Abstract
Despite the popularity of the human development index (HDI) in the measurement of human development, it has been variously criticized on the ground that its three dimensions, namely, health, education, and income, as presently constituted do not completely reflect human overall well-being goal which it set-out to measure. The critics have suggested the introduction of additional relevant indicators for the construction of HDI. The goal of this study is to investigate inclusive factor variables for determining the human development index for informal settlements using the city of Enugu, Nigeria, as a case study. The variables used in the development of HDI include the following: wealth, housing/environmental, and social protection. The HDI formula was subsequently modified to the more elaborate and inclusive factor inputs. The results show that households in informal settlements in Enugu are experiencing deprivation. The level of deprivation is highest in the area of wealth dimension, followed by housing/environmental and social protection. Four informal settlements are currently experiencing significant low-level human development in each area of housing/environmental and social protection issues. The aggregation of the three dimensions of the human development index shows that the informal settlements in the city of Enugu are seriously deprived. This implies that the settlements are poorly served with housing facilities, environmental amenities, and social protection structure. In effect, wealth, housing/environmental, and social protection mechanisms are veritable indicators for the measurement of human development and should be included as variables for calculating HDI, especially for the urban poor.
Plain language summary
The goal of this study is to investigate inclusive factor variables for determining the human development index for informal settlements using the city of Enugu, Nigeria, as a case study. The variables used in the development of HDI include the following: wealth, housing/environmental, and social protection. The HDI formula was subsequently modified to the more elaborate and inclusive factor inputs. The results show that households in informal settlements in Enugu are experiencing deprivation. The level of deprivation is highest in the area of wealth dimension, followed by housing/environmental and social protection.
Keywords
Introduction
The human development index (HDI) has become a major parameter for the measurement of human welfare since its introduction by the United Nations Development Program (UNDP) in 1990. “The HDI was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country” in addition to the pre-existing economic growth parameter (United Nation Development Program [UNDP], 2016, p. 5). The index measures human development “in terms of the income of the people and other welfare variables which also directly influence the quality of life namely health and education” (UNDP, 1990, p. 4). It shows “the achievement of a country on average in health, knowledge, and income which have been the three basic features of human development” (Javaid et al., 2018, p. 358). “The HDI helped in arousing the consciousness of nations toward the variables of human development and has also become a major instrument for the assessment of government’s policy priorities all over the world” (Sanusi, 2008, p. 385).
In Nigeria, HDI has been a tool for measuring multidimensional poverty index (MPI) by including additional variables such as food security, water reliability, underemployment, security shocks, school lag and child deprivations to create an even more comprehensive picture of poverty. A 2022 measure of Nigeria’s multidimensional poverty index based on the aforementioned variables shows that 62.9% of the population, about 133 million Nigerians, are multidimensionally poor. This means that they experience deprivations in more than one dimension, or in at least 26% of weighted indicators. It also shows that poor people in Nigeria experience just over one-quarter of all possible deprivations. The average deprivation score among poor people, which shows the intensity of poverty, is 40.9%. In addition, it indicates that multidimensional poverty is higher in rural areas (72%) than the urban areas (42%) (National Bureau of Statistics, 2022). The outcome of MPI enabled the nation to undertake evidence-based policy-making and implement programs to improve the lives of people, especially at the grassroots level. Also, the Nigeria MPI data provides design evidence-based and targeted poverty reduction interventions to support the initiative for lifting 100 million people out of poverty by 2030. Consequently, MPI assisted policymakers and program managers in setting targets and tracking trends over time on multidimensional poverty, as well as in identifying the need for new interventions (such as conditional cash transfer, N-power, and other social safety programs) in specific areas. The off-shoot of Nigeria’s multidimensional poverty index and its policy implications demonstrate the need for the inclusion of social protection dimensions in the measurement of human development index in Nigeria which have remained unexplored.
However, the HDI has faced several criticisms despite the new way of thinking it introduced to human development. Some studies (Bravo, 2014; Decancq & Lugo, 2013; Herrero et al., 2007; Pinar et al., 2022) argue that the dimensions of HDI as presently constituted do not reflect overall well-being. This makes it seem inconsistent with the very nature of the exercise of precise measurement of human development. They advocated for the introduction of new indicators in the construction of HDI. On the contrary, some proponents (Beja, 2021; Dervis & Klugman, 2011; Herrero et al., 2007; Sheth et al., 2023; Tobaigy et al., 2023) have argued that HDI is quite specific and embodies equivalent descriptions about the level of human development or lack of it.
In most likely reaction to the criticisms, some studies have introduced new dimensions such as wealth (Rutstein & Johnson, 2004)), environmental deprivation (Bravo, 2014; Sanusi, 2008), and governance indicators (Pinar et al., 2022) in their reconstruction of HDI. However, none of these studies paid adequate attention to the issues of social protection accessible to households especially the poor. This has become more relevant since the advent of COVID-19 and all its attendant impact on the poor. In addition, social protection is a key feature of the Sustainable Development Goals (SDGs) whose first goal explicitly focuses on reducing vulnerability to shocks and achieving sustainable coverage of social protection for the poor and vulnerable by the year 2030 (United Nations, 2015).
Consequently, the none-consideration of social protection by the other multidimensional poverty measures motivates this study whose objective is to introduce a third dimension, which is the social protection mechanism. This is in addition to wealth and housing/environmental deprivation variables as used in the existing studies, in the construction of HDI. This study expresses the view that social protection mechanisms should be placed alongside household asset accumulation and housing/environmental deprivations in the measurement of human development. This is pertinent for Nigeria where the existing multidimensional poverty index failed to include social protection indices in the measurement of the human development index. This refinement will have important implications on how development is conceptualized especially adequate representation of the poor. As a result, the goal of this study is to present inclusive factor variables for the determination of the Human Development Index for households living in informal settlements. The city of Enugu, Nigeria is used as a case study. It uses the current HDI method to evaluate other indicators of human development. These are household asset accumulation, housing/environmental and social protection factors. This study will answer the following two research questions: First, what are the inclusive factor inputs for the determination of the human development index for informal settlements? Second, what is the level of deprivation in informal settlements concerning household wealth, housing/environmental, and social protection factors? The answer to these research questions would provide policymakers with a better understanding of the specific problems in informal settlements and how best to improve their conditions.
Literature Review
Several studies have criticized HDI because it does not provide a holistic measure of human development. Among these studies are Sagar and Najam (1998), who carried out a critical review of the human development index. They found that HDI “reports have lost touch with their original version and the index fails to capture the essence of the world it seeks to portray” (p. 250). Besides, “the index focuses almost exclusively on national performance and ranking but does not pay adequate attention to development from a global perspective” (p. 250). The study proposed “the incorporation of three simple modifications, in terms of arithmetic average, logarithmic treatment of GDP, and inequality considerations, for the index” (p. 251) as a way to surmount the weaknesses.
In the same vein, Herrero et al. (2007) provide “an axiomatic foundation of a multiplicative human development index” (p.3) as an alternative to the HDI. The three advantages of this measure were based on the sound theoretical background, flexibility in the substitution between indicators, and allowance for the introduction of distributive consideration. Using data from 125 countries, the study found that life expectancy at birth may not be an adequate indicator of potential longevity because it is independent of population structure and thus tends to favor countries with an older population. In addition, the variable that measures education does not provide adequate information for developing countries. The study recommends the need to refine the choice of variables that measure health and education in the construction of HDI.
Similarly, Sanusi (2008) applied the human development index to measure deprivation among households in Minna, Nigeria by examining “housing facilities, housing adequacy, housing space, and solid waste disposal as part of indicators that affect human development” (p. 385). He found that the possession of the amenities by households within their dwelling units contributes to human development whereas their absence will constitute some deprivation. He argues for the widening of “the scope of issues covered by the index because it does not capture the totality of issues that affect human well-being” (p. 385). Also, Taner et al. (2011) argue in favor of enriching the HDI, which is based on three indices namely longevity, educational attainment, and income with a fourth index for employment. The study opined that the addition of unemployment as a new factor in the measurement of HDI has the potentiality of making the index more inclusive and gives a better approach for assessing the developmental performance of countries.
In line with the existing studies (Herrero et al., 2007; Sanusi, 2008; Taner et al., 2011), Ayasrah (2012) criticized HDI because it failed to consider other important factors such as unemployment, poverty, and environment in the measurement of human development. Consequently, the study proposed the social economic development index (SEDI) as an alternative to HDI. The SEDI considers the level of economic and social development in measuring a country’s level of development. The study found that following the classification of 118 countries into four different categories the number of countries in each group differed. Some 21 countries attained a very high development status, while 25 countries attained a high level of development status. In addition, 48 and 4 countries attain medium and low levels of development status respectively. The outcome of the study is easily understood. It addresses the inherent issues associated with HDI that have led to criticisms of its significance.
Salas-Bourgoin (2014) proposes HDI based on two new dimensions that are essential factors in creating and expanding opportunities and chance namely employment and freedom. The study made use of “three indicators namely employment-to-population ratio, non-valuable employment as a share of total employment, and democracy index” (p. 30). The result indicates that the “weakness in countries with high overall HDI scores relates mainly to employment while developing countries lag in the quality of employment” (p. 40). Moreover, regarding democracy, certain countries including Russia, Bolivia, and Venezuela with high HDI scores are marked down in terms of human development as a result of limits placed on political freedom. The modified HDI score for selected countries is lower than their traditional HDI scores. The study recommends the adoption of modified HDI in measuring human development.
Similarly, Louangrat (2017) constructed a modified HDI by incorporating the UNDP’s sustainability factor into the existing HDI equation in ten ASEAN countries. The study found that three countries, namely Cambodia, Laos, and Myanmar are not meeting sustainability goals, whereas Brunei and Singapore exceeded sustainability goals. In addition, the remaining five countries namely Indonesia, Malaysia, Philippines, Thailand, and Vietnam are within sustainable HDI targets. The study recommends that the current formula be revisited to include sustainable development factors.
Kayikci and Korkmaz (2019) developed new approaches to HDI by constructing two types of convergence tests using the product of health, education and income. The results show that the existence of less convergence in the development levels of the 95 sampled countries for the years 1980 to 2015 is contrary to the results from the original HDI which favors more convergence. The outcome of this study extends the convergence context of HDI to the broader measures of development and standard of living. Also, Scherbov and Gietel-Basten (2020) proposed “the human life indicator (HLI) as an alternative to HDI in the measurement of human development in the United States of America”(p. 2/14). The study found that HLI presents a de-facto means of computing human development at the sub-national level. In addition, the computation and interpretation of HLI is simpler than HDI. Moreover, HLI has the advantages of requiring fewer data, less measurement, more consistency over time and no commutations between components. The study envisions that the challenges of producing sub-national HLIs in the Global South are in the areas of lack of comprehensive civil registration and vital statistics systems. It opined that “as more and more countries develop their systems the potential to produce HLI will inevitably increase” (p. 11/14).
Prakash and Garg (2019) proposed a novel approach named Composite Development Index (CDI), as an alternative index to the conventional HDI. The CDI integrates all three aspects of sustainable development, namely, social, economic and environmental factors along with peace and happiness in its construction. The results indicated that no currently advanced country was able to have a CDI score of 0.8 on a scale of 0.1 to 1. Switzerland had the highest CDI of 0.767 whereas Norway with the highest HDI of 0.953 had a CDI of only 0.742. On the contrary, Costa Rica, Romania and Uruguay are in the top 20 nations in the CDI ranking, and therefore much ahead of the United Kingdom, France, and the USA. The study opines that the CDI can act as a single point of reference for policymakers, government and other development agencies because it presents a consolidated picture of development.
Leon-Castro et al. (2021) propose a new method called the prioritized-induced-ordered and weighted geometric average (POWGA) operator for estimating the HDI. The main focus of the method is that reordering steps will be performed based on induced variables determined by the decision maker. It proposes for the consideration of other values as well as the inclusion of everyone in the results. The study found that there are significant variations between the results from the traditional method and POWGA. The top 10 countries moved a little in the ranks from 5 to 10 positions, whereas changes were evident in 10 middle countries. Botswana for example declined from the 95th position in the traditional score to 91st in the IPOWGA operator. The least-ranking countries show no major alterations. The outcome of this study gives a different approach to evaluating different indices that measure and provide dependable information in each country at government level for decision-making.
Salama et al. (2022) propose a new calculated HDI using a data enveloping analysis approach which was based on the goal programing model. The proposed new HDI approach was validated through sensitivity analysis of normalization and weighting methods as well as Wilcoxon Signed Rank. The results show a positive high correlation between the proposed HDI and the United Nations HDI. In addition, the HDI rankings are highly correlated and unchanged given the different normative and weighting techniques. Moreover, the paired sample mean is not the same. The study opines that the results highlight the advantageous properties of the proposed HDI
Pinar et al. (2022) argued for the inclusion of new indicators in the construction of HDI. They opine “that the Human Development Index does not reflect overall well-being because it is constructed as a composite index of achievement in education income and health dimensions” (p. 342). Consequently, the study used “Stochastic Dominance Spanning in the inclusion of an additional institutional quality (governance) dimension to the HDI. This is to determine whether the addition of a new component to HDI could lead to distributional welfare gains” (p. 342). The study found that the addition of a governance dimension to the HDI led to welfare gains. However, the paper warned that “policymakers should be cautious about the proxy they may choose given the fact that the inclusion of different indicators that are seemingly measuring the same concept leads to distinctively different distributions of welfare” (p. 362).
Luo et al. (2023) added two dimensions of sustainability and livability to the traditional three dimensions of HDI (life span, education and income) to construct China’s Human Development Index (CHDI). Their study found that China has made major gains in human development and leaped from the low human development level group to the high human development level group. In addition, when the CHDI is compared to HDI, it shows a better reflection of the level of human development in China. The study recommends vigorous enhancement in the quality of education and health care.
In an apparent response to the criticisms of the human development index, Herrero et al. (2007) critically reviewed the evolution of the human development index. Their study found that the index presents advancement, both in terms of the characterization of the multi-dimensional nature of development and its refined theoretical basis. They argued that HDI should not be denied the recognition that it deserves but at the same time it should not be used to highlight things that it does not stand for nor should it be criticized or condemned for the things that it does not or cannot claim to capture. The study remarks that all HDI dimensions are essential for the development of human capabilities.
Similarly, Dervis and Klugman (2011) found that HDI has been a useful policy tool in measuring human progress since 1990. The study opined that the HDI has consistently measured the progress in three basic dimensions, which has an important advantage in terms of simplicity. It has never purported to be a comprehensive measure, instead complementary measures are presented. In addition, the study avers that a positive correlation among indicators is a sign that they measure the same phenomenon or does vary across country groups.
In apparent support of proponents of the human development index, Beja (2021) tested the reliability and validity of the Human Development Index from the United Nations Development program and the multidimensional poverty index from Oxford Poverty and Human Development Initiative. The results indicate that there is strong reliability within metrics and between metrics. This implies that HDI is more specific and embodies equivalent descriptions about the level of human development or lack of it.
Also, Tobaigy et al. (2023) found that HDI has become a valuable tool for measuring and comparing the progress of countries. It is a comprehensive index that considers health, education and income to better reflect a country’s overall wellbeing. The study opines that although the index has undergone several revisions since its introduction in 1990, it remains the standard method of measuring human development. In addition, they revealed that four factors namely skilled labor force, research and development expenditure, tourism and export and import are most critical for improving the human development index.
In addition, Sheth et al. (2023) used HDI to measure health and human development in cities and neighborhoods in the United States. The study found that on average, larger cities have higher HDI but exhibit greater disparity between communities. Also, the study discloses that appreciations in community HDI are associated with the concurrent decline of other set of negative neighborhood effects. The outcome of the study provides the basis for interdisciplinary synthesis and practice for sustainable equitable urban health and development. This indicates that HDI is a robust model for measuring human development.
Several studies in Nigeria and some African countries addressed the present matrix measurement of the HDI and its impact on public policies toward solving the problems of human development. Interestingly, Ilesanmi (2010) used the composite value of 13 socio-economic development indicators including demographic, health, education, employment life expectancy and GDP to measure the human development index for West African countries. Low level of human development index was found among the member states. However, variations exist in the level of human development among the nations. It recommends that good governance, peace and stability for each member country are prerequisites for improved human development.
Similarly, Kpolovice et al. (2017) compared HDI among six continents of the world. The study found that Africa has an HDI mean of 0.36, which is significantly lower than that for each of the other continents in the world (Asia: 0.714, Europe: 0.845; North America 0.733; South America: 0.738 and Oceania: 0.693) and the global average of 0.697. In addition, Europe has the highest HDI with significant overwhelming preponderance over the world average and greater than that of all other continents in the universe. The study recommends that each African country should do everything possible to guarantee the three HDI indicators for all its citizens to radically improve its human development index in Africa.
Moreover, Ita (2020) applied the standard human development index to measure human development in Nigeria. The study found that Nigeria’s HDI is one of the lowest in Africa. A comparison between Nigeria and West African countries shows that the human development index is higher in Nigeria than in Mali and Togo. This is with the exception of Ghana which indicates a higher HDI than Nigeria. This implies that Nigeria fares better than Mali and Togo in human development due to improved health care and educational systems. The study reveals that the decrease in human development in Nigeria is due to less emphasis and less budget allocation to the social sector.
In the same vein, Dauda and Iwegbu (2022) examined the relationship between HDI and macroeconomic shocks in Nigeria. The study found that fiscal policy shock is the major factor that influences the human development index. In particular, the human development index is found to respond positively to shocks from real interest rates, which are felt significantly in the short run. Besides, fiscal policy tools such as investment in education, health, housing and infrastructure are essential for human development. This finding underscored the important role government plays in enhancing the well-being of its citizens. The study opines that a sudden decline in the federal government’s capital budget expenditure impacts negatively on the human development index.
Onabote et al. (2023) examined the relationship between government sectoral spending and human development in Nigeria by applying the HDI indicators of educational attainment, life expectancy and per capita income. Surprisingly and contrary to some existing studies (Afolabi et al., 2023; Dauda & Iwegbu, 2022), they found that “there exists no link between government sectoral spending and human development in both the short and long run” (p. 6). The study attributed the situation to “either insufficiency in government spending on human development or the country’s high level of corruption which diverts resources away from social programs” (p. 7). The policy implication of the finding is that the government should increase its spending to facilitate human development.
Afolabi et al. (2023) examined the relationship between financial development and the human development index in Nigeria. The study found that “the long-run net effect of credit and broad money supply/GDP on human development is negligible and positive” (p. 206). However, “the long-run effect of money supply/GDP and CPS (rental supply) is statistically significant but has no power to influence human development” (p. 206). The study suggests “that policymakers should concentrate on the financial system and their roles for effective money supply and credit supply while implementing economic policies aimed at improving human development” (p. 209).
Osakede et al. (2023) used HDI to provide evidence on the drivers of human development across gender and income groups in 54 African countries. The result shows that “the drivers of HDI are similar across gender for each country income group, with infrastructure particularly, ICT shown to have a positive effect in the long run for all country groups” (p. 7). “For lower-middle and upper-middle income countries, the fertility rate induces a significant negative effect on HDI and gender development but only in the long run” (p. 7). The study found that in low-income countries the effect was significant for male and female HDI. “Moreover, an increase in real GDP promotes human development regardless of a country’s income classification. A larger positive effect of GDP was observed in the HDI for low-income countries” (p. 8). Consequently, the study opined that “efforts should continually be intensified toward promoting GDP growth regardless of the level of growth in macroeconomic income in a bid to improve human development” (p. 8).
Similarly, Mwangi and Mutabazi (2023) used the global standard HDI indicators (life expectancy, GNI and education) to analyze the trend of the human development index and compared it with East African countries. The study found that Kenya’s HDI ranged from 0.552 in 2012 to 0.598 in 2022. Besides, the East African average HDI score is 0.547, which is lower than the continent’s average of 0.581 and the global average of 0.747. In addition, the study shows that Seychelles has the highest HDI score in Africa (0.927) followed by Mauritania (0.804) and Botswana (0.713). A comparative analysis shows that Kenya has the highest HDI score in East African countries followed by Tanzania and Uganda. They opined that policymakers should design targeted strategies and policies that address and promote human development.
In the same vein, Yaruingam and Gupta (2023) compared the human development index of Nigeria and India in the 21st century. They found that Nigeria’s HDI score for 2021 is 0.535, placing it at 163 out of 191 countries and territories, consequently, placing it in the low human development category. India on the other hand had an HDI score of 0.633 for 2021, placing it at 132 out of 191 countries and territories. This places India in the medium of human development. In addition, Nigeria’s HDI value increased by 18.9% from 0.45 to 0.535 between 2003 and 2021, while India’s HDI value increased by 45% from 0.434 to 0.633 between 1990 and 2021. This implies that India performed better than Nigeria in all human development indicators. The study opined that India performs strategically better than Nigeria in the 21st century due to planned government policies, advanced technology, multi-channel income sources, higher education standards and better health facilities.
It is apparent from the literature that inadequate attention was paid to the dimension of social protection mechanisms by various studies in their construction of HDI. In addition, most of the existing studies focused on the construction of HDI at national and global levels with little or no attention to dimensions of social protection accessible to households especially the poor. This gap in the literature has necessitated the ground for this study. The outcome of this study will extend the existing literature on HDI by introducing social protection mechanisms in the measurement of human development.
Conceptual Framework
The Concept of Human Development
Human development is the process of satisfying the basic needs of the people (Ferjan, 2014). It emphasizes the development of human choices and recognizes the centrality of the people affected (Ayasrah, 2012). It is connected to the production and distribution of goods as well as the expansion and utilization of human abilities (Ferjan, 2014). Human development applies to both less developed and highly developed countries. It gives a better perspective of the complexity of human life, the numerous problems of people in different cultures worldwide as well as the economic, social and political differences in the lives of people around the world (Ferjan, 2014). Human development is about people attaining their potentiality, expanding their choices and enjoying the freedom to lead lives they value (Radovanovic, 2011).
The measurement of development is not only perceived to indicate the expansion of commodities and wealth available to a community but also to reflect the widening human choices (Ayasrah, 2012). The Human Development Index HDI has been utilized by UNDP to measure development since 1990. The HDI gives a summary measure of human development through average achievement in a country’s three basic dimensions of a long and healthy life, access to knowledge and decent standard of living (UNDP, 2011, p. 18).
The Concept of Human Development Index
The Human Development Index is a statistical tool created for UNDP in 1990 by Pakistani economist, Mahwubul to measure a country’s overall human development based on health, education attainment and standard of living (UNDP, 2016). The index is a tool that keeps track of the level of development of a country, as it combines all major social and economic indicators that are responsible for economic development (UNDP, 1990). The HDI ranks all the country’s development on a scale ranging from 0 to 1 for the lowest to highest human development level. The ranking is based on three objectives or results. These are long life (as measured by life expectancy at birth), education (as measured by a weighted average of adult literacy and mean year of school) and the living standard (measured with regard to the real per capita income) (Ferjan, 2014).
The HDI ranks countries by their level of human development by classifying them into developed, developing and underdeveloped countries. The classification aims to demonstrate the advancement of human development using the correlation between income and well-being (Ferjan, 2014). However, income and literacy among all the HDI components are subject to change due to short-term changes due to policies. Consequently, the HDI is measured over time to detect changes occurring over time (Ferjan, 2014).
Moreover, the HDI is not an ordinary index since it provides a better insight into the fundamental aspects of human life by providing a more complete perspective of a country’s development in comparison to other indicators such as GDP per capita.
The calculation of HDI has undergone several changes. The most important change is the simplification of the calculation which involves two steps. Step 1 is the transformation of the minimum and maximum values of the indicator to values between 0 and 1. The maximum values are the highest values within the observed period, whereas minimum values represent a survival value (Ferjan, 2014). The formula is given as:
Step 2 involves adding sub-indices for HDI calculation. It represents the geometric mean of the three items of the index. The formula is given as:
Where:
HDI = human development index
LEI = life expectancy index
E = education index
II = income index
The HDI has been criticized on the grounds of its selection of constituent indicators, weighting choices in the aggregation procedures, limitation of data and absence of distributive consideration which make it seem inconsistent with the exercise of measuring human development (Athanassoglou, 2015; Bravo, 2014; Decancq & Lugo, 2013; Herrero et al., 2007). It is on this basis that this study used the HDI formula to construct a human development index for informal settlements in Enugu, Nigeria.
Human Development Index and Multidimensional Poverty in Nigeria
A Multidimensional Poverty Index (MPI) creates a more comprehensive picture of poverty (Olarinde et al., 2020). It is the product of the multidimensional poverty headcount (the share of multidimensionally poor people) and the average number of deprivations each multidimensionally poor household experiences (the intensity of their poverty). It measures severe deprivations by mirroring the human development index in the dimensions of health, education, and living standards (UNDP, 2010). A household is multidimensionally poor if it is deprived in two to six indicators. Consequently, it reveals who is poor and how they are poor by focusing on a range of different disadvantages that poor people experience. These disadvantages move beyond looking solely at a lack of money by focusing on people’s life circumstances, living conditions, and capabilities. Importantly, a multidimensional measure of poverty recognizes that a poor person may experience several disadvantages concurrently. For example, they may have poor health or malnutrition, a lack of clean water or electricity, poor quality of work, or little schooling. An MPI reflects the overlapping disadvantages that affect poor people, illuminating which disadvantages cluster together in some areas and for specific sub-groups, so policies can address them effectively. The MPI is most appropriate for less developed countries. It captures the widespread deprivations in South Asia, Sub-Saharan Africa, and the poorest Latin American countries. (Akinyetun et al., 2021 )
The Nigeria MPI has four dimensions namely health, education, living standards, and work and shocks. The number of indicators has increased, leading to the addition of security shocks to the work dimension, which also now includes underemployment. Food security and time to healthcare have been added to the health dimension. School lag has been added to the education dimension as a proxy for quality, and water reliability was also added to living standards.
In addition, the Nigeria MPI has a linked Child MPI which extends the Nigeria MPI to include appropriate indicators for children under 5, by adding a fifth dimension of child survival and development. This additional dimension contains eight vital aspects of early childhood development in physical and cognitive domains. These include severe undernutrition, immunization, intellectually stimulating activities, and preschool. It does not offer individual-level data, but, it uncovers additional children who according to the extra dimension should qualify as multidimensionally poor.
The Nigeria Multidimensional Poverty Index (2022) indicates that 62.9% of the population (133 million people) is multidimensionally poor. This means that they experience deprivations in more than one dimension, or in at least 26% of weighted indicators. The average deprivation score among poor people, which shows the intensity of poverty, is 40.9%. The MPI score of 0.257 shows that poor people in Nigeria experience just over one-quarter of all possible deprivations. Over half of the population who are multidimensionally poor cook with dung, wood, or charcoal, rather than cleaner energy. High deprivations are also apparent in sanitation, time to healthcare, food insecurity, and housing.
Multidimensional poverty is higher in rural areas, where 72% of people are poor, compared to 42% of people in urban areas. Approximately 70% of Nigerians live in rural areas, yet these areas are home to 80% of poor people. The intensity of rural poverty is also higher (42%) than that of urban areas (37%). Moreover, 65% of poor people (86 million) live in the Northern Nigeria, whereas 35% (47 million) live in the Southern Nigeria. Also, the Nigeria MPI can be disaggregated by vulnerable populations, such as by disability status or children. Consequently, 71% of people living in households with at least one person living with a disability (PLWD) are poor, compared to 62% of people living in households where no one is living with a disability. Two-thirds of children aged 0 to 17 are poor (67.5%), compared to 58.7% of adults. This gives rise to the sobering reality that over half of all poor people (51%) are children (Nigeria Multidimensional Poverty Index, 2022).
The Nigeria Multidimensional Poverty Index (2022) is a frontline effort at creating an evidence-based, data demand and use strategy for achieving the policymaker’s mandate of lifting 100 million Nigerians out of poverty in a decade. Furthermore, it relates to the Sustainable Development Goals (SDGs) 2030 Agenda “Leave no one behind.” It shows the inter-linkages of deprivations experienced by poor people, namely, No Poverty (SDG 1); Zero Hunger (SDG 2); Health and Well-being (SDG 3); Quality Education (SDG 4); Clean Water and Sanitation (SDG 6); Affordable and Clean Energy (SDG 7); and Sustainable Cities and Communities (SDG 11). The Nigeria MPI has been adopted as the national measure for poverty that complements monetary measurements. This adoption is reflected in the National Development Plans (2021–2026 and 2026–2030), and the 10-year program of the National Poverty Reduction with Growth Strategy.
The Study Area
Enugu is one of the colonial cities in Nigeria and was founded in 1909. The city is positioned approximately on latitude 6° 30′E and longitudes 7° 3l N. It covers an approximate area of 73.2 m2. The topography of Enugu is characterized by an undulating landscape that stretches eastwards from the foot of Udi hills. The city is located on a very high relief of about 228.9 m above sea level. It falls within the equatorial climate zone with annual rainfall ranges of 1,250 to 2,030 mm, and annual mean temperature ranges of 22°C to 30.8°C.
The city has been an administrative headquarters in Nigeria since 1929 (Nwachukwu et al, 2023). However, the rapid increase in population has led to the development of informal settlements within it. The field survey showed that Enugu has 21 informal settlements. Out of this number, 15 are located close to high-density areas; five are located close to low-density areas, and one is located close to a medium-density neighborhood. Five out of the 15 informal settlements close to high–density neighborhoods are also near the central business district (CBD).
The city of Enugu is experiencing a high level of poverty. A report from Nigeria’s Multidimensional Poverty Index (2022) indicates that 62.5% of the adult population of the city aged 18 and above are multi-dimensionally poor, compared to 63.8% of children. The intensity of poverty for children is higher, with deprivations in 37.7% of possible indicators, compared to 36.9% for adults. The city’s multidimensional poverty index of 0.230 indicates that poor residents are experiencing just over one-quarter of all possible deprivations. This implies that the majority of the residents experience high levels of deprivation in health, education, living standards, work and shock, and child survival and development. In addition, the modified global HDI framework was applied in Nigeria measuring the multidimensional poverty index at national and state levels with little or no attention to dimensions of social protection accessible to households especially the poor. This may not have given a deep understanding of poverty and deprivations at the micro level which is needed to formulate appropriate policy that will minimize the high incidence of multidimensional poverty in the country. It is against this backdrop that this study used Enugu City as a case study to enhance measures toward evidence-based policy making and implementation of programs that are capable of improving the lives of people, especially at the grassroots level.
Research Methodology
The study adopted a mixed-method approach to comprehend the socioeconomic and spatial structure of the selected informal settlements as well as the dynamics and intensity of deprivations in the study area. Questionnaire and semi-structured interview methods were used to obtain quantitative and qualitative data respectively from nine randomly selected informal settlements in the city (see Figure 1). Households in the nine chosen informal settlements are the sample frame for the study (15,796 households).
Map of Enugu Metropolis showing the location of the chosen informal settlements.
The number of households for each of the selected settlements was obtained by dividing the population of the settlements by six (6) which is the current average household size in Nigeria (Federal Republic of Nigeria Official Gazette 2009). This was useful in choosing the sample size of 350 households and securing responses. A total of 350 households were sampled. The number of households sampled in each settlement was determined using the proportional method of distribution (see Table 1).
Household population and sample size of the nine sampled informal settlements.
Source. Field survey, 2020.
The spatial stratified method was used to pick households for the survey and was generated from a network of grids overlaid on the Google map of the settlements. In each of the settlements, grids were systematically used to identify compounds within the grid which were extracted from the spatial database for enumeration and sampling. A household living in the selected compound was then selected through random sampling for interview/administration of the questionnaire.
Data focused on the availability and condition of social services/infrastructure in the study area. Cronbach’s alpha was used to assess the internal consistency of scales used in the questionnaire with an α coefficient of .65 which indicated the reliability of the instrument.
Calculating of Human Development Index
The methodology of HDI was employed in calculating the human development index of residents of informal settlements in the city of Enugu. Using the geometric mean of the three study variables, the inclusive input factor for the determination of the Human Development Index is given by the following equation
Where; WI: Wealth Index
EDI: Quality Housing/Environment Index
SDI: Social protection Index
The construction of the index involved three steps. First, the construction of three dimensions of indicators to represent individual life conditions of households. These dimensions are household wealth accumulation, housing/environmental and social protection indicators. Second, the aggregation of three individual indicators because the index concerns several components in the function of each dimension; hence equal weights were assigned to each indicator. This is appropriate because all the three dimensions represented in the index are considered important and there is no substitution among them. This is advantageous on the ground that it is possible to gather information separately on a single dimension of the poverty index. Third, the scaling of each of the indicator dimensions is based on the value range of 0 to 1. The 0 scale is the lowest level of welfare while 1 represents the highest level. Settlements with HDI less than 0.5 are deemed to have a low level of human development, whereas those between 0.51 and 0.80 are regarded as medium level. However, those settlements with above 0.80 are regarded high level of HDI, (UNDP, 2011).
Variables Used for the Development of Wealth Indicators (WI)
Variables used for computation of wealth indicators which is a proxy determinant of household living standards are as follows: (1) Type of building material for wall (zinc, wood, mud, cement block, (2) Access to electricity. (3) Household assets (radio, television mobile phone, refrigerator, bicycle, motorcycle/tricycle, car, home theater system, computer, sewing machine, standing/ceiling fan, gas/electric cooker, coal/sawdust/kerosene stove, manual grinding machine) (4) Type of toilet (flush connected to a septic tank, flush connected to open drain, VIP latrine, pit latrine, no toilet/open defecation (5) Sources of drinking water (piped water in dwelling, government supply, motorized hand pump in dwelling, motorized hand pump outside, shallow well outside dwelling, tanker/water vendor, sachet water) (Rutstein & Johnson, 2004).
Variables Used for the Development of Environmental Indicators (EDI)
Variables used for determining household deprivations of quality housing/environmental indicators (EDI) are as follows:
Housing facilities: These are the nature and types of facilities in housing units. Eleven variables are obtained from three factors of housing facilities—toilet, bathroom, and kitchen. The eleven variables are as follows: proportion of households without toilets, use pit latrines, with toilet outside dwelling unit; the share of households without bathrooms, with bathroom outside dwelling unit, without kitchen, and with kitchen outside dwelling unit; and the share of households sharing one of the three facilities, sharing all three facilities, sharing a combination of facilities, without any of these facilities.
Housing space: This explains the spatial aspects of housing as related to activity units within dwelling units. Data for housing space were collected through questionnaire administration and field observations. There are five variables of housing space namely % of all households living in one room and sitting room in the settlement; % of all households that do not have a sitting room; and % of all households that make use of a sitting room as a bedroom. Others are % of rooms without cross ventilation, and % of dwelling units without internal open space.
Housing adequacy: “The variables of housing adequacy employed in the work are house renting, squatting, excess population (spill-over population) and housing occupancy ratio. However, house renting emphasizes non-homeowners who pay for their occupation of houses, whereas squatters are non-rent users who live with renters” (Sanusi, 2008, p. 389). Moreover, “excess population defines the population above the designed population of an area” (p. 389). “The excess population is calculated as the actual population minus the expected population, whereas the actual population is the number of households multiplied by the average household size. The expected population is the standard occupancy ratio (2.5) multiplied by the total number of habitable rooms” (Sanusi, 2008, p. 389).
Waste disposal: This covers gray water and solid waste disposal and is treated under five variables. These are the proportion of households whose wastewater flows into open drains; the proportion of households whose wastewater flows out to the roads; and the proportion of households whose wastewater flows into septic tanks. Others are the proportion of households whose solid wastes are disposed of in designated dumpsters and the proportion of households who dispose of their solid wastes through other informal means.
Variables Used for the Development of Social Protection Indicator (SDI)
This is based on the available social protection mechanisms available in Nigeria. These are the proportion of households who have access to health insurance, social welfare services, justice and human rights protection, and safe working conditions. Others are the proportion of households that have access to social intervention programs, as well as socio-cultural and political participation.
Data Presentation and Analysis
Table 2 shows the results of the calculation of the Human Deprivation Index for the nine studied informal settlements in Enugu City. The results indicate that the nine informal settlements have a low level of human development concerning wealth indicators (W.I). For the quality housing/environmental indicators (E.D.I), four settlements namely Aguowa, Onuasato, Ikirike and Ugbo- Odogwu has a medium level of human development. However, the remaining five informal settlements (Iva Valley, Ngeneve, Ncheagu, Ugbowa and Ugbo Raphael) indicate a low level of human development. Also, four informal settlements (Aguowa, Iva Valley, Ikirike and Onuasato ) show a medium level of human development for social protection whereas five others (Aguowa, Ngeneve, Ncheagu, Ugbowa and Ugbo Raphael) suggest a low level of human development. Furthermore, the aggregation of the three dimensions of the indicators of the HDI indicates that all nine informal settlements are experiencing low levels of human development.
Human Development Index for Informal Settlements in Enugu City.
Source. Research analysis.
Figure 2 shows the HDI results and location of each of the nine informal settlements in Enugu City. The distribution shows that five of the settlements namely Ugbodogwu, Iva Valley, Onuasato, Ngeneve, and Ugbo Raphael are located in the northern part of the city. However, Ucheagu and Ugbowa are found in the east, whereas Ikirike is located in the southern part. Moreover, two settlements (Aguowa and Onuasato) which have the highest HDI scores are located in the north of the city.
Map of Enugu showing HDI results for each of the nine settlements and their locations.
Table 3 shows the contribution of each of the input factors to the human development index in the nine informal settlements. Social protection factors made the highest contribution to HDI in four settlements namely Iva Valley (56.78%), Aguowa (50.37%), Ikirike (46.63%) and Ngenevu (42.62%). This implies that households in the aforementioned neighborhoods had more access to social protection mechanisms than the other five settlements. The quality housing/environmental factors contributed highest to HDI in Ncheagu (53.83%), Ugbo-Odogwu (52.90%), Ugbo Raphael (48.60%), and Ugbowa (45.37%) settlements. Also, this indicates that households in the five settlements had more access to quality housing and environment. Moreover, all households in the nine informal settlements have poor access to wealth indicators. This indicates the presence of monetary poverty among households of informal settlements in Enugu city. Overall, quality housing/environmental indicators contributed the highest (44.2%) to HDI among the three input factors in the informal settlements. This is followed by social protection mechanisms (41.48%) and wealth indicators (14.32%). This result implies that the social protection dimension (apart from the two other indicators) is essential in minimizing multidimensional poverty in Nigeria.
Percentage Contribution of Each Input Factor to the Human Development Index.
Discussion
The analysis (see Table 2) indicates that all the nine informal settlements have a low level of human development concerning wealth indicators. This implies that informal settlements in Enugu city are highly deprived concerning household living standards. A breakdown of the results shows that six informal settlements namely Aguowa (0.1296), Ikirike (0.1296), Ncheagu (0.1296), Ugbo-Odogwu (0.1296), Ugbowa (0.1296), and Ugbo Raphael (0.1296) are currently experiencing the highest level of deprivation with regards to household living standard. It is followed by Iva Valley (0.1368), Ngeneve (0.1368), and Onuasato (0.1368). This result implies that the households in informal settlements in Enugu are experiencing poor living standards. They lack access to quality housing, electricity supply, household assets, potable water, and good toilets. This depicts widespread and severe poverty and deprivation in Nigeria’s urban informal settlements. In addition, it suggests that residents of informal settlements lack access to the necessities of life. This outcome falls short of Nigeria’s Sustainable Development Goals initiative of lifting 100 million people out of poverty by 2030. The implication is that residents of informal settlements are left behind in Nigeria’s pursuit of the Sustainable Development Goals (SDGs) 2030 Agenda. This may be one of the reasons for Nigeria’s poor ranking in the global annual SDGs report. The outcome of this result is consistent with the work of Sanusi (2008), who found the existence of a poor standard of living among households in the city of Minna, Nigeria.
The analysis for quality housing/environmental factors (also see Table 2) suggests that Aguowa (0.56), Onuasato (0.58), Ikirike (0.50) and Ugbo-Odogwu (0.55) have medium levels of human development. This implies that households in the aforementioned four informal settlements are having significant human development in the area of access to quality housing/environment. It also indicates that the households are not experiencing serious deprivation with regard to quality housing/environment. On the other hand, the remaining five informal settlements [Iva Valley (0.27), Ngeneve (0.32), Ncheagu (0.35), Ugbowa (0.39), and Ugbo Raphael (0.24)] indicate a low level of human development. This is an indication the households are seriously deprived in terms of access to quality housing/environment. In addition, it suggests that households in the five informal settlements are living under poor housing/environmental conditions. They lack access to adequate housing, housing facilities, housing space, water and waste disposal systems. This results in poor sanitary conditions and environmental pollution which has become a common feature of urban informal settlements in the country. This is inimical to SDG 11 agenda in Nigeria which is targeted at achieving sustainable cities and communities by 2030. Furthermore, the results indicate the existence of variation in terms of quality of living environment standards in the Enugu informal settlements. This is because four informal settlements have considerable housing quality/environment, whereas the five others show poor living environment/housing quality. The outcome of this study supports the findings of the works of Sanusi (2008), Taner et al. (2011), Pinar et al. (2022), and Luo et al. (2023) which indicate that the inclusion of a new dimension such as quality environmental index in the calculation of HDI makes the index more comprehensive and a suitable approach for assessing the development performance as it affects human well-being.
Moreover, the analysis for the social protection dimension (Table 2) also shows that Aguowa (0.70), Iva Valley (0.53), Ikirike (0.55), and Onuasato (0.56) informal settlements are experiencing medium levels of human development. This implies that the dimensions of social protection accessible to households in the four aforementioned informal settlements are significant. Consequently, the four settlements are having significant human development in the area of social protection. This is an indication that households in the four settlements have significant access to available social protection mechanisms in Nigeria such as health insurance, justice and human rights, safe working conditions, social intervention programs and social and political participation. However, the other five informal settlements namely Ngeneve (0.34), Ncheagu (0.17), Ugbo-odogwu (0.36), Ugbowa (0.34), and Ugbo Raphael (0.23) suggest a low level of human development for access to social protection mechanisms. This implies that the five aforementioned settlements are experiencing serious deprivation concerning access to available social protection mechanisms. This suggests the existence of a high poverty rate in the five settlements. This result implies that social safety programs of the government for the poor and vulnerable households such as Conditional Cash Transfer, National Multi-Sectoral Plan of Action for Food and Nutrition, National Action Plan for the Revitalization of Nigeria’s Water Supply, Sanitation, and Hygiene Sector, National Home-Grown School Feeding Program and N-power are either inadequate or not getting to the target groups. Comparative analysis suggests that the level of deprivation concerning access to available social protection mechanisms differs among informal settlements in the city of Enugu. The outcome of this result lends credence to the call for the inclusion of dimensions of social protection accessible to households especially the poor in the calculation of HDI (Ayasrah, 2012; Taner et al., 2011).
In general, the aggregation of the three dimensions human development index (see Table 2) indicates that all the nine informal settlements are seriously deprived. The settlements are poorly served with housing facilities, environmental amenities and social protection mechanisms. The Nchagu community has the highest deprivation level of 81% among the nine informal settlements whereas, the lowest level of deprivation (63%) was found in Aguowa. This suggests a high level of deprivation among informal settlements in Enugu City.
A comparison of this study with Nigeria’s Multidimensional Poverty Index (2022) indicates interesting outcomes. This is because the poverty index (0.2815) of this study is similar to Nigeria’s national average score of 0.257. In addition, a similar pattern was also obtained at city level comparison between the two studies. This study indicates a poverty index score of 0.2815, whereas Nigeria’s MPI for Enugu City is 0.281. This confirms the outcome of Nigeria’s Multidimensional Poverty Index (2022) which indicates a high level of multidimensional poverty and deprivation among Nigerians. Consequently, this is a pointer that the outcome of this study is robust and consistent with the existing study in Nigeria. This therefore justifies the need for the inclusion of social protection dimensions in the measurement of the HDI in Nigeria.
Policy Implications and Recommendations
The findings of this study indicate that households in informal settlements are experiencing deprivation in areas of wealth, quality housing/environmental and social protection indicators. The inclusion of additional variables in measuring poverty in Nigeria’s informal settlements creates an even more comprehensive picture of poverty. This new evidence aligned with national priorities which can help make poverty reduction efforts more effective. Consequently, there is a need for policymakers to focus on policies and programs that promote efficient, sustainable, and broad-based economic growth and job creation, most especially in the informal sector of the economy which employs the majority of the urban poor. This will help to improve the capital base of the urban poor thereby enhancing the government’s initiative of lifting 100 million Nigerians out of poverty by 2030. In addition, it will complement monetary poverty measures such as conditional cash transfers to poor households in Nigeria which is aimed at tackling monetary poverty.
Policymakers should commit to placing poverty alleviation at the forefront of development strategies in Nigeria. This should be in line with SDG1 which entails ending poverty in all forms everywhere. This could be achieved by fine-tuning the existing social intervention programs in Nigeria to make them more responsive to the well-being of the urban poor. Consequently, the government should prioritize and accelerate the implementation of existing national policies and action plans that have an impact on clusters of deprivations that are particularly high at a national or sub-national level. These include the National Multi-Sectoral Plan of Action for Food and Nutrition (reducing deprivations in nutrition and food security), the National Action Plan for the Revitalization of Nigeria’s Water Supply, Sanitation, and Hygiene Sector (reducing deprivations in sanitation, water and water reliability), the National Home-Grown School Feeding Program (improving the health and educational outcomes of primary school students), and N-Power (geared toward job creation, poverty alleviation and empowerment initiatives through volunteering services for young people). The prioritization and implementation of the existing national policies will accelerate poverty reduction in Nigeria. Moreover, there is a need for policymakers to greatly improve the urban infrastructure and services needed to reduce existing deficiencies in areas of wealth creation, environmental development and social protection in the nation’s informal settlements. This will go a long way in reducing the vulnerabilities and deprivations faced by the urban poor since this is a key feature of the Sustainable Development Goals (SDGs).
The outcome of this study suggests that social protection mechanisms are a veritable indicator for measuring human development. This is because it captures the vulnerability and deprivation of households in informal settlements and provides a robust insight into the level of poverty and deprivation in society. It is therefore imperative to add the indicator for obtaining HDI, especially for the urban poor. The inclusion of the indicator in the calculation of HDI will give policymakers a better understanding of the specific problems in informal settlements and how best to improve their conditions. In addition, policymakers should develop a more complete understanding of the nature of social assistance that is necessary as well as the target poor and vulnerable households. Consequently, the National Social Register which is a repository of information containing poor and vulnerable households that can benefit from the social safety programs that the Nigerian government rolls out should be adjusted through online access and automatic controls with other existing administrative databases. This will increase social assistance program outreach as well as allow for better transparency and traceability of the social protection system and mitigate the risk of manipulation and fraud.
The outcome of this study indicates that the incidence, intensity, and composition of poverty vary across informal settlements. Consequently, policymakers should use the variation as a tool for planning and budgeting according to the needs of each community. Therefore, comparing the number of people deprived in each indicator against budget allocations for each indicator might lead to a rebalancing of budget priorities to reflect poverty priorities. This will ensure that the appropriate levels of resources are allocated to the poorest communities, as well as to those with higher numbers of poor people. In addition, it will simulate policy scenarios based on different targeting rules, budget assignments, and the provision of social benefits to set concrete annual poverty reduction goals for overall poverty and each indicator. This can be translated into sectoral goals and also used to highlight the importance of coordinating efforts across sectors.
Conclusion
This study derived the human development index for households in informal settlements in Enugu city using wealth, housing/environmental and social protection indicators. The results show that households in informal settlements in Enugu are experiencing deprivation in the three measured dimensions. The level of deprivation was highest in the area of wealth, followed by quality housing/environment and social protection dimensions. However, four informal settlements are experiencing significant human development in each area of quality housing/environmental and social protection mechanisms. The effect of aggregation of the three dimensions of the HDI suggests that the informal settlements in the city of Enugu are seriously deprived. This implies that the settlements are poorly served with housing facilities, environmental amenities and social protection mechanisms. Consequently, social protection mechanisms are a veritable indicator for measuring human development. It is therefore necessary to add the indicator in the calculation of a more inclusive HDI, especially for the urban poor.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
