INTRODUCTION - BACKGROUND
OF THE STUDY
Poverty
is the condition of having insufficient resources or income to meet the basic
needs of life. It could be seem from the multidimensional aspect, involving not
only lack of income, but also ill-health, illiteracy, lack of access to basic
social services and little opportunity to participate in the processes that
influence people’s lives. According to the Encyclopaedia Americana (cited in
Ijaiya and Mobolaji, 2004) poverty is viewed from the perspectives of
moneylessness and powerlessness. Moneylessness means insufficiency of cash and
chronic inadequacy of resources of all types to satisfy basic human needs such
as nutrition, warmth, rest and body care. Powerlessness on the other hand means
lack of opportunities and choices to govern oneself. It describes a set of
people who lack the opportunities and choices and whose lives seem to be
governed by forces and persons outside their control.
The
definition of poverty distinguishes two types of poverty: the absolute and
relative poverty. One can sometimes make the distinction between the poor and
the non-poor against absolute standard of welfare (e.g. amount of income, life
expectancy and housing conditions). For instance, if you know about the family
living just on the local staple (“garri” potatoes, rice etc). you might
conclude that, that family is poor. The relative measure of poverty identifies
the poor by relating their position to that of other individuals in their
environment or another. The extreme poor, also referred to as “hard-core poor”,
are more likely to be underweight; have higher mortality rates; prone to
disease and illness; less likely to have assets and have series fluctuations in
their employment status (Sowa, 2003).
Two
factors are responsible for poverty according to Yahie (1993) these include:
(a)
Structural
factors that are more permanent and dependent upon a host of exogenous factors
such as limited resources, lack of skills, locational disadvantage and other
factors that are inherent in the socio-political set-up.
(b)
Transitional
factors that are mainly due to structural adjustment programs and changes in
domestic economic policies that may result in price changes and increased
unemployment.
1.
Human
poverty: This means lack of essential human capabilities such as being literate
or adequately nourished.
2.
Income
poverty: This means the lack of minimally adequate incomes or expenditure.
3.
Extreme
poverty: This type of poverty is specified as the inability to satisfy minimum
food requirements.
4.
Overall
poverty: This refers to a less severe level of poverty usually seen as the
inability to satisfy essential non-food as well as food needs of which the
former varies considerably across societies.
5.
Relative
poverty: Is defined by standard that change across countries or overtime often
in terms of the capital income and often loosely used to mean overall poverty.
6.
Absolute
poverty: This is defined using an international standard of $1 a day as the
poverty line.
Recognizing that economic growth is
necessary and that poor policies and structural weakness mainly bring about
worsening economic and social conditions, the United National (UN) in its
millennium summit in 2000, agreed upon a set of millennium development goals
(MDG’s) to be reached by year 2015 as a way of guiding future efforts to
address poverty. One important commitment required to meet the MDG’s was for
the wealthy nations to increase their aid to 0.7 percent of Gross National
Income.
Nigeria faces a
major development challenge of how to revue the high poverty level prevailing
among her population. Central to this challenge is how the country can
effectively and substantially feed over 140 million people as well as accelerate
economic development, just as the prominent requirement for foreign aid to Nigeria is that
it should facilitate reduction in poverty and hunger as stipulated in one of
the eight millennium development goals. Moreso, the past 50 years of Nigeria’s
history has been characterized by high economic volatility, political
instability and social unrest which have militated against the effective
management of its wealth. Hence, there is a negative impact of resources
arising from large inflows of foreign capital and resulting high currency
exchange rates, which makes manufacturing non-competitive and encourage
de-industrialization.
Generally,
there are two schools of thought as regards the impact of foreign aid on
poverty. The first school of though believes that foreign aid would help
augment the efforts of the government on the standard of living of its people
and also aid economic growth. While the other school of thought believe that
foreign aid to developing countries harms their economy, since the aids are
most of the time not properly utilized, and at times out rightly looted.
Thus,
in a resource rich state like Nigeria,
where politics, public service and social existence is often entangled with
business interest and as such feeds corruption and mismanagement, the
contribution of foreign aid to the improvement of poverty is the country
remains an acid test for aid effectiveness.