Major economic reform policies were introduced by the government of Nigeria in mid 1986. These reforms were expected to revitalize the economy?s growth. Growth in turn was expected to contribute noticeably to improved equity in the country. Some earlier studies suggested that poverty actually declined in the first seven years of the reforms, but debate raged about the effect of the reforms.
To contribute to the debate, this study investigated the inequality and poverty profile in Nigeria during the period 1985-1997, using data for the 1985/86, 1992/93 and 1996/97 national household income surveys conducted by the Federal Office of Statistics. Households are classified by sector (urban! rural), gender and region (geopolitical zones).
The central objective was to examine how far poverty has been reduced by the policies introduced during the period, and particularly the pattern of growth these policies engendered. The food energy intake (FEI) method, a variant of the absolute poverty approach, was used. The issue of polarization in income distribution was also examined.
The study found evidence of worsening inequality and poverty in spite of economic growth. It was found also that male-headed households seem to have fared worse, and that poverty is more pronounced in rural areas and in the northern regions (zones). The poor policy stance during the period is found to have contributed to increased poverty.
The study found also that there was positive real growth throughout the period studied, yet poverty and inequality worsened. This suggests that the so-called "trickle down phenomenon, underlying the view that growth improves poverty and inequality, is not supported by the data sets used. This may well be due to the nature of growth pursued and the macroeconomic policies that underlie it. For example, there was generally a deterioration in the macroeconomic policy stance, which nonetheless produced growth. If the relatively more impressive growth of the economy in 1986-1992 could not yield an improvement in poverty, it is not surprising that the relatively lower growth in 1993- 1996 could not yield a better poverty profile. This may be because much of the growth is driven by the oil and mining sectors.
In order to improve the poverty situation in the country the findings suggest areas where attention needs to be focused. One such area is to ensure consistency, rather than reversal, in policies. Policies should also be conscious of the need to ensure use of the main assets owned by the poor. Another area is in the distribution of income. Polarization in distribution appears to contribute to increased poverty. A third area is socioeconomic infrastructural facilities. With the widely acknowledged relationship between education and poverty, the low level of literacy reported in this study suggests that there is need to strive to achieve a higher rate.