Depending on what you choose to look at, this administration has done the most in Nigeria’s history to stimulate economic growth, however, the things it failed to as a result of ignorance or a lack of preparation to tackle the disadvantages that accompany rapid growth has made such growth seem intangible. By all indication and against all odds, the economic situation in Nigeria seems hopeful. Across the country, statistical income groups are consuming more, more people are getting educated, citizenship empowerment is shaping democracy and causing it to evolve beyond the norm. Although,critics like to oppose this notion, all of these indicators can certainly not be accidental. However, disturbingly, inequality seems to be on the increase. The curves of a challenging disparity framework are emerging between growth and inequality; how can Nigeria’s growth be more tangible without tackling structural inequalities?
In context, inequality is becoming clearer as a structural, intricate phenomenon likely to pose a threat for the future. There is an increasing evidence that inequality is harmful to the citizens and society at large, and that the greater social and economic inclusion greatly correlates with longer and stronger periods of sustained economic growth(J. Stiglitz, 2012). Evidently, OECD research shows pre-crisis economic pathways that create room for and encourage these marked rises in inequality, although, it makes no good economic sense, but it is usually an attempt to keep the gap growing wider between the bottom(poor) and the top(rich) while reducing the power of the intermediate spectrum (middle-class). For example, the declining rates of the Naira per dollar makes no economic sense for a country that imports everything and in the long run will kill the burgeoning middle-class.
Inequality is not just about uneven income. It has psychological dimensions; status, self-worth and opportunities; it affects the quality of social relations, inhibits social mobility and ultimately drives consumption. It has an adverse impact on factors such as health conditions and educational attainment, and these factors have a direct impact on opportunities and earning capacities.
Presently, the world’s richest 10% earn ten times the income of the poorest 10%. Increasing inequalities are becoming macroeconomic concerns as the societal impact associated with inequality can no longer be overlooked. Resentment associated with the extreme income margin between the rich and everyone else, which spills into inequality in political power drives social unrest. It is for this reason that in Nigeria, the Niger-delta ethnic group feel entitled to power and boko haram terrorist group are holding the country to ransom. These factors are gaining grounds and influencing politics, hence affecting how leaders are chosen based on religion and ethnic group supremacy.
There are several attempts by the Nigerian government to address symptoms of inequality such as high youth unemployment by stimulating job creation. However, these efforts are faced with several integral dimensions that complicate tangible positive outcomes. For example, access to entrepreneurship funds assumes that all unemployed youths are entrepreneurs. Further, skills training programmes without job opportunities is futile, lack of market access stifles stimulating agricultural economy and general challenges such as lack of power still poses a problem to running of day to day business.
The threats of Nigerian economy growing unequally threatens sustainability and bears a cost for the future.The OECD research (2014), affirms that even the smallest increase in income inequality reduces annual GDP per capita growth by an average of 0.2%. What this means is that countries like Nigeria whose GDP growth is failing to create jobs and reduce inequality require specific methods to economic progress. These methods should focus on equality as drivers of growth while concurrently positioning economic growth as a means to welfare development as opposed to economic growth as a means to an end.
Based on analysis of the OECD research and Joseph E. Stiglitz , inclusive growth is the only approach that can reduce inequality, particularly inequality coexisting with economic growth. This assumption is based on the idea that inclusive growth notes that strong per capita GDP does not necessarily translate to a healthy economy and tangible growth. Attaining inclusive growth necessitates subsidizing GDP with multifaceted welfare metrics and using objective, measurable and subjective indicators. For Nigeria, inclusive growth requires a comprehensive approach which monitors the effect of policies focused on specific and varying interest groups as opposed to generalization across board. For example, targeting specific groups such as children, elderly, women, unemployed, the disabled and young people in the country to measure what works and tracing it down to how and why it works.
In conclusion, because market policies are living value-creation system; they can evolve and adapt. They could evolve and change direction as a result of accessibility to opportunities and better redistribution components. Welfare based approach could serve as a guide to policy makers; providing new and broader perspectives on what the people need, working effectively across different scales and systems of governance to restore a dynamic of social mobility in democracies, restructuring domestic tax systems, government agencies learning to work with multidimensional welfare indicators and bringing forward a new economic paradigm in which equality is a key driver of growth, making Nigeria’s growth more visible.