The Impact of Income Inequality and Poverty on Economic Growth in Nigeria

Income inequality and poverty are among the macroeconomic challenges facing the Nigerian economy, and it has been a concern for researchers and policymakers to find solutions to these challenges to ensure high economic growth. In light of the search for solutions to macroeconomic challenges facing Nigeria, the study investigated the impact of income inequality and poverty on economic growth. Annual data on gross domestic product growth rate, income inequality, poverty, population growth, inflation and foreign direct investment were sourced from the World Development Indicators (WDI) from 1980 to 2023. The study estimated a model of the dependent variable- gross domestic product growth rate on income inequality, poverty, population growth, inflation and foreign direct investment using the Autoregressive Distributed Lag (ARDL) Model and the Dynamic Ordinary Least Squares (DOLS) estimation techniques. The findings revealed that income inequality, poverty and the interactive term between income inequality and poverty had a negative and insignificant impact on economic growth in Nigeria. Based on the findings, the study recommended that the Nigerian government should design and implement viable economic policies towards income inequality and poverty reduction to promote economic growth in Nigeria.