ECONOMIC SYSTEM AND INCOME INEQUALITY IN THE NIGERIAN ECONOMY

Abstract

This study examines the economic system and income inequality in the Nigerian economy in selected years from 1985 to 2023. One of the essential features of an economic system is income distribution but oftentimes, this is not translated in the desired direction and
thus broadens inequality, threatens social and political instability in society. For instance, three Nigerians are wealthier than eighty-three million others. Thus, rising inequality in Nigeria can have a devastating effect on the effort to fight poverty. This study utilized descriptive analysis and employs secondary data to investigate the Gini coefficient and income share held by the lowest 10 percent and highest 10 percent in Nigeria. Findings show that there is tremendous income gap between incomes held by the lowest 10 percent and highest 10 percent while wealth inequality is on the increase in Nigeria with a Gini coefficient for wealth of 85.5 in the period
2000-2020. This study recommends that a comprehensive strategy within a consistent political framework would therefore seem to be called for. Additionally, there is need for subsidization of social investment such as education and health with adequate utilization of returns to achieve higher social benefits is necessary.