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Nigeria at 61: Struggling to catch up on lost opportunities

By Geoff Iyatse, Assistant Business Editor
04 October 2021   |   3:01 am
The misery of any failing economy can be measured not only in monetary terms but also in social terms. But more often, economists get carried away by declining numbers.

The misery of any failing economy can be measured not only in monetary terms but also in social terms. But more often, economists get carried away by declining numbers.

In the case of Nigeria, individuals who are still surviving hard times (caused by an economy that rewards a few capitalists and politicians but penalises the large majority) have resorted to self-help while the rest live their lives in utmost despair. The widespread expression of hopelessness and helplessness on social media in the past three days underscores the level of frustration in the land.

Researchers have established a strong negative correlation between inclusiveness of economic opportunities, which is signified by the general quality of life, and longevity. This close relationship may not be unconnected with the reason 30 countries, except Haiti, with the worst life expectancy profiles, are in Africa.

By the same logic, perhaps, Nigeria is fourth from the bottom. The country only ranks ahead of the Central Africa Republic, Chad and Lesotho. With the authorities unable to figure out the deteriorating security situation in the country, there is little hope that longevity will improve soon.

If the current data are held constant, an average living Nigerian will die at 56 years as against Singapore’s 84 years or Malaysia’s 77 years. The two countries, some decades ago, almost lagged behind Nigeria in terms of quality of life.

Between 1960, when Nigeria gained political Independence, and 2020 – a period of six decades – the average global life expectancy improved from 51 years to 73 years, suggesting that humanity gained 22 years owing to breakthroughs in science and technology which have helped man to ‘buy’ more years.

Indeed, Nigeria has achieved a few pluses. For instance, infant mortality declined from 173 to 55 per 1000 in the period. Deaths of under-five also fell from 288 to 90 per 1000. Sadly, general life expectancy has not witnessed a similar quantum leap as it merely moved up from 38 to 56 years, which is much slower than the global gain.

This slow catch-up places Nigeria on the same spot as the pre-1970s world. Also relevant in the data set is the fact that while other countries, reflecting in global moving average (MA), have improved consistently over the years, figures generated from Nigeria suggest a sort of anaemic improvement.

Perhaps, Nigeria’s longevity figures are a reminder of a country that has consistently, inadvertently and strangely provided casual access to means of death. Almost all socio-economic indices are head-scratching for every Nigerian.

Up-to-date unemployment statistics may be scarier than anybody can guess. But in reflecting on last year’s data, the situation is nothing short of a crisis. At a 33.3 per cent unemployment rate, Nigeria is among the three top countries with the highest percentage of jobless citizens.

The rate of unemployment as of 2020 increased by 6.2 percentage points in six months, from Q2 2020 (when it is 27.1 per cent) to Q4 2020. Though it was perhaps the sharpest documented job decline the country has witnessed, the bigger devil is in the temperament of unemployment. Youth unemployment (those aged between 15 and 34) jumped from 34.9 per cent to 42.5 per cent in six months, while underemployment among the demographic growth stood at 21 per cent. It so implies that only about four out of 10 youths that are able and willing to work are fully engaged.

In the six months spanning between June and December last year, the number of economically active people technically referred to as the working-age population increased by 4.3 per cent, from 116.9 million to 122 million. But the growth of the labour market rather shrunk as it declined by 13.2 per cent to 69.6 million.

Labour supply, ideally, is an increasing function of the active population. A reserved trend is exceptional, which makes Nigeria’s declining labour supply a curious case. Temporal withdrawal of labour is common in economies where there is a prolonged unemployment rate, and it has serious consequences for human capital development and social upheaval.

When people, especially youths do not participate in the labour market, it could signal an increasing tendency towards crimes. Often, people withdraw out of despair; and when this happens, the stock of human capital depreciates as they lose the opportunity to gain more experience and skills.

Idleness is an increasing function of insecurity, and that is observed in the rising restiveness and labour figures across different parts of the country.

Like labour statistics, Nigeria lags behind others in peace ranking. Report by the Nigeria Security Tracker (NST), a project of the Council on Foreign Relations Africa programme, says 80,542 deaths relating to insecurity challenges were recorded from May 2011 to June 2021 alone.

The 2021 Global Peace Index (GPI) rates the country 146 among 163 independent nations and territories according to its level of peacefulness. It moved one step from 147 in 2020. In Africa, it is ranked eighth least peaceful country after South Sudan, Somalia, the Democratic Republic of the Congo, Libya, Central African Republic, Sudan and Mali. Among the leading economies in the continent, Nigeria has the worst security credentials.

As the country celebrated its national day last week, Rivers State Governor, attacked the Federal Government and described Nigeria as one of the most indebted countries in the world. The Federal Government and, indeed, the states, including Wike’s Rivers, are worrisomely indebted. But does the country fit the description of most indebted countries in the world? At less than 35 per cent, Nigeria’s debt to gross domestic product (GDP) is far less than 105 per cent global average. In terms of figures, the country’s public debt is also below the humongous debts carried by its peers like South Africa and Egypt.

However, the country’s debt-carrying capacity raises sustainability concerns. Last year, debt servicing to revenue jumped from 54.7 per cent posted in 2019 to 72 per cent. Sadly, while the Federal Government has not done much to raise the revenue profile of the country, it has continued to take on more debts. The Director-General of the Debt Management Office (DMO), Patience Oniha, recently raised a concern that the country faced default challenges if nothing was done about the poor revenues.

Godwin Owoh, a debt management expert and professor of applied economics, said the increasing loan appetite would continue to pauperize the country. “It is sad that the politicians get richer while the country is getting poorer. That says a lot about the business orientation and integrity of those who manage the states,” Owoh added.

But the states are as culpable as the FG. At the close of last year, debts to total revenues of the 36 states and the Federal Capital Te rritory (FCT) stood at 170 per cent just as debts to internally generated revenues (IGRs) were 460 per cent. The Minister of Finance, Budget and National Planning, Zainab Ahmed, had disclosed to an audience at the African Development Bank (AfDB) that some of the states’ debts were undocumented. That implies that the situation could be worse than what has been reported. But the states are as culpable as the FG. At the close of last year, debts to total revenues of the 36 states and the Federal Capital Territory (FCT) stood at 170 per cent just as debts to internally generated revenues (IGRs) were 460 per cent. The Minister of Finance, Budget and National Planning, Zainab Ahmed, had disclosed to an audience at the African Development Bank (AfDB) that some of the states’ debts were undocumented. That implies that the situation could be worse than what has been reported.

Already, the country’s debt management approach tilts towards a long-term maturity strategy, suggesting that much of the debts will be passed to the future generation or the current teenagers, the majority of who are pushed into Internet scams by an economy that is rigged in favour of a few. Some economic theorists have argued that it is fair to defer debts if the future generation will be richer than the current one. Interestingly, the world has witnessed how people have dwarfed what the previous generations consider as economic prosperity as a result of new technologies that have increased outputs beyond imaginable limits. That possibly supports the debt-obsessed world.

Breakthrough and innovation are strongly connected with human capital investment over time. The rise of the Asian Tigers has demonstrated this relationship. Countries with robust investments in human capital, as shown by the human capital index (HCI) ranking, are also leaders in innovation and science. Today, Nigeria is sixth from the bottom on HCI, which is topped by four Asian giants – Singapore, Hong Kong, Japan and South Korea. Coincidentally, three out of these four countries – Singapore, Hong Kong and South Korea – are among the magical Asian Tigers.

Meanwhile, plans to remodel Nigeria’s education system to make it productive have stalled at the level of debate and proposal.

Cost of living is getting out of hand for the majority. The country’s inflation had almost touched 20 per cent before a recent retreat. At 17.01 per cent, it is still among the fastest inflation in Africa. The figure is exacerbated by the historic currency crisis that is triggered by poor production capacity and unrestrained importation. In the past four decades, for example, naira has lost over 99 per cent of its value against other currencies.

In the meantime, Nigeria celebrates amid uncertainty. And the government’s seemingly uninspiring approach to fixing the economy only compounds the woes and increases avoidable deaths.

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