Access to Electricity, Food Security and Poverty Reduction in Rural South-western Nigeria

1. Access to Electricity, Food Security and Poverty Reduction in Rural South-western Nigeria Awotide, B.A., T.T. Awoyemi, and A.O. Obayelu A paper prepared for Presentation at the Nigerian Association for Energy Economics Conference, Sheraton Hotel, Lagos, Nigeria. April 22-23, 2013

2. presentation outline • Introduction/Problem Statement • Research Questions • Objectives of the Study • Justification of the Study • Estimation Techniques • Results and Discussion • Summary, Conclusion and Policy Recommendation

3. Introduction/problem statement • The use of electricity in rural areas is basically for household lighting. :This is due to the fact that electric light is much brighter than that provided by kerosene lamps, and can be hundreds of time cheaper • Rural electrification can boost and smooth agricultural output in most developing countries, thereby increasing farm-income by inducing farmers to use irrigation equipment, tools and high yielding farm practices. • in Bangladesh and India, rural electrification enhance the use of irrigation, thereby significantly reducing poverty incidence ( Songco, 2002) • average annual income of households with electricity was 64.5% higher than that in the non electrified villages, and 126.1 % higher than that in the households without access to electricity in electrified villages (Barkat et al., 2002).

4. Global Access to Electricity Source: IEA, 2006

5. 75% - depend on agriculture for survival • Agricultural production is essentially rainfed, • There is minimal use of irrigation due to the lack of access to electricity and high cost of fossil fuel • Agricultural output is always very low and in most cases decline as a result of vagaries of weather

6. Poverty Trend in Nigeria by Sector Source: National Bureau of Statistics: 2005; 2012

7. Research Questions • What are the factors that determine rural households access to electricity • What is the food security and poverty status among the households with and without access to electricity • What is the impact of access to electricity on food security and poverty reduction among the respondents

8. Objectives of the study • Impact of access to electricity on food security and poverty reduction • Specifically: • Investigate the determinants of access to electricity • Assess food security and poverty status among the respondents • Empirically determine the impact of access to electricity on food security and poverty reduction

9. Justification of the Study Policy Relevance: MDG- half poverty by 2015 Literature: Many literatures have been written on rural infrastructures in Nigeria. For example: Energy Sector Management Assistance Program (ESMAP) in 2003, worked on ‘Expanding Access to Rural Electricity’ UNICEF study in Nigeria (2005), worked on Critical Infrastructure services Akinola (2007) examined coping with infrastructural deprivation in Nigeria

10. Santoshand Ganesh (2011), conducted a study to investigate the income and educational impacts of a large village-based electrification program in rural Bhutan • Khandker et al. (2008) assessed the welfare impact of rural electrification in Vietnam using panel surveys conducted in 2002 and 2005 for some 1100 households in rural Vietnam. • Khandker,et al. (2009) investigated the welfare impact of rural electrification using a cross-sectional survey conducted in 2005 of some 20,000 households in rural Bangladesh. • Awotide et al., (2012) assessed the impact of rural electrification on household welfare in Nigeria • No study on food security and poverty reduction: Gap

11. Analytical Techniques • Determinants of Access to Electricity: Logit Model • Measurement of Food Security • Z=food security line (2/3 mean per capita food expenditure) • q is the number of households below the food security line, • N is the total number of households in the total population • is the per capita food expenditure of household i • P is the extent at which a household is food insecure

12. Measurement of Poverty Indices • z is the poverty line, • is the per capita consumption expenditure of farmer • n- is the total number of farmers. • Average Treatment Effect (ATE) Estimation • ATE1= • ATE1 = is the treatment effect on the treated

13. Data collection • Multistage random sampling technique: • First stage: Osun and Ekiti states were randomly selected from the six states in South-West, Nigeria. • Second stage: 3 Local Government Areas (LGA) with and without access to electricity were randomly selected from each of the state. • Third stage,: 2 villages were randomly selected from each of the LGAs. • Last stage : random selection of 20 households from each of the selected villages. In total, 240 rural households were randomly selected for the analysis. • Data collected: socio-economic/demographic characteristics, income, expenditure, etc. However, after through data cleaning and management only 219 respondents, representing about 91% were utilised for the analysis.

14. Results and Discussion

15. Descriptive Statistics

16. Determinants of access to electricity ***,**,* implies significant at 1%, 5% and 10%, respectively

17. Poverty indices by access to electricity

18. Food Security Status by Access to Electricity

19. Impact of Access to Electricity on Food Security

20. Impact of Access to Electricity on Per capita income

21. summary • The logistic regression, which was used to assess the determinants of access to electricity among the rural households, showed that even when electricity is supplied to any locality, increase in years of education, improvement in consumption expenditure, which is sign of increase in welfare, increase in production assets and farm output will play a significant role in determining whether a household would connect to the electricity supply or not • The analysis further revealed that all the poverty indices reduced among the households that had access to electricity. Similarly, access to electricity also improves households’ food security among the rural households in the study area. The result of the empirical impact model showed that access to electricity significantly impacted both per capita food expenditure and households’ income significantly.

22. Conclusion and Policy Recommendations • Conclusion: • access to electricity is a vital component in achieving food security and poverty reduction in rural Nigeria • Recommendation: • access to electricity should be incorporated in all the efforts geared toward achieving sustainable food security and poverty reduction in Nigeria in general and the rural areas in particular. • Programs and policies that will lead to increase in education, improve rural households’ welfare and increase in farm output are important to influence rural households access to electricity.

23. Thank you