Why Nigeria’s wealthy are getting richer while the poor are getting poorer – Experts

The Federal Government’s economic and monetary policies may have widened the gap between the rich and the poor in the past nine months.

Also, the recent policies in the financial and energy sector have created the path to further widening of the gap in the months and probably years ahead without any sign of poverty reduction except palliative measures.

Saturday Vanguard findings in the commodities and financial markets indicate that much more money is now being controlled by the rich as efforts of the Central Bank of Nigeria, CBN, to mop up excess financial liquidity in its attempts to control inflation are not yet achieving expected results as the plight of the poor worsens.

Economy experts and financial analysts told Vanguard that though some of the big players in the economy and the rich members of the society playing in a few sectors were also affected by the policies, they have demonstrated the capacity to not only overcome the negative impact quickly but are also exploiting the advantage of the new policies.

They added that the poor have not only been further impoverished but have been stripped of the capacity to survive the harsh policies.

They also said that while the poor were still groaning under the existing policies introduced in the early months of the current administration, more of such policies are still being rolled out monthly with indications that many more are still underway in the months if not weeks ahead.

Some of the policies they listed include the withdrawal of petroleum subsidy, depreciation of the Naira against the world’s major currencies, raising of customs duty rates, and raising of benchmark interest rates, all of which have propelled the inflation rate to all-time high.

Also, the analysts mentioned the rollout of new adverse policies including electricity tariffs as one of the major hardship-inducing policies that has recently added to the rising cost of living, which reduces the disposable income of the poor.
According to the analysts, amidst all these adversities companies and individuals running the sectors in which the policies were based have been declaring stupendous profits.

The banks have declared average industry profits of N3.8 trillion in 2023 and N2.1 trillion in the first quarter of 2024 (Q1’24) indicating 220 percent and 314 percent average rise in profit for 2023 and 2024 respectively.

Those operating in the petroleum sector have equally declared mouth-watering profit growth amounting to 388 per cent in 2023 while Q1’2024 is also expected to come up as high.

Equally, the employees in these sectors have benefited to some extent with average salaries and allowances increase of about 75 per cent during the period.

The bulk of the profits went to the owners of the businesses in the sectors.

The rich across other sectors have also demonstrated their relative comfort with the current economic environment especially with the unprecedented over-subscription of 254 per cent to the CBN’s Treasury Bill sales three days ago.