The Impact of Financial Risk on Household Income in Nigeria

Abstract

The development of the human society the world over, particularly the rural poor in developing countries, has remained a key challenge because of exposure to varying forms of risks, including income risk and widespread corruption. The attendant shocks have had a devastating effect on the poor and rural households in Nigeria and have worsened the poverty situation and crime rate. This paper examines these negative trends and makes some recommendations for addressing them. The adoption of sound management policies by both the public and private sector, government enhancement of the productive capacities of poor households and provision of reliable and functional safety-nets will help contain poverty and crime. More emphasis should be placed on preventive rather than detective/corrective control measures considering their cost- effectiveness. Public sector wages and incentives should be reviewed periodically to reflect the realities of the times, and good moral values should be taught in the school system to reverse the ugly trend.