In the first part of this series, we saw how a theory on national security helped explained how the dramatic abduction of 110 schoolgirls from their school by Boko Haram militants could’ve happened. The theory gave us a clear perspective in understanding the buck passing between Ibrahim Gaidam, the former Yobe State governor, the military and the police on where to lay the blame. In the second, we saw how the application of the wrong economic theory can lead a nation on the path to underdevelopment and failure. The third part last week tackled issues arising from the implementation of SAP, especially how it applied to the education sector. We shall focus our attention today on the issue of poverty.
In an event in September, last year, the co-founder of the Bill and Melinda Gates Foundation, Bill Gates, singled out Nigeria and Democratic Republic of Congo (DRC) as countries that need “to invest more in human development as this is the only sure means to curb the rising poverty level in both counties.”
According to him, there is the urgent need to channel more investment towards health, family planning and education as a means of human development as this is the only way in which poverty can be alleviated.
Speaking on the Goalkeepers data report released some days to the event, Gates said Africa is a young continent so there is a need to invest in young people. The report was the second edition published by the Bill and Melinda Gates Foundation to discuss several aspects of work done across the globe. The first Goalkeepers data report was published in 2017. The report tracks progress on 18 key Sustainable Development Goals (SDGs) indicators and analyse promising approaches to achieving the goals.
Citing the report, Gates said by 2050, more than 40 per cent of the extremely poor people in the world will live in Nigeria and the DRC. Nigeria has the highest number of extremely poor people as it took over from India which used to hold the unenviable position. A Brooking Institution report in June, last year said many Nigerians in extreme poverty increases by six people every minute. Although the Nigerian economy came out of recession that year, many Nigerians slipped into extreme poverty.
When I first read Gates scathing comments what immediately came to my mind was the “Economic Recovery and Growth Plan 2017-2020 (EPGR)” which is the present government’s document in tackling poverty. Before the document, there was the “National Economic Empowerment and Development Strategy (NEEDS)” of the Obasanjo administration drafted in 2004 as Nigeria’s Poverty Reduction Strategy. Have we been applying the wrong theories in tackling poverty? If we have, what are the best models or theories to adopt?
For the records, the objectives of ERGP are three-fold: restoring growth, macroeconomic stability and engendering economic diversification. The EPRG intends to achieve this by driving fiscal stimulus (through increased government spending), ensure monetary stability, improve the balance of trade and focus on key sectors that drive and enable growth (such as agriculture, energy, Micro, Small and Medium Enterprises (MSMEs), manufacturing and services.
The ERGP would achieve the above by, leveraging on information technology. Secondly, ERGP also aims to invest in the Nigerian people by continuing to provide support for the economically-disadvantaged, create jobs, improve accessibility, affordability and quality of healthcare across the country and guarantee improved human capital through access to basic quality education for all.
Finally, the ERGP aims to significantly increase investment in infrastructure through robust Public Private Partnership arrangements, simplify and improve the legal and regulatory framework for doing business in Nigeria and promote digital-led growth through the expansion of broad band coverage.
To implement the plan, the administration proposed a budget of 7.2 trillion naira for the 2017 fiscal year. Other actions taken so far include signing of executive orders that aims to achieve ease of doing business in Nigeria as well as another that aims to shore up tax revenue as a way of reducing the reliance of crude oil revenue.
How will the objectives of ERGP be realised given the fact that over 196 firms were shut and over two million jobs lost due to the recession? Would the ERGP be able to transform the Nigerian economy? Some economic analysts see ERGP as a well-thought-out and well-written blueprint that is capable of thrusting the economy to recovery and growth but expresses reservation on the ability of the government to muster the political will to implement the plan.
If studied closely, it would appear Gates and the government agrees because the EPRG has aspects that captures what the former Microsoft boss advocated. Since the EPRG aims to invest in people by providing support, creating jobs and improving accessibility to healthcare and education, they may be on the same page? But it is not as it seems. Gates pointed out that poverty in Nigeria is concentrated within certain areas and in a very unique form. He said the increasing poverty rate was largely as a result of the ongoing violence, political instability, gender inequality, severe climate change and “other deep seated crises.”
Other factors he identified as intensifying the poverty rate include the high rates of child mortality and malnutrition. “As a result, today’s poorest people have significantly fewer opportunities than most of the billions of people who escaped poverty during the first two waves,” The conclusion to him is clear: “to continue improving the human condition, our task now is to help create opportunities in Africa’s fastest-growing, poorest countries. Specifically, it means investing in their health and education, or what economists call, human capital.”
This is the bedrock of their report: “in this year’s (2018) Goalkeepers report, we take an honest look at the challenges presented by the demographics of extreme poverty. We explore what it will take in the areas of health, education, and economic opportunity to position Africa’s booming youth population to transform the continent.”
He was quick to point out that human capital is not a magic bullet, but has played a pivotal role in the success of emerging economies around the world.
“Young people in the poorest countries are denied opportunities to build better lives as people worry about insecurity, instability, and mass migration. Projections show that human-capital investments can do the same for the poorest countries in Africa.
“We wish they would also recognise young people’s enormous potential to drive economic growth. They are the activists, innovators, leaders, and workers of the future. Investing in young people’s health and education is the best way for a country to unlock productivity and innovations, cut poverty, create opportunities, and generate prosperity,” he said.
Prior to his submission in September, last year, Gates had, six months earlier, pointed out during a visit to Nigeria that the government needs to re-evaluate its economic blueprint because it does not prioritise investment in human capital. He said the government’s ERGP identifies “investing in our people as one of three strategic objectives but the execution priorities do not fully reflect people’s needs: prioritising physical capital over human capital.”
So, Gates conclusion is inescapable: Nigeria’s economy tomorrow depends on improving its schools today. The same is true of health which should also be primary focus area. According to him, human capital is a prerequisite for economic development because it may be easier to capture the importance of investments in human capital by analysing the impact they have on individuals.
“Across sub-Saharan Africa, these investments could increase the size of the economy by nearly 90 per cent by 2050, making it much more likely that the poorest countries can break through their stagnation and follow the path of China and India. There are blueprints for investing successfully in human capital,” he said.
Gates added that if the countries and developmental partners invest more in human capital today, “young people wearing sandals in the poorest, fastest growing countries will be riding bicycles tomorrow – and inventing cheaper, cleaner, safer cars next week and that’s good for everyone.”
I find it interesting, yet not surprising, that Bill Gates sees Africa as the future and Nigeria as its very heart, yet our policy makers can’t see this?