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Poverty in Nigeria
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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 at risk of poverty. 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 Kashi 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."
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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 at risk of poverty. 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 Kashi 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."