Social Capital and Poverty Reduction in Niger State, Nigeria: A Structural Equation Modelling Approach

Abstract

Despite the numerous policy/strategy put in place by the Nigeria government since independent in other to reduce the poverty rate in the country, evidence shows that the rate of poverty is still on the increase. This paper looked at the impact of social capital on poverty reduction in Niger State, Nigeria. Based on the important and relevance of social capital to economic performance both at the micro and macro level, it is argued that it has an important role in poverty reduction. Social capital has seen as a missing link to poverty reduction. To this end, social capital has been depicted as an empirically elusive concept, and as the glue that holds society together. Using a set of household data generated from the administration of structured questionnaire to 479 households in Niger State. This paper aims to investigate the impact of social capital on poverty reduction in Niger State, Nigeria, using structural equation modelling approach (AMOS). The social capital variables considered are the one suggested by Putman which includes, community volunteerism, community organizational life, commitment in public affairs, informal cooperation and trust. The results obtained shows that apart from commitment in public affairs, all other variables were statistically significant, thus, fulfilling our a priori expectation that the more the people of the study area are engage in social capital activities the more they find themselves out of poverty. This result notwithstanding, policy measures that would continue to make social capital more relevant to poverty reduction in Niger State, Nigeria in particular and the world in general were suggested.