Increasing inequality in the Nigerian polity as a disincentive for investment, By Dipo Baruwa

Nigeria, a nation brimming with potential, faces a critical challenge that threatens its long-term economic prosperity: pervasive inequality. This isn’t just a social issue; it’s a profound economic disincentive, subtly eroding the very foundation of sustainable growth and investment.

The core problem lies in the erosion of our capacity for long-term planning, both at the individual household level and across the national landscape. When basic necessities like reliable healthcare, quality education, and fundamental infrastructure are perpetually uncertain, citizens are forced into a survival mode. The focus shifts from aspirations like savings, entrepreneurship, or innovation, to the immediate demands of the day.

This relentless struggle for survival has a ripple effect on the broader economy. Domestic financial intermediation, crucial for channeling funds into productive investments, remains regrettably shallow. Why? Because the average Nigerian citizen, burdened by daily uncertainties and a lack of reliable public services, simply doesn’t have the disposable income necessary to participate meaningfully in the financial system. This scarcity of domestic capital further discourages both local and foreign investment, creating a vicious cycle.

Ultimately, a society riddled with deep inequities discourages the kind of stable, predictable environment that investors, both large and small, crave. Without a robust social safety net and equitable access to opportunities, the long-term vision necessary for true economic transformation becomes increasingly blurred, pushing Nigeria further from its developmental goals.

Source: Original Article