INCOME INEQUALITY AND ECONOMIC DEVELOPMENT IN NIGERIA: AN EMPIRICAL ASSESSMENT

Abstract

The study examined the impact of income inequality on economic development in Nigeria for the period of 1989 to 2020. The specific objectives were to examine if gini coefficient has a significant impact on per capita income in Nigeria, to ascertain if poverty rate has a significant impact on per capita income in Nigeria and to determine if inflation rate has a significant impact on per capita income in Nigeria. The study made use of quantitative research design which involved the use of secondary method of data collection. The data collected was analyzed through multiple linear regression. The findings revealed that income inequality as proxied by gini coefficient and poverty rate has a negative and significant impact on per capita income, while inflation rate has a negative but insignificant impact on per capita income in Nigeria. It is therefore recommended that government should direct its policies and programs towards measures that enhance income redistribution, as this would reduce the level of inequality and ensure an even distribution of income; government should keep the rising inflation rate at single digit, while creation of government’s social investment program should be encouraged to capture more unemployed people, so as to enhance the availability of income on every household and citizen of Nigeria, among others were proffered.