Poverty Alleviation in Nigeria: A Decadal Examination of Political Economic Forces and Implications for Future Initiatives, Spotlighting Microfinance Banks

Abstract

This research investigates the impact of political-economic dynamics on the effectiveness of Poverty Reduction Strategy Papers (PRSPs) in Nigeria from 2004 to 2014, with a specific emphasis on the role played by Microfinance Banks (MFBs). Employing a phenomenological approach within the social constructionist tradition, the study utilizes both individual and focus group interviews, complemented by the analysis of official documents from Nigerian Federal Ministries and the Central Bank. The case selection centers on microcredit, an important component of the IMF country report for the specified period. The findings reveal that while the National Economic Empowerment and Development Strategy (NEEDS) exhibits positive macroeconomic indicators, its alignment with the empowerment framework is nuanced. The study highlights the challenges faced by microcredit users, emphasizing the high interest rates, lack of government support, and inadequacies in the regulatory framework. Microfinance policy, as outlined by the Central Bank of Nigeria, is critiqued for its failure to provide safety nets and welfare benefits for microcredit users, exacerbating their economic vulnerabilities. This research contributes a comprehensive understanding of the socio-economic impact of PRSPs in Nigeria, shedding light on the complex interplay between macroeconomic policies and micro-level dynamics. The policy recommendations provided aim to address these challenges, advocating for regulatory enhancements, targeted interventions, and inclusive economic growth to foster a more effective and equitable poverty reduction strategy.