public spending on poverty

Impact of agriculture expenditure on Poverty Alleviation in Nigeria

Agriculture expenditure and poverty alleviation in Nigeria has assumed a different dimension since 2016 given the currenet economic recession in the country.  Download the full research work below.  Several actions have been implemented to ameliorate the incidence of poverty in Nigeria, yet, it is still subsisting. Some of the factors responsible for this lie in the nature of the socio-political and economic structures, which alienate and exclude the poor from decisions making/implementation affecting their welfare.



1.1 Background to the Study

The issue of poverty and its ravaging effect is as old as man’s history, and has been increasing in magnitude, transcending within and across continents of the world especially Sub- Saharan Africa. In Nigeria and perhaps other under-developed countries, its growth in magnitude and latitude has attracted the attention of several international organizations, governmental and non-governmental agencies and scholars. Poverty and poverty alleviation have been the focus of numerous researches, discussions, debates and implementation programmes for over a decade now (Udofia & Essang, 2015).

Agriculture is the predominant activity in most of the zones in Nigeria, percentage of persons working in agriculture ranges between 24.4 and 85.1 percent across zones in Nigeria. With respect to states, the activity ranges between 2.4 and 91.7 per cent, majority of states having over 50 percent, (CBN, 2000). Increases in agricultural output brought about by increase in land and labour productivity, make food cheaper; benefit both rural and urban poor people who spend much of their income on food. Under the right conditions, increase in agricultural productivity causes the incomes of both small and large farmers to increase and generate employment opportunities.

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The UN human Poverty Index in 1999, credited Nigeria with 41.6%, captured the phenomenon more succinctly as the figure placed the nation as amongst the 25 poorest nations in the world. As at 2004, the HPI (Human Poverty Index) value for Nigeria, 40.6, ranks 76th among 102 developing countries for which the index has been calculated. The FOS study indicates that the poverty level in the country has risen from over 40% of the population in 1992 to 65% in 1996. Poverty is a plague affecting people all over the world; and a symptom of underdevelopment. According to the World Bank (1996), poverty is hunger, and lack of shelter. Poverty is a state where an individual is not able to cater adequately for his or her basic needs; like food, cloth and shelter (Noko, 2016).

International agencies like World Bank, United Nations Development Programme (UNDP) have been focusing on poverty, its repercussion and remedies in underdeveloped nations. In 1989, the World Bank issued a report on the crisis of poverty in Africa in which it highlighted the gravity of the economic situation on the continent and specifically put forward diverse economic strategies to halt upward trend in poverty across Africa and bring about improvement in the economic conditions of the people in the sub- Saharan region of the world. Also, there was the declaration in 1996 by the United Nations as the international year for the eradication of poverty. Subsequently, there was the proclamation of the first United Nations Decade for the eradication of poverty, which was adopted by the United Nations General Assembly in its fifty-first session in the autumn of the year, 1996. The theme for the decade was that eradicating poverty is ethical, social, political and economic imperative to human kind (Udofia & Essang, 2015).

Poverty alleviation is an attempt to restructure the battered economy and reduce the widespread of destitution through government policy intervention in order to give power to the poor and improve their general standard of living. Poverty alleviation is a major issue on the policy agenda of government of many countries, most especially developing countries where the incidence is very high. It is widely acknowledged that the fight against poverty is necessary condition for sustainable long run growth. Several poverty alleviation programmes have been implemented in Nigeria, but they have yielded no meaningful result due to their arbitrary targets, shoddy execution and institutional weaknesses and deficiencies (Umo, 2012).

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The foundation of these potential was laid by agricultural sector that effectively and efficiently played its traditional role. But in an economy like Nigeria, the agricultural sector had suffered setbacks attributed to widespread poverty and food insecurity. In the Nigerian economy and many developing countries, poverty is more pronounced in the rural sector where agriculture is practiced at subsistence level. Almost all rural dwellers depend on income from agricultural output for survival. About 70% of the total labour force is employed by the agricultural sector, therefore, agricultural transformation means a lot in reducing poverty alleviation and aiding national growth.   Invariably, every increase in income or per capita agricultural output enhances the incomes of the poor and reduces the number of people living on less than US$1 a day in this area, leading to increase in capital formation.

In Nigeria, various government has from time to time develop policies aimed at addressing poverty in the country especially through agriculture. The various programmes developed by the government both during the military regime and democratic leaders are discussed below. During the military regimes, programmes like Better Life for Rural Women was a programme established in 1988 by the then First Lady, Hajia Mariam Babangida, as her pet project in the military regime of Gen. Babangida. It focused on rural women in rural areas. It aimed at boosting the economic activities of women in the rural areas through agricultural extension services, education and vocational training, cottage industries and food processing, primary health care delivery and enlightenment. Family Support Programme was initiated by another First Lady, Mrs. Mariam Abacha, in 1998 to replace the Better Life Programme of Mariam Babangida. It aimed at improving and sustaining family cohesion through the promotion of social and economic well-being of the Nigerian families. Furthermore, Directorate of Food, Roads and Rural Infrastructure (DFRRI) was established in 1986 under the regime of Gen Babangida to alleviate poverty through the development of rural infrastructures. It was expected to provide basic amenities like access roads, rural electrification and potable water to ease the living conditions of the rural people (Lewu, 2011).

Also, National Directorate of Employment (NDE) was launched in 1987 for the purpose of creating employment opportunities in form of self-employment and self-reliance aimed at poverty reduction among unemployed youths in rural and urban areas. Enterprise and Agriculture was introduced under the regime of Gen Babangida in 1989 for the employment of 62,000 graduates and non-graduates nation-wide as part of 166 extra-budgetary relief package by the federal government (ibid). Mass Mobilisation for Social Justice and Economic Reconstruction (MAMSER) was introduced in 1986 to mobilize and encourage the participation of grassroot people in development. Community Action Programme for Poverty Alleviation (CAPPA) was yet another Federal Government programme aimed at alleviating poverty. It was established in 1997 under the Military regime of Gen Abacha. Its objectives were to improve the living conditions of the poor through a targeted, cost-effective, demand-driven and promptly delivered programme. Family Economic Advancement Programme (FEAP) was introduced in 1993 as an investment promotion and poverty alleviation programme by the Federal Government. Aimed at stimulating appropriate economic activities nation-wide, it focused on the provision of loans to promote entrepreneurship and business opportunities

In 2001, National Poverty Eradication Programme (NAPEP) was introduced after examining the report of a committee set up to study the achievements of previous poverty alleviation programmes. NAPEP was introduced and situated in the office of the President. Subsequently, several schemes followed to make NAPEP realistic. These schemes are the Youth Empowerment Schemes (YES), Rural Infrastructures Development Scheme (RIDS), Social Welfare Services Schemes (SOWESS), and National Resources Development and Conservation Scheme (NRDCS). Furthermore, New Agricultural Policy Thrust (NAP) was adopted in 2001 and modified two years later. It articulates a vision of how agriculture can become an engine of growth and poverty reduction, identifies binding constraints to the realization of that vision, and proposes policies to overcome those constraints (FMARD, 2010). National Economic Empowerment and Development Strategy (NEEDS) was implemented in 2004 as Nigeria’s home grown poverty reduction strategy, emphasizing the importance of increasing agricultural production (Mogues and Morris, 2008). The results have been heterogeneous. In some cases, a modest growth has been achieved through the transition from a centrally-planned economic system to a market-based strategy. But in virtually all cases, the modest growth achieved has not translated into any significant improvement in poverty or better living standards both for the urban and rural dwellers.

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Trends in poverty alleviation programmes and social incentives continues to rise from time to time including the current policies programme of the Buhari Led Government School children Feed, Payment of N5000 to the most vulnerable Nigerian are all programmes of poverty alleviation in Nigeria. Thus, in spite of the various poverty alleviation programmes developed by the government, this research aimed at examining the role of agriculture sector in achieving poverty reduction in Nigeria.

1.2 Statement of the Problem

Sub-Saharan Africa has been noted for the prevalence of poverty for more than a decade now despite the abundance of both human and material resources in this region. Poverty in countries of this region is massive, pervasive and chronic, engulfing a large proportion of the society. The concern about poverty in most of these countries, including Nigeria, has been very tremendous. Resulting from large-scale poverty, human conditions in Nigeria have greatly deteriorated. Real disposable incomes have dwindled while malnutrition rates are on the increase (Aluko, 2003).

For most Nigerians, poverty is endemic, real and devastating to the extent that it has become a walking being in urban and rural streets of the country. For a large percentage of the population, there is no food, housing, health, and security. Life in Nigeria involves a daily struggle against inhumanity by man, hunger and inadequate housing and health facilities. By 1998, estimates of the Nigerian Human Development Report (NHDR) put the number of Nigerians living in poverty at 48.5%. Between 1980 and the 1990, Nigerian experience worsened as the incidence of poverty rose from 46.3% of the population in 1985 to 65.6% in 1996 but reduced to 53% in 2015. The vast majority of the people have little or no access to the social amenities. In Nigeria, there is no social welfare network to ameliorate the condition of the poor. The poor depend largely and mostly on relations and friends for a bit of sustenance (Noko, 2016).

Poverty in Nigeria is a major macroeconomic problem which has assumed an endemic height. Programmes to eradicate poverty include and are not limited to deliberate industrialization, agricultural investment and intensification by government and the private sector, small scale industries, development and investment in education.

Several actions have been implemented to ameliorate the incidence of poverty in Nigeria, yet, it is still subsisting. Some of the factors responsible for this lie in the nature of the socio-political and economic structures, which alienate and exclude the poor from decisions making/implementation affecting their welfare. Programmes are imposed from the top, with huge overheads, which favour contractors, consultants and the cronies of those in power. The politicization of policies aimed at poverty reduction and the interplay of corrupt practices have often led to the displacement of goals and the objectives of programmes designed to reduce the incidence of poverty. Coupled with this is the problem of political instability, the rapid turnover of programmes of action and office holders, leading to the truncation of programmes and unnecessary duplication and waste (Aluko, 2003).

Agriculture, as the mainstay of the Nigerian economy, employs approximately two-third of the country’s total labour force and provides a livelihood for about 90% of the rural population (IFAD, 2010). This is why it has been highlighted as the sector that could best touch the poor as the sector is in the rural population of the country- the poverty base. Yet various agricultural programmes implemented have not yielded the desired result of generating and creating the platform for poverty reduction.

1.3      Research Questions

The research questions below are put forward to act as a guide to the research study.

  1. To what extent has agriculture sector impacted on poverty reduction in Nigeria?
  2. Is there any observed long run relationship between Nigeria’s poverty level and agriculture sector?

1.4.      Objectives of the Study

The main objectives of this study is to ascertain the impact of agriculture sector on poverty reduction programmes in Nigeria, specifically, by the end of the research, the study will aim at achieving the following objectives below;

  1. To find out the impact of oil and agriculture sector on poverty reduction program in Nigeria.
  2. To find out whether there is any long run relationship between agriculture sector and poverty level in Nigeria.

1.5       Hypothesis of the Study

Based on the objectives of the study, the researcher formulated the following hypothesis to guide this study.

H0: There is no significant impact of agriculture sector on Nigeria’s poverty level.

H0: There is no long-run relationship existing between agriculture sector and Nigeria’s poverty level.

1.6       Significance of the Study

The study will be beneficially to the following:

  1. It will be relevant to agricultural firms operating in Nigeria in many of their operational and investment decisions.
  2. It will equally serve as source of information for policy makers and stakeholders in the industry.
  3. It will also, guide the government and its agencies in collecting tax which is the second most important source of government revenue in due administration.
  4. It will be a good source of information to other researchers, students of economic, and the general public on the role government revenue plays in reducing poverty in the country.

1.7       Scope and Limitation of the Study

This study is basically focused on agriculture sector and how this revenue are spent to reduce poverty level in Nigeria. Deliberation will have made on how government expenditure reduce poverty in the country as well as how it has affected the country’s other economic development within the period of 1985 to 2016.

In carrying out this research work, the researcher therefore encounter certain limitations such as inadequate literature to prove deeply the authentically of the study. Also was time constraint, the time frame for this work was grossly inadequate considering the extent of coverage the researcher has in mind. Again there were also problem of reluctance by some librarians to make data available.

1.7 Organization of the study

The project work is divided into five chapters. Chapter one is the introduction to, and the background knowledge on the subject under discussion. The second chapter reports on a literature review into the topic. Chapter three explain and justifies the methodology adopted by the researcher, the strategy estimation procedure. Data presentation and analysis of the result was the focus of chapter four. Chapter five summarize, concludes and made policy recommendation based on the findings. The chapter also make some recommendations and presents implications for further research on the subject.

1.8 Operational Definition

Economic growth: This a quantitative increase in the monetary value of a country gross domestic product over time usually measured within the fiscal year.

Poverty Alleviation: Poverty alleviation is an attempt to restructure the battered economy and reduce the widespread of destitution through government policy intervention in order to give power to the poor and improve their general standard of living.

Economic policies: Economic policy is the action-statement of the government pertaining to particular sectors of the economy, describing the intended objectives and how to achieve them. Ordinarily, the object of economic policy is to improve the welfare of the people, either in the short-run or the long run. However, there is always a trade-off in the benefits of economic policies, requiring that economic realities dictate policy priorities.

Poverty: A poverty measure is an index that shows the magnitude of poverty in a society. The ability to distinguish between the poor and the non-poor requires an objective measurement of poverty. In quantifying poverty, the practice is to first of all specify some measure of the standard of living (both the direct consumption aspects and the basic needs/non-consumption aspect) in order to distinguish different individuals, households and countries from each other, and secondly, to establish or choose a ‘cut off’ (that is the poverty line), which separates those identified as poor from the non-poor (Ekpo and Uwatt, 2005).

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