It kills and discourages healthy competition,
It brings disrepute to any system.
Politicians have found a loophole to discourage Nigerians especially when it comes to job seeking, most Nigerians find it difficult to apply for federal jobs because it is believed that it is reserved for person with upper hand, and in most cases that's what happens.
The truth is that, there is nepotism in every part of world, but just that, the one practice in Nigeria has a higher voltage. Which is why most of time you don't have competent people manning strategic positions in the country because they got it outside of merit.
Not necessarily Politicians also private sector are involved ranging from hotels to those jobs you consider Upper-class. It's degenerating the value of school system, as majority now has the mindset that their job seeking now involves -who know who-. The truth remains that everyone is looking for who is loyal of which they can gain from and can represent them after they leave such position (planting someone who will he giving returns).
The sole reason we have mediocre managing various sector which have lead to low productivity. Also Tribalism is one major problem in Nigeria which is eating deeper than we expect.
I doubt you to say Nigeria rate is more or higher, we can really determine because we can use same situation in Nigeria and compare with others. America currently is suffering because of this as rate of unemployment keep increasing, whites lacking job, racism influencing the game. So we only emphasise and not exaggerate it.