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Economic Growth, Employment Generation and Poverty Reduction in Nigeria

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Name of the Asset | Economic Growth, Employment Generation and Poverty Reduction in Nigeria
Type of Asset | Working Paper
Date | October 2009


The interconnectivity 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. This study attempts to critically examine the interconnection between income inequality, employment and poverty reduction in the process of economic growth

Using Nigerian time series data, the study carries out 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.  

The results show, 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.


  • S.O. Akande, Nigerian Institute of Social and Economic Research (NISER)
  • O.O. Ogundele, Nigerian Institute of Social and Economic Research (NISER)
  • A.O. Ogunwale, Nigerian Institute of Social and Economic Research (NISER)
  • Ade S. Olomola, Nigerian Institute of Social and Economic Research (NISER)

Country and/or Region | Nigeria
Name of the Program | GDN’s Global Research Project on ‘Institutional Capacity Strengthening of African Public Policy Institutes to Support Inclusive Growth and the MDGs’
Funder(s) |  The United Nations Development Programme’s (UNDP) Bureau for Development Policy (BDP) and Regional Bureau for Africa (RBA)

Download the Full Study here

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