Many factors have contributed to the high increase of poverty in Nigeria. These factors are:
- Macro-economic distortions
- Effects of globalization
- Debt burden
- Low productivity
- High population growth rate
- Poor human resources development
Macro-economic distortions: Poor macro-economic and monetary policies results in low economic growth. For government to achieve poverty reduction, government must ensure low inflation rate, low interest rate, stable national currency and balance income distribution.
The Nigeria economy had experienced some changes since independence, but as at today, it is still characteristically dualistic and monolithic, depending on one primary product for over 90% of its exports and government revenue.
The productive base is still narrow and weak. This is despite, more than three decades of deliberate efforts at promoting economic and development plans. At independence, the Nigeria economy was almost entirely based on agriculture with the sector accounting for over 80% of employment, government revenue and exports. However, crude petroleum took over since the 1970s while agriculture is almost neglected.
Effects of globalization: The process of globalization which started about a decade and a half ago, caught in the throes of political instability.
The main feature of globalization includes liberation of trade, free movement of capital and accelerated development in information technology. Globalization provides window of opportunity if the indices of development (interest and exchange rate, terms of trade, tariff etc) are on the positive and favorable scale.
In Nigeria, by middle of eighties, public infrastructures and utility had gone into serious dilapidation. The road network was no longer in good shape, hospitals, school, power supply and telecommunication became very erratic.
Bad governance: Bad governance had deprived Nigerians of the ideal and dividends of democracy. It is the objective of the government of Nigeria to tap through democratic process, the energy and creative talents of the people and harness the nation’s resources to enhance the welfare of the citizenry.
This is with a mission to create a dynamic economy and establish a free, democratic and just society through the pursuit o people centered programmes. The process will facilitate and consistently cultivate a style of governance that places premium on openness, transparency and accountability, probity and effective leadership.
Corruption: In Africa, illegal takeover of the government through military coup, embezzlement, nepotism, looting, bribery, buying vote, and abuse of office are very common.
Nigeria is ranked among the most corrupt nations in the world due to the attitudes of their leaders in siphoning public funds and saving it in Swiss bank. Currently, corruption is freely practiced at corporate levels; foreigners find it difficult to invest in Nigeria because of the corrupt impediments put on their way.
Through corrupt practices the bulk of the nation’s wealth have been distributed in favour of the few privileged to the detriment of the majority of Nigerians who are now entrusting public responsibility of Nigerians needs to be evolved.
Low productivity: Productivity which is the ratio of output to the corresponding input of factors of production (labour, land, capital and technology) has over the last one and half decades continued to be low in virtually all sectors of the Nigerian economy.
Low productivity is the genesis of economic stagnation in Nigeria. The long period of military rule with its centralized system of administration further aggravated the problem.
Unemployment: The unemployment rate in Nigeria currently is alarming; no nation of the world will ever succeed if their youth are not gainfully employed. The Nigeria people are eager to work but the absence of factories to absorb them has caused hardship in the country.
The unemployment situation in Nigeria was worsened by the primary school, secondary school, college dropouts and retrenched workers due to the closure of many industries.
Poor human resources development: Traditional and formal education ensures the full development of human personality and citizenship. Initial training develops a person’s skills and professional competence that enables him to perform in employment.
This is when complemented with life long experience would ensure continued appreciation and adaptation to change in global environment. In a developing country like Nigeria, poor human resource development has contributed in the cause of poverty in the country. Without adequate formal training and skills acquisition the nation will hardly progress into a major hub of economic power.