Is Nigeria’s poverty by choice?

I just read an interesting article in Nigerian Business Day newspaper, which states that Nigeria has many of its citizens living in poverty today because it has accepted its present situation rather than intensifying its efforts to lift its citizens out of poverty. [http://www.businessdayonline.com/NG/index.php/editorial/24822-nigerias-poverty-is-a-choice]

Yes, I agree with the view that Nigeria’s poverty is by choice. We have the human and natural resources needed to lift millions out of poverty in Nigeria yet majority of Nigerians are poor. One of the major causes of poverty in Nigeria today is corruption. Public resources have been wasted or mismanaged. This has resulted in the inability of Nigeria to translate its oil revenues into achieving poverty reducing growth. In addition, the economy is not diversified and mostly depends on oil for its revenue which has only been beneficial to very few Nigerians. The new government has made the choice of transforming the country. It has promised to build a sustainable future for Nigerians. The government should seriously focus on tackling corruption which I identified in my first blog post (https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B2vNy3QoOvZbZGVjYTM3N2UtY2RhOC00YTIxLTgyYWMtY2IxNDNmNDA3ODBk&hl=en&authkey=COjgqKsD&pli=1) as having a perverse effect on four of the five binding constraints to Nigeria’s economic growth which are: Inadequate infrastructure, inadequate access to finance, shortage of skilled staff and high costs of inputs due to restrictive trade policies. It also needs to intensify its efforts in tackling the issue of insecurity which also poses a serious threat to Nigeria’s development. This would go a long way in helping Nigeria lift its citizens out of poverty. Nigeria has what it takes to tackle poverty; it just needs to make the right choices. 

Nigerian President reiterates his commitment to tackle corruption

[http://www.thisdaylive.com/articles/i-won-t-shield-any-corrupt-official-says-jonathan/95118/]

Dr. Ngozi Okonjo-Iweala’s return good for Nigeria

Dr. Ngozi Okonjo-Iweala was among the ministers confirmed yesterday by the Senate. I am thrilled by this development as Nigeria would greatly benefit from her relevant experience and skills. More importantly, I am pleased with her focus areas which include job creation, increasing the ease of doing business in Nigeria and infrastructural development.

[http://www.sunnewsonline.com/webpages/news/national/2011/july/07/national-07-07-2011-002.html]

I hope she will be allowed to implement these policies effectively which I believe will improve the economy and help move Nigeria forward.

Private Sector Development in Nigeria: Getting the Basics Right

The Nigerian President has vowed to create an enabling environment for private sector development in Nigeria [http://www.thisdaylive.com/articles/jonathan-hard-economic-decisions-on-the-way/94057/]. The President has also promised to protect local industries from foreign competition. While this sounds like a good way to help the growth of local industries in Nigeria (if well implemented), it is also not a magic bullet for private sector development. Protectionism is not new in Nigeria. Nigeria’s trade policy to some extent is focused on trade protectionism through import bans to protect its local industries against competition from foreign firms. This has not boosted local industries in Nigeria, rather only few industries have benefited from it. On the contrary, the main success story of Nigeria’s private sector has been largely driven by foreign direct investment in the telecommunication sector from companies like MTN which has created employment opportunities and small businesses for many Nigerians. The Nigerian government should focus on keeping to its promise of  reducing the over all cost of doing business in Nigeria which would involve addressing the power crisis, maintaining roads  and improving security in order to boost private sector development. This would be beneficial to both local industries as well as attract foreign direct investment to Nigeria.

How did Nigeria perform in the 2011 Failed States Index?

The Failed States Index is produced by the Fund for Peace; an independent Washington based non-profit research and educational organisation. The index highlights key issues affecting weak and failing states as well as normal pressures that all states experience. The index scores are interpreted as the lower the score the better. High scores show greater instability.

Nigeria ranked 14th position out of the 177 countries in the 2011 Failed States Index. It retained the same position as 2010 with a score of 99.9 (maximum and worst score being 120) which was a 'slight improvement'  from the score of 100.2 in 2010.

[http://www.foreignpolicy.com/articles/2011/06/17/2011_failed_states_index_interactive_map_and_rankings]

There are 12 indicators (Social, Economic and Political/Military) on a scale of 1-10 with 10 being the least stable/most at risk of collapse & violence and 1 being the most stable. Nigeria scored badly under the following;

• Group grievance (9.6): When tension and violence exists between groups, it undermines the state’s ability to provide security. When security is not guaranteed, violence and fear may ensue;
• Uneven development (9.0); When there are ethnic, religious, or regional disparities, the governed tend to be uneven in their commitment to the social contract;
• Legitimacy of the state(9.0); Corruption and a lack of representativeness in the government directly undermine the social contract;
• Public services (9.0): Progressive deterioration of public services, the provision of health, education, and sanitation services are a key aspect of the social contract; 
• Security apparatus (9.1);  The security apparatus should have a monopoly on the use of legitimate force. When the security apparatus is fractured or when competing or parallel groups exist, this weakens the social contract and;
• Factionalised elites (9.5): When local and national leaders engage in deadlock and brinksmanship for political gain, this undermines the social contract.

Nigeria’s performed best in the massive movement of refugees indicator with a score of 6 (which is still on the high side). Not surprisingly, Nigeria was ranked the second worst performer under the group grievance indicator as a result of the violence in the Niger Delta and the North. In the Western and Central Africa Region, Ghana had the best regional score (67.7) while Guinea had the worst score (102.5).

The Nigerian government should aim to be among the best performers in the Western and Central Africa region by tackling the weak areas identified in the index.  It should focus on achieving poverty reducing growth which would involve tackling corruption and improving security in the country. Nigeria needs to create an enabling environment for private sector development that would generate jobs for its people and boost the economy. The government should reduce the cost of governance and focus more on effectively delivering public services to the people. This would improve the lives of Nigerians and help to address issues such as group grievances and deteriorating public services mentioned in the index.

http://www.fundforpeace.org/global/library/cr-11-14-fs-failedstatesindex2011-1106p.pdf (The report of the 2011 Failed States Index)