Nigeria scored 35.1 in the 2022 Gini coefficient on countries with wealth inequality. With this score, Nigeria is 11th in West Africa and 100th out of 163 countries globally.
Nigeria has an income inequality of 1 to 14 for the top 10% to the bottom 50% of the population and 1 to 37 for the top 1% to the bottom 50%.
Wealth inequality or wealth gap measures wealth distribution in a country. It is the difference between the richest and the poorest in a country or location. Wealth inequality is similar to income inequality, although wealth inequality also includes the value of bank accounts, stocks and investments, homes, and personal possessions. It’s a major determinant of an unequal standard of living.
A review shows that the country maintained the same score of 35.1. in the 2018 index, which preceded the latest 2022 index.
The level of inequality measured in a Gini coefficient ranges from 0 to 1, with 0 referring to perfect equality and 1 perfect inequality. The coefficient is arrived at by reviewing some basic economic parameters in the country. These are the GDP at purchasing power parity, poverty rate, unemployment, GDP per capita, and social spending.
Also, the Corruption Perceptions Index’s political index is considered. All these are weighted into the Gini coefficient to give the final scores.
Nigeria’s performance on the index considered the country’s unemployment rate at 33.28%, and a poverty headcount rate of 40.09% by the end of 2020.
The estimated average income in the country is equivalent to €PPP7,600 or N1,895,630 for the entire population. The top 10% of the population, who make about 42% of the national income, earn an average of €PPP32,700 or NGN8,098,350.
One percent of the population earns €PPP88,600 average annual income, and this category contributes 25.2% of the national income.
However, those in the bottom 50% earn €PPP2,400, equivalent to NGN587,583. This group of persons contributes 15% of the total national income.
Wealth disparity in the country is very high. The income inequality for the top 10% to the bottom 50% is 1 to 14. This simply means that one person’s income in the top 10% of the population will pay for 14 persons in the bottom 50%. However, one person’s income in the top 1% of the population will conveniently pay 37 persons in the bottom 50%. Income inequality between the top 1% to the bottom 50% is 1 to 37.
Consistent with reports like the Gender Pay Parity report, income inequality is high between men and women in Nigeria. Female income labour share is 28% and although this is within the sub-Saharan average, it is lower than the 36% share in South Africa.
Across West Africa, Nigeria is ranked 11th on wealth inequality among other countries. The country with the highest wealth inequality in the sub-region is Guinea Bissau, with a coefficient of 50.7. The Republic of Benin and Ghana are second and third, with a coefficient of 47.8 and 43.5, respectively.
Globally, South Africa has the highest inequality of the 163 countries. The country recorded a coefficient of 63. South Africa maintained this score as it was also the country that topped in the 2019 survey.
According to the report inequality has remained high in Nigeria since the 1990s. Although there was a decrease between 2010 and 2015 marked by “fast-rising bottom and middle incomes”, the trend turned downwards again following the 2016 growth slowdown, and average incomes have been falling since then.