Recent analysis on consumption patterns in Nigeria seems to suggest an increase in inequality
that could have offset the poverty-reducing benefits from sustained growth. Inequality increase
is however just one aspect of the whole problem. Our hypothesis is that Nigeria is also going
through a process of economic polarization. Broadly speaking, the notion of polarization is
concerned with the disappearance or—as in the case of Nigeria—non-consolidation of the middle
class, which occurs when there is a tendency to concentrate in the tails, rather than the middle,
of the income/consumption distribution. The aim of this paper is to document the increasing
polarization, paying a special attention to certain areas of the country, notably those where
in the last decade economic growth had been stagnant or particularly non-inclusive with vast
negative repercussions on social stability. An analysis of this type is rather new for Nigeria. The
limited availability of comparable data has hindered an investigation that requires data series
not too close in time: the process of polarization is generally slow and significant changes can be
detected over long periods. The present paper tries to overcome this limitation by making use of
recently developed survey-to-survey imputation techniques. To explore polarization, our study
uses instead the relative distribution methodology (Handcock and Morris, 1998, 1999). This
flexible and straightforward method provides a non-parametric framework for comparing the
income (or other) distributions of two populations—either cross-sectional or over time—in a way
that permits consideration of differences throughout the entire income range. Findings confirm
the sharp increase of polarization. Compared to 2003, the 2013 consumption distribution is more
concentrated in upper and lower deciles, while the middle deciles are progressively empying out.
A between-group analysis based on the six geo-political zones of the country also shows the
emergence of a macro-regional gap: in fact, while the South South and South West regions
contribute mainly to polarization in the upper tail of the national consumption distribution,
households in the North East and North West zones—the conflict-stricken areas—are more
likely to fall in the lower national deciles compared to the rest of the country