Dr. Ngozi Okonjo Iweala, Finance Minister
By Eromosele Abiodun
As the income disparity in Nigeria continues to widen, a report by BGL Limited has revealed that politicians, civil servants, blue collar workers, directors in government parastatals, industrialists and top executives of companies, representing less than 5 per cent of the country's population, consume more than 40 per cent of the nation's total income.
The report indicated that over 70 per cent of Nigeria's working population are employed in agriculture, which remains largely subsistence and restricted mainly to rural areas whose earning capacity is low.
The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo Iweala had recently warned that the Nigerian economy may be in danger if the private sector do not join hands with government to create jobs, and reduce the inequality in the country.
Okonjo Iweala, who accused the private sector of creating wealth for a few and not jobs, disclosed that the federal government created a total of 1.6 million jobs in 2012 and another 431 thousand jobs in the first quarter of 2013.
The earning capacity of majority of Nigerians, according to the report, is generally bound in a circle of subsistence, adding that economic interaction with the cities is highly tortuous, which creates large arbitrage opportunities for traders who take the risk of facilitating markets between the rural and urban areas.
"New sets of classes are created in the cities, made up of large poor urban immigrants with little or no skills who forcefully abandoned the villages to seek greener pastures. They form the large unemployed or underemployed population living in slums in cities like Lagos, Port Harcourt, Abuja, Kano, Enugu and Ibadan amongst others, barely earning more than the subsistence average income, earning barely $2 a day," BGL said.
On the reported growth in the nation's gross domestic products (GDP) per capita, BGL argued that using trends indicators like GDP hide the real economic situation of countries and could give misleading impression about the wellbeing of a nation.
"Focusing on other human development indicators (HDIs) such as the poverty level, access to drinkable water, unemployment rate, and health access indicators would help policy makers at targeting reforms. These measures do not only expand the inclusiveness of strong growth, they suggest sustainable capacity to keep growing while closing the gaps within the classes in the society, "BGL noted.