Manifestation of Income Inequality and Poverty Prevalence in Selected North Central States of Nigeria

Poverty in Nigeria has been described as pervasive owing to the fact that the nation has witnessed a persistent increase in poverty level over the years. More so, there has been a renewed and growing concern about poverty and income inequality due to their negative implications for both economic growth and social peace. In Nigeria, the twin issues of poverty and inequitable income distribution present a paradox. This is because, though the country is rich in land, human and natural resources, yet 70 percent of Nigerians are still considered poor with low per capital income. More so, it has been argued that income inequality is a manifestation as well as strong cause of poverty. The study therefore analyses the empirical relationship between manifestation of income inequality and poverty prevalence among households in selected North Central States in Nigeria. This study employed survey method using structured questionnaire. A representative sample of 600 respondents was planned for the survey in order to have at least 462 households responding. However, the study has 501 household respondents representing 84 percent success rate. The result shows that 84 percent households believe that income inequality is a major determinant of poverty in Nigeria and 76 percent also agreed that poverty occur most in rural area than urban areas. It was found that a disproportionate share in income across divide would exacerbate poverty among rural dwellers particularly farmers, artisans, and traders. The study therefore recommends a deliberate policy of reducing income inequality so as to reduce the incidence of poverty especially among the rural dwellers.


Introduction
There has been a renewed and growing concern about increasing poverty and income inequality both within and across countries and their negative implications for both growth and social peace (Bourguignon, Fournier, & Gurgand, 1998;Birsall, 2005).
In Africa, poverty remains a scourge that undermines development in contemporary African Society in that: it is deep-rooted and pervasive (Igbatayo & Igbinedion, 2006). Perhaps, nowhere in the African continent is the scourge more prevalent than in sub-Saharan African, where about one-sixth of people are chronically poor (World Bank, 1996;CFA, 2005).
In Nigeria, the twin's issue of poverty and inequality income distribution presents a paradox. This is so because, though the country is rich in land, human and natural resources, the people are still considered to be poor, as nearly 70 percent of Nigerian in 1999 were living in poverty (Soludo, 2006).
In the past few years, Nigeria government has spent colossal sums of money at various levels in vain attempts at reducing poverty by initiating and executing several poverty alleviation programmes.
However, many of the programmes do not produce the desired result.
Studies have shown that poverty and income inequality are closely related (Ravallion, 2009). More so, it has been argued that income inequality is a manifestation as well as a strong cause of poverty (UNU/WIDER, 2000). Income inequality is often studied as part of broader analysis covering poverty and welfare. Income inequality is detrimental to economic growth and development, because it aggravates poverty and that is why it is important to measure and monitor its level from time to time (Ugoh & Ukpere, 2009).
Published by SCHOLINK INC. and indicators. In general, poverty lines provide the basis for measuring the poverty profile of a country while the poverty indicator serves as indirect measure.

Concept of Income Inequality
Inequality can be conceptualized as the dispersion of a distribution whether one is considering income, consumption or some welfare indicators, therefore, income inequality refers to how evenly or unevenly income is distributed in a society (Babatunde, 2008). Income inequality is often studied as part of broader analysis covering poverty and welfare. As mentioned earlier, income inequality is detrimental to economic growth and development, because it aggravates poverty and that is why it is important to measure and monitor its level from time to time. Income Inequality can be measured using the Gini co-efficient and the Regression based decomposition.

Trends in Poverty and Inequality in Nigeria
Poverty among plenty is the world greatest challenge and the resurgence of interest in the issue derives from the effect that growth has on poverty. Economic growth which is accompanied by high inequality will have a lesser poverty-reducing effect than one which is inequality-neutral. It also follows that the decline in poverty incidence resulting from growth would be larger when accompanied by declining inequality.
However, Nigeria is also one of the most unequal societies in the world, with income distribution skewed heavily such that whenever aggregate growth occur, it is not shared by all. On the average, Nigerians are very income poor. But the skewed distribution of the available income makes the situation of the have-nots to be desperate.
Poverty and inequality are global phenomenon but the rates in Nigeria are higher than most countries in the world. Since 1980s, the poverty rate has been trending significantly downward in all regions of the world except in sub-Saharan Africa (SSA).

Manifestation of Income Inequality and Poverty in Nigeria
In Nigeria, poverty is manifested in the following sceneries i. The decay of social service accompanied by rapid population growth.
ii. Limited access to social and economic infrastructure such as water, housing, health facilities and schools.
iii. Rising level of poverty in rural areas aggravated by lower level of access to public services.
iv. There is also low level of income that is decline in household income on the micro level and a decline in per capital income on the macro level. This is because, the more unequal the distribution of per capital income, the higher the incidence of poverty. Also, the lower the average income level, the greater the incidence of poverty.
v. Cyclically, poverty causes hunger and starvation, which triggers actions resulting to begging, stealing, robbery, wars and other social vices in order to eradicate hunger and starvation. Sustained civilian hunger causes ill health and death which in turn lead to low productivity and slow economic growth.
vi. Income inequality refers to how evenly or unevenly income is distributed in a society, it is often study as part of broader analysis covering poverty and welfare. Hence, it is detrimental to economic growth and development.
vii. Finally, there usually the effect on low income, which has adverse effect on ability to save. More so, greater number of people do not have access to financial institution for fund but rather rely heavily on informal financial institution.

Empirical Review
Pigou (1912) and Dalton (1920), proposed a Pigou Dalton transfer. This principle opines that inequality increases when there is a transfer of income from a poorer to a richer person. More so, measure of inequality in literature satisfies this principle. Furthermore, Dalton (1920)  More so, about 68.9 percent of the respondents' acknowledged income inequality as a current problem in Nigeria while 31 percent disagreed. Only 33 percent believed that government is doing enough to curtail this menace.
A good number of the responding households (66 percent) were believed not to have any other source of income with its adverse effect on their ability to save from the meager income they earn.
The Table 2 above indicates that most of the capitals operated by the respondents are from their personal savings, income from friends and other informal financial institutions such as: Adashi, Osusu.
More so, 78 percent agreed that their savings change directly with their income level.
Furthermore, greater number of respondents, 80 percent agreed that their income level has prevented them to accessing the basic primary healthcare in their locality. This is a manifestation of poverty prevalence in the rural areas.

Summary of Major Findings
Poverty remains a multi-dimensional concept, as it does not lend to itself to a single universally accepted definition. Inequality on the other hand, implies the dispersion of a distribution whether one is considering income, consumption or some other welfare indicators.
It is obvious that high prevalence rate of poverty in conjunction with income inequality no doubt has greatly affected the development of human capital in North Central and Nigeria in general.
The study obviously found a causal relationship between manifestation of income inequality and poverty prevalence. Given the result in Table 2, it is seen that 84 percent of the respondent agreed that inequality in income is a significant determinants of poverty prevalence in North Central states and in Nigeria in general.
The study found a considerable level of poverty prevalence in North Central States. In addition, the study found a high prevalence of poverty in rural area up to 76 percent (see Table 2). This is also in line with multidimensional poverty index report of 2010 which shows that 46 percent Nigerian live below Published by SCHOLINK INC.
the National poverty line with only 28 percent in urban areas and nearly 70 percent in rural areas.

Conclusions
Increasing income inequality and poverty continue to be the most challenging economic problem facing most developing countries and Nigeria is not an exception.
Poverty has remained a major source of concern to many developing nations of the world because of its debilitating effects on citizenry. In Nigeria poverty is multi-faceted and it incorporates economic, social, cultural and political dimensions. As such achieving an appreciable rate of poverty reduction through equitable income distribution within a reasonable time requires commitments of both government and society in general.

Recommendations
Arising from the preceding empirical findings, the following policy implications can be deduced.
i. The study found income inequality significant; as a result, reducing inequality in income level amongst groups should be a deliberate policy to reducing incidence of poverty in Nigeria especially amongst the rural dwellers. Government should give subsidies and credit facilities to farmers, artisans and traders through cooperative organizations, specialized agencies and micro finance houses in order to step up their incomes. Government should also increase it expenditure in social services, promote employment opportunities and encourage labour augmenting technical change. Beside government at all level should ensure more equitable distribution of income and an acceptable revenue sharing formula.
ii. Government should reasonably step up expenditure in both social service and health sector with a view to enhance growth of domestic economy and alleviate the impact of poverty.
iii. More so, there is need to overhaul existing poverty alleviation programmes, so that they are strengthened to make the desire impact. In addition, there is need to campaign against large family size, while women are placed on birth control to reduce dependency ratio especially in rural areas.
iv. Quality education is seen as key to eradicating inequality in income and in turn high incidence of poverty in Nigeria. Government should increase it expenditure on education with a view of reducing the high literacy level in line with the Millennium Development Goals (MDGs). Efforts should be made to fund and re-position the tertiary institutions with a view of making graduates self employed rather than seeking for jobs after graduation. There is need for instituting good governance in every sphere of government activity which is a sine-qua-non for poverty reduction. v.
In all, greater efforts should be made towards strengthening the domestic macro economic growth in the economy. This is complemented by relevant policies aimed at addressing equitable distribution of income among various groups and sectors.