How an increase in government infrastructure spending will affect income and consumption in the economy of Nigeria? Explain logically

            Nigeria is an African country rich in natural resources ranging from arable land, water, oil, natural gas, minerals, forests, and wildlife. It is not only full of natural resources but also there are abundant wildlife reserves. It is the biggest economy in Africa. Suppose, the newly elected government investigates the issues of the economy of Nigeria. They find that there are many serious issues facing the economy of Nigeria.  A few of them are given below:

• Poverty

• Low investment

• Low consumption and demand

• Unequal distribution of wealth

            The new government decides to increase government infrastructure spending in the development of building new roads and constructing new houses for poor people.

Requirement:

            How an increase in government infrastructure spending will affect income and consumption in the economy of Nigeria? Explain logically

Solution:

            An increase in government infrastructure spending, such as building new roads and constructing new houses for poor people, can have a positive impact on income and consumption in the economy of Nigeria.

            Firstly, the increased government spending on infrastructure can lead to the creation of jobs, particularly in the construction and transportation industries. This can help to alleviate poverty by providing people with a source of income.

            Secondly, the new infrastructure can also help to increase investment in the country. For example, new roads and housing can make it easier for businesses to transport goods and for people to access markets and job opportunities. This can help to attract more investment and boost economic growth.

            Thirdly, the new infrastructure can also help to increase consumption and demand in the economy. For example, new housing can help to improve people's living standards, which can lead to increased consumption of goods and services. Additionally, new roads can make it easier for people to access goods and services, which can also help to increase consumption.

            Finally, the new infrastructure can also help to reduce the unequal distribution of wealth by providing more opportunities for people living in poverty to improve their living standards.

            Overall, an increase in government infrastructure spending can have a positive impact on income and consumption in the economy of Nigeria by creating jobs, attracting investment, increasing consumption and demand, and reducing the unequal distribution of wealth.