Relative Contributions of Disaggregated Government Social Expenditure to Income Poverty Reduction in Nigeria

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue III, March 2022 | ISSN 2454–6186

Relative Contributions of Disaggregated Government Social Expenditure to Income Poverty Reduction in Nigeria

Dr. FASHANU Felix Adeniyi¹,  Dr. KASALI Taofeek Aremu^2, Dr. OLOWE Olukemi Olumuyiwa^1
1McPherson University, College of Social and Management Sciences, Seriki-Sotayo, Nigeria
²Moshood Abiola Polytechnic, School of Business and Management Studies, Abeokuta, Ogun State Nigeria

Abstract: Poverty has been viewed severally as a phenomenon that constitutes a major menace threatening the whole fabric of the development process in developing economies worldwide. However, attempts made to reduce this menace have not produced any significant positive results in Nigeria. It is for this purpose that this study investigates the relative contributions of disaggregated government social expenditure to income poverty reduction in Nigeria. The study adopted an ex post facto research design using the Autoregressive Distributed Lag (ARDL) model technique to analyse time-series data for a period from 1981 to 2020. The results established a long-run relationship between government social recurrent expenditure capital transfer and social transfer. CT and GSEX were found to be inversely related to poverty reduction (dPOVR). On the other hand, however, ST was found to be positively related to dPOVR. The study, therefore, concluded that while CT and ST have potentials for poverty reduction in Nigeria, increased government on GESX will further increase poverty. The study, therefore, recommended that government should prioritise the investment in social infrastructure in the rural areas where most of the poor in Nigeria reside, and this should be complemented with sustainable improvement in the government’s social recurrent expenditures on education, health and sanitation. To also make ST more effective, we further recommended that government should put in place reliable programs of social transfer and revisit government policies on pension and gratuities.

Keywords: Poverty reduction, capital transfer, social transfer, government expenditure and developing countries.

I. INTRODUCTION

Poverty has been viewed severally as a phenomenon that constitutes a major menace threatening the whole fabric of the development process in developing economies worldwide. It has greatly impacted negatively on the ability of most developing economies to achieve their sustainable development goal (SDG). The ability to reduce poverty incidence relative to other nations and among a country’s citizenry has distinguished between the developed and developing economies. This exertion explains why the governments of various nations constituting the less developed countries have adopted various measures aimed at achieving a drastically significant reduction in the incidence of poverty among their nationals, while at the same time striving to improve their comparative standing within the global economy.

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