By: Vidya Diwakar and Adeniran Adedeji
Cassava processing, a source of employment to Nigerian women
Photo credit: International Institute of Tropical Agriculture
Nigeria has a large and growing share of people living in poverty. Roughly 40.1% of its population live below the national poverty line, while a similar share (46.4%) are multidimensionally poor. Covid19 has amplified these concerns, forecasted to push an estimated additional 10 million Nigerians into extreme poverty by 2022.
Research by CPAN and CSEA investigated key drivers associated with descents into and exits from relative monetary poverty across zones of Nigeria, the ways in which COVID-19 pandemic are likely to impact on these dynamics, and the implications for the design of social protection programmes and policy in Nigeria.
Pathways out of poverty constrained by vicious cycle of shocks and insecurity
The analysis uncovered limited sustained poverty escapes (6% of households), but a large share (19%) of households that experienced impoverishment or just transitory escapes from poverty, with spatial variations. If more of these households could be converted into sustained escapes, poverty would reduce in Nigeria.
To escape poverty, many households rely on land, education, and good health to enable livelihood-based pathways out of poverty. Engagement in non-farm enterprises (NFEs) is a common source of poverty escapes in the country, particularly for households with good health and some savings to start up the business. Salaried employment can drive sustained poverty escapes, particularly when coupled with completion of at least lower secondary education. In its absence, poverty escapes through agriculture are also possible, with land ownership important in guarding against subsequent descents into poverty.
However, high volatility of income especially in non-farm businesses during Covid19 has aggravated the riskiness of enterprises, limited education access, worsened health outcomes, and constrained the ability of households in poverty to effectively respond to shocks. The resulting hunger and distress coping strategies that emerge during Covid19 has created a vicious cycle limiting the potential of households to develop viable livelihoods to escape poverty in the time ahead.
Figure 1: Vicious cycle (outer circle) limiting poverty escapes (inner circle)
What can be done to support asset-enabled livelihood pathways out of poverty in Nigeria?
The research identified various factors that hold back the emerging social protection system from having a greater impact in reducing poverty. Key among them include a heavy dependence on using a social register that remains limited geographically and in its ability to provide real-time information on a household’s potentially changing status, the latter especially important in Covid. There is a pressing need to scale up investments in social protection policies, programmes and systems at federal and state levels-- especially in real-time selection and updating, and identification of a wider range of participants.
In addition, integrating social protection with other interventions in human development and livelihood sectors is relevant in better balancing the 3Ps of social protection (protection, prevention, and promotion). However, in a situation of weak governance, the institutional mechanisms for arbitrage may be limited, and so prioritising issues that require integration becomes key, as is ensuring contextual relevance in different regions.
The results of the analysis point to issues particularly important in helping tackle chronic poverty, prevent impoverishment, and ensure sustained escapes from poverty, and that concurrently work to address the 3ps of social protection (protection, prevention, and promotion). Examples of such interventions include effectively addressing ill health through access to quality services free at the point of delivery, responding to key sources of livelihood risk in non-farm businesses and agriculture (e.g. through micro-insurance), and supporting asset development.
In efforts to integrate, social protection could be at the core of a sequence over a period of years, with social assistance gradually combined with individual and collective savings and credit (e.g. through GEEP), education catch-up if necessary, and then with technical and business skill upgrading, and business development advice and/or agricultural extension support.
Addressing the vicious cycle through integrated social protection is an important component of enabling sustained poverty escapes in Nigeria