Connect with us

Global Affairs

Wealth Inequality in Nigeria

 3 min read / 

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.

Contributing Factors

The main factors that contribute to wealth inequality in Nigeria are corruption and high governance costs.

Corruption

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.

1 Comment

1 Comment

  1. Geography student

    November 13, 2016 at 4:01 PM

    This was sooooo helpful for my case study! Thanks!

Leave a Reply

Your email address will not be published. Required fields are marked *

Companies

Financing for Green Sustainable Development

 3 min read / 

Green Sustainable Development

Green sustainable development has been on multiple discussions channels. Talks, seminars, workshops, you name it. However, financing it has not been thoroughly discussed. How do we finance sustainable green development? Is it profitable for companies who do so? Is the rate of return high enough to cover the cost of investing in green technologies?

No doubt, green sustainable technology is an expensive technology with no clear ROI. Venturing into green technologies may be a blind-man guided only by a voice in his head. Yes, green sustainable technology yields a significant Marginal Social Benefit (MSB). But often, MSB is non-quantifiable.

Leading this social-technology movement, Jeffrey Sachs, with the support of foundations such as the Jeffrey Cheah Institute, established the Sustainable Development Goals (SDG) centre in the backdrop of academics – Sunway University.

The aim is to directly address the issues for SDGs and to ensure the goal set in the Paris Climate Agreement is able to be achieved successfully.

Now, as mentioned, private firms are both afraid and pessimistic about green sustainable development. Many do not see the outcome of this initiative and are not concerned about the environment. The technology is costly, and some firms are even struggling to break-even at their current costs. Lack of momentum from firms involved in similar industries and lack of financial support has made venturing into green technology unattractive.

On 14th of January 2018, pioneers and advocates from across the globe were invited to join a workshop at Sunway University. The idea was to bring together a group of academics, from the Asian Development Bank Institute to representatives from New Zealand and Austria, to discuss how to finance green sustainable developments. It attracted a number of firms involved or who wanted to be involved in this movement.

Financing models such as the SIB model and the Yozma model were introduced by Dr Hee Jin Noh. Papers on the theoretical relationships between a firm, a bank, and households were presented by Dr Maria Teresa Punzi. And the outcome of these series of workshops will be a book, which aims to provide a better insight and guideline for green financing, written by Dr Hee.

Also presented was a case study, comparing different countries. Associate Professor Ivan Diaz-Rainey had made comparisons on some successful countries, looking at European countries versus New Zealand and Australia. In the case study, countries were compared, and recommendations were made on how to make green financing successful. Though the definition and KPIs of a successful green development country are still vague, countries from Europe are exemplary on the ‘theory to practice’ phase.

While there is a significant increase in awareness and wanting to be involved by private firms, it needs to be supported by the government more. Regulators need to provide sufficient information to assist private firms venturing into green technology or green development. A healthy government support will increase the chance of a firm venturing into green development being successful. And these are the baby steps needed in order for transformation at city-scale or nationwide-scale.

Keep reading |  3 min read

Global Affairs

Smart Cities Take Off

Smart cities

Big tech deals took off in 2017 as big tech firms strived to make smart cities a reality. 

Editor’s Remarks: In 2017, 35 agreements were reached between various cities around the world and big tech companies – a huge increase from the eight that were agreed in 2016. Alphabet has launched a project to develop a miniature smart city in 12 acres of land it purchased in Toronto. Meanwhile, Alibaba is leveraging digital infrastructure in Macau, where its smart transport systems will hopefully improve efficiency for the municipal government. Saudi Arabia has also announced a plan to build a new city, to be named NEOM, which will rely fully on renewable energy as well as self-driving vehicles and drones.

Read more on Big Tech:

Keep reading |  1 min read

Europe

Bayeux Tapestry on Loan

Bayeux Tapestry UK

Emmanuel Macron has offered to loan the famous tapestry to the UK in an effort to improve relations.

Editor’s Remarks: The offer is expected to be announced this Thursday, when Macron will meet UK officials at the Anglo-French summit at Sandhurst. The Bayeux Tapestry was commission by William the Conquerer’s brother to celebrate his 1066 conquest of England and depicts the Norman king defeating the Anglo-Saxon ruler King Harold. Although it was made in England, the piece – which measures about 35 square metres – has remained in France for the past 940 years. At the upcoming summit, Macron is also expected to petition the UK to join his combined European military initiative – a move many expect Britain’s new defence secretary Gavin Williamson to push back on.

Read more on Europe:

Keep reading |  1 min read

Trending

Send this to a friend