More than 83 million Nigerians, representing 39 percent of the country’s population, are living in extreme poverty. This means that ‘poor Nigerians’ survive on less than $2 a day, according to 2022 data from the National Bureau of Statistics.
The poverty gap in a country is a major factor in measuring inequality which is determined by unequal distribution of income or wealth.
According to OXFAM’s research, the drivers of these inequality challenges are connected to inadequate social spending, tax disparities, regional disparities, and political or institutional challenges. Others are gender inequality and the pervasiveness of income and wealth inequality.
The NBS 2022 Multidimensional Poverty Index survey revealed that 133 million people, about 63 percent of the population, are multidimensionally poor. Of this figure, 82.9 million people lived below the poverty line of ₦137,430.
Extreme poverty in the country grew from 18 percent of the country’s population as reported by the NBS in 2016 to 40.1 percent reported in 2019, and now 63 percent. A major part of these affected Nigerians reside in rural areas where limited access to basic services, infrastructure, and economic opportunities among others is a great challenge.
Nigeria’s population is predominantly rural, with approximately 60 percent of citizens residing in rural areas, compared to 40 percent in urban centers. However, the MPI survey revealed stark disparities in poverty rates as 72 percent of these rural residents are poor compared to 42 percent of residents who lives in urban areas.
On geographical disparities, the northern region is faced with a high level of poverty, with a regional average of 73 percent, compared to states in the southern region.
OXFAM also noted that another significant indicator of inequality in Nigeria is the Gini coefficient, which stands at approximately 35.1 percent, compared to other countries in Sub-Saharan Africa.
The drivers of inequality
According to OXFAM’s findings, 10 percent of Nigeria’s population control 32.5 percent of the country’s wealth, compared to the poorest citizens, who hold 2.3 percent of the national income. This disparity could mean that those born into poverty are likely to remain in it.
Most of these inequality gaps exist among women who have limited access to opportunities, as data showed that the literacy rate among women is 35 percent, compared to 59.5 percent for men.
Also, the federal government’s allocation to critical sectors has consistently failed to meet the thresholds included in various international agreements it is a signatory to. It continues to allocate less than six percent of its national budgets to sectors like education, agriculture, and healthcare among others which could reduce the inequality gap within the country.
Despite these poor allocations, OXFAM pointed out that poor Nigerians and businesses are overburdened with multiple taxes, compared to big businesses that receive tax waivers from the government.
Similarly, political and institutional challenges, including corruption, weak governance, and elite capture, according to the report, remain key drivers of inequality in Nigeria, as many of Nigeria’s wealthiest individuals have accumulated their fortunes through political connections or direct participation in government.
How can this be solved?
OXFAM recommended that the government, in collaboration with non-state actors, adopt a more inclusive, transparent, and equitable approach. Targeted investments in human capital, infrastructure, and rural development will play a key role in bridging these divides.
Equally, progressive taxation and policies to improve governance and accountability will be essential in ensuring that resources are more equitably distributed across the country.
By addressing the root causes of inequality, OXFAM noted that Nigeria can chart a path toward inclusive growth, improved social mobility, and a more equitable society for all its citizens.