Measuring Relationships between Economic Growth and Poverty in Nigeria - Part 2 - discussion on findings from EPAR Technical Report 327

Sep 16, 2026

Second in a two-part series examining how economic growth and poverty interact in Nigeria, drawing on findings from EPAR Technical Report #327. It contrasts GDP per capita and GNI per capita measurements and shows elasticity of poverty varies across 1992–2009. Despite continued economic growth, the document finds no consistent relationship with poverty reduction, highlighting the role of inequality, oil dependence, corruption, and regionally uneven education and health outcomes.

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Measuring Relationships between Economic Growth and Poverty in Nigeria

Growth elasticity and measurement choices (1992-2009)

What factors influence the relationship

Continue What is economic growth in nigeria This is the second in a two-part series on measuring and understanding economic growth and poverty in Nigeria, presenting findings from EPAR Technical Report \#327 . Nigeria became Africa’s largest economy in 2014. As Nigeria’s Gross Domestic Product (GDP) per capita grew by nearly 70% between 1992-2009, poverty rates fell by 6% . However, while the proportion of impoverished Nigerians decreased slightly, the population grew by 54. 3%, increasing the absolute number of Nigerians below the poverty line. In part one of this series, we examine different measures of economic growth and poverty and how the choice of measures may affect findings. Here, we discuss the relationship between economic growth and poverty reduction in Nigeria, explore factors that may influence this relationship, and highlight how this relationship potentially affects aid allocation to countries like Nigeria.Measuring Relationships between Economic Growth and PovertyAs a country’s economy grows, as measured by indicators like Gross Domestic Product (GDP), scholars hypothesize that individual-level income will increase and poverty will be reduced. While previous research demonstrates this correlation at a global scale, some authors contend that the correlation may be heavily influenced by trends in more populous countries such as China and India, which have seen particularly large economic growth and poverty reduction over the past 30 years. In many developing countries, persistent income inequality may keep poor populations from benefiting from economic growth.The growth elasticity of poverty (“elasticity”), defined as the percentage change in poverty divided by the percentage change in the size of the economy or average income, is one measure of the association between economic growth and poverty reduction. We compare different economic growth measures and poverty measures in Nigeria between 1992-2009, and find that estimates of elasticity vary across different measures, especially between 1992-1996 and 1996-2003. In both these periods, measuring economic growth using GDP per capita as opposed to GNI per capita (both in terms of constant 2011 $ at PPP) would lead to very different findings, as shown in the figure below.Estimates of Growth Elasticity of Poverty Using the Poverty Headcount Ratio at $1 .90/day, 2011 PPPAcross the whole period 1992-2009, looking at GDP per capita, PPP (constant 2011 $) we would conclude that economic growth was associated with large decreases in poverty in the early 1990s, but that the magnitude of this relationship has fallen since and that there is now nearly no effect of economic growth on poverty. Looking at the equivalent measure of GNI per capita, PPP, we would conclude that economic growth in 1992-1996 was associated with large increases in poverty, but there has been almost no effect in more recent years.What Factors Influence Economic Growth and Poverty?Overall, we observe no consistent relationship between economic growth and poverty reduction in Nigeria, as measures of poverty have not changes significantly since 1996 in spite of continued economic growth. Our review suggests several factors that may affect this relationship and limit the potential positive effect of economic growth on poverty reduction.Economic inequality in Nigeria is growing, with an ever-increasing economic gap between the relatively affluent urban southern region and the comparatively poor rural populations in the north. This gap is largely due to a lack of equal access to infrastructure and education in the north and is further heightened by security concerns with the Boko Haram insurgency. Inequality means that gains from economic growth are concentrated among the already affluent and opportunities for the poor to escape poverty are reduced.These effects are further exacerbated by dependence on the oil sector, which is estimated to contribute 75% of Nigeria’s government revenue. This sector is

FAQs

What is the document’s main focus regarding Nigeria’s economic growth and poverty?

It examines how different measures of economic growth relate to poverty reduction in Nigeria, using findings from EPAR Technical Report #327.

How do GDP per capita and GNI per capita lead to different conclusions?

Using GDP per capita suggests large poverty decreases in the early 1990s, while using GNI per capita suggests poverty increases in 1992–1996 and little effect afterward.

Why does economic growth not consistently reduce poverty in Nigeria?

The document points to rising inequality, oil dependence limiting labor-intensive job creation, and corruption that weakens social infrastructure and public investment.

Sep 16, 2026

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