas and Canagarajah, 2002). Yet, Nigeria is not only one of the poorest countries in the world but also in Africa and indeed in south Saharan Africa. As long as majority of Nigerians remain poor, accompanied by limited social development, the nation’s great natural wealth not withstanding, it will be difficult for the country to meet the Millennium Development Goals (MDGs) argued National Planning Commission (2004).
From the foregoing, the World Bank’s ‘crossing of the desert’ has not only become an illusion but got more Nigerians ‘trapped in the desert’ as poverty has turned to be a widespread phenomenon in the country. It is an irony to witness worsening poverty level amidst efforts to alleviate it. Thus, the reality of persistent poverty in Nigeria along side various poverty alleviation programmes has compelled one to re-think the dynamics of the role of government in intervening to minimize social and economic inequalities, especially for rural people who are predominantly poor and in places where the poor people are located. It is in the light of this that a research into the appraisal of poverty alleviation programmes in the study area is considered worth while most especially that majority of the people in the study area are not only farmers but also rural dwellers