Business

Nigeria: The tragic truth hidden in plain sight


As of 2014, Nigeria was classified as Africa’s largest economy after it rebased its gross domestic product (GDP), Africa’s most populous country, Africa’s largest democracy, and a major exporter of oil and gas.

But Nigeria is currently facing development challenges, which it must overcome to fulfil its significant potentials. The statistics are however not very encouraging and it has become imperative that the people in control of the government and economy be told the truth.

Today, at least 33 percent of Nigerians live in extreme poverty. Between 2018 and March 2022, Nigeria led the rest of the world, surpassing China and India with much higher populations, as the country with the highest number of people living in extreme poverty.

Already, Nigeria has the highest number of out-of-school children and those Nigerian children who do attend school have learning outcomes that are among the worst in the world (ten and a half million Nigerian youngsters, mostly girls, are not in school. 98 percent of those out of school are in Nigeria’s poorer North region).

Health statistics are equally not encouraging. Nigeria has the world’s second-highest number of persons living with HIV/AIDS after South Africa. Maternal deaths during childbirth among Nigerian women are alarmingly high. While Nigerian women make up just one percent of the world’s population, they account for 13 percent of the world’s maternal mortality (only 38 percent of pregnant women are assisted by a slated birth attendant during delivery with just 12 percent in North-Western Nigeria).

Similarly, Nigeria accounts for approximately 13 percent of global child deaths and one-third of all malaria deaths worldwide (42 percent of Nigerians have malaria). Nigeria has more tuberculosis cases than any country in Africa.

Nigeria used to be the breadbasket of West Africa but has become a net food-importer due to the neglect of the agriculture sector since the discovery of oil in the 1970s. Nigeria spends $11 billion annually to import wheat, rice, sugar and fish. Underinvestment in agriculture and rural development more generally has contributed to widespread chronic malnutrition. The story of decline in the agriculture sector is repeated across the economy where almost every productive sector has seen disinvestment and a loss of quality jobs.

With the exceptions of telecommunications and trade and finance, economic growth has also been highly variable regionally, with the coastal Southwest around Lagos being the primary target of international and Nigerian investment, leaving the highly populated North falling further behind in almost all economic indicators.

A critical restraint to economic growth has been the lack of reliable electrical power. Insufficient power from the national grid forces individuals and firms to invest in private power generation (i.e. generators) to meet electricity requirements, driving up costs, slowing economic activity, and worsening air pollution from generators and use of fire wood. Annual per capita electricity consumption in Nigeria is one of the poorest in the world – 106 kilowatts per hour compared to 245 kilowatts per hour in Ghana; 133 kilowatts per hour in Kenya; and 4,347 kilowatts per hour in South Africa. The minimal electricity that is available is again, disproportionally found in the South and Southwest, with Northern Nigeria almost unserved by the national grid.

Turning around and improving the dismal statistics on Nigerian education, health, agriculture and electricity sectors will have a significant impact on Nigeria’s poverty rate.

Nigeria has the assets to bring to this effort. It is a country of significant human and natural resources, with oil being the most prominent, generally about 75 percent of government revenue. The country’s federal system has proven to be resilient and stable, reliably transferring resources from the national level to the states. Nigeria has clearly made a firm transition back to democracy and civilian government, and the military has retained respect since its withdrawal from politics.

Under Nigeria’s federal constitutional structure the majority of social services, including education and health care, are the responsibility of state and local governments. Unfortunately, weak institutional capacity has proven unable to ensure transparency and integrity in government operations, leading to significant under-funding of key social services or misuse of public resources on highly visible projects, such as universities and tertiary hospitals, at the expense of primary care and basic education. The emergence of a civil society that is vocal, and as independent media outlets begin to evolve, these emerging voices of public opinion offer hope that the ingredients for a turn-around are in place.

There is need to pinpoint that one of the major reasons Nigeria lags in so many development measures is weak governance capacity and practice, a weakness that is evident in nearly every sector and at all levels of government. Poor management of public resources and institutions manifests in several interrelated ways.

First, the economy is overly dependent on income from petroleum, which accounts for the vast majority of the national budget, yet oil production is an economic sector that produces relatively few jobs.

Read also: Nigeria headed in wrong direction – API poll

Moreover, while Nigeria’s oil revenues are substantial, they do not translate into game-changing wealth for the majority of the citizens, such as that found in Saudi Arabia (oil revenues equal approximately $900,000 per person annually in Saudi Arabia and only $21,000 in Nigeria).

Nevertheless, the failure to properly mobilise Nigeria’s still significant oil revenues has meant that there have been few broad-based benefits to the people.

Second, Nigeria has some of the lowest social spending levels in the world. While the transfer of oil revenues to the states is fairly stable and state-level budgets for public services are generally adequate, the money often does not flow through the system, as budgeted, leaving local governments under-resourced and ill-equipped to provide services. Regional differences in public expectations, often culturally based, of what the government can and should provide, also negatively affect local social service delivery.

Third, an unfriendly business climate makes private sector-led economic growth difficult in Nigeria. Rampant corruption, the high cost of financing, and unpredictable legal decisions drive up costs and chase away many potential investors. Adding to this, the dismal electricity supply service escalates costs of production and significantly diminishes the productivity of business ventures.

In terms of the business environment, Nigeria remains one of the most difficult places in the world to do business. Nigeria continues to rank badly in the World Bank’s Doing Business Report.

Conflict has become an epidemic in Nigeria and links strongly to the theme of poor governance. In the oil-rich Delta region conflict has arisen over the lack of widespread benefits from petroleum and the devastating environmental impacts of massive oil spills.

In the Middle Belt, population pressures have sparked deadly disputes over land usage that have gone unattended to by official institutions and are being exacerbated by religious affiliations of the affected communities.

Finally, in the North East, what was once a civil protest against the profound level of corruption in government has now morphed into a deadly insurgency that aligned itself with the Islamic State of Iraq and Syria (or ISIS) and threatens the stability of not only Northern Nigeria but also to other Lake Chad Basin countries.

Although oil resources have, to an extent, “masked” the underlying issues drawing conflicts, the time these resources bought was not put to good use to address the root cause of the violence.

In conclusion, Nigerian politicians and public servants cannot continue to pretend that Nigeria is a great country, while the majority of the population lives in poverty.

From the presidency to the national assembly, senate, state governors, state assemblies down to the local governments and all public services, it is time the business of governance is taken seriously mingled with human empathy as to deliver the necessary public goods that will improve the lives of majority of Nigerians.

Civil society, independent media, and academia must be vocal and insist on proper accounting of public resources and intuitions to improve public service and the need to do things differently.

OBIOHA, executive vice president, Bluefield Associates (USA) Inc. and president, Clear Essence Cosmetics (USA) Inc



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