THE EFFECT OF INCOME INEQUALITIES ON THE WELFARE OF THE POOR IN NIGERIA

The study is to examine the scope and dimension of income inequality and its effect on poverty problem in Nigeria. The issue of poverty is a very crucial one due to the prevailing increase in the incidence of poverty in Nigeria. Poverty brings about unemployment in the society which also leads to waste of human resources, in the sense that those people that would have been useful in contributing positively to the growth of the economy are there contributing negatively due to joblessness. This therefore leads to reduction in the level of productivity which consequently brings about a decline in GDP rate of Nigerian economy. The research method employs time series data between 1980 and 2008 using e-view statistical package. The result of the finds reject null hypothesis that income inequality has no significant effect on welfare of poor in Nigeria. Thus, effect of income inequalities on poor is in conformity with the theoretical expectation. It is very important that government should embark on poverty reduction programme like National Economic Empowerment and Development Strategy (NEED) programme, achieve Millennium Development Goals (MDGs) among others.