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American Economic & Social Review; Vol. 2, No. 1; 2018 

ISSN 2576-1269   E-ISSN 2576-1277 

  Published by Centre for Research on Islamic Banking & Finance and Business, USA 

 

Poverty and Income Inequality in Nigeria: An Illustration of Lorenz 

Curve from NBS Survey 

Lucky Anyike Lucky1 & Achebelema Damiebi Sam1 

1Department of Banking and Finance, Rivers State University, Port Harcourt, Nigeria 

Correspondence: Lucky Anyike Lucky, Department of Banking and Finance, Rivers State University, Port Harcourt, 

Nigeria 

 

Received:  April 06, 2018 Accepted: April 19, 2018 Online Published: May 05, 2018 
 

Abstract 

This study adopted the Nigerian Bureau of Statistics survey to examine poverty and income inequality in Nigeria. 

The objective was to examine the rate of poverty and income distribution in Nigeria using the Lorenz curve and 

Gain coefficient. Food poverty line, absolute poverty line, subjective poverty measure and dollar per day poverty 

line were used to measure poverty while Gani coefficient was used to measure income inequality. Findings reveal 

that significant proportions of Nigerian population are living below the poverty line adopted in this study. The study 

also found that there is wide gap between the rich and the poor in Nigeria. The study recommend implementable 
polices to reduce poverty and reduce income inequality in Nigeria. 

 

Keywords: Poverty, Income Inequality, Nigeria, Lorenz Curve, Gani Coefficient, NBS Survey. 

 

1. Introduction 

Nigeria economy is a developing economy with abundant human and other natural resources; nigeria is recognized 

as oil producing country, a member of organization of petroleum exporting countries (opec), the tenth largest 

producer of crude oil in the world and African highest exporter of crude oil (lucky and nwosi, 2016). The country’s 

crude oil reserve is estimated at 35 billion barrel with national gas reserve of 180 trillion cubic feet, a production 

capacity of 2.5 million barrel per day and annual production of 900,000,000 barrel (ushieet al. 2012) but among the 
third world countries and ranked among the poorest. This is contrary to the global perception of nigeria as a rich oil 

producing country. 

The population is estimated at 189 million, 2.48% of total world population, 205 per km2, the total land area is 

910802km2, 48.1% of the population is urban, the median age 18 years and the sex ratio is 1.026 that is 1,026 male 

per 1000 female. The literacy rate is 56.6%, the dependency ratio is 78.8%, and child dependency ratio is 73.2%. 

40.9% of the population are children under 15 years, 55.9% are between 15 and 64 years while 3.1% are 65 years 

and above. Apart from macroeconomic challenges such galloping inflation, unemployment, balance of payment 

deficit, poor economic growth and depreciating naira value, other challenges face significant population of the 

country is poverty and income inequality. Traditionally, income distribution and poverty concerned how income was 

divided among the owners of business (for whom profits were the source of income), the owners of land (who 

receive rent) and the workers (who earned wages) (colander, 2005). 

Poverty and income inequality have theoretically been identified to be inextricably linked and that the existence of 
one often implies the existence of the other (burtless and smeeding, 2002; bourguignon, 2004). A better income 

distribution helps people of the lowest income group to increase their income so that they can exit from their 

poverty. Achieving income equality and reduction on the growing level of poverty is one the major developmental 

objectives of the developing countries this because income inequality and growing level of poverty is a major 

limitation of economic development. Analysts have argued that solving the problems of poverty and inequality 

needs appropriate policies that aims at the gaps and ensures that the poor in a given population can benefit from it 

(ogbeide and agu, 2015). 

Nigeria was ranked 156th position among 177 countries as compared to the 151st position in 2002 in human 

development index (hdi), Nigeria human poverty index (hpi) for 2009 was only 36.2% placing Nigeria at the 114th 

position and among the 7th poorest nations in the world while the ratio of the richest 10 percent to the poorest 10 

percent was 16.3 with gini index from 42.9 in 2004 to 44.7 in (national bureau of statistics - nbs, 2012; undp, 2013). 



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Yet the country ranks 6th and 7th as oil producer and exporter and ranks 10th as the most populous country in the 

world with a real GDP growth rate of 7.0 in 2009 which grew to 8.0 in 2010 which however dropped to 6.3 in 

2013(ogbede and agu, 2015). 

The argument on what constitute poverty level and income equality has long been a point of departure among 

economists. Economist who favour a relative measure of poverty argue that the poverty measure is too low since 
food is closer to a fourth of family’s total budget, it would be reasonable to increase the poverty threshold by 

multiplying food expenditures by a number a bit less than four rather than by three. Economist who favour an 

absolute measure of poverty argue that the measure is too high as it does not capture non-cash transfers such as food 

stamps and housing assistance nor does it consider under reporting income or the saving people have. 

From the classical perspective, income equality discourages savings. Income equality means a higher income for the 

working classes and a rise in their consumption. This, in turn, means rise in population. The classical believed that 

inequalities of incomes were necessary to provide the incentives for economic growth. The Keynesian economists 

pleaded for income equality to sustain economic growth. The Keynesian’s opinion was that a society which saves 

more due to inequalities of income and wealth brings secular stagnation, because inequalities would reduce its 

consumption capacity and bring contraction in demand. Ultimately, it would lead to fall in production and slowing 

down the economic activity (adegoke, 2013). 

The Marxian also supported this claim. According to them, it was income inequality that would bring the doom of 

capitalism. Marx argued that income inequality meant less consumption for the poor masses. This would 

automatically lead to unsold stocks of goods and to a stop of further production. In this way these would be 
cumulative over-production and under consumption and the capitalist economy would move towards secular 

stagnations. 

The post Keynesian economist carried Keynes views further. Keynes believed that encouraging consumption is 

alternative to savings. But the post-Keynesian economists showed that they are complementary. When there is 

income inequality it leads to excessive thriftiness and fall in inducement to invest as a result of declining marginal 

efficiency of capital. Economic growth requires the balancing of the two forces which is possible in a high wage low 

profit economy and investment free society. From the above this study intends to examine poverty and income 

inequality in Nigeria as other studies fail capture the various dimensions of poverty and income inequality. The rest 

part of this paper are as follows; section two discuses the concept of poverty, income inequality causes of poverty 

and policies for income redistribution, section three discusses the methods adopted in the study, section four  

presents and analyze results while section five concludes and make recommendations from the findings. 

2. Literature Review 

 The Concept of Poverty 
Poverty is the economic condition in which people lack sufficient income to obtain certain minimal levels of health 

services, food, housing, clothing and education which are necessities for standard of living (world bank, 2011). The 

various definitions and measures of poverty lead to two perspectives which are income poverty and lack of basic 

need poverty. Income poverty occurs when an individual does not have enough money to meet up with the a certain 

standard of living while lack of basic need poverty occurs when one is unable to meet some of the basic needs such 

as food, shelter and clothing as identified by united nations, children’s fund (unicef). From the above definition of 

poverty, income definition is the most appropriate, therefore this study use the income definition of poverty 

(Ogbeide and Agu, 2015). 

 The Concept of Income Inequality 

Inequality has to do with differences in the share of something between/among two or more persons where the share 

of one/some is greater than that of the others. According to ray (1998), economic inequality occurs when one 

individual is given some material choice/resources and another is denied the same thing. Inequality can be in 
income, consumption, wealth, gender, employment, health variables and many more. But for this study we are 

interested in income inequality. Income inequality is defined as the inequitable distribution of income among the 

members of a particular group, an economy or society. Income inequality can be measured generally using the 

lorenz curve, the gini coefficient and general entropy class. The gini coefficient is most frequently used measure and 

it is close to the lorenz curve (Ogbeide and Agu, 2015). 

 Income Redistribution Policy 

 Social Transfers and Inequality 
Redistribution can take place through social transfers, including social assistance benefits and social insurance 

programmes. The former typically target the needy and can therefore be expected to have a strong redistributive 

effect. In Nigeria however, social insurance programmes such as pensions and unemployment insurance is 

regressive rather than progressive; and this tendency is exacerbated by the fact that such programmes tend to 
exclude workers in the informal economy, who disproportionately comprise the poor. There is a relatively strong 

negative association 



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between spending on social transfers and inequality. Developing countries such as Nigeria have high rate income 

inequality to poor implementation of social transfer policies and fraudulent activities in the programmes. The 

negative relationship between income inequality and social transfers can be interpreted as evidence that high- 

inequality countries like Nigeria lack the economic or political means to fund social programmes. 

 The Role of Taxes in Income Redistribution 
Redistribution can take place through taxation. Different taxes have different impacts on income distribution. 

Generally, personal income taxes and property taxes are progressive increasing equality, corporate taxes are u- 
shaped (regressive for small and large companies and progressive for medium-sized companies) and indirect taxes 

are regressive. 

Together reliance on different taxes combines to define the extent of progressivity in the overall tax system. 

Typically, the overall tax system in poor countries is regressive (Gemmel and Morrissey 2005). Great care needs to 

be taken when using the tax instrument for redistribution purposes. It is crucial that taxes should not distort 

incentives to work, invest and create wealth. Any recourse to tax reform reduces income inequalities should 

therefore take into account the possible impact on economic growth and employment. Taxes are used for a variety of 

purposes; they can raise revenue for government, provide incentives or disincentives for certain activities and correct 

market failure, taxes and expenditures can also serve to distribute income and help reduce inequality. 

 Government Expenditures on Public Goods 

Public expenditure concerns the expenses incurred by government for its own maintenance, the maintenance of the 

society and the economy at large. Expenditures incurred for helping countries form a part of total public 
expenditure. The starting point of the theory of public expenditure is the failure of the market mechanism to respond 

fully to the true needs of the society. In other words, market mechanism is not able to bridge the gap between private 

and social goods. Furthermore, the public sector considers it relevant to protect the economy from the evils of 

market mechanism such as labour exploitation, economic and social injustice. The public sector is on expanding the 

supply of merit goods and forcing the consumption upon the members of the society. Thus, theory of public 

expenditure started attracting increasing attention with the advent of welfare economics in which the role of the state 

was explicitly recognized and in which budgetary operations assumed a significant role. This tendency has been 

further reinforced by the widening interest of economists in the problems of economic growth, planning regional 

disparities, distributive justice and the like. 

Investment in education, health and other social services can also exert are distributive effect. While taxes and social 

transfers have an immediate effect on income distribution, public provision of social services tends to have a more 
long-term impact. Government programmes in primary education or health care and infrastructure investment in 

areas such as water and sanitation help alleviate the deep-rooted aspects of inequality by creating opportunities. This 

is particularly the case with education and heath programmes, which directly support low-income groups, since they 

tend to benefit all individuals more or less equally and replace private spending on health care and schooling. 

Education and health programmes help redistributive opportunities over the long run, enhancing human capital in all 

groups and thus changing income capabilities. 

 Income Inequality: The Political Class 
Nigeria politicians earn the highest salaries the whole world. In Luxemburg where minimum wage is $2,500, their 

lawmakers are paid $7,400. In Libya where minimum wage is $430, law-makers earn $3000. In Nigeria where 

minimum wage is $38 (n18, 000), law-makers earn $65,000 (n29m).the Lagos pension law approved by former 

governor in 2007, a former governor will enjoy the following benefits for life: two houses, one in Lagos and another 

in Abuja. Property experts estimate such a house in Lagos to cost n500m and Abuja n700m.) Others are six brand 

new cars replaceable every three years; furniture allowance of 300 percent of annual salary to be paid every two 

years, and a close to n2.5m as pension (About N30m Pension Annually). He Will Also Enjoy Security Detail, Free 

Medicals Including For His Immediate Families. Other Benefits Are 10 Percent House Maintenance, 30 Percent Car 

Maintenance, 10 Percent Entertainment, 20 Percent Utility, and Several Domestic Staff. 
In rivers, the law provides 100 percent of annual basic salaries for ex-governor and deputy, one residential house for 

former governor anywhere of his choice in Nigeria; one residential house anywhere in rivers for the deputy, three 

cars for the ex-governor every four years; two cars for the deputy every four years. His furniture is 300 percent of 

annual basic salary every four years en bloc. House maintenance is 10 percent of annual basic salary. 

In Akwa Ibom, the law provides for n200m annual pay to ex governors, deputies. He enjoys a pension for life at a 

rate equivalent to the salary of the incumbent governor/deputy governor respectively. A new official car and a utility 

vehicle every four years; one personal aide and provision of adequate security; a cook, chauffeurs and security 

guards for the governor at a sum not exceeding n5m per month and n2.5m for the deputy governor. There is also a 

free medical service for governor and spouse at an amount not exceeding n100m for the governor per annum and 

n50m for the deputy governor. Also, there is a five-Bedroom Mansion in Abuja and Akwa Ibom and Allowance of 



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300 Percent of Annual Basic Salary For The Deputy Governor. He Takes A Furniture Allowance Of 300 Percent Of 

annual basic salary every four years in addition to severance gratuity. 

The Kano state pension rights of governor and deputy governor law 2007 provides for 100 percent of annual basic 
salaries for former governor and deputy. Furnished and equipped office, as well as a 6-bedroom house; well- 

furnished 4-bedroom for deputy, plus an office. The former governor is also entitled to free medical treatment along 

with his immediate families within and outside Nigeria where necessary. It is same for deputy. Two drivers are also 

for former governor and a driver for his deputy; and personal staff below the rank of a principal administrative 
officer and a pa not below grade level 10. There is a provision for a 30- day vacation within and outside Nigeria. 

In Gombe, there are n300 million executive pension benefits for the ex-governor. In kwara, the 2010 law gives a 

former governor two cars and a security car, replaceable every three years, a well-furnished 5-bedroom duplex, 

furniture allowance of 300 per cent of his salary; five personal staff, free medical care for the governor and the 

deputy, 30 percent of salary for car maintenance, 20 per cent for utility, 10 percent for entertainment, 10 per cent for 

house maintenance. 

The Zamfara version of the law, signed in 2006, gives former governors pension for life, two personal staff, two 

vehicles replaceable every four years, two drivers, free medical for the former governors and deputies and their 

immediate families in Nigeria or abroad. The law also gives the former governors a 4-bedroom house in zamfara and 

an office, free telephone and 30 days paid vacation outside Nigeria. 

In Sokoto, former governors and deputy governors are to receive n200m and n180m respectively being monetization 

for other entitlements which include domestic aides, residence and vehicles that could be renewed after every four 
years. Section 2 (2) of the Sokoto state grant of pension (governor and deputy governor) law, 2013 states that the 

total annual pension to be paid to the governor and deputy governor, shall be at a rate equivalent to the annual total 

salary of the incumbent governor or deputy governor of the state respectively. 

According To Rmafc, A Minister Receives An Annual Basic Salary Of n2m, Accommodation n4m, Vehicle Loan 

n8m, Furniture Allowance n6m, Utility N607, 920, Vehicle Maintenance N1.5m, Entertainment N911, 880 And 

Leave Allowance N202, 640. The Minister Also Receives N506, 600 For Personal Assistants, N1.5 Million For 

Domestic Staff, N303, 960 For Newspapers And N6m As Severance Gratuity. In Addition, The Minister Is Entitled 

To N35,000 As Duty Tour Allowance (Dta) Per Day. For Foreign Trips, A Minister Receives $1,000 Per Day. 

A Senator Earns A Basic Salary Of N2,026,400.00, Accommodation, Motor Vehicle Loan(400% Of Their Annual 

Basic Salary), Motor Vehicle Maintenance Allowance (75% Of Annual Basic Salary), Furniture Allowance(300% 

Of Their Annual Basic Salary), Utilities Allowance( 30% Of Their Basic Salary), And Medical Allowance. Other 
Benefits They Are Earning Are Newspaper Allowances, Special Assistant (Between Grade Level 12 And 14), 

Personal Assistant, Two Legislative Aides, One Senior Legislative Aide, Entertainment Allowance, Wardrobe 

Allowance And Constituency Allowance And Severance Gratuity. 

Section 2 (a) of the ccb law provides that a public officer shall not “receive or be paid the emoluments of any public 

office at the same time as he receives or is paid emoluments of any other public office; or (b) except where he is not 

employed on full time basis, engage or participate in the management or running of any private business, profession 

or trade; but nothing in this sub-paragraph shall prevent a public officer from engaging in farming. 

Section 4 of the law says a public officer shall not, after his retirement from public service and while receiving 
pension from public funds, accept more than one remunerative position as chairman, director or employee of (a) a 

company owned or controlled by the government; or (b) any public authority. A retired public servant shall not 

receive any other remuneration from public funds in addition to his pension and the emolument of such one 

remunerative position. 

Section 14 of the same law exempted lawmakers from the above provisions thus: in its application to public officers 
(a) members of legislative houses shall be exempted from the provisions of paragraph 4 of this code; and (b) the 
national assembly may by law exempt any cadre of public officers from the provisions of paragraph 4and 11 of this 

code if it appears to it that their position in the public service is below the rank which it considers appropriate for the 

application of the provisions. 

3. Research Methodology 

The objective of this study is to examine dimension of poverty and income inequality in Nigeria, the descriptive 

methods of data analysis with the application of lorenz curve. Lorenz curve is an instrument to analyze curve, the 

numbers of income recipients are plotted on the horizontal axis, not in absolute terms but in cumulative percentages. 

The vertical axis shows the share of total income received by each percentage of population. The cumulative is up to 

100%, meaning that both axes are equally long. 
The entire figure is enclosed in a square and a diagonal line is drawn from the lower left corner (the origin) of the 

square to the upper right corner. At every point on that diagram, the percentage of income received is exactly equal 

to the percentage of income recipients for example; the point halfway along the length of the diagonal represents 



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50% of the income being distributed to exactly 50% of the population. The more the Lorenz curve line is away from 

the diagonal (perfect equality), the greater the degree of inequality represented. 

4. Poverty Indicators 
The major component in the computation of relative poverty measurement is the household expenditure. 

Expenditure refers to all goods and services for use of the household. It also includes all monetary transactions such 

as donations, savings, esusu contribution. Poverty line is a measure that divides the poor from non-poor. Using the 

mean per capita household expenditure one-third of it gives (separate) the extreme or core poor from the rest of the 

population while two-third of the mean per capita expenditure separate the moderate poor from the rest of the 

population. The accumulation of the core poor and moderate poor gives the poor population while the non-poor are 

the population greater than two-third of the population. In the course of computing the poverty profile for Nigeria 

using the harmonized Nigeria living standard survey, all the above approaches have been adopted. Though the use of 

country adult equivalent and household size seems to be the current method in the computation of absolute 
(objective) poverty measure, the nbs adopted per capita expenditure (total expenditure/household size) just for 

consistency. Absolute poverty measure used the per capita expenditure approach. However, the measurement of 

poverty is about individuals in poverty, hence the choice of per capita expenditure which will estimate the 

population as against adult-equivalent which under-estimate the population. For clarity, it is necessary to state the 

different measures and what they translate in monetary. The poverty lines for each of the measures are as follows: 

 Food poverty line: This food poverty is an aspect of absolute poverty measure which considers only food 

expenditure for the affected households. 

 Absolute poverty line: This is the second step in absolute (objective) poverty measure. Here, this method 
considers both food expenditure and non- food expenditure using the per capita expenditure approach 

 The relative poverty line: This line separates the poor from the non-poor. All persons whose per capita 

expenditure is less than the above are considered to be poor while those above the stated amount are 
considered to be non-poor. 

 The dollar per day poverty line: This measures, consider all individuals whose expenditure per day is less 
than a dollar per day using the exchange rate of naira to dollar. 

 The subjective poverty measure is the perception of the citizenry. It is neither related to per capita 

expenditure of household nor the country adult equivalent scale. 

 Another critical measure of poverty is the gini coefficient (inequality measurement). This measure can 

explain the spread of income or expenditure yet cannot explain increase or decrease of individuals or 

persons in poverty. 

5. Data Presentation and Analysis 

 

Table 1: Nigerian Poverty By Sector 

Sector Food Poor Absolute Poor Relative Poor Dollar Per Day 

Urban 26.7 52.0 61.8 52.4 

Rural 48.3 66.1 73.2 66.3 

 

Table 2: Analysis Of Nigerian Poverty By Geographical Region 

Zone Food Poor Absolute Poor Relative Poor Dollar Per Day 

North Central 38.6 59.5 67.5 59.7 

North East 51.5 69.0 76.3 69.1 

North West 51.8 70.0 77.7 70.4 

South East 41.0 58.7 67.0 59.2 

South-South 35.5 55.9 63.8 56.1 

South West 25.4 49.8 59.1 50.1 

Source: Nbs Survey 2010 

Table 3: Dimension Of Nigeria Population In Poverty 

 2004 (%) 2010 (%) 2011 (%) 

Estimated Population (Million) 126.3 163 168 

Relative Poverty 54.4 69 71.5 

Absolute Poverty 54.7 60.9 61.9 

Dollar Per Day 62.8 61.2 62.8 

 



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Table 4: Analysis Of Poverty By Region And State 

  Food Poverty Absolute Poverty Moderately Poor Dollar Per 

Day 
 Food Poor Non Poor Poor Non Poor Poor 

Sector Urban 26.7 73.3 52.0 48.0 
 Rural 48.3 51.7 66.1 33.9 

Zone North Central 38.6 61.4 59.5 40.5 
 North East 51.5 48.5 69.0 31.0 
 North West 51.8 48.2 70.0 30.0 
 South East 41.0 59.0 58.7 41.3 
 South South 35.5 64.5 55.9 44.1 
 South West 25.4 74.6 49.8 50.2 

State Abia 30.5 69.5 57.4 42.6 
 Adamawa 55.4 44.6 74.2 25.8 
 Akwaibom 35.6 64.4 53.7 46.3 
 Anambra 34.2 65.8 56.8 43.2 
 Bauchi 54.1 45.9 73.0 27.0 
 Bayelsa 23.3 76.7 47.0 53.0 
 Benue 48.5 51.5 67.1 32.9 
 Borno 33.2 66.8 55.1 44.9 
 Cross-Rivers 46.4 53.6 52.9 47.1 
 Delta 42.8 57.2 63.3 36.7 
 Ebonyi 63.5 36.5 73.6 26.4 
 Edo 39.4 60.6 65.6 34.4 
 Ekiti 35.8 64.2 52.4 47.6 
 Enugu 52.7 47.3 62.5 37.5 
 Gombe 71.5 28.5 74.2 25.8 
 Imo 33.3 66.7 50.5 49.5 
 Jigawa 71.1 28.9 74.1 25.9 
 Kaduna 41.7 58.3 61.5 38.5 
 Kano 48.3 51.7 65.6 34.4 
 Katsina 56.2 43.8 74.5 25.5 
 Kebbi 47.0 53.0 72.0 28.0 
 Kogi 50.1 49.9 67.1 32.9 
 Kwara 38.1 61.9 61.8 38.2 
 Lagos 14.6 85.4 48.6 51.4 
 Nassarawa 26.8 73.2 60.4 39.6 
 Niger 20.4 79.6 33.8 66.2 
 Ogun 41.8 58.2 62.3 37.7 
 Ondo 36.1 63.9 45.7 54.3 
 Osun 19.5 80.5 37.9 62.1 
 Oyo 24.6 75.4 51.8 48.2 
 Plateau 44.0 56.0 74.1 25.9 
 Rivers 26.3 73.7 50.4 49.6 
 Sokoto 56.6 43.4 81.2 18.8 
 Taraba 45.2 54.8 68.9 31.1 
 Yobe 58.5 41.5 73.8 26.2 
 Zamfara 44.4 55.6 70.8 29.2 
 Fct 32.5 67.5 55.6 44.4 

Source: Nbs Survey 2010 



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Table 5: Derived Subjective Poverty Measure 

 Core Poor Moderate Poor Non-Poor Total 

Sector     

Urban 36.3 56.2 7.5 100.0 

Rural 53.5 41.2 5.3 100.0 

Total 46.7 47.2 6.1 100.0 

North Central     

Benue 63.0 32.7 4.3 100.0 

Kogi 38.0 58.7 3.3 100.0 

Kwara 40.4 57.0 2.6 100.0 

Nassarawa 34.0 60.0 6.1 100.0 

Niger 32.0 59.6 8.4 100.0 

Plateau 38.7 55.9 5.4 100.0 

Fct Abuja 42.4 55.6 2.1 100.0 

Total 42.4 52.8 4.8 100.0 

North East     

Damawa 56.7 39.2 4.1 100.0 

Bauchi 49.3 41.9 8.7 100.0 

Borno 45.6 51.3 3.1 100.0 

Gombe 50.0 46.3 3.7 100.0 

Taraba 64.4 29.8 5.8 100.0 

Yobe 46.4 49.7 3.9 100.0 

Total 51.6 43.5 4.9 100.0 

North West     

Jigawa 35.6 56.0 8.4 100.0 

Kaduna 52.4 38.2 9.5 100.0 

Kano 53.4 40.8 5.8 100.0 

Katsina 48.6 46.2 5.2 100.0 

Kebbi 46.2 46.3 7.5 100.0 

Sokoto 31.9 59.4 8.7 100.0 

Zamfara 52.6 43.6 3.8 100.0 

Total 47.3 45.8 6.9 100.0 

South East     

Abia 63.0 30.3 6.7 100.0 

Anambra 47.6 45.0 7.4 100.0 

Ebonyi 79.1 15.2 5.7 100.0 

Enugu 49.4 42.2 8.4 100.0 

Imo 67.0 30.4 2.6 100.0 

Total 59.0 34.8 6.2 100.0 

South South     

Akwa Ibom 50.4 43.3 6.3 100.0 

Bayelsa 67.6 28.6 3.8 100.0 

C/ River 69.6 26.0 4.4 100.0 

Delta 57.1 36.2 6.7 100.0 

Edo 33.7 59.1 7.2 100.0 

Rivers 57.9 33.9 8.2 100.0 

Total 54.3 39.2 6.6 100.0 

South West     

Ekiti 45.6 51.1 3.3 100.0 

Lagos 24.8 66.2 9.0 100.0 

Ogun 24.6 69.2 6.3 100.0 

Ondo 52.3 44.2 3.5 100.0 



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Osun 25.4 65.3 9.3 100.0 

Oyo 46.0 49.5 4.5 100.0 

Total 34.4 59.1 6.5 100.0 

Source: Nbs Survey 2010 

Table 6: Household Assessment of Livelihood 

 Very Poor Poor Moderate Fairly Rich Rich Total 

Sector       

Urban 6.1 30.1 56.2 6.3 1.2 100.0 

Rural 11.6 41.9 41.2 4.5 0.8 100.0 

Total 9.5 37.2 47.2 5.2 0.9 100.0 

North Central       

Benue 12.6 50.4 32.7 3.8 0.5 100.0 

Kogi 5.8 32.2 58.7 2.9 0.4 100.0 

Kwara 3.8 36.6 57.0 2.4 0.2 100.0 

Nasarawa 7.0 26.9 60.0 5.9 0.2 100.0 

Niger 6.9 25.1 59.6 7.7 0.7 100.0 

Plateau 7.6 31.1 55.9 4.0 1.4 100.0 

Fct 3.3 39.0 55.6 1.3 0.8 100.0 

Total 7.3 35.1 52.8 4.2 0.6 100.0 

North East       

Adamawa 10.2 46.6 39.2 3.5 0.6 100.0 

Bauchi 7.1 42.3 41.9 8.1 0.6 100.0 

Borno 3.9 41.7 51.3 2.4 0.7 100.0 

Gombe 7.5 42.6 46.3 2.9 0.8 100.0 

Taraba 10.1 54.3 29.8 5.4 0.4 100.0 

Yobe 11.0 35.4 49.7 3.3 0.5 100.0 

Total 7.8 43.8 43.5 4.3 0.6 100.0 

North West       

Jigawa 4.9 30.7 56.0 7.3 1.0 100.0 

Kaduna 8.8 43.5 38.2 9.0 0.5 100.0 

Kano 11.5 41.9 40.8 5.2 0.6 100.0 

Katsina 7.9 40.8 46.2 4.5 0.7 100.0 

Kebbi 6.6 39.6 46.3 5.3 2.2 100.0 

Sokoto 8.6 23.3 59.4 7.5 1.1 100.0 

Zamfara 15.3 37.2 43.6 2.8 1.0 100.0 

Total 9.3 38.0 45.8 6.0 0.9 100.0 

South East       

Abia 15.8 47.2 30.3 4.9 1.8 100.0 

Anambra 10.1 37.5 45.0 5.1 2.2 100.0 

Ebonyi 27.6 51.4 15.2 5.2 0.5 100.0 

Enugu 13.2 36.2 42.2 7.7 0.8 100.0 

Imo 20.3 46.7 30.4 1.8 0.8 100.0 

Total 16.3 42.8 34.8 4.9 1.3 100.0 

South South       

Akwaibom 14.0 36.4 43.3 4.5 1.8 100.0 

Bayelsa 32.6 35.0 28.6 1.7 2.1 100.0 

Cross River 17.0 52.7 26.0 3.7 0.7 100.0 

Delta 13.6 43.5 36.2 6.0 0.7 100.0 

Edo 3.9 29.8 59.1 6.1 1.1 100.0 

Rivers 12.0 45.9 33.9 6.2 1.9 100.0 

Total 13.6 40.6 39.2 5.2 1.4 100.0 

 



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South West       

Ekiti 8.0 37.6 51.1 2.7 0.6 100.0 

Lagos 4.3 20.5 66.2 8.3 0.7 100.0 

Ogun 2.7 21.8 69.2 5.2 1.0 100.0 

Ondo 5.9 46.4 44.2 3.4 0.0 100.0 

Osun 1.9 23.6 65.3 7.0 2.3 100.0 

Oyo 7.6 38.3 49.5 3.9 0.6 100.0 

Total 4.9 29.4 59.1 5.7 0.8 100.0 

Source: Nbs Survey 2010 
Table 7: Income Inequality 

 Income Inequality  % Change From 

National 0.4296 0.447 4.1 

State    

Abia 0.3524 0.3968 12.6 

Adamawa 0.4414 0.4339 -1.7 

Akwaibom 0.3645 0.4381 20.2 

Anambra 0.3534 0.3803 7.6 

Bauchi 0.4705 0.3348 -28.9 

Bayelsa 0.3333 0.337 1.1 

Benue 0.3888 0.4069 4.6 

Borno 0.3604 0.3841 6.7 

Cross-Rivers 0.3977 0.4369 9.8 

Delta 0.3582 0.4698 31.1 

Ebonyi 0.3598 0.425 18.1 

Edo 0.3742 0.4177 11.6 

Ekiti 0.3695 0.4831 30.7 

Enugu 0.3976 0.4273 7.5 

Gombe 0.3652 0.4217 15.5 

Imo 0.3844 0.425 10.6 

Jigawa 0.3368 0.3976 18.1 

Kaduna 0.3668 0.4005 9.2 

Kano 0.375 0.4692 25.1 

Katsina 0.4174 0.374 -10.4 

Kebbi 0.3046 0.3259 7 

Kogi 0.4914 0.4145 -15.7 

Kwara 0.4848 0.3594 -25.9 

Lagos 0.504 0.3719 -26.2 

Nassarawa 0.3494 0.34 -2.7 

Niger 0.3665 0.3675 0.3 

Ogun 0.3984 0.4076 2.3 

Ondo 0.3274 0.3869 18.2 

Osun 0.3482 0.3856 10.7 

Oyo 0.3295 0.3923 19.1 

Plateau 0.4242 0.3995 -5.8 

Rivers 0.4052 0.4614 13.9 

Sokoto 0.3574 0.355 -0.7 

Taraba 0.3664 0.5241 43 

Yobe 0.3283 0.523 59.3 

Zamfara 0.3506 0.3397 -3.1 

Fct 0.4062 0.5116 26 

Source: Nbs Survey 2010 



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6. Findings of the Study 

 Food poverty line is n39, 759.49. 

 Absolute poverty line is n54, 401.16, while the total expenditure of food and non-food produce a poverty 

incidence of 60.2 percent or 89,096,000 Nigerians living in poverty. 

 The relative poverty line is n66, 802.20 while relative poverty measure showed that 69% or 112,470,000 of 

Nigerians are living in poverty. 

 The dollar per day poverty line is n54, 750, while cpi and the exchange rate it gave n59.2 to one us$1. 
When annualized, it gives a poverty incidence of 56.6% 

 The core poor is 46.7 percent, moderate poor is 47.2 percent while the non poor is 6.1 percent 

 Gini coefficient was 0.4296 and was 0.4470 indicating that inequality increased by 4.1 percent nationally. 

 Subjective poverty rate: the incidence of poverty was 75.5 percent; however the perception index of 
household living in poverty had risen to 92.5 percent. 

 Poverty 

Rate 

100 

 
 

90 

 
 

80 

 
 

60 

 
 

59 

 
 

40 
 
 

30 

10 20 30 40 50 60 70 80 90 

Figure1: Lorenz curve for Nigeria showing income distribution according to class (upper, middle, 

upper middle, and lower classes) 
 Lower Class 

This is primarily comprised of lower-level citizens, white-collar workers. These workers are typically not educated 

and lack the graduate degrees needed to advance to higher levels of employment, or have a degree but remain 

unemployed but manage to put food on its table. Income for these workers generally falls between n160,500 and 

n200,000. This category is trapped in the poverty rate of 69% of the total population. 

 Middle Class 

They typically have post-graduate degrees and work at high-level, white-collar positions. They are mostly civil 
servant, traders and vocational professional: household income for these workers is often above n1m naira annually, 

10% of nigerian adult population is in this class. 

 Upper Middle Class 
These professional class workers earn enough to be in the top one-third of nigeria’s incomes. They earn above n4m 

naira annually, nigeria have 15% of this category. 

 Upper Class 
This income level is what is commonly called the high class. This category is mainly occupied by politician and 

business moguls, those that control the nigeria oil money and children of nigerian past leaders. 



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100 

 
 

90 

 
 

0 

 
 

70 

 
 

60 

 
 

594 

 
0 

 
 

30 

 
 

20 

 
Income Inequality in Nigeria 

 

10 20 30 40 50 60 70 80 90 

Figure 2: Plot of Difference between Share of Income the Highest 20%, Lowest 20% and Lowest 10% 

100 

 
 

90 

 
 

80 

 
 

70 

 
 

60 

 
 

59 
 
 

40 
10 20 30 40 50 60 70 80 90 100 

Figure 3: Plot of Difference between Share of Income the Highest 20% and the Lowest 20% 



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Figure 4: Plot of Difference between Share of Income Held by the Highest 10% and the Lowest 10% 

 

According to nbs report 2018, inequality in Nigeria worsened between 2004 and 2013 but improved in 2016 using 

either the gini coefficient or theil. Inequality as measured by the gini worsened from 0.356 in 2004 to 0.41 in 2013 

but improves to 0.391 in 2016. Using thiel, inequality worsened from 0.217 in 2003 to 0.395 in 2013 but improved 

to 0.31 in 2016. With respect to consumption shares (and using consumption as a proxy for income), in 2004, the 

bottom 10% (poorest of the poor) of the population consumed 2.56% of goods and services, while the top 10% 

(super rich) consumed 26.59% of all goods and services. The richest 10% were responsible for 26.59% of national 

expenditure or income in 2016. This increased to 33.72% in 2013 but decreased to 31.09% in 2016. The top 20% 

were responsible for 42.40% of national income/expenditure in 2004. This increased to 48.28% in 2013 but declined 

to 46.63% in 2016. While no agreed standard definition of the Nigerian middle class exists, for the purpose of this 
report we have classified decile 01-03 as the lower class, decile 04-07 as the middle class and decile 08-10 as the 

upper class. 

Accordingly, the upper class was responsible for 58.39% of national income/expenditure down from 59.42% in 

2013. The share of the upper class in national income had been rising between 2004 and 2013 before reducing in 

2016. The middle class on the other hand accounted for 30.26% of national income/expenditure in 2016, higher than 

29.14% in 2013. The share of the middle class had been declining between 2004 and 2013 in favor of the higher 

class but that reversed in 2016. Finally, the lower class accounted for 11.35% of national income/expenditure in 

2016 lower than 11.43% in 2013.the biggest gainers of income/expenditure shares between 2013 and 2016 has 

therefore been the middle class, while the lower-class share remained constant while the high-class shares reduced. 

This widening gap between the rich and the poor in nigeria is contrary to kuznets’ hypothesis. 

7. Conclusion and Recommendation 

Despite the fact that Nigerian economy is paradoxically growing, the proportion of Nigerians living in poverty is 
increasing every year. The proportion of the population living below the poverty line increased significantly over the 

past three decades despite policies formulated over time to reduce poverty and income inequality in the country.  

The increasing rate of poverty can be trace to the politicization of politics, embezzlement of public funds and capital 

flight. It is imperative that the management of national wealth and the reduction of poverty are the key questions of 

political economy all over the world today, Nigeria have to do more to bring its people out of poverty rate. 

According to nbs survey 2010, the increase in poverty at national levels show cased a number of variables at other 

levels of disaggregation. The poverty profile of Nigeria recognizes the role of the World Bank, the UK department 

of international development (DFID) other development partners in their effort in helping countries improve the 

10 20 30 40 50 60 70 80 90 

100 

 
 

90 

 
 

80 

 
 

70 

 
 

60 

 
 

59 

 
 

40 



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availability of statistical data on which effective poverty monitoring and evaluation depend on. Government at all 

levels should ensure implementable policies that will reduce poverty and the widen gap between the rich and the 

poor in Nigeria. 

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