and expenditures are the foundation of any viable business or economy, as the
economy of the nation is a direct replica of the economies of its citizens. The
concept of expenditure and income in Nigeria has to be clearly understood. We
all know that in a developing country like ours, there is need for a concrete
study of how Nigerians expend vis a vis their level of income in relation to
their poverty level seeing that a vast majority of Nigerians live below the
poverty line of less than one dollar per day (Okonkwo 2007). Aside knowing
this, there is also need to understand the pattern of spending of the general
Nigeria populace especially as regards their saving habit. The definition of income and
expenditures encompasses different areas and types of transactions, as
different professional disciplines see them in ways relevant to their specific
situations. Understanding the different types, especially expenditures, enables
companies, economies or families to record financial data more accurately with a
view to reducing the poverty level in Nigeria.
has different definitions depending upon the specified area of business.
General income is cash or an equivalent that results from wages or salaries,
rent from land or a building or interest, dividends or profit from an
investment (Mohammed 2005). Economists and statisticians view revenue as the
maximum amount of money a person spends during any given period without
becoming worse off. In economic terms, income is the real driver of the
economy, whether at the family or national level, since buyers' demand for
goods and services can only exist if buyers have income to spend.
Expenditure is cash or a cash equivalent paid in
exchange for goods and services. An expense may also be a charge against
available revenue, as in the case of an invoice awaiting payment. Revenue
expenditure pays for goods and services that the family uses within a short
time frame, such as one year or less. If a family or nation makes expenditure
for fixed assets like machinery or large equipment that lasts for longer than
one year, this qualifies as a capital expenditure. Businesses, families,
nations etc attempt to keep costs as low as possible without sacrificing
revenue. This comes with accurate recording and controlling of income and
1.1 STATEMENT OF GENERAL PROBLEM
Generally in Nigeria,
expending without recourse to income has been a major problem. This problem has
done more harm than good to our economy at large seeing that when expenditures
are made without consideration to the income or amount earned it helps to
increase the poverty level in Nigeria.
Nigeria, being a
developing country has had its fair share of criticism of being a country with
a very high level of poverty with almost half of its citizens living on less
than a US dollar per day. It is being said that Nigerians spend extravagantly,
if this claim is anything to go by then the reason of our dwindling economy
1.2. AIMS AND OBJECTIVES OF THE STUDY
This study is aimed at looking at possible
areas Nigerians can be educated to increase their level of savings.
The following are the
cardinal aims and objectives of this research work:
Nigerians on the relationship of their expenditures to income with a view to
enhancing their saving habit.
solutions of improving Nigeria’s economy at large.
causes of excessive expenditures of Nigerians.
effect of income earned to expenditure.
1.3. SIGNIFICANCE OF THE STUDY
The importance of this
study is mainly to identify major causes of excessive expenditures of
Nigerians. Another cardinal significance of this study is to know if there is
any statistical significant relationship between expenditures and income in
relation to poverty level. Another major significance of this study is to
determine if there is a relationship between the economy of Nigeria to how
Nigerians spend in relation to their income
various studies as well as discussion mentioned earlier, it is apparent that
there is enough reason to warrant a study that will examine these factors. So
that we can recommend solutions on how the economy can be improved upon, on how
Nigerians can save more and finally know the reasons for excessive spending in
1.4 SCOPE AND LIMITATIONS OF THE STUDY
the topic of the study states, the scope is to know the relationship between
expenditures and income of Nigerians in relation to their poverty levels.
Another scope of this study is to determine the income Nigerians earn to their
expenditure. The research covers in a comprehensive position
the ways and what Nigerians majorly spend on in relation to their income.
It is necessary to mention some of the
limitation of this research work. The principal limitation is the difficulty in
obtaining relevant information. The school library has related books on the
subject of the study.
problem in the data obtained, since the researcher has to go round in
retrieving these questionnaires from respondents. Subsequent to this problem is
the combination of academic work with the study. There were also little cases
of missing data in these questionnaires.
in the highlighted limitation above, it is hoped that this research will be
useful to Nigerians who would want to enhance their saving habit and also to
those who would want to know the relationship between expenditures and income
to poverty level.
1.5 DEFINITION OF TERMS
Expenditure: the act of spending or using money.
Expense: the money spent on something.
Income: the money that a person, a region, a country etc. earns from work from
investing money, time, business etc.
1.6. RESEARCH HYPOTHESES
research hypotheses are as follows:
there is no significant relationship
between income and expenditure.
H1: there is significant relationship
between income and expenditure.
rule: reject H0 if p-value is
less than the level of significance. Accept H0 if otherwise.
H0: there is no significant relationship
between income and expenditure on poverty level.
H1:there is significant relationship between income and
expenditure on poverty level.
of significance (α):
rule: reject H0 if the p-value
is less than the level of significance (α) accept H0 if otherwise.