Vol 9 Issue 1 January 2022-April 2022
KAKAIN, Stephen, EWUBARE Dennis Brown
Abstract: The resource-development nexus has sparked renewed interest in the development literature with growing controversies. As the controversies continue to grow, it becomes imperative to examine the empirical relationship between natural resources rents and income inequality in Nigeria. This study specifically examined how oil rents, natural gas rents and total natural resources rents affect income inequality in Nigeria. The data required for this study were obtained from the World Development Indicators and analyzed using the autoregressive distributed lag method, descriptive statistics and robustness tests. The unit root test showed evidence of levels and first difference stationary processes, which indicates that the variables are fractionally integrated. The bounds test results showed that the variables for investigation are cointegrated. This implies that income inequality has a long run relationship with the underlying measures of natural resources rents during the study period. The findings revealed that, in the long run, all the rents accruable to Nigeria from natural resources contributed significantly in reducing the disparity in income distribution. However, the short run results are mixed. It was evident from the results that the short term effect of total natural resources rents is negative and significant. This indicates that the aggregate rents generated from the natural resources are significant in reducing the gap in the distribution of income. However, rents from oil and natural gas were formed to amplify the disparity in income among the Nigerian population following their significant positive on income inequality. Given the findings, it is recommended that policymakers should move towards addressing the growing incidence and pervasiveness of rent seeking in the management of the revenue from natural resources to reduce the income gap among the population.
Keywords: Total resources rents, oil rents, natural gas, income inequality, development and Nigeria.
Title: NATURAL RESOURCES RENTS AND INCOME INEQUALITY IN NIGERIA
Author: KAKAIN, Stephen, EWUBARE Dennis Brown
ISSN 2394-7322
International Journal of Novel Research in Marketing Management and Economics
Novelty Journals