Reasons why poverty can be easily alleviated
Poverty can be easily alleviated when the government has the political will to commit to country. They can make use of the natural elements of the country to improve economy so that alleviation of poverty could be achieved. Poverty alleviation is more likely to happen in countries facing lesser challenges. For example, with no divide and prosecution.
Why would there be good governance?
Poverty can be easily alleviated when the government has the political will to commit to country. They can make use of the natural elements of the country to improve economy so that alleviation of poverty could be achieved. Poverty alleviation is more likely to happen in countries facing lesser challenges. For example, with no divide and prosecution.
Case study (South Nigeria)
In Nigeria, there is a divide between the North and the South which caused unequal distribution of resources. The South is favoured more by the government because it helped Nigeria to create a stable economy due to the exploitation of its natural resources. Thus, more resources were given to the South.
Upon discovery of the oil reserves in its southern region, the Nigerian government started exploiting the oil for its economy. This is around after Nigeria's 1967-70 civil war, where petroleum prices increased. Because of the government's control of the extraction, refining, and distribution of oil, large revenue was generated, and South Nigeria became the main source of capital, accounting for three-fourths of total federal revenue (Metz, 1991). The petroleum industry in Nigeria is the largest on the African continent. As a result, Lagos, the largest oil generating state, has attracted most of the over $20 billion in foreign direct investment (FDI) that has come into Nigeria from 2011 to 2013. The Gross Domestic Product (GDP) of Nigeria has increased largely over the years, with $145.43 billion USD in 2006, to $568.51 billion USD in 2014. That is almost a 400% increase in 8 years.
On top of the oil industry, the government considered the exploitation of South Nigeria’s mineral resources to be among its highest priorities and was committed to the orderly development of these resources. It also recognised that the successful exploration and exploitation required both technical, expertise and financial strength. To attract overseas investors, the government planned to foster a stable economic and political environment to encourage investors to make long term commitments to developments of the country (Obaje, 2009, p. 186).
Upon discovery of the oil reserves in its southern region, the Nigerian government started exploiting the oil for its economy. This is around after Nigeria's 1967-70 civil war, where petroleum prices increased. Because of the government's control of the extraction, refining, and distribution of oil, large revenue was generated, and South Nigeria became the main source of capital, accounting for three-fourths of total federal revenue (Metz, 1991). The petroleum industry in Nigeria is the largest on the African continent. As a result, Lagos, the largest oil generating state, has attracted most of the over $20 billion in foreign direct investment (FDI) that has come into Nigeria from 2011 to 2013. The Gross Domestic Product (GDP) of Nigeria has increased largely over the years, with $145.43 billion USD in 2006, to $568.51 billion USD in 2014. That is almost a 400% increase in 8 years.
On top of the oil industry, the government considered the exploitation of South Nigeria’s mineral resources to be among its highest priorities and was committed to the orderly development of these resources. It also recognised that the successful exploration and exploitation required both technical, expertise and financial strength. To attract overseas investors, the government planned to foster a stable economic and political environment to encourage investors to make long term commitments to developments of the country (Obaje, 2009, p. 186).
Why can poverty be easily alleviated in South Nigeria?
In South Nigeria, it could be seen that the government is willing to invest money in the oil industry from foreign aids as oil generates the main income for the country. The government recognizes that by doing this, more income could be generated and a more stable economy could be achieved. The government also considers the downside of investing on oil industry, which is the low employment that it provides for the large population in Nigeria. In regards with this downside, the government tries to exploit another area of industry, which is mining of mineral resources to develop the country further. The many aspects that the government take into account to create a stable economy in South Nigeria shows the efforts and commitment they have for the country, which could ultimately alleviate poverty. Although Nigeria did not have a fair distribution of resources across all regions, South Nigeria was the one which benefitted from the distribution and had the commitment of the government to invest on the oil development. This cause South to be richer than the North. This is shown from “the relatively low poverty rates in the South, ranging from 16% in the South West to 28.8% in the South East, while poverty rates in the North West and North East are 45.9% and 50.2%, respectively.” (Abuja, 2014).