IOSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 20, Issue 3, Ver. V (Mar. 2015), PP 61-70 e-ISSN: 2279-0837, p-ISSN: 2279-0845. www.iosrjournals.org DOI: 10.9790/0837-20356170 www.iosrjournals.org 61 | Page Explaining Poverty and Inequality by Income Sources in Rural Nigeria Adigun G.T, Bamiro O.M and Adedeji I.A Department of Agricultural Economics and Extension, Landmark University, Omu-Aran Kwara State Nigeria Abstract: This paper analyses poverty and income inequality among farm households in rural Nigeria. The incidence of poverty was highest (65.70 per cent) among Remittance Income Earners (RIEs) followed by other sources of income (58.0 per cent). It was lowest (34.1 per cent) among Non-farm Income Earners (NIEs). RIEs contributed most (61.8 per cent) to rural poverty based on FGT(2) and was followed by Others sources(59.5 per cent). NIEs contributed the least (32.8 per cent). The results also reveal the relative importance of specific income sources to income inequality and the various determinants of income inequality in rural Nigeria. From the results, the overall Gini index of income inequality is 0.39 indicating low income disparity among rural dwellers. While Agricultural Employment is income inequality reducing (45.3 per cent), followed by NIE (55.3 per cent), Remittances Income Earning (RIE) increases inequality (67.1 per cent). Farming activities and non- farm employment therefore hold the potentials for boosting income of the rural poor in Nigeria. Keywords: Poverty, inequality, income sources, rural Nigeria I. Introduction Extreme poverty and hunger are major problems faced by majority of the countries in Sub-Saharan Africa including Nigeria. Past governments between 1970s and now have mounted several projects that were meant to alleviate poverty with billions of naira spent on these projects. Yet Nigerians have remained poor and hungry. The International Fund for Agricultural Development (IFAD) (2007) noted that ―despite its plentiful resources and oil wealth, poverty is widespread in Nigeria. The situation has worsened since the late 1990s, to the extent that the country is now considered one of the 20 poorest countries in the world. Over 70 percent of the population is classified as poor, with 35 percent living in absolute poverty‖. The Millennium Development Goals (MDGs) was adopted in 2000 and the target date for achieving the goals is 2015. Nigeria is a party to the adoption of MDGs. The millennium development goals are a platform for actions that will make for sustainability. It provides direction and focus for governments and various educational settings to improve the well being of families. In effect, poverty eradication strategies are the main thrust of MDGs. 1.1 Rural Poverty in Nigeria IFAD (2007) reported that poverty in Nigeria tend to spread evenly across the country but is worse in some zones such as the northern area bordering Niger which is arid. Poverty is especially severe in rural areas, where social services and infrastructure are limited or non –existent. The link between poverty, hunger and human development is very significant. Indeed, poverty and hunger are the exact opposite of human development. All the attributes of human development are deprived by poverty. Poverty is lack of job. Poverty is hunger, poor health, low education, low self esteem, lack of adequate housing, lack of land, inability to cloth oneself/family low economic status. Maduagwu (2007) concluded that poverty creates frustration, loss of hope/prospects and value for life, loss of meaning for life and purpose of living. It also creates disillusionment about morality, poverty makes people compromise on moral values or abandon moral values completely. Okafor (2004) affirmed that the success or failure of any government is measured by the degree of attainment of human development or the level of poverty prevalent among the people. On this note, Nigerian government is faced with the challenge of so many people wallowing in abject poverty. Poverty is a challenge to all and a call to action by the rich as well as the poor to change the nation so that people will have enough food to eat, roof over their heads, suitable clothes, access to quality education, good health facilities, protection from violence and having a voice in what happens in their communities. ―It is appropriate for government to ensure their citizen‘s active participation in formulating and implementing projects of which they are supposed to be the beneficiaries‖ (Maduagwu 2007). Commenting on the many faces of poverty, IFHE (2003) postulated that ―poverty is not on ly inadequate income; it is also the lack of access to basic services and amenities, the lack of security and exclusion from community life. The recommendation is to focus efforts to uproot the causes of poverty and to achieve the involvement of the poor themselves taking part in the elaboration of policies which concern them‖.