Nigeria has experienced great economic growth over the last 20 years and is projected to be among the world’s top 20 economies by 2030. It is the largest country in Africa with a population of over 180 million. It is a rich nation with vast natural resources and even with this, the wealth gap in the country is getting bigger. Nigeria has revenues of over $80 billion from oil reserves alone, yet wealth inequality in the country is among one of the worst in the world. Despite the country’s growth projections, if it fails to address these issues of wealth inequality, it may pose serious implications for the growth and future of the economy.
Poverty in Nigeria
Absolute poverty in Nigeria (earning less than a dollar a day) has increased from 55% in 2004 to 61% in 2014 and in contrast; there are almost 16,000 millionaires currently living in Nigeria, a 44% increase in the last 6 years. This is expected to grow to 23,000 by 2017, which represents a 47% increase. In Lagos, which is Africa’s most populous city, wealth inequality is most prominent and is home to 9,500 of these millionaires. These figures represent a huge issue with wealth distribution in the country and are attributed to a number of factors embedded within the Nigerian culture, system and policies. Even with its abundant oil resources amounting to $80+ billion in annual revenue for the country, poverty is increasingly becoming a major issue for a vast amount of the population. Under these conditions, many inhabitants are forced to live in slums with limited access to food, education, electricity and clean water. For Nigeria to grow as a nation and become an economic powerhouse for the future, these issues need to be addressed through the introduction of social systems and policies that cater to the disadvantaged members of the population.
The main factors that contribute to wealth inequality in Nigeria are corruption and high governance costs.
Corruption is a major issue that is contributing to the increasing wealth gap between the rich and poor in Nigeria. Corruption has been ever present since the country’s independence in the 1960’s and it now seems to be an issue that is embedded within the Nigerian system and culture. Fighting corruption in Nigeria is a battle and will take a great leadership in exposing and prosecuting those that are undermining the future and development of the Nigerian economy. There is a need for transparency and accountability in the Nigerian system and until that is achieved, the wealth gap in the country will continue to get worse.
Cost of Governance
As long as corruption is embedded in the system, the cost of governance will continue to remain high. A report by the Sahara Reporters in 2012 found that it costs Nigerians $8.3 billion to pay the salaries of those in politics. In 2012, $7.4 was to be spent on developing infrastructure, but only half of this was spent towards its development. To put this into perspective, it meant that for every dollar spent on infrastructure development in Nigeria, two dollars are spent on salaries of those in politics.
Corruption and high governance costs are the major factors that are hindering economic development in Nigeria. Wealth distribution in the country is unequal, as money that input into the country, does not benefit the poorer members of the population. Great leadership is needed to eradicate these issues of corruption and until this is done, we won’t see ‘real’ economic development in Nigeria.