Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective

Abstract

Neo-liberalismcharacterised the revival of 19th-century concepts linked to laissez-faire economic liberalism, promotes open markets, free trade, and less government involvement in the economy. Following worldwide trends and influenced by international financial organisations like the World Bank and the International Monetary Fund (IMF), Nigeria enacted several neo-liberal policies during the 1980s. These measures include liberalising the economy, deregulating the oil industry, and privatising state-owned businesses, developments that have continued to shape socioeconomic complexities in the countries impacting wellbeing of the people including poverty index. This paper used dependency theory as its theoretical foundation to discuss how neoliberalism has impacted the pace of poverty in Nigeria. Using secondary data, the paper argued thatwhereas neoliberal policies have boosted economic growth, poverty and inequality have also increased as a result of them. Neoliberal policies like fiscal austerity and privatisation have disproportionately impacted rural and marginalised communities, resulting in an unequal distribution of wealth and a strengthening of poverty cycles. Furthermore, efforts to reduce poverty have been hampered by the focus on foreign investment over important industries like small-scale manufacturing and agriculture. Despite their distinct circumstances, Ghana, South Africa, and Kenya are among the other African nations that face comparable difficulties. These results underlined the necessity of a more comprehensive strategy for development that tackles systemic problems and gives localised approaches to poverty alleviation as top priority.

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Quest Journals
Journal of Research in Humanities and Social Science
Volume 13 ~ Issue 1 (2025) pp: 125-133
ISSN(Online):2321-9467
www.questjournals.org
DOI: 10.35629/9467-1301125133 www.questjournals.org 125 | Page
Research Paper
Neo-Liberalism and Theoretical Explanation of Poverty in
Africa: The Nigerian Perspective.
Adekunle Saheed Ajisebiyawo
Department of Political Science and Public Administration
Igbinedion University, Okada, Edo State, Nigeria.
Donald Igbinosa Eboigbe
Department of Political Science and Public Administration
Igbinedion University, Okada, Edo State, Nigeria.
Osas-Osayomwanbo Ilawagbon
Department of Political Science and Public Administration
Igbinedion University, Okada, Edo State, Nigeria
Abstract
Neo-liberalismcharacterised the revival of 19th-century concepts linked to laissez-faire economic liberalism,
promotes open markets, free trade, and less government involvement in the economy. Following worldwide
trends and influenced by international financial organisations like the World Bank and the International
Monetary Fund (IMF), Nigeria enacted several neo-liberal policies during the 1980s. These measures include
liberalising the economy, deregulating the oil industry, and privatising state-owned businesses, developments
that have continued to shape socioeconomic complexities in the countries impacting wellbeing of the people
including poverty index. This paper used dependency theory as its theoretical foundation to discuss how
neoliberalism has impacted the pace of poverty in Nigeria. Using secondary data, the paper argued thatwhereas
neoliberal policies have boosted economic growth, poverty and inequality have also increased as a result of
them. Neoliberal policies like fiscal austerity and privatisation have disproportionately impacted rural and
marginalised communities, resulting in an unequal distribution of wealth and a strengthening of poverty cycles.
Furthermore, efforts to reduce poverty have been hampered by the focus on foreign investment over important
industries like small-scale manufacturing and agriculture. Despite their distinct circumstances, Ghana, South
Africa, and Kenya are among the other African nations that face comparable difficulties. These results
underlined the necessity of a more comprehensive strategy for development that tackles systemic problems and
gives localised approaches to poverty alleviation as top priority.
Keywords: Dependency, Inequality, Neoliberalism, Poverty, Socioeconomic Impact
Received 07 Jan., 2025; Revised 16 Jan., 2025; Accepted 18 Jan., 2025 © The author(s) 2025.
Published with open access at www.questjournas.org
I. Introduction
Due to the complexity of the issue and the variety of approaches used to solve it, poverty in Africa,
with a focus on Nigeria, has garnered a great deal of attention. Neo-liberal policies have been a famous and
controversial strategy among these (Odili, 2019). Since the late 20th century, international economic policies
have been greatly impacted by the well-known economic and political ideology known as neoliberalism.
Numerous countries throughout the world, including Africa, have embraced its ideas of deregulation, free-
market capitalism, and cutting back on government expenditure. Neoliberal approaches have been at the heart of
economic reforms and development initiatives in Nigeria, the largest economy in Africa, since the mid-1980s
(Ekanade, 2014).
Nigeria is a key illustration of the effects of neoliberalism in Africa due to its abundance of resources
and diverse people. Nigeria's economy has seen tremendous changes since the Structural Adjustment

Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective.
DOI: 10.35629/9467-1301125133 www.questjournals.org 126 | Page
Programme (SAP) was adopted in 1986, with the help of international financial organisations like the World
Bank and the International Monetary Fund (IMF) (Babawale et al. 1996; Abah and Naankiel, 2016). Through
market liberalisation, the privatisation of state-owned businesses, and a decrease in government intervention in
the economy, these changes were intended to improve economic efficiency and growth (Mkandawire, 2001;
Stiglitz, 2002). Nigeria has had modest economic improvement, but the country still faces significant poverty
and inequality. Nearly 133 million people, or 63% of the overall population, live in multidimensional poverty,
according to the National Bureau of Statistics (National Bureau of Statistics, 2020). The National MPI of 0.257
shows that slightly more than 25% of all potential deprivations are experienced by the poor in Nigeria. This
figure serves as a sobering reminder that despite decades of different economic policies and interventions,
poverty is still a problem. Nigeria is a relevant case study for analysing the consequences of neoliberal policy
because of this contradiction.
Neo-liberalism, a word used to characterise the revival of 19th-century concepts linked to laissez-faire
economic liberalism, promotes open markets, free trade, and less government involvement in the economy
(Harvey, 2005). Following worldwide trends and influenced by international financial organisations like the
World Bank and the International Monetary Fund (IMF), Nigeria enacted several neo-liberal policies during the
1980s. These measures include liberalising the economy, deregulating the oil industry, and privatising state-
owned businesses (Rodrik, 2006).
One cannot stress the topic's importance to current problems in Nigeria. Nigeria, as the biggest
economy in Africa, sets trends that impact not only its populace but the entire region through the economic
methods it employs. The fact that poverty rates are still high despite neo-liberal reforms raises concerns about
how well these policies are working to promote economic growth and development that benefits all societal
strata. The goal of this paper is to critically examine how neo-liberalism has shaped Nigeria's poor situation.
Its goal is to evaluate the theoretical bases of neo-liberal policies as well as their actual effects, especially in
reducing poverty. Reviewing the neo-liberal policies that Nigeria embraced, how they were put into practice,
and the ensuing socioeconomic shifts are all included in this examination. In addition, the study will look at
other theories and models that might be more appropriate for addressing the subtleties of poverty in Nigeria.
By doing this, the paper hopes to show that although neo-liberal policies have been pushed as a means
of achieving economic progress and prosperity, their effect on poverty in Nigeria has not been entirely positive.
It will contend that market-driven initiatives have the potential to deepen inequality and marginalise
disadvantaged communities and that these policies frequently ignore the socioeconomic realities of emerging
nations like Nigeria.
Despite their stated goal of promoting economic development, this study contends that neoliberal
policies have not successfully solved Nigeria's poverty issue. Rather, these measures have frequently
exacerbated social stratification and raised inequality, which makes poverty more difficult to overcome. The
analysis will show that in the absence of strong social policies that guarantee the equitable distribution of
economic gains, the neoliberal concentration on market-driven growth is insufficient.
The paper is concerned with neo-liberalism and theoretical explanation of poverty in Africa: the
Nigerian perspective. To do this, the research adopts a qualitative method. This method involves the summary,
collation and synthesis of existing literature which includes previous research reports, newspapers, journals,
books as well as government and poll statistics. Thus, the study design is historical in approach.
II. Literature Review
According to the economic philosophy of neoliberalism, the government should have little influence on
the economy. Neoliberalism's origins can be found in the early 20th century. Certain economists began
advocating for the notion that the best method to manage an economy is through free markets, in which
individuals can freely trade goods and services with minimal interference from the government (Chikozho. and
Mapedza, 2017). They held that everyone benefits more from having the freedom to make their own decisions.
Concepts of neoliberalism were popular in the 1970s and 1980s. Many nations were dealing with
economic issues at the time, such as high inflation and sluggish growth. Milton Friedman was a prominent
economist in the neoliberal movement's growth. Friedman promoted little government involvement in the
economy in his seminal book "Capitalism and Freedom" (1962). He thought that the greatest way to distribute
resources and advance personal freedom was through free markets. Friedrich Hayek, the 1974 winner of the
Nobel Prize in Economics, was another significant person. The 1944 book "The Road to Serfdom" by Friedrich
Hayek promoted laissez-faire capitalism and cautioned against the perils of central planning.
In the 1980s, neoliberal ideas gained popularity, especially with the support of politicians like as
Margaret Thatcher in the UK and Ronald Reagan in the US (Peters, 2023). These leaders put into effect
measures including tax reductions, industry liberalisation, and the privatisation of state-owned
businesses.Neoliberalism's proponents contend that it has brought prosperity and economic growth to numerous

Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective.
DOI: 10.35629/9467-1301125133 www.questjournals.org 127 | Page
nations. They cite nations like the UK and the US as instances where neoliberal policies are credited with
bringing stagnant economies back to life. Nonetheless, detractors contend that neoliberalism has moreover
resulted in heightened poverty and inequality (Feldman, 2019; Lane, 2023). They cite instances where financial
crises have resulted from deregulatory measures, including the global financial crisis of 2008. Critics contend
that the privatisation of basic services, such as healthcare and water, may result in increased costs and restricted
access for the impoverished.
Neoliberalism has a few key principles:
Free Markets: Neoliberals believe that markets should be free from government interference. They think that
when businesses compete without restrictions, it leads to better products and lower prices for consumers.
Limited Government: Neoliberals argue that governments should have a smaller role in the economy. They
believe that too much government involvement can stifle innovation and entrepreneurship.
Individual Responsibility: Neoliberalism emphasizes individual responsibility. People are expected to take
care of themselves and their families without relying too much on government support.
Privatization: Neoliberal policies often involve privatizing state-owned industries. This means selling off
government-owned businesses to private companies, who are then responsible for running them.
Since the 1980s, Nigeria's economic landscape has been largely shaped by neoliberal policies, with
structural adjustment programmes, or SAPs, playing a major role. The World Bank's proposals had a big impact
on these policies, which President Ibrahim Badamasi Babangida's military administration implemented in 1987.
Through the promotion of privatisation, trade liberalisation, and fiscal restraint, SAPs sought to transform
Nigeria's economy. According to Marshall (2022), the purpose of these policies was to lessen reliance on public
money while increasing the influence of the private sector and market forces.
Several state-funded initiatives aimed at reducing poverty were launched by succeeding Nigerian
governments to lessen the social costs connected with the adoption of SAP. The World Bank recommended
supplementary measures to address the social implications of SAPs, and several programs—such as the Better
Life Programme for Rural Women and the Directorate of Food and Rural Road Infrastructure—were in line
with those suggestions. But over time, poverty rates kept rising even with large investments in these initiatives.
According to Marshall (2022), despite the introduction of SAPs and pro-poor initiatives, there was an
unsettling trend in Nigeria's poverty rate. Before SAP was implemented in 1980, the poverty rate was 28.1%; by
1985, it had increased to 46.3%. The poverty rate only slightly dropped to 42.7% by 1992 despite six years of
SAP installation, before skyrocketing to 96.1% in 1996. Nigeria had an astounding 70% poverty rate by the time
Chief Olusegun Obasanjo took office in 1999. This trend continued into 2021, garnering Nigeria the awful
moniker of the "poverty capital of the world."
SAPs were intended to stimulate the private sector, but due to the misappropriation of public finances,
many of the monies ended up in overseas investments and Swiss bank accounts, and the real implementation
failed. This misappropriation of funding reduced SAPs' efficacy and ultimately led to their demise, which the
World Bank allegedly predicted.
Neoliberal practices were further entrenched in Nigeria under President Obasanjo's administration.
Following his government election, Obasanjo launched many new pro-poor initiatives, such as the National
Poverty Eradication Programme and the Poverty Alleviation Programme, both of which received support from
foreign organisations like the Food and Agricultural Organisation and the World Bank. To coordinate his
administration's efforts against poverty, President Obasanjo presented the National Economic Empowerment
and Development Strategy (NEEDS) in 2003. This approach placed a strong emphasis on the privatisation,
deregulation, and liberalisation of the private sector as a means of fostering economic development driven by
the private sector and restructuring public institutions for increased efficiency and transparency.All things
considered, Nigeria's experience with neoliberalism, as demonstrated by SAPs and later policies, highlights the
difficulties and complexities involved in putting market-driven economic reforms into practice in the setting of
developing nations.
According to Mbah et al. (2023), Nigeria's neoliberal economic policies have failed, and as a result,
there has been a rise in criminal activity there. They contend that neoliberal economic policies like deregulation,
privatisation, and the elimination of government subsidies weaken the foundation of the Nigerian economy and
consequently fuel crime nationwide. Although criminal activity is closely linked to neoliberal states,
deregulation and privatisation have made it easier to create a large pool of unemployed labour by undermining
local creativity and established industries. This helps to explain Nigeria's extreme economic marginalisation as
well as the stagnant pool that is marked by extreme poverty.
Neoliberal feminism and Africa were examined by Akinbobola (2019), with an emphasis on Nigeria.
Neoliberal feminism, according to Akinbobola, is more likely to be accepted in Nigeria than some of the other
feminisms that are currently in vogue. This is because its high rates of unemployment and poverty have

Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective.
DOI: 10.35629/9467-1301125133 www.questjournals.org 128 | Page
encouraged an entrepreneurial mindset that is more individualised and, in some ways, consistent with this kind
of feminism.
The neoliberal economic nexus, which offers a broad perspective and a heuristically excellent
foundation for explaining the intensity and seeming intractability of the Boko Haram insurgency in Nigeria, was
examined by Aloysius-Michaels et al. (2020). The paper makes the case—based on dialectic theory—that the
neoliberal economy imposed a dysfunctional system on the populace that was unable to offer social safety nets,
high-quality education, and reasonably priced healthcare. The state's subsequent inability to provide civilians
with basic amenities surely created a depressing environment that was ideal for the emergence of the Boko
Haram insurgency.
According to Anazonwu (2023), children in neoliberal Nigeria are not taken care of by social safety nets
because of a gap in policy implementation caused by the adoption of neoliberal economic policies. The rate at
which children are excluded and integrated in the areas of education, health, protection, nutrition, and overall
well-being has increased as a result of these gaps. This is mostly because neoliberal policies prioritise increasing
market forces, promoting free competition, improving mass production, drawing in foreign investment, and
maximising consumption—all of which hurt the welfare and development of children.
Okolie (2022) investigated how Nigeria's COVID-19 management was impacted by neoliberalism.
Neoliberalism hindered provisioning and social investment projects because of its focus on privatisation and
austerity. Nigeria's health sector was severely hindered by privatisation, which resulted in the demise of public
health institutions and the growth of unofficial and commercial health delivery systems. It damaged the health of
impoverished Nigerians, restricted access to high-quality healthcare for all, and made the health system unable
to handle emergency medical emergencies like COVID-19. The lack of well-coordinated social investment
initiatives to lessen the effects of the lockdown led to an increase in social inequality and hardship because it
was harder for those in the informal economy to adhere to the Covid-19 recommendations. In reaction, the
government enforced the rules with repression.
Theoretical Framework
Dependency theory is applied in this investigation. A critical paradigm known as dependency theory
looks at the link between established and emerging nations, emphasising how the latter rely on the former for
economic development and progress. According to this theory, the underdevelopment of nations in the global
South, like Nigeria, is caused by their integration into the global capitalist system, which upholds economic
exploitation and dependency, rather than internal shortcomings (Randall and Theobald, 1998).
According to dependency theory, structural and historical causes have trapped states like Nigeria in a
cycle of dependence on wealthier countries. These elements include unfair trade practices, colonialism, and the
predominance of multinational firms in the world economy. Dependency theorists contend that because the
capitalist system is marked by uneven exchange and income distribution, it keeps developing nations like
Nigeria impoverished by ensuring that their interests are subordinated to those of the global North (Ake, 2002).
Frank (1950) was a leading proponent of dependence theory, contending that the global North's progress
is to blame for the underdevelopment in the global South. Frank highlighted how imperialism shaped
developing nations' economic systems, arguing that their integration into the world economy serves the core
capitalist nations at the price of the developing nations' progress. Dependency theory sheds light on how
Nigeria's economy is influenced by its ties to richer countries and global economic institutions, particularly from
a neoliberal perspective.
Neoliberalism, which emphasises free market ideas and little government interference, has made
Nigeria even more dependent on commerce, investment, and help from abroad, which has made internal poverty
worse. One important component of Nigeria's economic dependency is its reliance on foreign aid.
International organisations and donor nations frequently provide aid to the nation to solve a range of
development issues, including poverty. But frequently, this assistance is contingent on neoliberal policies that
give priority to market liberalisation, deregulation, and privatisation. Even while these reforms are meant to spur
economic progress, they frequently worsen poverty and create inequality by enriching elites and multinational
firms at the expense of the underprivileged.
Moreover, Nigeria's reliance on wealthier countries has been sustained by its inclusion into the global
economy through trade and investment. The economy of the nation is mostly dependent on the export of natural
resources, such as oil, which account for a sizeable amount of its GDP. The terms of trade are frequently
unfavourable, though, with Nigeria paying less for its exports than it does for the value-added goods it imports.
This unequal exchange restricts the nation's capacity to create income and make investments in infrastructure
and social services, which helps to ensure that poverty persists.
Additionally, extractive industries and other sectors that don't always support sustainable development
or the reduction of poverty tend to receive the majority of foreign direct investment (FDI) in Nigeria. FDI

Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective.
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inflows, on the other hand, have the potential to worsen social inequality, environmental damage, and economic
instability, further marginalising disadvantaged groups, and extending poverty.
In essence, dependence theory emphasises Nigeria's economic reliance on wealthier countries and
international economic institutions, offering a useful framework for comprehending poverty in the country from
a neoliberal standpoint. Policymakers may create more equitable and long-lasting plans for combating poverty
and advancing inclusive development by looking at how Nigeria's reliance on foreign commerce, investment,
and aid exacerbates poverty and continues its underdevelopment.
Socioeconomic Impact of Neoliberalism Polices in Nigeria
Over the past few decades, the implementation of neoliberal policies has had a considerable impact on
the socioeconomic landscape of Nigeria. Neoliberal policies are criticised for their detrimental impact on social
welfare, poverty, and inequality, while its supporters contend that these policies promote economic growth and
progress.
Nigeria's economic growth has been linked to neoliberal policies, especially during the 2000s when
liberalisation and oil income drove the country's economy. Nonetheless, there have been notable differences in
this rise between various socioeconomic categories and between urban and rural locations (Olajide and
Lawrence, 2022). Neoliberal policies have helped some demographic groups and urban centres, but they have
frequently left rural areas and marginalised communities behind. This unequal growth distribution has made
poverty in some areas worse and maintained existing inequities.
Neoliberalism's concentration on foreign investment at the expense of businesses like small-scale
manufacturing and agriculture, which are essential for reducing poverty, is one of the main complaints levelled
at it in Nigeria. For example, efforts to reduce poverty in rural regions have been hampered by the neglect of
agriculture, which employs the majority of Nigerians (Ogunlela and Ogungbile, 2016). Neoliberal policies have
prioritised large-scale agribusiness and export-oriented cash crops above smallholder farmers and agricultural
development. This has made many small-scale farmers impoverished and contributed to the downfall of rural
economies.
In a similar vein, the emphasis on luring in foreign capital has frequently led to the disregard for
indigenous sectors (Osemene, Kolawole and Olanipekun, 2017). In a market dominated by multinational
corporations, small and medium-sized firms (SMEs), which are vital to the creation of jobs and the elimination
of poverty, have found it difficult to compete.
Another feature of neoliberalism is the privatisation of state-owned businesses, which has caused job
losses and created economic instability for many Nigerians (Akinwale, 2014). The economy has been
restructured as a result of this. Although some people have benefited from these policies, others have lost their
jobs, labour has become more informal, and working conditions have become unstable. Vulnerability to poverty
has been made worse by the absence of social safety nets and lax labour laws, especially for the urban poor and
those employed in the unorganised sector (Adamaagashi, 2023).
Many people now work in positions that aren't protected or formally recognised as a result of these
changes. Their work is now riskier and more uncertain as a result. Additionally, it implies that they are less
likely to have access to retirement benefits or healthcare. Those who already struggle to make ends meet in
cities and those employed in the informal economy are typically the ones most impacted by this. The lack of
strict regulations ensuring that workers receive fair treatment and have certain rights is one of the main issues.
Workers are more likely to be taken advantage of or treated poorly in the absence of these safeguards. Equally,
without safety nets like unemployment benefits, losing a job can push someone and their family into poverty
pretty quickly.
Therefore, although Nigeria's economy has changed somewhat as a result of neoliberal policies, these
changes haven't all been favourable. They've made it more difficult for a lot of folks to get steady, secure
employment. Families and communities may be greatly impacted by this, becoming even more impoverished.
In Nigeria, the neoliberal agenda has also placed a higher priority on fiscal austerity and lowered
government spending on social services like social protection, healthcare, and education. The impoverished,
who significantly depend on public services for their fundamental needs, have been disproportionately impacted
by this (Mbah, 2014). According to Anazonwu, Mbah, and Ajaero (2023), the implementation of user fees and
cost recovery mechanisms has impeded the availability of necessary services, hence intensifying access
disparities and prolonging poverty cycles.
The main takeaway from this is that fewer individuals receive the assistance they require when the
government invests less in programmes like healthcare and education. Imagine that you are ill, but the cost of
visiting a doctor is too much for you to afford. Or you wish to enrol your children in school, but all of a sudden
you find yourself unable to pay the additional fees. It's unfair and perpetuates the cycle of poverty for those who
are impoverished. In summary, Nigeria's already limited finances for social services are being further squeezed
by neoliberal policies. Because they depend on these services the most, the poorest people are most affected.

Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective.
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The government is making it much harder for people to escape poverty by raising the cost of necessities like
healthcare and education.
One of the main complaints is that the bulk of Nigerians have been left behind by neoliberal policies,
which have largely benefited a tiny number of rich individuals. These policies have resulted in the concentration
of wealth among a privileged few rather than improving the lot of the populace as a whole (Koechlin, 2013).
Odili (2019), who emphasises how neoliberal techniques have given preference to the growth of wealth among a
chosen elite, while leaving others struggling to improve their economic circumstances, supports this point of
view. Furthermore, the demands of society's most vulnerable citizens have frequently been overlooked in
favour of market-driven solutions. Neoliberalism's key tenets of trade liberalisation and structural adjustment
programmes have made industries like agriculture vulnerable to fierce international competition. The local
producers, many of whom are already impoverished, have suffered as a result. Due to the disruption of
traditional livelihoods and the displacement of local producers, these policies have made rural poverty worse.
Neoliberal ideas have essentially had a significant socioeconomic impact on Nigeria, with varying
degrees of success in reducing poverty. Although these measures have aided in times of economic expansion,
they have also made poverty cycles more persistent, increased inequality, and jeopardised social welfare. In the
future, a more balanced strategy that gives social justice, inclusive development, and poverty reduction tactics
specific to Nigeria's circumstances top priority is required.
Comparative Analysis of Impact of Neoliberal Policies on Poverty in Africa.
a. Ghana
Neoliberal policies have been included in Ghana's economic reform programme, just like they have in
Nigeria. These measures consist of market liberalisation, deregulation, and privatisation. Ghana's high rates of
poverty persist despite early economic progress and advancements in macroeconomic metrics like GDP growth
and decreased inflation. About 23.4% of Ghanaians were estimated by the World Bank to be living below the
poverty level as of 2020 (World Bank, 2021).
Despite having different backgrounds, Ghana and Nigeria share several problems that should be
considered while comparing the two nations. Both countries have a history of colonial domination, a diversified
population, and abundant natural resources. These parallels imply that their different socioeconomic
backgrounds are not the only reason for the disparities in their poverty levels. The unequal distribution of
income is one reason why poverty persists in both Ghana and Nigeria despite neoliberal changes (Oluwadara,
2022). The advantages of these measures haven't been distributed equally throughout society, even though they
may have boosted economic growth. Rather, many more have been left behind as money and opportunities have
consolidated in the hands of a select few.
Furthermore, market forces are frequently given precedence over social welfare programmes in
neoliberal policy. Because those who are already disadvantaged may find it difficult to compete in a deregulated
and privatised economy, this concentration on market mechanisms may worsen inequality. Vulnerable groups
face the dangers of poverty and unstable economies in the absence of sufficient safety nets and support
networks. The effect of outside pressures on the economies of Ghana and Nigeria should also be taken into
account. International financial institutions and developments in the world market have a significant impact on
both nations. This implies that although neoliberal changes have boosted economic development, they have not
been adequate to considerably reduce poverty.
B. South Africa
Another fascinating example of neoliberalism in Africa is South Africa. Neoliberal policies were
implemented in South Africa after apartheid ended to bring in foreign investment and integrate the nation into
the global economy. But even with the most developed economy on the continent, South Africa still has severe
problems with inequality and poverty.
Additionally, both nations have significant unemployment rates, which exacerbates poverty. Millions
of South Africans are unable to find steady work due to the country's abnormally high unemployment rate. A
sizeable section of the population lived in poverty as of 2021, with the official unemployment rate being 34.4%,
according to Statistics South Africa (Statistics South Africa, 2021). This demonstrates how ineffective
neoliberal approaches are at resolving systemic problems like inequality and unemployment. Similar issues with
unemployment plague Nigeria, particularly among its youth population.
Furthermore, the social welfare systems in South Africa and Nigeria have suffered as a result of the
adoption of neoliberal policies. Public services, including healthcare and education, have frequently deteriorated
as a result of privatisation and deregulation, disproportionately harming the poor. For instance, Nigeria's poor
public healthcare system results in pervasive health inequities and restricted access to necessary medical care

Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective.
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(World Bank, 2021). In a similar vein, inequality in South Africa's access to high-quality education contributes
to poverty cycles (Statistics South Africa, 2021).
c. Kenya
Neoliberalism has also been adopted by Kenya as a component of its economic development plan. To
entice foreign investment and foster economic growth, the nation has embraced privatisation, trade
liberalisation, and fiscal austerity measures. Nonetheless, Kenya faces pervasive poverty and inequality, just like
Nigeria. About 36.1% of Kenyans were estimated to be living below the poverty level as of 2020 by the Kenya
National Bureau of Statistics (Kenya National Bureau of Statistics, 2021). This suggests that poverty is still a
problem even in the face of economic liberalisation attempts.
Kenya's experience highlights the shortcomings of neoliberalism in combating inequality and poverty.
Adopting such policies attempts to boost economic growth and draw in foreign investment, but they frequently
don't result in real changes to people's lives, especially for those who are impoverished. The issue of inequality
presents a significant commonality between Kenya and Nigeria. Even with the adoption of neoliberal policies,
there is still a great deal of income inequality in both nations. For instance, there are still wealth distribution
gaps in Kenya, where a tiny minority of people own a sizable share of the nation's resources (Bigsten and others,
2016). The necessity for a reevaluation of economic policy is shown by the fact that poverty and inequality still
exist in Kenya and Nigeria despite their adoption of neoliberalism. Although market-oriented methods are given
priority under neoliberalism, structural problems including social exclusion, lack of access to healthcare and
education, and insufficient social safety nets are becoming increasingly important to address.
The comparative analysis of Nigeria with Ghana, South Africa, and Kenya reveals several important
insights regarding the relationship between neoliberal policies and poverty in Africa:
Economic Growth vs. Poverty Reduction: Neoliberal reforms may boost economic expansion, but
poverty alleviation is not always a result of them. Prolonged poverty and inequality are associated with high
rates of economic growth, indicating that the advantages of this expansion are not shared equally.
Structural Challenges: The fundamental structural problems that underlie neoliberal policies—such as
unemployment, inequality, and limited access to essential services—are frequently ignored. Due to the
underlying nature of these problems, broader solutions other than market-oriented changes are needed.
Governance and Implementation: The ability of governance and the methods used for implementation
determine how successful neoliberal programmes are. Reforms may not have the desired effects if there is
corruption, a lack of accountability, or weak institutional structures.
The comparative analysis highlights the intricate connection between poverty and neoliberalism in
Africa since Nigeria faces comparable difficulties to other nations that have adopted comparable economic
strategies. Neoliberal reforms have not been adequate to successfully address poverty, even though they may
spur economic growth. Nigerian poverty must be addressed with a multidimensional strategy that emphasises
inclusive growth plans, strengthens governance, and addresses systemic problems.
III. Conclusions
Neoliberal policies have had a significant and intricate effect on poverty in Nigeria. Despite the claims
of supporters that these measures foster economic expansion, the data points to a different picture. Even during
times of economic growth, not everyone in society has benefited equally. Rather, neoliberalism has made social
welfare issues worse, increased poverty in some areas, and widened gaps in already existing inequities.
The emphasis on drawing in foreign capital has frequently come at the expense of important industries
like small-scale and agricultural businesses, which are essential for reducing poverty. Especially in rural areas
where most Nigerians live, ignoring these industries has impeded efforts to reduce poverty. Vulnerable
communities have been further marginalised by the privatisation of state-owned businesses, which has also
resulted in job losses and exacerbated economic instability. In addition, the impoverished have been
disproportionately impacted by fiscal austerity measures and decreased governmental spending on social
services, which has made it more difficult for them to obtain social assistance, healthcare, and education. This
lack of access exacerbates inequality and prolongs cycles of poverty.
Despite the implementation of neoliberal reforms, a comparative comparison with other African nations,
including Ghana, South Africa, and Kenya, indicates comparable patterns of enduring poverty and inequality.
These results highlight the shortcomings of neoliberalism in tackling systemic problems and the necessity of
reassessing economic strategies to give priority to social justice, inclusive development, and poverty reduction
tactics that are appropriate for Nigeria.
In summary, neoliberal policies have not been successful in reducing poverty and inequality, even though they
may have aided in Nigeria's economic progress. Going forward, a more balanced strategy that targets the

Neo-Liberalism and Theoretical Explanation of Poverty in Africa: The Nigerian Perspective.
DOI: 10.35629/9467-1301125133 www.questjournals.org 132 | Page
underlying causes of poverty and gives priority to the needs of society's most vulnerable citizens is desperately
needed.
Recommendation
1. Inclusive Policy Formulation: In light of the detrimental impact of neoliberal policies on poverty in
Nigeria, inclusive development solutions ought to be given top priority by policymakers. This entails taking
into account the demands of all societal groups, with a focus on marginalised and rural people in particular.
The government can guarantee that economic progress benefits everyone, not just a chosen few, by
concentrating on businesses like small-scale and agricultural sectors, which are essential for reducing
poverty.
2. Support for Small and Medium Enterprises (SMEs): Large multinational firms have been given
preference over small and medium-sized enterprises (SMEs) in Nigeria under neoliberal policies. Policies
supporting SMEs should be put in place by policymakers to rectify this imbalance and encourage inclusive
growth. This can entail giving SMEs access to financing, technical support, and market connections so they
can compete more successfully in the global economy.
3. Investment in Social Services: The impoverished in Nigeria have been disproportionately impacted by the
decrease in state investment in social services like healthcare and education. The government ought to give
social service spending priority to lessen the negative effects of neoliberal changes on poverty. This would
entail boosting financing for public hospitals and schools as well as putting policies in place to guarantee
that everyone, regardless of financial level, has access to basic services.
4. Strengthening Labor Regulations: Neoliberal policies' in formalization of labour and unstable working
conditions have made people more susceptible to poverty, particularly the urban poor and those employed
in the informal sector. Legislators should make sure that workers have access to social protections like
healthcare and retirement benefits in addition to tightening labour laws to address this. The government can
assist in keeping workers out of poverty by protecting their rights and preventing employment insecurity
and exploitation.
5. Reevaluation of Economic Policies: The failure of neoliberalism to effectively combat poverty and
inequality is demonstrated by the experiences of other African nations, such as Ghana, South Africa, and
Kenya. Nigeria's economic policies need to be reevaluated in light of these difficulties. Rather than
concentrating just on market-driven solutions, policymakers should take into account alternative strategies
that give social equity and poverty reduction top priority. To address the underlying causes of poverty, this
may entail taking a more balanced strategy that combines targeted interventions with market mechanisms.
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