IMPACT OF COMMERCIAL TRICYCLE BUSINESS ON POVERTY ALLEVIATION IN ABUJA MUNICIPAL AREA COUNCIL, NIGERIA
ABSTRACT
Poverty is an issue of concern in socio-economic and sustainable development in Nigeria. The study sought to investigate the extent to which commercial tricycles business impacted on those who engaged in the business in Abuja Municipal Area Council. A total of 222 responds were randomly selected for the study. The instruments of data collection were questionnaire and interview. Simple percentages, chats, frequency tables, were used in the analysis. The study also used logit models to test the hypotheses. The study found that those who sourced their commercial tricycles from government-sponsored National Poverty Eradication Programme (NAPEP) were better and faster impacted positively than those than those who got their tricycles through hire-purchase and lease. It was also found that financial status of tricycle operators depended on the duration of involvement in commercial tricycles business. Hence, it was concluded that commercial tricycle business (KEKE) is a potent strategy for poverty alleviation. Based on the fact that poverty cuts across gender, it is recommended that the AMAC and NAPEP should extend the distribution of the tricycle to females too if poverty is to be sufficiently reduced.
TABLE OF CONTENT
Certification Page …………………………………………………… .................…..i
Approval Page ………………………………………………………..................…..ii
Dedication …………………………………………………………….......................iii
Acknowledgement ……………………………………………………......................iv
Table of Content …………………………………………………....................……v
List of Tables ……………………………………………………….....................….viii
List of Figures ……………………………………………………....................…….ix
Abstract …………………………………………………………….....................…..x
CHAPTER ONE: INTRODUCTION
1.1 Background of the study ……………………………………………………. 1
1.2 Statement of the Problem …………………………………………………… 4
1.3 Objectives of the Study ……………………………………………………... 6
1.4 Research Questions …………………………………………………………. 6
1.5 Hypothesis ………………………………………………………………….. .7
1.6 Significance of the Study ………………………………………………….....7
1.7 Scope and Plan of the Study ………………………………………………....8
1.8 Operational Definition …………………………………………………….....8
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction …………………………………………………………………… 9
2.2 Conceptual Framework ……………………………………………………….. 9
2.3 Theoretical Framework ………………………………………………………. 15
2.4 Empirical Literature ………………………………………………………….. 18
2.5 Gaps in Literature ……………………………………………………………. 23
CHAPTER THREE: METHODOLOGY
3.1 Introduction …………………………………………………………………..... 24
3.2 Study Design ………………………………………………………………….. 24
3.3 Area of Study ………………………………………………………………….. 25
3.4 Study Population ……………………………………………………………..…26
3.5 Sampling and Sampling Technique………….……………………………….... 26
3.6 Data Collection ……………………………………………………………….. 27
3.7 Methods of Data Analysis …………………………………………………….. 29
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF RESULT
4.1 Introduction ………………………………………………………………… 31
4.2 The Results ………………………………………………………………….. 31
4.3 Research Question ………………………………………………….……….. 36
4.4 Regression Result …………………………………………………..……… 40
4.5 Test of Hypotheses ………………………………………………..……….. 40
CHATER FIVE: DISCUSSION OF FINDINGS
5.1 Introduction ………………………………………………….......…………. 42
5.2 Use of Tricycle and Poverty Alleviation ……………………...……………... 42
5.3 Income Level of Tricycle Riders …………………………...………………... 43
5.4 Sources of Acquisition ……………………………………........……………. 44
5.5 Factors Militating Against the Tricycle source from NAPEP ……………… 44
CHAPTER SIX SUMMARY: CONCLUSION AND RECOMMENDATIONS
6.1 Introduction ……………………………………………………......…………46
6.2 Summary of Findings ……………………………………......……………… 46
6.3 Limitations of the study ………………………………......………………….48
6.4 suggestions for Further Studies ………………………….......……………….48
6.5 Conclusion …………………………………………….......…………………48
6.6 Recommendations ……………………………………….....………………..49
References ……………………………………………………........……………51
Appendix …………………………………………………........………………..54
LIST OF TABLES
Table 4.2.1 Questionnaire Administered and Returned ………………………31
Table 4.2.2 Demographic Distribution of Tricycle Riders ………………………32
Table 4.4.1 Logit Regression Result ………………………………………….39
LIST OF FIGURES
Fig 4.2.1: Duration of Use ……………………………………..................…….33
Fig 4.2.2: Source of Tricycle ……………………………………….....……….34
Fig 4.2.3 Jobs before Benefitting From Tricycle (Job B4) …………......………35
Fig 4.3.1: Effects of Union Levy on Income ………………………..........……36
Fig 4.3.2: Effects of Union Levy of Fares ………………………..........………37
Fig 4.3.3: Effects of Government Charges …………………….....……………37
Fig 4.3.4: Government Charges ………………………………..........…………38
Fig 4.3.5 Effects of Routes Restriction ……………………..........…………….38
Fig 4.3.6: Effects of negative Perception ………………..……………………..39
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Poverty is a plague afflicting people all over the world; it is a vicious circle which keeps the poor in a state of destitution. Poverty affects various aspects of human life; it is one of the serious problems confronting Nigeria and other developing countries. Sachs (2005) asserted that “more than Eight Million people around the world die each year because they are too poor to stay alive” Sachs went further to state that, “our generation can choose to end poverty.”
Nigeria is highly blessed with wide and varied natural endowment in agriculture, mineral, fossils and human resources, all of which can be transformed into a long list of opportunities for both sustainable development and economic prosperity. This notwithstanding, poverty still remains a major social problem which the various Nigerian governments have not been able to solve. This point was also amplified by The International Fund for Agricultural Development (IFAD) 2007 when it noted that “despite its plentiful resources and oil wealth, poverty is widespread in Nigeria. The situation has worsened since 1990s to the extent that the country is now considered one of the 20 poorest countries of the world. Over 70 percent of the population is classified poor, with 35 percent living in absolute poverty”.
The desperate strait to which the national economy has sunk requires that we must mobilize all available resources to fight poverty. Consequently, every successive government in Nigeria has initiated one programme or another with a view to getting out of the poverty trap. It is in view of this that poverty alleviation was a cardinal trust of President Obansanjo’s administration. In recognition of the multi-sectoral and multidimensional nature of poverty, hence a number of coordinated programmes and policies had been formulated to combat poverty in all its ramifications
The first programme was the Poverty Alleviation Programme (PAP) which was targeted at correcting the deficiencies of the past efforts at alleviating poverty through the overall objective of providing direct jobs for 200,000 unemployed persons and thusstimulates production within a period of one year. This programme later metamorphosed into the Poverty Eradication Programme (PEP) because of the need to improve participation and sustainability, as well as enhance for effective coordination at all levels of government. The core programmes of Poverty Eradication Programme were Youth Employment Scheme; Social Welfare Services Scheme; Rural Infrastructure Development Scheme and Natural Resource Development and Conservation Scheme.
The National poverty Eradication programme (NAPEP) was established in January 2001. According to NAPEP’s blueprint, its ultimate target is the eradication of absolute poverty in the country by the year 2010. The programme’s specific objectives include:
(i) Nigerian youth empowerment to acquire skills.
(ii) Functional infrastructural facilities.
(iii) Basic necessities of life to all Nigerians so as to bring about a socially-organized and economically-prosperous society.
(iv) Enhance long-term optimum development of natural resources and reduction of objectionable practices in resource exploitation to the minimum,
In order to ensure that these objectives are achieved, the programme’s activities were to be undertaken under four (4) schemes namely: (a) youth empowerment scheme (b) rural infrastructure development scheme (c) social welfare services scheme and (d) the natural resource development and conservation scheme. For proper coordination and implementation of the programme, the government established National Coordination Committee, State coordination committee and Local Government monitoring committees under the National poverty Eradication Council. Other poverty alleviation programmes include the National Poverty Eradication Programme (NAPEP), the National Economic and Development Strategy (NEEDS) and the Millennium Development Goals (MDGs)
In addition, the government streamlined and rationalized the functions of core poverty alleviation institutions and agencies. For example, the Nigeria Agricultural and Cooperative Bank (NACB), the People’s Bank of Nigeria (PBN) and the Family Economic Advancement Programme (FEAP) were merged to form the Nigerian Agricultural, Cooperative and Rural Development Bank (NACRDB). Also, the activities of the National Directorate of Employment (NDE) have been streamlined to exclude credit delivery (Aliyu, 2001).
The National Poverty Eradication Programme (NAPEP) as the symbol of the Federal Government commitment to the fight against poverty is charged with the responsibility of coordinating and monitoring all poverty eradication activities in the country, including the implementation of our conditional cash Transfer Programme for the poor, which is the first of its kind in Nigeria. The introduction of Commercial Tricycle in the country’s economic sector was borne out of the worry state of unemployment level in the country. The scheme was conceived by the Chairman Autobahn Technique Limited (ATL), Dr. Alban OfiliOkonkwor and aimed at converting the legion of area boys from an idle and wasting national human capital into a gainfully productive work force and creating mass gainful employment through the establishment of a large number of small-scale transportation business particularly for the youth.
The “Commercial Tricycle” template was actually conceived as an experimental model for youth empowerment and poverty eradication. It is a scheme aimed at providing sustainable engagement for the “unemployable” youth across the country. The underlining principle of the Autobahn “COMMERCIAL TRICYCLE” initiative is the recognition that the beneficiaries are largely uneducated and unskilled thus they do not possess any discipline or training that could enable them conceive a business plan.
The Commercial Tricycle-NAPEP project was formally launched in 2001 as a model poverty eradication strategy by former President, Chief OlusegunObasanjo. The project is mainly viewed as poverty eradication initiative because it possesses attributes, which includes:
1. Composite and mass gainful employment
2. Sustainable wealth creation
3. Provision of affordable mass transit services; and
4. Provides opportunities for other ancillary mobile business services such as vending potable water, mobile food canteens mobile grocery shops, post-delivery, etc.
Furthermore, the project provides a practical opportunity for technical entrepreneurs and related small business to facilitate a smooth appropriate technological transfer for the evolution of a Nigeria made Commercial Tricycle.
Consequently, the project has the following components:
I. Provision of Commercial Tricycle units;
II. Provision of spare parts,
III. Training of operators’ Spare parts dealers and mechanics, and
IV. Building of local contents.
The project has been in three phases, and up to 9,000 Commercial TricycleNAPEP have been distributed to the 36 states and the FCT within the three phases. It is also said that the allocation is based on equity, economic viability. The relative impact of the Commercial Tricycle project to poverty alleviation is therefore the intent of this study
1.2 Statement of the Problem
The UNDP Human Development Index, which includes components such as purchasing power based on real GDP, literacy and life expectancy, ranked Nigeria as the 158th in 2009. Nigeria’s aggregate HDI for that year was a meagre 0.511. Per capita income as of the time was $1,969; adult literacy is quite high; 72% while life expectancy is 47.7. The intuition behind the HDI is that development incorporates quality of life of the population especially the way economic growth is managed and wealth distributed for the benefit of the people.
The above partly accounts for the reason why poverty alleviation has for the past decades been the central challenge facing policymakers in Nigeria. In fact, the high level of poverty in Nigeria has attracted the attention of successive governments, multilateral agencies such as World Bank and the United Nations Development Agencies as well as other development partners. As such, since 1972, various governments have launched various programmes meant to alleviate poverty.
In Year 2000, a few months after the new democratic government of the then President OlusegunObasanjo was sworn-in, one of the solutions he proffered to the country’s deepening poverty crisis came in the form of the National Poverty Eradication Programme, (NAPEP). Consequently, in 2001, tricycles popularly known as Commercial Tricycles were procured and distributed to all the Thirty Six (36) States of the Federation including FCT Abuja by the National Poverty Eradication Programme (NAPEP)
The procurement of Commercial Tricycles was meant to alleviate poverty in the country. In fact, while several other components of the original poverty alleviation programme (including the conditional cash transfers) have ebbed out over the years, the purchase and distribution of Commercial Tricycles has continued, making the activities of NAPEP almost synonymous with the Commercial Tricycle. At both Federal and State levels of the operations of the Agency, the distribution of Commercial Tricycle has continued, either directly by government or through public private partnership arrangements. And with the risks attendant with movements using motorcycles, the popularity and usage of Commercial Tricycle has grown nationwide. In fact, in a number of states, private agencies have literally taken over the purchase and distribution efforts, sometimes working in collaboration with government agencies, and sometimes acting alone. However, government participation has remained high in some states in the country particularly in AkwaIbom and Imo States. In part because of its metropolitan outlook and in part because it is the seat of government, transportation in the FCT has historically been highly regulated. Thus, there has been quite a surge in the use of Commercial Tricyclebusiness following bans on motorcycles and the high cost of taxis, particularly in the Abuja Municipal Area Council (AMAC). But again, operations of these tricycles are restricted to areas outside of the city centre.
But after almost a decade of its introduction, the extent to which the Commercial Tricycle project has hadreal impact on poverty reduction is not clear. It has neither been established that the beneficiaries of the project are actually the poor nor has it been shown that those that benefitted from it has been able to get out of poverty principally on account of their participation. Over time, a number of youths have moved into driving Commercial Tricycle, moving them away from other sectors of the economy, part of the attraction being the quick (daily) returns from the business. But whether their individual objectives of poverty reduction were realized has hardly been documented anywhere. ThoughCommercial Tricycle has become a phenomenon, and an assumed leeway out of poverty, not much research has been carried on this claim, hence the need for this study. At the broader economic management level, it is difficult to assert with any certainty that the Commercial Tricyclebusiness approach to poverty reduction has been effective.
The study intends to critically examine and evaluate the relative impact of Commercial Tricycle business on poverty alleviation, Abuja Municipal Area Council (AMAC), being one of the six Area Councils in FCT Abuja.
1.3 Objectives of the Study
The broad objective of this study is to briefly assess the impact of Commercial Tricycle business by NAPEP on poverty alleviationin Nigeria since its inception in 2001.
The specific objectives and targets of this study are:
1. To examine whether commercial tricycle business is a potent strategy for poverty reduction and the extent to which it has impacted on poverty alleviation in Abuja Municipal Area Council (AMAC), FCT Abuja.
2. To identify and establish whether the beneficiaries of Commercial Tricycles were the poor and if the poor have access to Commercial Tricycle as a means of poverty alleviation.
3. To identify the challenges militating against the successful implementation of the Commercial Tricycle project towards poverty alleviation in Abuja Municipal Area council (AMAC) FCT Abuja.
1.4 Hypotheses of the Study
In order to achieve the objectives above, we form two testable hypotheses and one research question as follows.
H01:Distributionand use of Commercial Tricyclebusiness has not contributed significantly to poverty alleviation and improvement of the quality of life and well-being of its beneficiaries in the FCT.
H02:The Beneficiaries of Commercial Tricycle are not the poor and the actual poor do not have access to Commercial Tricycle as a poverty alleviation scheme.
1.5 Research Question:
In addition to the above two hypotheses, we include a research question as follows:
1. What are the challenges militating against the success of the Commercial Tricycle project the alleviation of poverty in AMAC, FCT Abuja?
1.6 Significance of the Study
No research is carried out for its own sake, but rather to contribute to existing knowledge and provoke further research on a given area of study. Hence the study is expected to make both theoretical and practical contributions to the problem of poverty alleviation in AMAC, FCT Abuja in particular and the country in general.
Many scholars and academicians have written on various aspects of poverty alleviation over the years. Some of these studies include: Aku (1997)who wrote on the prospective of poverty and the recent efforts of government to alleviate it. Bayero(2001) wrote on poverty alleviation efforts of the government using “FEAP” as a case study while Ilorin(2000) wrote on the role of PFT in poverty alleviation in Nigeria.
The researcher has seen the works of various scholars and academicians,though their studies are quite remarkable but none to our knowledge has examined the impact of Commercial Tricyclebusiness on poverty alleviation in AMAC FCT Abuja. This study will therefore depart from previous ones in that it will examine and critically discuss the commercial tricycle businessscheme and its impacts on the poverty alleviation programme in AMAC FCT Abuja.
The study also intends to assess the impact made by the National Poverty Eradication Programme (NAPEP) on poverty in AMAC Abuja FCT since its inception.
This study will be significant in so many aspects;
⦁ It will assist government and policy makers in the successful implementation of the Commercial Tricycle business as a strategy for reducing poverty and adding value to the wellbeing of the poor.
⦁ It will identify the strengths and challenges in the implementation of the National Poverty Eradication Programme (NAPEP)
⦁ The work will also contribute positively to the existing literature on poverty alleviation.
1.7 Scope of the Study
The scope of this project is between the years 2001 to 2009. This period coincides with the time when Commercial Tricycle business project was established by NAPEP in 2001. The plan is also to assess the efforts made by NAPEP in poverty alleviation. The study specifically focuses on whether Commercial Tricyclebusiness has added value to the quality of life and wellbeing of the poor in AMAC, FCT Abuja hence the sample estimate will cover only the Abuja Municipal Area Council AMAC in the FCT Abuja where Commercial Tricycle is being used as means of transportation.
The Choice of Abuja Municipal Area Council (AMAC)
The choice of AMAC for the study is based on the fact that of all the six Area Councils in the Federal Capital Territory Abuja, AMAC is the most metropolitan in outlook. In spite of its metropolitan nature, AMAC consists of both the urbanized and rural segments where the low income persons reside. Though the low incomes reside in the suburbs, they commute daily to work in the city centre by means of the readily available transport means- the tricycle. Due to the large number of residents and the number that commute daily to work in the city entre AMAC was the first Area Council that embarked on organized commercial tricycles business through the NAPEP office as a strategy for poverty alleviation among the six Area Councils that constitute the Federal Capital Territory, Abuja.
1.8 Operational Definition
Impact: Impact means to have strong effect on something. In this study, the impact of Commercial Tricycle on poverty will be measured with the aid of a logit model.
Poor: being poor has to do with having no money, it has to do with deficiency of most basic needs of life. Being poor means being in a state where one lacks material possessions or money.
Poverty Alleviation: Poverty alleviation is any process which seeks to reduce the level of poverty in a community, or amongst a group of people or countries. Poverty reduction programs may be aimed at economic or non-economic poverty. Some of the popular methods used are education, economic development, and income redistribution. Poverty reduction efforts should also be made with a view to removingthe social and legal barriers in accessing finances and income growth among the poor.
Commercial Tricycle: This refers to the tricycle popularly known as Keke which isbeing used as a poverty reduction strategy.
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