BrazilNigerian population could benefit more from country’s economic growth
According to a new report, Nigeria’s powerful economic growth since the turn of the century has not translated into a higher standard of living. Despite stable growth, people are still left wanting in areas of healthcare and basic infrastructural facilities, having to deal, instead, with an oil-dependent economy and widespread systematic corruption.
Nigeria has been an independent state since 1960, when it gained freedom from British rule, but only came under a stable democratic government in 1999 after the end of a civil war. Political stablity brought with it the room for economic growth, and the country has registered a staggering 7.5% annual growth rate since 2000.
Using its SEPA mechanism for measurement, The Boston Consulting Group (BCG) has released its ‘Unlocking Nigeria's Potential: the path to well-being’ report, which examines the true impact that steady economic growth has had on its people. The report also provides a comparative study with other similar cases.
SEDA
BCG’s Sustainable Economic Development Assessment (SEDA) model is a tool developed by the consulting firm to study various dimensions of economic growth, using the welfare and lifestyle of a country’s people as the sole metric for economic development. In essence, it measures whether GDP growth translates into individual well-being.
To this end, the model breaks economic indicators down into three indices and ten sub-indices. The three indices include economics, investments, and sustainability. Using these, along with the ten sub-indices, the model generates a current score based on the current status of each sub-index, and a recent-progress score, based on a 7 year progress report on each index. So far, SEDA has been used to score 149 countries.
No permeation
According to Nigeria’s SEDA score, the wealth being generated is not trickling down to the general population. A staggering statistic that emerged from the report is that more than 80% of the population lives on less than $2 per day. In South Africa, this number stands at 26%. The proportion of national wealth to individual welfare in Nigeria emerged as one of the lowest in the world. Important indicators include the level of education, which remains well behind those across countries in aa similar GDP bracket.
Sporadic diversification
The study found that while Nigeria has a relatively diverse economy with booming mining and quarrying industries, the government is heavily dependent on oil and gas for its export activity, leaving it subject to risks. These risks manifested recently, when falling oil prices drove a number of countries into recession.
Challenges
For the study, Nigeria was compared with peers in a number of categories. For example, it was compared with oil and gas peers such as Mexico, Columbia, Egypt and Brazil. Alternatively, it was compared with Sub Saharan peers, and also aspirational emerging peers, such as Brazil and Turkey.
In this comparison, the country performed well compared to most of its Sub-Saharan peers, in most categories except Civil Society and Governance. Corruption still plagues a large portion of Nigerian society. Meanwhile, the country fell considerably behind compared to most oil and gas producers, particularly in areas of health, education, and infrastructure.
Hans-Paul Bürkner, former CEO (2004 - 2012) and now t Chairman of BCG, commented, “Nigeria's challenges are significant—but they are more than matched by the talent and entrepreneurial drive of its people. However, the Nigerian people need better infrastructure, health, education, and institutions to be able to translate their energy and drive into prosperous personal lives and a prosperous society."
