Modelling structural breaks in social cash transfers effects on poverty and inequality reduction in Africa: A case of Nigeria

• Published in: Scientific African 2024-03, Vol.23, p.e02106, Article e02106
• Main Authors: Ajisafe, Rufus Adebayo, Okunade, Solomon Oluwaseun, Fatai, Musbau Olaniyan
• Format: Article
• Language: English
• Subjects: E02; H55; I32; Inequality; M14; Nigeria; Poverty; Social cash transfers; Structural breaks
• ISSN: 2468-2276; 2468-2276
• DOI: 10.1016/j.sciaf.2024.e02106

Poverty and inequality have become persistent challenges, hindering sustainable growth in African countries. Against this backdrop, the Nigerian government introduced social cash transfer (SCT) programmes to provide targeted financial assistance to vulnerable populations and foster inclusive social welfare. However, the impact has been somewhat indefinable given the continued increase in poverty and inequality levels in Nigeria. Thus, this present study focuses on the effect of SCT on poverty, inequality, and macroeconomic instability in Nigeria using secondary data for the periods of 1984 to 2021. The results of the Dynamic Ordinary Least Squares with structural breaks showed that SCT reduced poverty and inequality levels, but increased macroeconomic instability in Nigeria; however, when we considered the institutional peculiarities (control of corruption and accountability in the public sector), the findings showed that SCT increased poverty level in Nigeria. We report other significant findings that are instructive to policymaking and future research.