The Nigerian problem in the 20th century has been the inability to get the best from her
human resources. The problem goes beyond low income, savings and growth. It includes high
inequality, which includes among others, unequal access to basic infrastructure and unequal
capabilities (education and health status). There have been numerous studies on poverty in
Nigeria, but few on inequality. Incidentally, the importance of unequal access to opportunities,
assets, income and expenditure cannot be overemphasised as it plays important roles in reducing
poverty and spurring the economy to long-term development. In Nigeria the poor are not just the
rich with less money, but are the poorest of the poor. Households are not only poor; they also
suffer from vast inequality in incomes, in assets (including education and health status), in
control over public resources, and in access to essential services as well as pervasive insecurity
(World Bank, 2000). The distributional consequences of economic growth is therefore one of
the main policy issues in Nigeria.
Inequality in income distribution has been a subject of controversy in the literature with
the Kuznet hypothesis being the focal point. The hypothesis has suggested that as development
proceeds, inequality will increase at the very early stages and then decline. However, there has
been no consensus on whether a Kuznet curve exists for Africa (Fields, 2000). Although
economic growth is important for the success of any economy, it becomes less effective for
poverty in the face of massive inequality. Given the depth of inequality in Nigeria, growth may
not be enough without giving attention to easing inequality and eliminating barriers that
constrain poor people to benefit from a growing economy and to contribute to that growth
(Iwayemi et al, 2000). Unless distributional elements are included in developmental programmes
and reforms, it will be difficult to solve human development crisis, which might also deter the
development of the economy. Rather it has been pointed out that in high inequality countries, upfront
actions that are both growth promoting and equity enhancing may be the only realistic
option for development to be sustained (Estudilo, 1997).