Nigeria has the largest
population in Africa and is the eight most populous
countries in the world. DFID (2009) observed that despite Nigeria’s oil
wealth, poverty levels are high with more than half of its about 140 million
people living on less than one dollar ($1) a day, one child out of every five
children dies before it reaches its fifth birthday. These factors are key
contributors to Nigeria
being off track on the millennium development gaols.
The
obstacles to promoting effective poverty reduction in the country are huge. Oil
wealth has distorted the economy and has discouraged growth in other sectors.
Competition for a share of oil wealth dominates politics, feeds corruption and
diverts attention away from improving governance. Moreso, years of military
rule has devastated the delivery of basic service, management of public
finances and as such preventing the development of a social contract between
the people and the government.
A
combination of ‘Dutch disease’ and rent seeking behaviour has undermined
activity in other areas of the economy (particularly agriculture and
manufacturing) reducing non-oil sector economic growth, fuelling unemployment
and increasing poverty and conflict. According to Collier et al (2003), the
Dutch disease is a route by which aid might increase capital flight as it will
tend to appreciate the real exchange rate thereby reducing the profitability of
the tradable sector.
Worthy
of note, is that there are different types of foreign aid to Nigeria, and
yet, a comprehensive record of very aid received and how it was utilized seems
very difficult to obtain. Thus the measurements of response of both the income
and non-income determinants of poverty also seem difficult. Furthermore,
corruption and capital flight have posed great obstacles to efforts aimed at
reducing poverty via foreign aid and this was note by Lynda Chalker, the former
British Secretary of State for International development when she revealed at
the Commonwealth summit in Abuja, Nigeria on December 3, 2003 that 40 percent
of the wealth created in Africa is invested outside the continent and that
foreign aid has not been spared of this capital flight.
Despite
the various international aid received by Nigeria, the country’s poverty
indicators remains a far cry from what is expected; Nigeria has the highest
number of children who are not enrolled in schools of any country in the world,
has 2% of the world’s population but suffers 100% of the world’s maternal
deaths (DFID,2009). In addition, access to primary healthcare, gender equality,
availability and access to basic social services still remains a problem, neither
has the standard of living of the people improved.
Abiola
and Olofin (2008) noted that studies have examined the importance of foreign
aid on food supply in countries where food crisis is prevalent, notably the low
income countries in sub-Saharan Africa but not much has been done in
investigating the relationship between foreign aid, food supply and poverty
reduction in Nigeria.
OBJECTIVE OF THE STUDY
The
main objectives of this work are:
i.
To
investigate the relationship between foreign aid and poverty in Nigeria.
ii.
To
investigate the impact of foreign aid on poverty level in Nigeria.
STATEMENT OF HYPOTHESIS
The
work will be guided by these hypotheses
H0: There is no relationship existing
between foreign aid and poverty in Nigeria.
H1: There is relationship existing
between foreign aid and poverty in Nigeria.
H0: There is no significant impact of
foreign aid on poverty in Nigeria.
SIGNIFICANCE OF STUDY
This
work will help to determine the direction of impact of foreign aid on poverty
in Nigeria
and thus, validate or disprove the various schools of through. In addition it
would serve as a guide to further enquiry and other research works.
LIMITATION OF THE STUDY
The
mot debilitating limitation of this study is the inadequacy of data in that
data on study poverty’s incidence in Nigeria by the relevant authority
was last undated in the social welfare survey carried out by the federal office
of statistics in 2007. Information made available to the researcher revealed
that Mr. President has just requested the national poverty eradication
programmes to collaborate with the federal office of statistics to conduct an
update survey to avail him and all concerned the much needed current relevant
data.