The Gini Coefficient

distribution

The Gini Coefficient shows the disparity between income distribution in a country. The lower the number (i.e. the closer the number to zero), the more EQUITABLY distributed the total wealth of the country is amongst the population.

Now observe:

The United States has Gini Coefficient of 45

However, Nigeria has a Gini Coefficient of only 43.

This means that wealth is more equitably distributed amongst the population in Nigeria than it is in the United States (note: I know that economic figures change every day and this could have fluctuated by the time I hit ‘Publish Post’), so why then are my business classmates so fond of making mind boggling statements like “The economic gap in Nigeria between the rich and the poor is so vast!” or ” A great impassable chasm exists between the haves and the have-nots in Nigeria”

This is obviously a crock of bullshit.

I’m not saying that everyone in Nigeria is on the same economic level. Of course not, but what I AM saying is that the economic divide(s) in Nigeria are no greater than those that exist in the United States. Yet I don’t see anybody desperately trying to save the United States or looking upon it as a country with condescension and pity.

The United States and Nigeria are very very similar in many aspects. They are not that different. I hate it when people act as if life in Nigeria is so different from life anywhere else in the world. We have the same economic problems and we’ll fucking deal with them, but anybody trying to make out that Nigeria’s disparity is sooooooooooooooo enormous is freaking joking.

Personally I think Nigerians ENJOY pretending that there is no middle class in Nigeria and that everyone neatly fits into either Stinking Rich or Dirt Poor.

As if.

Update/Clarification:

I’m not saying that incomes in the US are comparable to incomes in Nigeria. What I am saying is that the distribution of income in Nigeria (whatever it may be) is almost the same as the distribution of income in the United States. This does not mean that Nigerians are earning the same salary that Americans are. It just means that the proportion or rich people in America compared to the proportion of poor people in America (according to what America calls rich and poor) is the same as the proportion of rich people to poor people in Nigeria.

Also, again, it is untrue that MAJORITY of Nigerians are poor. I am not saying this because all my friends are comfortable and I have never seen poverty. I am saying this because the only part of Nigeria in which majority of the people are poor is in the North where there is a 70% poverty rate. The poverty rates for the South East is only 23% while the poverty rate of the South West is 25%. On top of that, I think a lot of people are taking a very narrow definition of middle class here.

My personal definition of middle class and how I apply it to this situation is this:

I divide the population of Nigeria into the following groups:

Top Out of Sight
(the super ultimate mega rich. So rich that you can’t even see them – in other words – Silent Billionaires – tend to be entrepreneurs or heirs and heiresses to inherited family fortunes e.g. the children of Dangote, Adenuga, Fernandez and co.)

Upper Class
(the super rich but still very visible to society – Millionaires in the 50 -100 millions and above and maybe a billionaire or two e.g. Dangote, Adenuga, Fernandez and co *note, these are the parents. Their children are classed ABOVE them because while they (the parents) had to work for majority of the wealth, their children were born into luxury and as such it is their natural habitat while their parents are the outsiders/foreigners to wealth*). Usually entrepreneurs, top bankers, top doctors, lawyers, engineers, famous/celebrated authors, artists, etc.

Upper Middle Class
Basically people who own their own houses, own their own cars, can afford to send their children to excellent – but not elite/ultimate exclusive – schools, can go on holiday numerous times a year to any country if they so choose – although they might not, are very well educated, anywhere from 10 million to 50 – 80 million and above. Typically the type to use something like forex signals to boost their wealth. Usually doctors, lawyers, etc, near top managers, minor executives, or oil company employees and people in other areas

Lower Middle Class
People who own at least one house and can afford to live exceedingly comfortably, you’ll likely be within the Lower Middle Class to Upper if you might have money tied up in your home. They can afford extravagances without discomfort occasionally but certainly not as frequently as the upper middle class can. If they rent because it is preferable they have no problem at all paying their rent and irrespective of whether or not they ACTUALLY do this in REAL LIFE, they have the CAPABILITY to pay for at least 90% of all their expenses on time and with minimum discomfort. They probably go on holiday once a year but don’t embark on foreign travel on a whim, their children probably attend pretty good private schools but generally not the super exclusive schools that provide luxury amenities (e.g. laundry service) for their students. Usually white collar workers in banks, oil companies, telecomms companies, and so on. Children generally attend good but less prestigious/desirable schools.

Working Class
People who generally rent with no ownership whatsoever anywhere (not even a house in villa – family houses don’t count). Generally work less lucrative jobs than lower middle class. May or may not own cars but most certainly do not own houses. Can afford a few luxuries with minor to moderate discomfort/inconvenience. Children generally do not attend the most desirable schools.
In Nigeria teachers often fall into this category. Especially teachers in Federal Government schools. I know of course that there are lots of rich teachers out there and that’s cool, but I’m just saying. Can only afford foreign travel once in a blue moon and then only with major preparation and considerable discomfort.

Lower Class
Do not own houses. May rent but generally rent either low income housing or rent in groups (face me I face you or many people sharing one room). May not have long term permanent employment, most work as housemaids, drivers, maiguardis, and other domestic help or provide services in markets, motor parks, and so on in other areas of the informal economy. Many of these people may even take the money that they do have and decide to look at how commodity trading and investing in these areas may help them to make a profit – especially if you make an accurate prediction. For individuals in the lower class, every bit of money helps, and many will be willing to do anything to get more, even if it means taking a gamble. But with the right online broker, you could be more likely to experience success. Children generally attend sub-standard schooling such as Federal grammar schools. May own cars but in much fewer numbers than Working class.

Destitute
Most certainly do not own houses nor cars. Most likely unemployed or engaged in temporary employment. Beggars and other people of similar economic status fall into this bracket.

So, as you can see, Nigeria is not starkly divided into rich and poor. Perhaps if you wanted to divide Nigeria into SuperMegaKabuto Rich and Non-SuperMegaKabuto Rich then I could totally agree.

The fact is, Nigeria is stratified on socioeconomic levels just like any other country. And while there are really terribly poor people in Nigeria, it is not everybody and they are not even the majority. I would say that the three largest groups are the Lower Middle Class, the Working Class, and the Lower Class, and only one of these groups is out-and-out, categorically, ho-ha poor.

Finally, this is not a ranking of purely social class so please don’t think that it is. I am not saying that teachers are lower class and that they are somehow beneath other people. I am ranking Nigerians according to socioECONOMIC status with HEAVY emphasis on the ECONOMIC part. Also, this is a VERY ROUGH/BROAD ranking and it is by no means definitive. It just a framework to give you guys (and any non-Nigerians out there) a snapshot of my idea of Nigeria’s economic demographics.

As far as social class goes, it is a combination of things and not just money that go into determining social class. Having lots of money does not automatically make you upper class, and having little or no money even does not automatically make you lower class or destitute. For example, you may have money invested via a canadian stock market app that is worth several thousands but because you do not own a home or earn money, you can be considered lower class. There are people who have not even one kobo to their name in Nigeria that are upper class in every other aspect of their lives (except money of course) and there are some seriously lower class billionaires roaming about Nigeria like nobody’s business. So, please do not be offended by this even though saying that is a waste of my breath.

Disclaimers to this post:

1. This is all just stuff I’ve written from my head. Please do not ask me for specific reports to back it up. I have lived in Nigeria for eighteen years, moved about frequently and interacted with all sorts of people, and I believe that as a Nigerian that makes my experiences in Nigeria a credible source to draw these conclusions from. Does this mean that my experience in Nigeria is THE DEFINITIVE Nigerian experience? No. Does it mean that my perspective on Nigeria is THE only right perspective or the only true perspective? No. I suppose a dirt poor person in Nigeria would probably say that there are only two kinds of people in Nigeria: Rich and Poor. That’s an opinion that’s formed from their own experiences in life. However, I’m thankful that I was born into a situation that allowed me to see a WIDE RANGE of Nigerian situations and this has led me to conclude (and categorize Nigerians according to socio-economic status) the way I have.

2. Regarding the Renting versus Owning situation, I am taking into account the fact that outside Nigeria’s major cities, house ownership rates skyrocket. This is because we are a country where MOST people are still GENERALLY living on their own ancestral land. As a result, I only considered home ownership rates in Nigerian centres of migration (i.e. big cities where almost half the occupants are NOT living on their ANCESTRAL land – in other words, most of the people in Lagos and Abuja MIGRATED there).

3. I am well aware that there are very rich beggars out there (particularly in the North) who have made begging fortunes through organizing highly complex and stratified inter-state begging syndicates. However, for the general purposes of this post I am referring to the average every day Nigerian beggar.

4. I cannot vouch for the numbers on this. I’m just pulling this stuff out of my head BASED ON WHAT I HAVE SEEN, EXPERIENCED, and OBSERVED. In other words they are very broad estimates. If YOUR experience is different, that is fine. But please before you jump out to call me a liar remember that what is true for me might not be true for you but at the same time just because it isn’t true for you does not make it any less true in general. However, the numbers for the poverty rates in Northern Nigeria, Eastern Nigeria and Western Nigeria are correct. I got them from a published study that came out last year. I have mislaid the study but I think some googling will eventually lead you to it. It was published in a couple of Nigerian newspapers so as far as my knowledge goes, the poverty rate numbers I quoted are accurate. Everything else is an estimate.

5. The titles of my classifications are taken from the book “Class” by Paul Fussel. However, the descriptions of the classes in Nigeria, occupations, etc are entirely my own based on my life in Nigeria and my own observations.Only the headings/titles belong to Mr. Fussel. But I must credit him as a reference for giving me an idea of where to start in classifying the Nigerian population.

6. There are always exceptions. I am well aware of this. There is no need to tell me about your Uncle’s Brother’s Aunty’s Cousin who… I know.




There are 18 comments

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  1. Ayomide

    While both countries have high levels of income disparity, the consequences of poverty in Nigeria are much direr than those in the United States. That is the issue. And statistically speaking, even though there are lots of middle class people in Nigeria (because it has a big population), there are literally millions of people living in abject poverty.

    (3rd time lucky with no spelling errors!)

  2. Nice Anon

    My question is how much of the “wealth” is being distributed amongst the general population in Nigeria? The amount of dollar to Naira should come into account here shouldn’t it?

    Surely middle class in America can’t compare to middle class in Nigeria can it?

  3. Mamuje

    Most of the people I know in Nigeria fall into the middle class, the middle class is fast becoming the IT in Nigeria (Unless they want to decieve themselves that they are the rich ones)

  4. Lara

    The Middle clas is the IT in Nigeria. Yes the majorty of the population are poor but, I think the middle class family are becoming more than the poor self. Life in Nigeria is not that bad just our people would not be caught dead doing all those dirty jobs they do over there, down here in Nigeria

  5. Gin

    Just because you hang around mostly ‘middle class’ Nigerians (I’m talking to everyone) doesn’t mean the millions of people hawking on the streets do not exist. Saying that there are more ‘middle class’ Nigerians than there are the poor is not entirely true, unless middle class in Nigeria means having a house.

    Post: Nigeria’s Gini is 43, yeah, but Pakistan is 30 and Burkina Faso is 39. There is no way Nigeria could ever compare to the US in terms of economy, income etc. There are 150 million people in Nigeria, if 110 million earn $70 a month that will make the Gini fall even if 15 million are earning $2000 a month. I don’t understand why Nigeria should be compared to the US when Nigeria is just not in their league. An average American makes 2-3 thousand dollars a month, I know we do not agree that an average Nigerian makes the same.

  6. Lady X

    Correct me if I’m wrong SugaBelly but I think you were saying that the difference between the rich and the poor in Naija is not very different from that of the US. That’s what I got from the post. She didn’t say the middle class in Naija earn the same as the middle class in the US.

  7. L-VII

    This is the first time, I have disagree with you bam bam! Lol. I do not know that your assertion that the economic divide in Nigeria and the USA is similar is true. Actually, I am almost sure it is not true…. I think you might have your patriotic blinkers on right here….

  8. LucidLilith

    I can’t begin to tell you how often I get raised eyebrows when I tell people that I was not one of those kids they show on television with flies hanging around them and potruding bellies. They get surprised when I tell them of the ‘middle class’ back home. I guess not having a house with a picket fence, two car-garage and 2.5 kids puts us out of the picture.

  9. Gin

    Lady X – I was addressing the point of the post: the majority of Nigerians are living comfortably and; the divide between rich and poor in Nigeria is the same as the US. The last sentence was an example out of one of the points I was making in my post which is that the majority of Nigerians have low wages which makes it seem like everyone has an equal amount of wages when there is a smaller amount of people who live like middle class Americans and even smaller amount that are billionaires. The majority of the populations’ wages over shadows these people in the Gini Coefficient.

    The post makes it seem like housemaid’s will grow up to afford the same things as their madam. Let me give an example: An average American loves Mc Donalds, but how many times have you seen an Okada drivers family in Mr. Biggs?

  10. Tiger in the Year of the Tiger

    Sugabelly, this will unquestionably digress from the point of your post, but…

    I am not sure we should be bogged down by income disparities in Nigeria or in the US, particularly because in the league of industrialized nations, America is a big disgrace. Indeed, my friend from Finland once called America a ‘Third World Country’, much to the chagrin of Yanks in the room!

    Back to Nigeria…

    There is very little doubt that the overwhelming majority of Nigerians live in abject and eye-popping poverty, with little access to quality education, clean water, quality healthcare, or hope for a brighter future. And nearly every indicator of standard of living points to declining standards over the past 30-40 years.

    One of the biggest mistakes a middle-class Nigerian could make is the assumption that ‘most’ Nigerians live like he/she does/did (I am not saying you made this assumption). I thankfully never fell into that trap because even though I spent my early childhood as part of Middle-class Nigeria, the latter half of my childhood was steeped in abject poverty. It was an eye-opener, and it had the effect of freeing me from some of the delusions I would otherwise never have dethroned if I hadn’t been so violently pried from my comfort zone in Middle-Class Nigeria.

    Rather than latch on to just one indicator of the quality of overall human existence in a nation (I doubt that this is one, really), why not take a holistic approach? What is overall HDI like in Nigeria, as opposed to the USA? What’s life expectancy at birth for both countries like? Infant mortality? Maternal mortality? Access to clean water? What % of children in both countries die before they reach a certain age? Look at these TOGETHER.

    If there is one thing I have picked up from endless discussions with my family about quality of life in different nations, it’s the fact that one indicator alone is not enough to paint an accurate portrait of life in a certain country. An oft-parroted statement is that 1% of the American population accounts for 90% of the economy. Whether or not this is true, it hasn’t changed the fact that the standard of living of the average American is far better than that of the average Nigerian, regardless of what income distribution in Nigeria is like.

    I am invariably quick to point out that information about income distribution, if not placed in the proper context, is what the Japanese call ‘muda’ (which, in Six Sigma, is regarded as waste).

    We must take a broader view of life in both countries, otherwise we will spend endless years comparing one index against the other without painting an accurate overall portrait.

  11. sosexy

    First time here.. So new on blogsville.Like your blog but will totally disagree with you on the issue of Nigerians not recognising the Middle class.That is so not true..It truly exists,like the everyday Nigeria’s hope that from the middle class he can survive.

  12. wannabewriter

    Seriously i understand where you are coming from however i cannot agree with you on this….What i don’t understand about Nigerians is when we try to defend something that is so blatantly clear!…because you are in the middle class or roll with people in the middle class does not mean that is every ones experience…even the so called middle class is just a stone throw away from poverty….i don’t care what a crappy text book say after all we know they twist things up… i go by what i know…look Nigerians, instead of trying to show your foreign ignorant friends how much you did not live a “poor” life in Nigeria….why don’t you try to help the ones suffering….not trying to preach but i’m tired of Nigerians trying so hard to portray their story while forgetting that there are millions actually living that poverty story you are trying so hard not to be a part of…mschewwww…personally i call it inferiority complex

  13. F and M

    I totally agree with this post. Both countries have economic problems. It’s just that news channels are more inclined to opening Naija’s yansh than doing the same to “The land of the free”. Take Hurricane Katrina for example. It took that awful disaster to show that “third world country” conditions existed in the so-called greatest nation on earth. They should keep fooling themselves. It’s amusing.

  14. The Misses

    I don’t think she’s trying to show or prove anything to anyone its just that she wants to dispute the negative stereotypes that comes with her nation. I think she means well. Look, I’m an African American I can understand the power of stereotypes and perceptions. Take poverty for example, yes there are many people that are poor that look like me in this country but we also have those that are not and those who are educated but which class of people do you only hear about? What class of people represent us in this country? So if someone was to think negatively of African Americans about how they think we live and should live I could understand because we are only represented by poverty, violence, the lack of education, the have nots and not the haves so I understand where SB is coming from because you can compare how people judge her nation by how people often judge African Americans. I don’t think SB is being naïve intentionally she’s probably just tired of seeing her people and country being portrayed negatively all of the time. I don’t know what’s right or wrong as far as the Gini thing but I understand where she is coming from she was trying to dispute what her classmates believed to be true. Some things are true but its not the only truth.

    I think Nigerians enjoy pretending that there is no middle class in Nigeria but I do think people enjoy believing and portraying African Americans as not having anything nor not knowing anything and that everyone fits into the dirt poor.

    F and m is right about the hurricane because many people who was out of the country has said the people in foreign countries couldn’t believe what they saw and while they were there someone said “anywhere else but not america.”

    Nigeria rank higher than Brazil because I believe wealth is less equitably distributed there than anywhere else in the world.

  15. The Misses

    I meant to say i don’t think Nigerians enjoy pretending that there is no middle class in Nigeria but I do think people enjoy believing and portraying African Americans as not having anything nor not knowing anything and that everyone fits into the dirt poor.


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