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This paper examines social inequality as a driver of social conflicts in Nigeria, which causes loss of confidence in state institutions and the rise of insurgents. The aim of the study was to examine why the government is not able to respond to the root causes of inequality, which have been fuelling an increasing social unrest and violent opposition. The study employed the Relative Deprivation Theory to analyze the disparity between the desires of the society and the real access to resources, which leads to dissatisfaction and conflict. The research was qualitative as it used secondary data in the form of books, journal articles, government publications and news about the topic of study through content analysis. The results showed that elite capture has led to inequality of distribution of wealth and opportunities especially among ethnic and regional groups. This exclusion coupled with the incapacity of the state to resolve socio-economic inequalities has given way to the emergence of insurgence groups like Boko Haram and Niger Delta militants. Moreover, failure of the government to deliver essential services and corruption has also contributed to lack of trust of the people in the institutions of the state, which worsened the conflict. The paper concludes that the underlying causes of inequality, which are triggered both by elite capture and state failure, are major causes of social unrest and insurgency. There paper therefore, recommended that it should be inclusive governance system, building of strong institutions in the country, and invest in the social and economic development to minimize inequality and reduce violent opposition.