Summary
It is widely perceived
that there is a growing gulf in Nigeria between the poor and the nonpoor – the
rich are getting richer and the poor, poorer. And that this is standing in the
way of the poor from sharing in the benefits of economic growth, thus, preventing
many of them from escaping poverty. This paper presents a shred of
counterevidence. For instance, between 1980 and 2010 the GDP per capita of Nigeria rose by
18.92%; but at the same time the rate of absolute poverty rose by 62.76%; and
the level of inequality – measured in terms of Gini Index – declined by 35.66%.
The picture being painted by these stylized facts raises at least three
questions: (a) over the past three decades, how has inequality in Nigeria
evolved: has it be rising or falling? (b) What are the forces driving the
change in the country's level of inequality? (c) If at all, does rising inequality
erodes growth-driven opportunity for poverty reduction?
Using survey-based
datasets that together spanned 1980-2010 and employing various measures of
distribution, I show that Nigeria is less unequal in recent times than it was
about three and a half decades ago. And that the decline in the level of
inequality was driven by (i) series of economic contractions coinciding with
the late 1970s and early the 1980s busts in world oil price in that the rich
were losing more than the poor, (ii) higher redistribution of welfare among the
non-poor than between the rich and the poor: the level of within-group
inequality is higher than between-group inequality's. (iii) The attainment of
‘pro-poor’ growth that correspond with the country’s return to civilian rule in
1999 which was accompanied by a series of reforms in key sectors of the economy, especially, the revamping of the financial system.
[Full paper is forthcoming]
Zuhumnan Dapel | Twitter : @dapelzg
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