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UNEVEN SECTORAL GROWTH AND ITS IMPLICATIONS FOR INCOME INEQUALITY IN RIVERS STATE.
Abstract
In Rivers State, Nigeria, there has been an unequal development of every sector with the oil and gas sector largely dominating agriculture and manufacturing, as well as other sectors, which are not based on oil and gas, which has contributed significantly to income inequality. This chapter explores the dynamics of this imbalance, its historical background in resource dependence, and its multisided consequences, such as endemic poverty, environmental degradation, social exclusion and insecurity. Critical terms are established, and modern academic evidence is also included to show how oil-based development continues to create inequalities even with the presence of plenty resources. The paper highlights the need to diversify the sector in order to have an inclusive development. Its importance is that it can be used in informing evidence-based policies to deal with the resource curse at the subnational level to guarantee equitable wealth distribution and sustainable livelihoods in the Niger Delta.
Chapter One
Introduction
1.1 Background of the Study
Rivers State, which is a core oil-producing area in the Niger Delta of Nigeria, is a good example of uneven sectoral growth, a term that refers to the unbalanced growth and distribution of resources to one sector, namely the oil and gas extraction, at the detriment of balanced development in the areas of agriculture, manufacturing, services, and informal sector (Raheem et al., 2014). This trend is correlated with the resource curse, also referred to as the paradox of plenty, according to which the resource-rich region, especially the non-renewable ones, such as oil, will however, have poor economic performance, with the slow growth of non-resource sectors, weak institutions, corruption, and increased inequality prevailing, as opposed to the supposed prosperity (Ali, 2025; Olaniyan, 2026).
Traditionally, the economic situation in Rivers State before oil boom in the 1970s was heavily reliant on agriculture, fishing and trade. The oil discovery and subsequent commercialization shifted the focus of investments and policies in the extractive industries, causing the decline of traditional industries and a subsequent consequence of swift, albeit concentrated urbanization in the centers like Port Harcourt (Nkem, 2024). Income inequality, which is the imbalanced distribution of income and wealth among the people or households within a population, is commonly quantified using Gini coefficient, a statistical measure whereby the coefficient varies between 0 (perfect equality) and 1 (perfect inequality) used in quantifying the dispersion in income shares (World Bank, n.d.; Wokoma, 2024). Research in oil-affected Rivers State communities shows extremely high Gini coefficients, including 0.80 in the selected regions, which indicate high levels of inequality whereby a small elite controls most of the benefits as the rest of the population lives in poverty (Wokoma, 2024).
These problems are compounded by oil dependency, which disrupts the livelihoods and economic well-being of the populations: spills (thousands of them each year), environmental pollution, destroys farmlands and fisheries, displaces populations, increases their economic vulnerability (Nkem, 2024; Animashaun, 2025). Inequality is further aggravated by social exclusion which is the intentional deprivation of rights, opportunities and resources to some individuals or groups of people, since the oil revenues often do not reach host communities because of opaque benefit-sharing mechanisms and elite capture (Nkem, 2022). In the Niger Delta, such a process has led to high living standards in the oil-rich regions, scarce jobs in oil sector, which is capital intensive, and multidimensional poverty in spite of the national oil prosperity (Animashaun, 2025; Nkem, 2024).
Wider Nigerian contexts show that sectoral imbalances are known to promote regional gaps, with the oil-rich southern states of the country, like Rivers, showing internal imbalances regardless of having higher per-capita revenues (Doran, 2022). An increase in extractive industries does not necessarily decrease poverty without a corresponding decrease in inequality below the critical levels (Ochi, 2023).
1.2 Statement of the Problem
The nature of unequal sectoral development, which is institutionalized due to the dominance of oil in Rivers State where the share of the state revenues and national exports is made up mostly, predetermines income inequality and the associated issues. This has the Dutch disease effect, as resource boom leads to currency appreciation, which makes non-oil exports non-competitive and a deterrent to diversification (Ali, 2025; Olaniyan, 2026). The livelihoods of the communities are affected where oil spills and gas flaring cause contaminated water, reduced fish levels and unproductive farmlands thus consigning many into poverty (Nkem, 2024; Jack, 2025).
The oil industry and the gender and age gaps in the indigenous companies can lead to work dissatisfaction and departure, and the absence of healthcare, education, and financial opportunities is a social exclusion reducing access to these services (Ejiogu et al., 2025; Nkem, 2022). The lack of security as a result of dissatisfaction with the unequal allocation of resources also negatively affects development (Egbe, 2025). Devoid of the corrective measures, sustainable and inclusive growth has not been achieved in this resource-rich but poor region.
1.3 Objectives of the Study
The primary objective is to analyze the implications of uneven sectoral growth on income inequality in Rivers State. Specific objectives include:
- To examine the historical and structural causes of sectoral imbalances in the state.
- To assess how oil sector dominance influences income distribution, poverty, and social exclusion.
- To evaluate the environmental, health, and security consequences of these disparities.
- To propose strategies for sectoral diversification and equitable development.
1.4 Research Questions
- What factors drive uneven sectoral growth in Rivers State?
- How does oil dependency contribute to income inequality and related social issues?
- In what ways do environmental degradation and exclusion mechanisms amplify disparities?
- What policy interventions can foster balanced sectoral growth and reduced inequality?
1.5 Significance of the Study
The research is academically relevant because it adds empirical evidence to the existing discussion of the subnational resource curse, and it elucidates how sectoral inequity reinforces inequality in the oil-dependent states, including the Niger Delta (Animashaun, 2025; Olaniyan, 2026). It seals the research gaps between national and state analyses by establishing and implementing major terms resource curse, Gini coefficient, and social exclusion in a localised setting, contributing to the literature about sustainable development in Africa (Nkem, 2024; Ali, 2025).
In practise, the conclusions offer policy makers evidence-based policy to diversify e.g. rejuvenate agriculture, invest in modular refineries and enhance revenue transparency to reduce inequality and drive inclusive growth (Olaniyan, 2026). To the communities, NGOs, and advocacy groups in Rivers State, it favours appeals of environmental clean-up, fair benefit-sharing and human-security centred measures that could diminish grievances that cause conflict and criminal activities (Egbe, 2025; Nkem, 2022). Addressing them economically may improve and uplift livelihoods and reduce multidimensional poverty and health in oil-impacted regions, increasing long-term stability to the region and to Nigeria and its overall development agenda (Siloko, 2024).
1.6 Scope of the Study
The research will focus on Rivers State since around the year 2010 with the main focus on the oil, agricultural and informal sectors. It uses secondary academic materials, the weaknesses are the availability of data and the possibility of bias in available research. Future research may use primary data to facilitate a deeper analysis.
References
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