PETERSIDE ECONOMIC REVIEW

Chamberlain S. Peterside, Ph.DTuesday, August 29, 2006
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New York, NY, USA

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IF STATISTICS DON’T LIE
…NIGERIA MIGHT BE THE MOST UNDER-ACHIEVING COUNTRY ON EARTH


…The Napping Giant

hat Nigeria is a country of many extremes is no secret. It is often described in superlative terms, like “the giant of Africa”. True, it is the most populous country in Africa, boasts of the largest black population in the world, produces more crude oil than anyone else on the continent, harbors the happiest people on earth, home to the most religious people alive and until recently, the second most corrupt country (based on corruption perception index). On a lighter side - few people also know that Nigeria has the highest number of twins in the world.


Nigeria is easily the wealthiest country amongst long-suffering African nations and that might sound quite exciting to low-achievers, except that on the flipside, its average quality of life pales in comparison to even other developing countries. It is absolutely ludicrous for Nigeria to constantly feel proud amongst a bunch of impoverished countries, when in reality it is performing far below expectation in the comity of nations, this runs parallel to the old saying - to whom more is given, much is required.

The superlative epithets mean very little vis-à-vis concrete socio-economic and demographic benchmarks, such as life expectancy, per capita gross domestic product, human development index (HDI), infant mortality, maternal mortality ratio (death during birth), access to safe drinking water, daily calorie intake (gainfully employed people can't even afford balanced diet), electric energy consumption per inhabitant, tele-density (phone lines per citizen), Internet access, etc. Ironically, few months ago World Bank survey classified Nigeria as one of the most unfriendly business terrains, just as a recent report published by Heritage Foundation and Wall Street Journal ranked Nigeria 146 out of 157 in level of economic freedom (index of economic freedom). The sad truth is that Nigeria rates quite dismally in the global community based on qualitative yardsticks.

In other words, Nigeria might have $40 billion external reserves, less than $5 billion in foreign debt, be home to highest number of millionaires on the continent (legitimately or not), have 10 banks ranked amongst the top 1000 globally, have the most number of doctorate degree holders, most number of universities, most modern capital city (Abuja), so on and so forth – still all that doesn't amount to a better life for the masses. I am quite curious about how many informed-people have paused to think about this.

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…Sliding Slope
It is perhaps much to the credit of current administration that some of its officials actually realize these critical defects and making relentless effort to improve things. The deplorable conditions are reflective of deep-seated ineptitude around policy-circles. Within two decades (from early 1980s), Nigeria skidded from 37th highest per capita income into a prolonged coma that literally stagnated its economy, stigmatized its citizens around the world, stunted advancement in standard of living and reversed the gains of 1960s and 1970s. Based on World Bank data, most key indicators that track development standard plummeted precipitously, so much that Nigeria slipped into the basket of most backward countries.

This was exacerbated by the fact that as economic performance deteriorated; population soared at an annual rate of 2,5 percent surpassing 135 million in 2003 from a modest level of 80 million in early 1980s. For most of the 1990s, the economy posted negative growth rate, except a few episodic improvements during the late 1980s to early 1990s. Not until 2003 did Nigeria regain traction to clock a growth rate above 3% - hitting 5,6% and 6% in 2004/2005 respectively.

Some see the malaise as a consequence of declining oil revenue and ensuing liquidity crunch on the economy (austerity measures), I lay the blame squarely on the doorsteps of successive autocratic regimes, am sure most readers will agree. Nigeria places within the lowest quintile in terms of quality of life (ranking 125 out of 151 countries in the human development index). Weighed against the backdrop of economic potential (population, natural resources, infrastructure, climatic condition etc) of countries in that lowest stratum the logical conclusion is that Nigeria is worse-off.

Statistically, Nigeria is not deemed Least Developed Country (LDC) because it possesses quite favorable climatic conditions and not land-locked (unlike Chad or Niger), not prone to adverse weather patterns (hurricane, earthquake, drought, locust infestation, etc) and not at war (civil ended over 35 years ago). Moreover it also has vast arable land and mineral resources, especially crude oil – a major income earner in the global market.

During the celebrated debt campaign, Nigeria was not recognized as a highly indebted poor country (HIPC) and therefore didn't merit debt right-off, for the shere reason that it has significant earning-power and sizable external reserves. It was inconceivable that an OPEC nation could have attracted sympathy in this era of high oil price. Nonetheless, Nigeria received a somewhat favorable debt-deal from the Paris Club in 2005. For comparative analysis we randomly selected few countries within Africa, Asia and South America, - smaller countries that are much less endowed than Nigeria.

Nigeria In The Global Performance Scale

#

 

Economic Indicator

Nigeria’s Performance

In Comparison With Selected Poor Countries

Chad

Niger

Haiti

Honduras

Laos

Vietnam

Cambodia

1

GDP Per Capita*

860

1,020

800

1,610

1,720

2,300

2,060

2,600

2

Human Development Index (HDI)**

0,466

0,379

0,292

0,463

0,534

0,691

0,568

0,672

3

Infant Mortality

(death per 1000 births)

100

117

155

79,0

87,0

20,0

96,0

32,0

4

Life Expectancy at birth

52

44,4

44,2

48,2

52,5

67,2

57,2

68,6

5

Maternal Mortality

(per 100,000 live births)

1,100

1,500

920

1,100

650

95,0

590

220

6

Access to safe water

62,0

27,0

59,0

58,0

35,0

75,0

31,0

89,0

7

Undernourished People (%)

9,3

33,9

33,9

47,1

22,1

18,5

32,9

22,5

8

Telephone lines (fixed/mob)

Per 100 subscribers)

1,80

0,60

0,30

3,30

2,10

7,20

3,00

9,70

9

Internet Access(per 100 people)

0,40

0,40

0,10

1,00

0,30

1,90

0,20

2,50

10

Energy Consumption

(kg of oil equivalent)

174

5,00

32,0

67,0

79,0

241

14,0

278

11

Adult illiteracy

31,9

52,5

82,4

47,1

32,7

7,0

29,9

23,2

12

Agriculture Production (per capita index)

96,8

99,3

98,7

98,7

111

113

99,8

97,1

*In USD based on international Purchasing Power Parity (PPP)

*** On a scale of 1-10

…What A Mockery
Granted that Nigeria remains a country with huge upside potential, the situation on the ground tells a different story - that Nigeria is closer to countries like Haiti, Cambodia, Laos, Vietnam, war-ravaged Rwanda, Congo, Liberia, Sudan and Sierra, or hunger stricken Niger, Chad and Eritrea on the human development scale. Worse still, when you compare the level of national wealth (be it natural or physical wealth) within those countries, none come close to Nigeria, which buttresses my assumption. The chart shows that, except in percentage of undernourished people (9,3%), there are no other criteria of human well-being in which Nigeria has successfully established clear leadership even amongst poor countries worldwide, despite its financial prowess.

The former Finance Minister, Dr Ngozi Okonjo-Iweala was aptly right when as a line of defense for debt relief, she persistently argued that Nigeria is really impoverished, and to put it succinctly, - I'd say, technically the most under-performing country on earth, from the standpoint of its enormous wealth. Its per capita income and human development index say it all – it is not the lowest, but given the colossal resources at its disposal, Nigeria should be in a far better shape than its peers at the bottom rung.

On the reverse side of the spectrum, large resource-rich countries like India, Brazil, Egypt, Pakistan, China, Indonesia and Philippines have all attained more impressive strides in the last two decades that make Nigeria look like a dullard, whereas smaller countries like Botswana, or next door neighbor, Ghana have also made gradual progress. You often wonder if politicians recognize this misnomer or have simply decided to ignore it, much to their utter peril.

…Sprint Uphill or Starve
Like I have always maintained, the underlying premise for political agitation and governance should be to improve life for the citizens, but without understanding the depth of these qualitative deficiencies, any effort to revamp the country will remain a political charade.

One of the generally accepted maxims is that corruption in high places remains one of the underlying causes of this quagmire coupled with inefficient bureaucracy set up by self-serving regimes. Beyond that, I might add that market regulations and the economic framework in general have been flawed and inimical to the long-term prosperity of larger population. Not until recently, little or no effort was made to genuinely and radically restructure the economy and set it on a sound pedestal.

As the experience of Asian countries and more recently India and China shows, it doesn't necessarily take rocket science to achieve sustainable development – it requires a solid infrastructure base, favorable business environment, flexible labor market, educated/informed workforce, genuine commitment, and predictable political atmosphere, devoid of unnecessary tension. Nigeria certainly has been bereft of these pre-requisites hence the lack-luster performance.

That’s why efforts to reposition the economy and aggressive crackdown on corruption and influence peddling pursued by regulatory organs and law enforcement agencies is quite commendable and hopefully will help cure the lethargy and assuage societal inequalities in the long-run. Given the level of backwardness, it would take more than quick-fixes to ultimately scale the ladder and set the society on a sure-footing. To borrow a phrase from Allen Hammond, author of the book - Which World, Scenarios for the 21st Century; Africa (and indeed Nigeria despite its perceived wealth and potentials), “must run hard just to stand still and must sprint uphill to achieve even modest prosperity for the people in the coming half century” The prognosis by Goldman Sachs that Nigeria might become a top twenty economy in 20 years (year 2025), can only make sense if the size of pie is commensurate with level of well-being to avert anarchy. Otherwise the country will be poised to remain a paradox at best – rich country of poor people.

Chamberlain is the Founder & President of New Era Capital Corp. and MyCompleteFinance.com, a New York based financial services group. He was previously a Financial Advisor in the Global Private Client Group, of Merrill Lynch.