Assessment of Rural Households Poverty in Nigeria: Evidence from Ogbomoso Agricultural Zone of Oyo State, Nigeria

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1 Journal of Scientific Research & Reports 2(): 35-45, 203; Article no. JSRR SCIENCEDOMAIN international Assessment of Rural Households Poverty in Nigeria: Evidence from Ogbomoso Agricultural Zone of Oyo State, Nigeria S. O. Olawuyi * and M. O. Adetunji Department of Agricultural Economics, Ladoke Akintola University of Technology, P.M.B 4000, Ogbomoso, Oyo State, Nigeria. Authors contributions The corresponding author SOO designed the study, performed the statistical analysis and wrote the first draft of the manuscript. The author MOA managed and reviewed the literature searches, proof read the first draft of the manuscript; then, make the necessary suggestions and corrections; hence, all authors read and approved the final manuscript. Research Article Received 5 th September 202 Accepted 22 nd December 202 Published 8 th February 203 ABSTRACT Poverty is a topical issue in developing countries especially Africa and Nigeria in particular. The dearth of studies on quantitative determinants of poverty in Nigeria is a major weak point in the country s poverty reduction policy and strategy formulation. This study analyzed the incidence, severity and the determinants of household poverty in Ogbomoso Agricultural Zone of Oyo State, Nigeria using the data collected through wellstructured questionnaire from 20 respondents who were selected through a multistage sampling technique. Analytical techniques used include descriptive statistics (frequency counts, percentages and mean values), poverty Indices and ordinary least square technique (OLS); this was used t o assess the determinants of poverty among the households. The findings revealed that poverty is higher among households that have old heads, female heads, and large household size, engage in farming as the only occupation and have no formal education; poverty therefore rises with the increase in household size while it reduces with increase in level of education, farm size and participation non-farm jobs as alternative livelihood source (livelihood diversification). Gender, household size, years spent in school, farm size and non-farm jobs were found to be important and significant factors determining poverty in the study area. The study recommends that, *Corresponding author: seyidolapo@yahoo.co.uk;

2 there is the need to control household size, invest in human capital development, increase farm size and embrace livelihood diversification; these and many more are ingredients of effective poverty reduction strategies. Keywords: Rural households; poverty; poverty indices; OLS; Oyo State; Nigeria.. INTRODUCTION Nigeria has experienced a high incidence of poverty in the last two decades and this has been largely traced to the adverse macroeconomic performance of the economy especially as dictated by the effects of negative external shocks and the adjustment reforms that were initiated in response to the shocks; succeeding governments have not been able to adequately cope with this deep-rooted problem [9]; he further stated that, studies on poverty in Nigeria have not been given priority until recently. [5] stressed Nigeria has a population of 50 million, the largest in Africa and a fast-growing economy. Agriculture is the mainstay of the economy, contributing about 45 per cent of GDP. The agriculture sector employs about two-thirds of the country s total labour force and provides a livelihood for about 90 per cent of the rural population. Nigeria is the world s largest producer of cassava, yam and cowpea - all staple foods in sub-saharan Africa. It is also a major producer of fish. Yet it is a food-deficit nation and imports large amounts of grain, livestock products and fish. Nigeria s huge agricultural resource base offers great potential for growth. Recent government policies have started to show results: between 2003 and 2007, the agricultural sector is reported to have grown by 7 percent a year. The area of land under cultivation could be increased by as much as 00 per cent. And there is substantial scope for an increase in irrigation, which now covers only 7 per cent of irrigable land. Irrigation and other inputs would substantially increase average yields for major staple crops, currently below those in other developing countries. Despite Nigeria s plentiful agricultural resources and oil wealth, poverty is widespread in the country and has increased since the late 990s. Over 70 per cent of Nigerians are now classified as poor, and 35 per cent of them live in absolute poverty. Poverty is especially severe in rural areas, where up to 80 percent of the population lives below the poverty line and social services and infrastructure are limited. The country s poor rural women and men depend on agriculture for food and income. About 90 per cent of Nigeria s food is produced by small-scale farmers who cultivate small plots of land and depend on rainfall rather than irrigation systems [5]. [6] defined poverty as deprivation from resources (physical, economic, social, etc.), which are needed to achieve a sustainable livelihood. Poverty is recognized to be multidimensional in its causes and manifestations; including lack of income and productive resources sufficient to ensure a sustainable livelihood; hunger and malnutrition; ill health; limited or lack of access to education and other basic services, increasing morbidity and mortality from illness, homelessness and inadequate housing, unsafe environments; social discrimination and exclusion; lack of participation in decision-making, social and cultural life. More importantly, many of the other aspects of poverty (e.g., health, education, environment, political empowerment) are covered more fully in the assessments reports of the other critical areas of concern; the direct focus of this report is poverty and economic empowerment of women. A commonly used measure of the incidence of poverty is the head count ratio. This is defined as the share of the population whose consumption falls below the poverty line. The poverty line is a specified threshold of income or value of consumption for a given country, sub-region or region, below which one is defined as poor. For developing countries, poverty lines are usually calculated as the monetary value of some minimum 36

3 bundle of consumption goods and services (food, shelter and health, etc.) required to satisfying basic requirements within a particular social context. Poverty lines may differ among countries/regions in a given space in time, and may also vary over time, as socioeconomic conditions change. Forty four per cent of the Africa's population lives below the region-wide poverty line of $39 per capita per month. However, the extent and severity of poverty varies among the sub-regions. The least prevalent incidence of poverty is found in the rth African sub-region where 22 percent of the population lives below the sub-regional poverty line of $54 per capita per month. In Sub-Saharan Africa, 5 percent of the population lives below the regional poverty line of $34 per capita per month. In Sub-Saharan Africa, the incidence of poverty in rural areas tends to be higher than that in urban areas. She further stressed said that, this (the incidence of poverty in rural areas tends to be higher than that in urban areas) was found to be the case on the basis of comparisons of the head-count ratio, the mean expenditure, poverty line and average expenditure for the urban and rural areas. The extent of rural poverty varies among countries. Cote d Ivoire was found to have the lowest level of rural poverty, while the Central African Republic had the highest proportion (78%) of its rural population living in poverty. African Governments and international organizations expressed their commitments to implement the Dakar and Beijing Platforms for Action in their declarations and speeches at the Dakar and Beijing conferences on women. The subsequent National Action Plans showed their commitments further, outlining planned modalities for implementation. These Plans showed that an overwhelming majority of African Governments placed poverty reduction and the economic empowerment of women among their top priorities for action. Country assessment reports indicated that countries faced a number of constraints in implementing the Beijing Platform for Action in the areas of poverty reduction and the economic empowerment of women. Commonly reported constraints included the lack of financial and human resources; the debt burden, which constrains available resources for gender equity programmes; time constraints associated with women's fulfilment of their multiple roles; war and civil strife. Despite these constraints, many countries reported progress in implementing some aspects of the Beijing Platform for Action. In the area of policies and institutional mechanisms, countries reported the establishment or the strengthening of national machineries for the promotion of gender equality. In addition, some countries reported the adoption of the principal of gender mainstreaming for all public policies and programmes; other countries also reported the passage of affirmative action laws to facilitate women's entry into decision-making bodies, especially the parliament [6]. The overall objective of this study is to assess the determinants of poverty among rural households in Ogbomoso Agricultural Zone of Oyo State, Nigeria. And, the specific objectives are to: Identify socio-economic characteristics of the households. Examine the influence of socio-economic characteristics on households welfare. Assess the determinants of poverty among the households.. Literature Review According to [4], the failure of many poverty reduction interventions has been because they ignored the great diversity and heterogeneity in assets portfolios across rural households and the range of activities in which they engage to generate income. But, now it has been discovered that peasant households in developing countries typically earn income from many different sources [2]; literatures on income diversification across developing countries have pointed to the increasing role of off-farm income in poverty reduction [2] and with 37

4 increasingly limited agricultural resources; many have proposed a poverty reduction strategy, which would focus on the role of the off-farm sector to eradicate poverty and ensure equitable rural development. [0] opined that, the extent and depth of poverty in the developing world is a disgrace; over. billion people (30 percent of the population) live in absolute poverty with only a dollar a day or less per person to meet food, shelter, and other needs. t surprisingly, hunger, malnutrition, and associated diseases are widespread: more than 700 million people do not have access to sufficient food to lead healthy, productive lives; millions more live on the edge of hunger; and more than 80 million pre-school children are significantly underweight. Every second, person in South Asia and Sub-Saharan Africa is absolutely poor; unless concerted action is taken now, poverty is not expected to diminish much in the near future. South Asia will continue to be home to half the developing world's poor, and Sub-Saharan Africa, where the number of poor is projected to increase 40 percent between 990 and 2000, will emerge as an increasingly important locus of poverty. Poverty is a rural phenomenon in most of the developing world, especially the low-income developing countries. The rural poor make up more than 75 percent of the poor in many Sub-Saharan African and Asian countries. Latin America's high urbanization rates have led to a higher prevalence of urban poverty, but even in that region the majority of the poor are rural. [6] observed that while commonly used indicators are useful in providing an understanding of overall poverty situation, yet they do not enable much insight into the gendered nature of the underlying causes and incidence of poverty; they tend to be based primarily on consumption and income data collected at the household level. They are not however, broken down by gender and therefore do not indicate the sex disaggregation of those classified as poor. These indicators are also unable to reflect gender-based inequities within households. A key challenge for documenting and monitoring the gendered nature of poverty is the development of appropriate and reliable indicators. This would probably entail the use of the common indicators of poverty, along with information collected within households. Meanwhile, there is still a paucity of generally accepted indicators looking at the genderdifferentiation in the incidence, severity and change in poverty; for instance, the presence of female heads of households is sometimes considered a generalized likely indicator of women's economic poverty particularly in Africa. However, recent studies have shown that the existence of female heads of households does not always coincide with higher levels of poverty. It was also argued that, in West Africa, polygamous male headed households as a group had a larger incidence of poverty in the society. However, an argument can be made that, in many cases, women are the de-facto heads of households. As such, in some features, sub-units of polygamous households could be considered as female-headed households. Similar results were found for Kenya, Guinea-Bissau and Cote d Ivoire. On the other hand, in Southern Africa, it was found that the incidence of poverty was actually higher among female-headed households. Other indicators for women s poverty which have been considered include family size, women's control over resources and women's levels of education. However, for the most part, there is still a need to collect gender-disaggregated data, develop indicators and use them for policy, research and advocacy for the enhancement of gender equality in Africa. [9] stressed that, there is controversy in the literature on what exactly a poverty line is. There are two main approaches that have been used to determine poverty line in the literature; these include the absolute approach and the relative or subjective approach. Under the absolute approach, a household is said to be poor if its income or consumption level is insufficient to acquire a given level of goods and services regarded for essential minimum standard of living. The poverty line from this approach usually has a fixed value; the popular methods in estimating these poverty lines include the food energy intake and the cost of basic needs methods. The relative or 38

5 subjective approach defines the poor relative to others in the same society or economy. A relative poverty line varies as the average of total population consumption varies; for instance, when the poverty level is fixed at 2/3 of the mean; the relative poverty line is both subjective and arbitrary. These controversy notwithstanding, the main issue in poverty line however, is to be able to get a poverty line that offers a consistent poverty profile so that we would be able to compare precisely poverty among households. In the same vein, [8] defined poverty line as a predetermined or well-defined standard of income or value of consumption, which is deemed to represent the minimum required for a productive and active life or even survival. The global concern about poverty is not by accident as there is a general consensus that poverty has become a pervasive and massive global outrage; this is because almost a billion people in the world over live in absolute poverty and suffer from chronic hunger []..2 Prevalence of Poverty in Nigeria [3] analyzed the prevalence of poverty in Nigeria between 980 and 2004; this is shown in Table : Table. Prevalence of poverty in Nigeria ( ) Percentage of poor people in total population Total Sector Urban Rural Geopolitical zones rth-east rth-west rth-central South-east South-west South-south Size of household person 2-4 people 5-9 people 0-20 people More than 20 people Education of household head education Primary education Secondary education Post-secondary education Adapted from [2]

6 2. MATERIALS AND METHODS The study was carried out in Ogbomoso Agricultural Zone which comprises of Five Local Government Areas; these are Ogbomoso rth, Ogbomoso South, Ogo-Oluwa, Orire and Surulere Local Government Areas (LGAs). The zone experience both wet and dry season annually. The climate of the area favours arable crops production. The rainy season usually starts in March and last till vember. The dry season is usually very hot except during harmattan period when it is cold and dry. Majority of the populace combines subsistence farming with other occupation like trading, civil service and handicraft. According to Nigeria population census of 2006, Ogbomoso is the second largest town in Oyo State with an urban population of about 657,47 and lies between latitude 8º29 rth of the equator and between 40º30 rth of the Greenwich Meridian. Ogbomoso has an area landmass covering about 37,984 square kilometers and located in the northern part of Oyo State. The vegetation of Ogbomoso is dominated by derived savannah vegetation and agriculture is the main occupation of the people. Multistage sampling technique was used to select the representative sample. Three Local Government Areas were purposively selected from the identified LGAs because of their rurality in nature. Four villages were randomly selected from each of the chosen local government areas, making a total of twelve villages; then, ten households were selected with the aid of the document obtained from Ogbomoso Agricultural Development Zone (ADP) Zone office which contains listed households from each of the selected villages; this was done through random sampling technique to arrive at a total of 20 respondents used for the study. Analytical techniques used include descriptive statistics such as frequency count, percentages and mean values. Also, poverty indices which are the measurement of head count ratio (P 0 ), depth of poverty (P ) and severity of poverty (P 2 ) as well as Ordinary Least Square technique (OLS) were also used to examine the determinants of poverty among the households. 2. Poverty Indices According to [], poverty indices are the measurement of head count ratio (P 0 ), depth of poverty (P ) and Severity of poverty (P 2 ). The measures related to the different dimension of the incidence of poverty. The three measures are based on a single formular but each index put different weight on the degree to which household or individuals falls below poverty line. This approach is based on the mathematical formular which explains poverty indices anchored upon the existence of households classification according to income or consumption expenditure. To determine poverty profile indices, it becomes necessary to use the so called P-alpha measured analyzing poverty; its mathematical formulation is derived thus: P x = ( z a N i y z ) a ( ) Where N = the total population in the group of interest, Z = Poverty line, N = Number of individual below the poverty line, Y = Expenditure of income of the household in which the individual lives. x = the degree of concern for the depth of poverty, it takes on the value of 0, 40

7 and 2, for poverty incidence, poverty gap and poverty severity respectively. The indices are then derived as follows: P 0 = P = P 2 = N N N a i a i a i ( z ( z ( z y z y z y z 3. RESULTS AND DISCUSSION ) ) ) 0 2 ( 2 ) ( 3 ) ( 4 ) The selected characteristics of the sampled households as succinctly given in Table 2 shows an average age of respondents to be 47.4 years, this indicates that the respondents are in their economically active and productive age bracket while nearly two-third of the sampled households are headed by male. The average household size is estimated as 8 members per adult equivalents, which is above the national average [7]; this is perhaps because of the need for family labour to work on the family farms. About half of them have no formal education judging by number of years spent in school and more than two-third acquire their land through inheritance which results to land fragmentation as such land is passed to offspring after owner s death; this eventually leads to low productivity as all the landed area may not be put to agricultural use by the beneficiaries. The average farm size of 2ha is somewhat comparable to the national average; the implication of this is reflected in their total productivity as well as income because it is event that they farming operation in the study area is on subsistence level. It was also observed that more than half of the respondents are members of social group through which they acquire social network and benefits while about half of the sampled households have other working (employed) members apart from the household head, who in one way or the other contribute their quota to the household income as well as household maintenance. More than half of them do not have any other means of livelihood other than farming which limits the income, affects expenditure and ultimately aggravates poverty. The result of the poverty indices based according to selected household s characteristics as presented in Table 3 shows that the prevalence of poverty is higher among households with older head and those that do not belong to social group; this connotes that there are more income-earning opportunity for young and active farmers as well as those that are members of social group as such group provides needed social network and benefits. It was also observed that poverty is higher among small-scale farmers (farmers cultivating less than 2ha of land); the poverty rate among this group is twice that of those that cultivate more than 2ha. The prevalence of poverty is also higher among the households in the lowest expenditure class (those spending less than N5, 000) per month. 4

8 Table 2. Selected Households socio-economic characteristics Characteristics Frequency Characteristics Frequency Age (years) Above 60 Mean (47.4) Gender Male Female Household size Above 0 Mean (8.2) Years spent in school (years) ne Above 2 Farm size (ha) Less than Above 4 Mean (2.43) Land tenure Inheritance Borrow Lease Gift Total 3 (25.8) 24 (20.0) 53 (44.2) 2 (0.0) 79 (65.8) 4 (34.2) 43 (35.8) 7 (59.2) 6 (5.0) 59 (49.2) 44 (36.7) 3 (0.8) 4 (3.3) 32 (26.7) 64 (53.3) 24 (20.0) 83 (69.2) 22 (8.3) 9 (7.5) 6 (5.0) 20 (00.0) Members of social group (dummy) n-farm Jobs Other employed member Total Households Income (N/month) Less 20,000 2,000 40,000 40,000 60,000 Above 60,000 Mean (N 37,75.23) Households Expenditure (N/month) Less 5,000 5,000 30,000 3,000 45,000 Above 45,000 Mean (N 23,38.34) Poverty status Poor n-poor Total 78 (65.0) 42 (35.0) 49 (40.8) 7 (59.2) 64 (53.3) 56 (46.7) 23 (9.2) 36 (30.0) 53 (44.2) 8 (6.6) 7 (4.2) 59 (49.2) 3 (25.8) 3 (0.8) 54 (45.0) 66 (55.0) 20 (00.0) Source: Field survey, 20. Figures in parentheses are percentage values. Poverty rate among households that engage only in farming is higher than those that combine farming with non-farm work (livelihood diversification); this is expected considering the low return to labour in farming compared to what non-farm work offers. As expected, the prevalence of poverty is lower among household heads with formal education; this is because education tends to open more opportunity for income generation through various means such as participation in alternative livelihood activities. The prevalence of poverty is not considerably different between household with head that acquire land through inheritance, borrowing, lease and gift, as they are being affected by the prevailing land tenure system in the study area. 42

9 Table 3. Prevalence, Depth and Severity of poverty based on selected socio-economic variables Variables Age (years) Above 60 Household size Above 0 Years spent in school (years) ne Above 2 Farm size (ha) Less than Above 4 Land tenure Inheritance Borrow Lease Gift Members of social group (dummy) n-farm Jobs Other employed household member Households expenditure (N/month) Less 5,000 5,000 30,000 3,000 45,000 Above 45,000 Prevalence of poverty (%) Source: Field survey, 20 Poverty depth (%) Severity of poverty (%) Determinants of Poverty among the Sampled Rural Households The OLS regression estimates of the model as presented in Table 4 revealed a coefficient of determination of 0.536, indicating 53.6% of the total variation in the dependent variable (per capita expenditure as a proxy for income and a measure of welfare) is explained by the independent variables; this further suggests that the model has good predictive ability. The 43

10 result shows that gender, household size, years spent in school, farm size and non-farm jobs are important and significant factors determining poverty in the study area. It was revealed that gender, years spent in school, farm size and non-farm jobs have positive relationship with per capita expenditure while household size have negative relationship with per capita expenditure; all these suggest that female-headed households are poorer than their male counterparts; then, as expected, years spent in school is positively significant meaning that respondents with less educational level is poorer than those with more educational level because education exposes individuals to better and alternative means of livelihood; this agrees with the findings of [3]. Also, the positive relationship of farm size suggests that poverty decreases with increase in farm size which could be translated to increased output and more income if resources are well used. In the same vein, positive significance of nonfarm jobs suggests that livelihood diversification is important towards raising household income. Meanwhile, the negative relationship of household size with per capita expenditure shows that poverty increases with increase in household size, all things being equal. Table 4. Determinants of households poverty Variables Co-efficient t-value Constant Gender (dummy) Log Household size Log Years spent in school (years) Log Land tenure Log Farm size (ha) Log n-farm job Log member of social group (dummy) R 2 Adjusted R 2 F-value * **.723* *** 3.82***.557 Dependent variable: Log of per capita household expenditure. ***, **, * - indicate significance at %, 5%, and 0% probability level respectively. Source: Computer print-out, CONCLUSION This study was carried out to access the determinants of rural households poverty in Ogbomoso Agricultural Zone of Oyo state, Nigeria using the data collected through questionnaire from 20 respondents who were selected through multistage sampling techniques. The result revealed that majority of the respondents is still within the economic and active age bracket while about 65.8% of the households are headed by male. The prevalence of poverty is higher among households with older head and those that do not belong to social group. It was also observed that poverty is higher among small-scale farmers (farmers cultivating less than 2ha of land. The prevalence of poverty is also higher among the households in the lowest expenditure class. It was found that, poverty rate among households that engage only in farming is higher than those that combine farming with non-farm work the prevalence of poverty is lower among household heads with formal education. The Econometric analysis shows that, gender, household size, years spent in school farm size and non-farm jobs are important and significant factors determining poverty in the study. Some of these findings agree with [3]. 44

11 Based on the findings of this study, it is recommended that effective mass literacy programmes and campaign against high fertility rate are necessary to reduce the unappreciated rate of poverty since large household size and those with less educational level are poorer. And, the need for livelihood diversification is of utmost importance so as to pave ways for different income sources because more income source is capable of lifting them above the poverty line. COMPETING INTERESTS Authors have declared that no competing interests exist. REFERENCES. Akingbile LA, Ndaghu AAT. Poverty level and poverty alleviating strategies of farm families in Michika L.G.A of Adamawa State, Nigeria. Journal of Economics and Rural Development, 2005;4(2):0. 2. Babatunde RO. Income Portfolios in Rural Nigeria. Composition and Determinants. Trends Agric. Econ, 2008;: Babatunde RO, Olorunsanya EO, Adejola AD. Assessment of Rural Household Poverty: Evidence from South-western Nigeria. American-Eurasian Journal of Agric. And Environ. Sci. 2008;3(6): De-Janvry A, Sadoulet E. Income strategies among rural households in Mexico: The role of off-farm activities. World Dev. 200;29: IFAD. Rural Poverty in Nigeria. Agriculture in the Federal Republic of Nigeria: Approaches, Policies and Programmes, 3 th February; Katepa-kalala P. Assessment Report on women and poverty, and the economic empowerment of Women. A paper presented at the Economic Commission for Africa s Sixth African Regional Conference on Women; vember, 999. Addis Ababa, Ethiopia. 7. NBS. National Bureau of Statistics, socio-economic survey on Nigeria, Abuja; Okumadewa FY. Overview of the Measurement of Poverty. Paper presented at the Graduate Studies Capacity Building Programme Training Workshop, July, 999. Ibadan, Nigeria. 9. Olaniyan O. The Role of Household Endowments in determining Poverty in Nigeria. Department of Economics, University of Ibadan, Nigeria; Per PA, Rajul PL. Agricultural Growth is the Key to Poverty Alleviation in Low-Income Developing Countrie, IFPRI Vision 2020 Brief 5; Scott C.D. Poverty among Small Farmers under Frei and Pinochet ( ). Bull. Latin Am. Res. 997;6(): Olawuyi and Adetunji; This is an Open Access article distributed under the terms of the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. Peer-review history: The peer review history for this paper can be accessed here: 45