Inequality and poverty are two common macroeconomic issues challenging many Nigerians for decades. Many people are poor in Nigeria as a result of inequality. Inequality and poverty have negatively impacted Nigeria’s economy.
Inequality is the gap in social status, wealth, or opportunity between people or groups, which makes them produce different results. Inequality is in two perspectives; gender inequality and income/wealth inequality. Gender inequality means differences in the roles or activities considered appropriate for men and women.
Income/wealth inequality denotes a gap in the amount of money received/income held by men and women. Wealth is the net personal material possession, and income is the amount of money received, especially regularly, for work done or investments undertaken.
Inequality creates poverty in an economy. Poverty has hindered inclusive growth and development in Nigeria. Inequality concentrates wealth in the hands of the few. In 2020, about 83 million Nigerians were poor; they lived below the poverty line of $1.90 per day, according to the National Bureau of Statistics (NBS).
The World Bank report further stated that about 7 million Nigerians would fall into poverty in 2021 due to high inflation. By these reports, about 90 million Nigerians were below the poverty line in 2021. The World Bank projected the number of poor people in Nigeria to reach 95 million in 2022.
Poverty in Nigeria is not a result of a lack of resources, but the misappropriation of resources and corruption among the political elites who are aware of the daily struggles of Nigerians but adamant about providing a solution.
One of the causes of inequality in Nigeria is the high cost of governance. According to Oxfam International, Nigerian lawmakers are the best paid globally; their average annual salary is amongst the highest globally.
The cost of maintaining the government machinery in Nigeria is also among the highest. The high cost of governance aggravates inequality because few resources will be left to provide basic essential services for the growing Nigerian population.
The opportunities available to the children and relatives of the political class are unparalleled. They attend the best schools overseas, eat the best food, and subsequently get the best jobs in the Nigerian Ministries, Departments, and Agencies (MDAs) when they return home.
The vulnerable do not get jobs in public and private organizations after struggling to graduate from Nigerian universities because the political class has deliberately neglected the education system in Nigeria and hijacked the available jobs for their children and relatives. The NBS report showed that 42.5 percent of Nigerian youth were unemployed in 2020. This shows the height of inequality in Nigeria.
Inequality has increased social tensions, violence, corruption, and crime in Nigeria. The rising height of inequality in Nigeria poses threats to Nigeria’s unity and stability.
The problem of insecurity in Nigeria is a product of inequality. Many Nigerians cannot provide security for themselves; as a result, they are killed in numbers daily by bandits. Many Nigerian students are currently out of school because of the ASUU strike; they don’t have enough money to study abroad or in private universities. Students who are staying idle at home can be involved in crime, thereby increasing insecurity problems in the country.
The question many researchers and economists are asking is “inequality reduction and poverty eradication policies, which is appropriate for Nigeria’s economy?” The appropriate economic policy for Nigeria’s economy is an inequality reduction policy, says Professor A.C. Pigou – a welfare economist. Professor Pigou posits that given the level of resources, income redistribution eradicates poverty and enhances the welfare of the citizens.
Read also: Good governance critical to curbing poverty in Nigeria
It is high time the Nigerian government embarked on the appropriate economic policies to bridge the gap between the rich and the poor in Nigeria. A fight against inequality will help to reduce poverty, crime rate, social tension, youth emigration, youth unemployment, and corruption and strengthen national unity.
The Nigerian government must create a Nigeria where the sons and daughters of nobody can get jobs in the MDAs with relative ease to reduce poverty. The government should allocate adequate funds to the education, health, industrial and agricultural sectors annually to revive the ailing economy.
The heights of inequality and poverty have reached extreme levels. Many Nigerians are poor; they can hardly contribute to economic growth and development. On a sincere note, Nigeria can be great again with economic policies targeted at inequality to eradicate poverty; to return Nigeria on the path of impressive growth rates.
Felix Ashakah is an economics lecturer at Western Delta University, Oghara
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