IMPACT OF INCOME INEQUALITY ON ECONOMIC GROWTH IN NIGERIA: LORENZ CURVE AND ARDL APPROACH

Abstract

The United Nations' 2030 Leave No One Behind Sustainable Development Goal (SDG) is currently receiving significant attention. This has heightened awareness of the significance of reducing economic inequality in Nigeria. Mitigating inequality can foster economic advancement, harmonious collaboration, and more robust and enduring social connections. This study examines the relationship between Nigeria's economic growth and income disparity from 1986 to 2024. The research employed the Auto Regressive Distributed Lag (ARDL) Bound test approach to identify short-term fluctuations and a long-term relationship. The co-integration test indicates an absence of a long-term relationship between income disparity and economic growth. The Auto-Regressive Distributed Lag (ARDL) test indicates a robust and positive influence between income inequality and economic growth in the short term. Based on these results, the study recommends policies that channel short-term inequality-induced gains into long-term inclusive growth. Specifically, the government should strengthen progressive taxation to redistribute wealth fairly.