Publication:
No Condition Is Permanent: Middle Class in Nigeria in the Last Decade

Loading...
Thumbnail Image
Files in English
English PDF (501.35 KB)
889 downloads
Date
2017-09-21
ISSN
0022-0388
Published
2017-09-21
Author(s)
Editor(s)
Abstract
The economic debate on the existence and definition of the middle class has become particularly lively in many developing countries. Building on a recently developed framework called the Vulnerability Approach to Middle Class (VAMC) to define the middle class, this paper tries to estimate the size of the Nigerian middle class in a rigorous quantitative manner and to gauge its evolution over time. Using the VAMC method, the middle class group can be defined residually from the vulnerability analysis as those for which the probability of falling into poverty is below a certain threshold. The results show that there has been considerable improvement in the size of the Nigerian middle class from 13 per cent in 2003/4 to 19 per cent in 2012/13. However, the rate has been slower than expected given the high growth rates experienced in the country over the same period. The results also paint a heterogeneous picture of the middle class in Nigeria with large spatial differences. The southern regions have a higher share and experienced more growth of the middle class compared with the northern regions.
Link to Data Set
Associated URLs
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue
Citations

Related items

Showing items related by metadata.

  • Publication
    No Condition is Permanent
    (World Bank Group, Washington, DC, 2015-03) Oseni, Gbemisola; Corral, Paul; Molini, Vasco
    The economic debate on existence and definition of the middle class has become particularly lively in many developing countries. Despite this growing interest, the identification of the middle class group in these countries remains quite challenging. Building on a recently developed framework to define the middle class, this paper tries to estimate the Nigerian middle class size in a rigorous quantitative manner. By exploiting publicly available panel data, the expenditure associated to a 10 percent probability of falling into poverty is estimated, and this is used as the middle class threshold for Nigeria. The threshold expenditure for the middle class in Nigeria is found to be 378.39 Naira per capita per day (2010 PPP). Relying on this threshold and through survey-to-survey imputation the size of Nigeria's middle class in 2003 is also estimated. The results show that there has been considerable improvement on the size of the middle class and poverty reduction between 2003 and 2013. Poverty decreased between 2003 and 2013 from 45 to 33 percent, while the middle class increased from 13 percent to 19 percent. Nevertheless the results still paint a heterogeneous picture of poverty and the middle class in Nigeria, where the largest portion of the population, although above the poverty threshold, continues to live with average or high vulnerability to poverty.
  • Publication
    Heterogeneous Returns to Income Diversification
    (World Bank, Washington, DC, 2016-11) Bertoni, Eleonora; Corral, Paul; Molini, Vasco; Oseni, Gbemisola
    This paper investigates the impact of income diversification on farming households' welfare in Nigeria on two rounds of the Nigeria General Household Survey-Panel, namely the 2010/2011 and 2012/2013. The study finds that income diversification is the norm in Nigeria, with about 60 percent of farmers diversifying away from subsistence farming into non-farm activities and cash crops. In addition, using the panel of farmers interviewed before and after a severe drought that hit Northern Nigeria in particular in 2011, the study finds that diversification increased throughout Nigeria from 60 to 64 percent and in the North from 58 to 63 percent. The study postulates the existence of heterogeneous returns on diversification as a consequence of the drought, and estimates the returns through a non-parametric selection model using a local instrumental variable. The choice of this model is dictated by the necessity to account for both heterogeneous effects of diversification and selection bias related to households' decision to diversify. Overall, it is found that diversification positively affects consumption in Nigeria. However, who benefits the most is crucially determined by the initial conditions under which diversification is undertaken and the specific agro-climatic context in which households operate.
  • Publication
    Can We Measure Resilience? A Proposed Method and Evidence from Countries in the Sahel
    (World Bank Group, Washington, DC, 2015-01) Alfani, Federica; Dabalen, Andrew; Fisker, Peter; Molini, Vasco
    Although resilience has become a popular concept in studies of poverty and vulnerability, it has been difficult to obtain a credible measure of resilience. This difficulty is because the data required to measure resilience, which involves observing household outcomes over time after every exposure to a shock, are usually unavailable in many contexts. This paper proposes a new method for measuring household resilience using readily available cross section data. Intuitively, a household is considered resilient if there is very little difference between the pre- and post-shock welfare. By obtaining counterfactual welfare for households before and after a shock, households are classified as chronically poor, non-resilient, and resilient. This method is applied to four countries in the Sahel. It is found that Niger, Burkina Faso, and Northern Nigeria have high percentages of chronically poor: respectively, 48, 34, and 27 percent. In Senegal, only 4 percent of the population is chronically poor. The middle group, the non-resilient, accounts for about 70 percent of the households in Senegal, while in the other countries it ranges between 34 and 38 percent. Resilient households account for about 33 percent in all countries except Niger, where the share is around 18 percent.
  • Publication
    Sustaining Poverty Gains
    (Washington, DC: World Bank, 2024-09-05) Barriga-Cabanillas, Oscar; Bossuroy, Thomas; Corral Rodas, Paul Andres; Rodríguez-Castelán, Carlos; Skoufias, Emmanuel
    Poverty maps are a useful tool for targeting social programs on areas with high concentrations of poverty. However, a static focus on poverty ignores its temporal dimension. Thus, current nonpoor households still face substantial welfare volatility and are at risk of becoming poor in the face of shocks. This paper combines the methods of poverty mapping and vulnerability estimation to create highly disaggregated vulnerability maps. The maps include predictions of the share of chronically poor households (poverty-induced vulnerability)—the focus of traditional poverty maps—and the share of households showing a significant probability of falling into poverty (risk-induced vulnerability). As an application of the method, the paper estimates a vulnerability map for Senegal that provides quotas for the expansion of the social registry. Accounting for the poor and the population at risk of poverty implies, in practice, the expansion of coverage into urban and peri-urban areas that tend to experience lower poverty rates. The inclusion of nonpoor households also serves as a first step toward supporting a dynamic social registry.
  • Publication
    Explaining Gender Differentials in Agricultural Production in Nigeria
    (World Bank, Washington, DC, 2014-03) Oseni, Gbemisola; Corral, Paul; Goldstein, Markus; Winters, Paul
    This paper uses data from the General Household Survey Panel 2010/11 to analyze differences in agricultural productivity across male and female plot managers in Nigeria. The analysis utilizes the Oaxaca-Blinder decomposition method, which allows for decomposing the unconditional gender gap into (i) the portion caused by observable differences in the factors of production (endowment effect) and (ii) the unexplained portion caused by differences in returns to the same observed factors of production (structural effect). The analysis is conducted separately for the North and South regions, excluding the west of the country. The findings show that in the North, women produce 28 percent less than men after controlling for observed factors of production, while there are no significant gender differences in the South. In the decomposition results, the structural effect in the North is larger than the endowment at the mean. Although women in the North have access to less productive resources than men, the results indicate that even if given the same level of inputs, significant differences still emerge. However for the South, the decomposition results show that the endowment effect is more important than the structural effect. Access to resources explains most of the gender gap in the South and if women are given the same level of inputs as men, the gap will be minimal. The difference in the results for the North and South suggests that policy should vary by region.

Users also downloaded

Showing related downloaded files

  • Publication
    Global Economic Prospects, January 2025
    (Washington, DC: World Bank, 2025-01-16) World Bank
    Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.
  • Publication
    Global Economic Prospects, January 2024
    (Washington, DC: World Bank, 2024-01-09) World Bank
    Note: Chart 1.2.B has been updated on January 18, 2024. Chart 2.2.3 B has been updated on January 14, 2024. Global growth is expected to slow further this year, reflecting the lagged and ongoing effects of tight monetary policy to rein in inflation, restrictive credit conditions, and anemic global trade and investment. Downside risks include an escalation of the recent conflict in the Middle East, financial stress, persistent inflation, weaker-than-expected activity in China, trade fragmentation, and climate-related disasters. Against this backdrop, policy makers face enormous challenges. In emerging market and developing economies (EMDEs), commodity exporters face the enduring challenges posed by fiscal policy procyclicality and volatility, which highlight the need for robust fiscal frameworks. Across EMDEs, previous episodes of investment growth acceleration underscore the critical importance of macroeconomic and structural policies and an enabling institutional environment in bolstering investment and long-term growth. At the global level, cooperation needs to be strengthened to provide debt relief, facilitate trade integration, tackle climate change, and alleviate food insecurity.
  • Publication
    The Container Port Performance Index 2023
    (Washington, DC: World Bank, 2024-07-18) World Bank
    The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy. These stakeholders include port authorities and operators, national governments, supranational organizations, development agencies, and other public and private players in trade and logistics. The index highlights where vessel time in container ports could be improved. Streamlining these processes would benefit all parties involved, including shipping lines, national governments, and consumers. This fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). Combining these two approaches ensures that the overall ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. The CPPI methodology assesses the sequential steps of a container ship port call. ‘Total port hours’ refers to the total time elapsed from the moment a ship arrives at the port until the vessel leaves the berth after completing its cargo operations. The CPPI uses time as an indicator because time is very important to shipping lines, ports, and the entire logistics chain. However, time, as captured by the CPPI, is not the only way to measure port efficiency, so it does not tell the entire story of a port’s performance. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. A detailed port-specific diagnostic would be required to assess the contribution of underlying factors to the time a vessel spends in port. A very low ranking or a significant change in ranking may warrant special attention, for which the World Bank generally recommends a detailed diagnostic.
  • Publication
    Digital Progress and Trends Report 2023
    (Washington, DC: World Bank, 2024-03-05) World Bank
    Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.
  • Publication
    Global Economic Prospects, June 2025
    (Washington, DC: World Bank, 2025-06-10) World Bank
    The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.