Source: The Nigerian dynamic computable general equilibrium model results. Note: GDP = gross domestic product.
growth of 3.0 percent), the total decline in the poverty rate was only 11.2 percentage points over these seven years (or 2.3 percentage points per year). By comparing the total decline in the national poverty rate (that is, 2004’s poverty rate is 17 percent [not percentage points] lower than that in 1996) with the total growth in per capital GDP (22 percent) in the same seven years, we derive a poverty-reduction–growth elasticity equal to –0.78. This value indicates that 1.00 percent growth in per capita GDP between 1996 and 2004 caused poverty to fall by 0.78 percent. Although the elasticity is affected by the initial level of the poverty rate (which was high in 1996) and the pattern of income distribution around the poverty line, the elasticity is comparable with that obtained for other African countries. The poverty–growth elasticity was also calculated using the results of the model simulation for the baseline using the same formula. A similar elasticity of –0.85 was