Chapter 1


1. 1- Background of the study

It is evident that poverty in Africa is still pervasive, despite the decreasing trend in the last few decades. But there are differences of opinion regarding how fast poverty is declining .For example, researches using national accounts (Pinkovskiy and Sala-i-Martin ( 2014), Sala-iMartin and Pinkovskiy(2010) ; and also researches using DHS data like Young (2012) both argue that poverty in Africa has fallen much faster than what the researches using survey estimates found (For eg Chen and Ravallion (2010) ) . Despite the conflicting findings regarding the speed and the current level of poverty, there seems to be a growing consensus in the literature that poverty is falling in Africa ( Mckay, 2013; World bank, 2015). Despite the modest achievement of African countries, poverty reduction is still the focus and the top agenda of most of the policies of African countries. It is also one of the key goals of international institutions, like UN which includes the ‘no poverty’ component of Sustainable Development Goals (SDGs), and the Millennium Development Goals (MDGs) before SDGs As it may be expected, the prevalence of poverty has also spawned several research outputs on poverty in developing countries. The researches on poverty has been facilitated by the availability of household data , the periodic report of poverty head count and Demographic and Health Survey ( DHS) data and other data sources. As new data for recent years becomes available, new empirical researches that are based on the new data need to be carried out. Besides, the transformation of the economic structure of developing countries is resulting in significant change in the poverty status of households. Therefore, there is a need to make continuous research that captures the new reality as new 2 events and transformations unfold. Moreover, there is a debate on what data source to use- the household survey or the national accounts for poverty research in Africa, with some preferring the one to the other. Besides, what measure of poverty to use (income, consumption, or assetbased or non-monetary measures) is also a matter of contention. Therefore, research on poverty in Africa is far from consensus, and is filled with controversies. In Ethiopian context, although there are some empirical researches undertaken, there is a need for new researches that make use of recent data set like that of Ethiopian Socioeconomic Survey (ESS), a joint undertaking of Central Statistical Authority (CSA) and World Bank. Moreover, little research is done on the variables that affect the dynamics of poverty so as to understand what determines households to fall into and move out of poverty.

The research problem

Nigeria has shown remarkable progress in reducing poverty in the last two decades. In 2000, Nigeria had one of the highest poverty rates in the world, with 56% of the population living below US$1.25 Purchasing Power Parity (PPP) a day and 44% of its population below the national poverty line. In 2011, less than 30% of the population lived below the national poverty line and 31% lived on less than US$1.25 PPP a day. (World Bank, 2015). Recent estimates by National Planning Commission (2017) indicate that as of 2015/16, poverty rate has even further declined to 23.5%. Despite the modest improvement in reducing poverty, poverty is still pervasive in Nigeria since the proportion of population below poverty line (23.5%) is not a negligible proportion, a little below one fourth of the population. This necessitates a policy intervention targeted at eradicating poverty in the country. But policy intervention is effective if the policies use evidence-based researches as an input. Moreover, policies aimed at reducing poverty need to use the knowledge of the variables that affect changes at individual and household level ( Jollife et al, 2016). Such evidence based and hence well-targeted policies will facilitate the country’s effort to meet the SDG goal of “no poverty”/“end poverty in all forms and dimensions by 2030” ( UNDP, 2018)

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Updated: 9th May 2019 — 4:31 pm