Poverty alleviation and the effects on Nigeria economic growth

Poverty continues to be one of the greatest obstacles to sustainable economic growth in developing nations, with Nigeria being no exception. This study explores the connection between poverty alleviation initiatives and economic growth in Nigeria from 1980 to 2022, using secondary data and econometric techniques. The research is grounded in the Solow Growth Model, which emphasizes the importance of human capital and investment in fostering economic development.

The analysis considers Gross Domestic Product (GDP) as the dependent variable and evaluates key independent variables such as the poverty index, government spending on poverty alleviation programs, unemployment rates, and inflation rates. Findings indicate that high poverty levels significantly and negatively affect economic growth by limiting labor productivity, human capital development, and overall demand. On the other hand, government spending on poverty alleviation programs demonstrates a positive and significant influence on GDP growth, underscoring the potential of well-executed fiscal interventions to reduce poverty and promote economic progress.

However, the study also reveals that macroeconomic instability, reflected in high unemployment and inflation rates, severely hampers economic growth, highlighting the urgent need for structural and policy reforms. The research concludes that while poverty alleviation efforts in Nigeria have achieved some positive results, they are still hindered by systemic inefficiencies, corruption, and persistent macroeconomic challenges.

Recommendations include improving the effectiveness of poverty alleviation programs, prioritizing investments in human capital development, implementing robust macroeconomic reforms, and strengthening institutional frameworks to enhance transparency and accountability. These findings contribute to the ongoing discourse on poverty reduction and economic growth, offering practical insights for policymakers and stakeholders in Nigeria and other developing countries.