Investment, Public Spending and Income Growth: Implication for Poverty Reduction Policy in Nigeria

Abstract

This study examines the precise relationship between income and poverty rate in Nigeria within the period of 1970 and 2013. It tests for unit root, cointegration, multiple regression estimation, post-estimation and causal relations among income, government spending on health and education, investment, revenue from oil proceeds and poverty rate. The results showed that government spending on education and revenue from oil proceeds plays a greater role in reducing poverty level in Nigeria. Nevertheless, income, investment, and government spending on health deteriorate the reduction in poverty level in Nigeria. This can be adduced to bad governance and high level of corruption in our public offices which has ruined the country’s resources. Therefore, there is need for good governance that promotes civil and economic liberties as they are essential for the development of citizenry initiatives and opportunity creation.

Keywords: Poverty rate, income, public spending, investment, Nigeria.