Economic Growth, Employment Generation and Poverty Reduction in Nigeria

The relationship among economic growth, employment and poverty reduction is an organic one such that the evolution of economic growth is intimately tied to the evolution of employment generation and poverty reduction. Imbalances in macro-economic policies and poor implementation could result in unemployment thereby exacerbating inequality and poverty. The methodology of the study is basically a macro level analysis of how economic growth could contribute to poverty reduction through increases in employment in higher productivity sectors/occupations and a rise in wages. It employs intensity of growth as measured by the GDP elasticity of employment. The technique further involves a macroeconomic analysis of the linkage between the incidence of poverty and employment intensity of growth in Nigeria. The study found among other things that poverty has risen since the resumption of growth in Nigeria. Although there seems to be some decline in relative poverty in recent past, the actual number of people in poverty continues to rise considerably. Moreover, the analysis shows that inequality in income distribution is widening and varies between female- and male-headed households. The developments that are found to make a positive contribution to poverty reduction include structural transformation of employment towards manufacturing and other non-farm sectors, education, and lowering of the dependency burden (i.e., increase in labour force participation). Thus, efforts to reduce poverty will have to focus on the informal sector, acknowledging this sector as not a problem for development, but rather as a starting point for achieving development and poverty reduction