Nigeria is a country of absurd economic realities. The 12th largest crude oil producer in the world and the second largest economy in Africa earn an estimated $2.2 million a day in oil revenue. Yet, its GDP per capita, at just over $1,400, is among the lowest for the continent and 54% of its 148 million people live on less than $1 per day.
The figures are especially shocking because of the abundance of natural resources primarily oil and natural gas, and massive agricultural potential based on its climate and significant rural population.
Human development data for Nigeria has remained persistently bleak despite a considerable upturn in the country’s economic fortunes since 2000.
The UNDP ranked the country 80th in a poverty survey of 108 developing nations that focussed on severe deprivation . The agency gave Nigeria a Human Poverty Index of 37.3, placing it below more impoverished African neighbours with far smaller economies like Rwanda and Malawi. Significantly, the study looked not just at income destitution, but also at secondary aspects including education, access to health care, standard of living and life_expectancy. More than 67 million Nigerians are docketed as poor according to standard definitions, while 35% of the total population live in extreme poverty.
These recent trends are especially worrying because they parallel a significant but contradictory improvement in Nigeria’s macro_economic performance. Before the current global financial crisis set in, Abuja had been successful in wielding substantial positive change in its overall balance sheets through a process of re_prioritisation and economic reform since 1999. A slew of measures, including privatisation of several steel, petrochemical, mining and port entities helped develop the non_oil sector, bring down inflation and boost international currency reserves. Nigeria also successfully negotiated with the London and Paris clubs to do away with a large part of its foreign debt.
However, World Bank research confirms that even during periods of relative prosperity, poverty levels remained unabated in the broadest sense, and actually worsened during successive positive growth periods.
Between 1972 and 1980, for instance, the Nigerian per capita income shot up from $1,300 to $2,900 based on rapidly escalating oil prices.
A subsequent decline in global oil revenues dragged down per capita income, consumption and expenditure to critical levels. However, Nigeria neglected investment in human development projects and continued to pump borrowed finances into capital_intensive enterprises. The fallout was that the dramatic rise in national fortunes bypassed the majority of Nigerians, as evident from the negligible rise in per capita consumption figures for the same period.
The differential effect on poverty levels in rural and urban areas for the coinciding period is equally startling. Because of a simultaneous worsening of income distribution, rural poverty declined slightly while the number of urban poor gained. However, the worst_off were also the worst losers, as the population living in extreme poverty across Nigeria swelled up from 10 million to 14 million. The obvious explanation behind this is that policy makers sorely failed to share the increase in wealth equitably.
Till 1985, a variety of local factors (political turmoil and social unrest) and foreign influences (falling oil prices and mismanagement of state assets) was responsible for increasing poverty and a widening disparity between rural and urban incomes. Even by 1995, per capita income and consumption remained lower than at the beginning of the oil boom in the ’70s.
It was only towards the end of the 20th century that Nigeria began to press forward a concerted though gradual effort at reform and regulation, made possible by relative political stability and the establishment of a democratically elected government.
The advent of more inclusive policies truly began with the adoption of a proactive manifesto that sought to wean away Nigeria’s exclusive dependence on non_renewable resources and promote micro and macro level entrepreneurship as the only viable means to durable economic prosperity.
This change of stance pertinently describes the entrepreneurial spirit in general: the insistence on unique and creatively challenging business models for rapidly sustainable wealth creation. Entrepreneurship is the core ideal of all developed nations that have successfully capitalized on their human and natural resources to drive economic progress.
Since the Thatcher_Regan era of the 1980s, most developed and developing nations the world over have wholeheartedly embraced entrepreneurship as the key to economic and market superiority.