TRENDS AND DETERMINANTS OF POVERTY AND INEQUALITY IN NIGERIA

Abstract

The study analyzed the determinants of poverty and income inequality in Nigeria. The objectives of the study are to examine the impact of population growth on poverty and income inequality in Nigeria and to examine the impact of unemployment on poverty and income inequality in Nigeria. To achieve the stated objectives, secondary data from NBS and CBN statistical bulletin were collected on poverty, income inequality, population growth and unemployment. The study used descriptive statistics and Generalized Method of Moments GMM test as the estimation techniques of data analysis. The Kwiatkowski, Phillips, Schemidt and Shin, KPSS unit root test preceded the GMM test in order to establish the stationarity of the variables the variables are platykurtic in nature, implying their distributions are higher than normal. The KPSS stationarity test of the series showed that the variables were stationary at first difference as their respective LM statistics are less than 5 percent critical values. The GMM results show that the coefficient of population growth POP is positively related with poverty and statistically significant at 5 percent level. Similarly the coefficient of unemployment UEM is negatively related with poverty but statistically not significant at 5 percent level. Moreover, the coefficient of population growth POP is positively related with income inequality and statistically significant at 5 percent level. Also, the coefficient of unemployment UEM is negatively related with poverty and statistically significant at 5 percent level. The study concludes that there is significant prevalence of poverty and income inequality among the Nigerian citizen. Based on findings of the study recommends implementation of a sound government programme and welfare package in order to check growing rate of poverty and inequality in Nigeria.