Relative poverty anywhere is very intuitive and does not require or need elaboration. You can feel it by a sense of ‘it should not be this way’. People who lives in the slums and ghettoes across Nigeria can be classified as poor. Because in Nigeria, appearances can be deceptive, we will be looking at absolute poverty. This will include but not limited to all those who sleep on the street or do not have a place to put their head at night.
Relative poverty generally means that a person can’t afford an “ordinary living pattern”—they’re excluded from the activities and opportunities that the average person enjoys.
A household is in relative poverty (also called relative low income) if its income is below 60% of the median household income.
The median is the number ‘in the middle’ of a set—so half of all households earn more than the median income household, and half earn less.
The government wants to measure spending power, rather than earning power, so it counts incomes after taxes and benefits.
And households need different degrees of spending power to live comfortably, depending on their size and shape. A household with one person in it needs less money to live comfortably than a household consisting of a couple and two children.
So household incomes are “equivalised” in poverty statistics. They’re adjusted to take into account the number of adults and children who live there.
If you want to know where your own household fits in the income scale you need to adjust your income in a similar way.
Absolute poverty is slightly trickier. The definition used by a number of international organisations (such as the UN and the World Bank) is that you cannot afford the basic needs of life—food, clothing, shelter and so on.
This is absolute in the sense that it’s measured relative to a fixed standard of living, rather than the rest of the population.
This isn’t the definition used by the Nigeria government.
As we explained above, it defines “relative poverty” in comparison to median incomes in the current year.
It defines “absolute poverty” in comparison to the median in 2010/11.
This gives a measure of poverty that’s constant over time.
Poverty is multi-dimensional and no single indicator can capture all the aspects of poverty. We define poverty based on the availability of certain basic needs such as food, clothing, shelter, sanitation facilities, pipe-borne water, education, good healthcare and access to information. Statistically however, we determine poverty based on income and/or consumption, which assigns numbers to living standards and makes it easier to calculate poverty. The National Bureau of Statistics (NBS) captures poverty rates across Nigeria with three different approaches – (1) Absolute Poverty Approach; (2) Relative Poverty Approach; and (3) Dollar per day. In presenting Absolute Poverty measurement, the cost of basic needs approach to measuring poverty is used with three key steps: (a) Food basic minimum needs required to satisfy daily needs. This caloric threshold is set at 3,000 calories per person per day. (b) Non-food needs and (c) Aggregation of food and non-food to derive the absolute poverty line. Absolute poverty is preferred internationally because it is easier to compare poverty rates across countries. Relative Poverty measurement on the other hand is based on household expenditures. Per capita expenditures that are less than two-thirds of the poverty line are considered to be poor, while those above are non-poor. Relative measure has been the NBS’ official poverty measure, but this will change to absolute measure, so we can compare Nigeria’s poverty rates with other countries’. Finally, Dollar per day sets poverty at US$2 a day or less and extreme poverty at US$1.25. This abstract report of a more comprehensive report, which will be released shortly, is focused on the revision of Absolute Poverty only.
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