By Osmund Agbo
The evidence is overwhelming and suggests that inequality in Nigeria is a significant contributor to poverty and its consequences. Poverty has a far-reaching impact on society and the economy. Poverty perpetuates a cycle of poor health, low education, and crime, which in turn increase the cost of healthcare, education, and law enforcement.
I need to tell you about John (not real name). He is a Cameroonian immigrant who came to the US on a student’s visa. To earn some money and support himself through school, he waited tables in a popular pub in downtown Houston. Hardworking, courteous and gregarious, John wears the most infectious and charming smile you have ever seen.
It didn’t take long for him to get noticed by the club’s high rollers who reciprocated his friendly disposition with hefty tips. Weeks rolled into months and John was living his best American dream. But something happened. He joined this fraternity in college, notorious for being loud and tastelessly showy. To cement his new status, he acquired a Mercedes convertible; top tier and sun-roof. Then Covid hit, big tips dried up and life happened to John. Quickly.
I got to know John’s story from a friend who had brought him to ask if one could be of any help. Faced with eviction notice for two months of unpaid rent and threatened with repossession of his Benz for the same reason, he took the worst but the only option left for him: a payday loan.
In America, taking a payday loan is another way of asking the Devil to help you. You know you will eventually get destroyed but hope to live for at least one more day. John got a $500 loan at 400% interest rate plus a $55 dollar loan processing fee, all was due in 2 weeks. At loan maturity, he found himself owing $2,555 in debt. But that’s not all. Another month ended quickly and both his house rent and car note were due. Problem was, his monthly earnings couldn’t even cover the loan, let alone pay for groceries and other sundry living expenses. Needless to say that at this point, he had to pause going to school.
By the time I saw John, I was seriously torn between empathy for this kid whom post-Covid economy had dealt a tough hand and my natural aversion for those who love to keep up with the Joneses and drown in conspicuous consumption. But the intervention from this piece is not about John. It’s about the hefty price of living poor whether it’s for an individual or a country. Which is why I fell in love with the Nordic countries of Europe. They practice the concept equivalent to what “onye aghana nwanne ya”, represents in the Igbo spirits of kinship; namely; be your brother’s keeper.
According to the World Bank, as of 2021, about 40% of Nigeria’s population, or roughly 83 million people, live in poverty, overtaking India to become the poverty capital of the world. With limited access to clean water, sanitation, and healthcare, many are more susceptible to diseases and illnesses. Nigerians struggle daily to find what to eat. Faced with death from hunger and starvation, many gravitated towards crime and became willing recruits in the hands of deadly terrorists and insurgents.
According to the Global Terrorism Index 2020, Nigeria was ranked as the third most impacted country by terrorism globally, with 2,040 deaths reported in 2019 alone. To fight this menace, Nigeria spent over $2 billion between 2011 and 2020. These are mostly borrowed funds obtained under the most unfavorable terms and conditions from foreign sharks, similar to John’s payday loan. And so now, a country as broke as Nigeria, has to obtain a loan with the highest interest rate, to fight a condition that was mostly precipitated by poverty. What the heck do you call that ?
How about the fact that those living in poverty will still have their own children. Those children are likely not going to be vaccinated and may be developmentally delayed to the point of not reaching their full economic potentials in life. This continues the vicious cycle of poverty which is a breeding ground for crime. A society high in crime will require the government to tax people more to be able to hire more law enforcement officers to police the place. The cycle continues.
You see, oftentimes when we talk about the rich countries of the world, the United States, China and the rest come to mind. They are rich no doubt, running on trillion dollar economies and home to iconic business districts. But at the end of the day, it’s the availability of all the things that helps add to the quality of life of citizens of a country that tells a better story. It is about the number of people not living in poverty. The United Nations Development Program (UNDP) issues an annual report to measure this and it’s called the Human Development Index(HDI). The US is not top on this list. That’s because, it doesn’t matter that Elon Musk is worth a gazillion dollars when you have a good chunk of Americans living under the Brooklyn bridge.
The Nordic countries of Norway, Iceland , Denmark, Finland, Sweden especially Norway have always ranked higher than others in HDI. These countries operate an economy that is all inclusive and income inequality is at the barest minimum, unlike world’s biggest economies where it could be as wide as the Gulf of Mexico. When it comes to Nigeria, the matter of inequality is on a whole new level.
Figures from World Inequality Database showed that the top 1% of income earners in Nigeria accounted for approximately 25% of total income in 2019. According to the World Bank’s Gini index, which measures income inequality on a scale of 0 to 100, Nigeria had a Gini coefficient of 38.0 in 2020. This is higher than the African average of 33.9, indicating a higher level of income inequality in Nigeria. Sweet!
The evidence is overwhelming and suggests that inequality in Nigeria is a significant contributor to poverty and its consequences. Poverty has a far-reaching impact on society and the economy. Poverty perpetuates a cycle of poor health, low education, and crime, which in turn increase the cost of healthcare, education, and law enforcement.
Any wonder why Nigeria is buffeted on all fronts from Boko Haram, ISWAP to killer herdsmen, members of whom the society has totally left behind. “The children of the poor you failed to train will never let your children have peace”, says Chief Awolowo. The chicken has come home to roost but Nigeria cannot afford this level of poverty.
Oh! Did you care to know what happened to John? He is still struggling and barely scraping by till this day. Just like Nigeria of the 70’s, he squandered all he made at the job, trying to impress those who didn’t give an ounce of care. Unfortunately for him, America does not suffer fools gladly.
Osmund Agbo writes from Houston, Texas. Email: Eagleosmund@yahoo.com
