Mountain Top University Library

This study examined the relationship between income inequality, poverty and
economic growth. It also analyzed the impact of income inequality on economic growth, the
effect of poverty on economic growth and assessed the impact of income inequality on the
effect of economic growth on poverty. This study made use of annual times series secondary data. Data on GDP, inequality, poverty, population, public expenditure on education, corruption, unemployment, per capita
income and inflation were sourced from World Development Indicators (2020), Central Bank
of Nigeria Statistical Bulletin (2020), National Bureau of Statistics (2020) and Kneoma
(2020). The data collected were analysed using econometric techniques, particularly, Auto
regressive Distributed lag (ARDL) Model. The analysis performed are unit root, using both
Augmented Dickey-Fuller (ADF) test and the Phillip and Perron (PP) test, the lag order of
the ARDL models using VAR lag selection criteria and bound test. The results showed that income inequality has a negative but insignificant impact on
economic growth in Nigeria. While poverty has a negative but insignificant relationship with
economic growth, income inequality and economic growth has a negative but significant
relationship with poverty . In conclusion, to lessen the level of inequality and poverty that will ensure Nigeria’s
economic growth and development, there is the need for plausible and viable economic
policies and strategies. For instance, government should empower people in rural areas by
funding projects and creating productive activities to generate higher income for a better life.