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Nigeria: New Human Development Report

AfricaFocus Bulletin
Mar 5, 2010 (100305)
(Reposted from sources cited below)

Editor's Note

"Between 1985 and 2004, inequality in Nigeria worsened from 0.43 to 0.49, placing the country among those with the highest inequality levels in the world. Many studies have shown that despite its vast resources, Nigeria ranks among the most unequal countries in the world. The poverty problem in the country is partly a feature of high inequality which manifests in highly unequal income distribution and differential access to basic infrastructure, education, training and job opportunities." - UNDP Human Development Report, 2008-2009

Nigeria's latest Human Development Report, released in December 2009, highlighted agreement in principle on the desired path of development among independent development experts and Nigerian government officials. But the declared goal of "growth with equity," few can doubt, will face many obstacles on the road from rhetoric to implementation.

This AfricaFocus Bulletin contains excerpts from a press release and the summary of the report. Both documents, as well as the full report, are available on the website of the UNDP in Nigeria, at http://www.ng.undp.org

Another AfricaFocus Bulletin sent out today contains a report analyzing Shell's failures in "social responsibility" in the Niger Delta. That bulletin also contains links to a number of other relevant recent reports. (see
http://www.africafocus.org/docs10/nig1003a.php).

For previous AfricaFocus Bulletins on Nigeria, visit http://www.africafocus.org/country/nigeria.php

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

Nigeria Human Development Report advocates for growth with equity

Nigeria's more than 140 million people will be better-off if the 6% average growth of the economy is matched with more productive and stable jobs and a more equitable distribution of income. This theme is the core message of the 2008-2009 National Human Development Report launched in Abuja, on 7 December 2009.

Dr. Shamsudeen Usman, Nigeria's Minister of National Planning who launched the UNDP commissioned report, agreed with the theme, Achieving Growth with Equity. He said, "The choice of the theme was considered very appropriate, as it is in consonance with the policy of Government of achieving growth and development as a panacea to sustainable poverty reduction and high standard of living in the country."

He said that Nigeria aspires to be among the top 20 economies in the world by the year 2020. "This can only be done by reducing poverty and unemployment through concrete measures, policies and the involvement of all stakeholders. To this end, the report pays particular attention to strategic approaches to employment generation using both sector specific and macro-based strategies." The Minister added.

UNDP Resident Representative a.i. Mr. Turhan Saleh said, "The NHDR breaks some new ground by generating State and zonal level data on the human development index (HDI), poverty, inequality and a proxy measure of State gross domestic product (GDP) through what can be described as an index of economic activity. These are all firsts in Nigeria! And, as it happens, a lot of the data and analysis validates and reinforces the arguments that have been put forward courageously in the National Vision 20:2020 document."

He was particularly happy that the report is a strictly home grown product, developed, written, reviewed and revised by Nigerian experts. Data was supplied by the work of the National Bureau of Statistics, and an Advisory Board composed of senior Government officials, civil society, the private sector, independent experts and UNDP provided guidance. "We are deeply grateful to these institutions and individuals for their enthusiasm, commitment and hard work without which this report could not have been written," Mr. Saleh said.

Former Economic Adviser to the President and Minister of National Planning, and a member of the advisory council on the NHDR, Prof. Ode Ojowu, shed light on the highlights of the Report. He revealed that inequity in Nigeria was one of the highest in the world with the top 20% of the population controlling 65% of national assets. Although there has been significant growth in recent years with per capita income crossing the $1,000 mark in 2006, there is still prevalence of extreme poverty, with agriculture, the driver of growth accounting for about 7 out of 10 poor.

The National Human Development Nigeria 2008-2009 sends out five clear messages.

  • The first one is about avoiding the trap of focusing on economic growth as an end in itself. The Report argues that growth is not an end in itself but a means to improved human development - better health and education, longer and more productive lives, higher incomes, and more opportunities for people, especially the poor and marginalized, to engage fully in the life of their communities and country.
  • The second key message is that a narrow focus on economic growth will diminish Nigeria's prospects of achieving key aspects of National Vision 20:2020 and the MDGs. This is because a narrow focus on economic growth will fail to tap the potential of the majority of Nigerian men and women who are poor today but can be highly productive citizens in the future.
  • The third message is that, going forward, the best development strategy and associated policy choices will be about promoting growth with equity. Growth with equity is a simple but powerful idea which aims to set in motion a virtuous cycle of development. As the population gets healthier, more educated and skilled - and begins to have access to other inputs such as credit, technology and equipment as well as markets - productivity increases; as productivity increases, the economy grows; and as the economy grows, more resources become available to invest more in people, infrastructure and other inputs for development, thus, promoting further economic expansion and making its benefits available to more people, especially the poor.
  • A fourth message is that the growth with equity approach is not anti-growth: the approach simply says that a 'growth first and then let us worry about equity later' strategy poses a false choice and holds back human development.
  • A final message that comes through strongly in the NHDR is that there is a common sense agenda of policies and actions to pursue growth with equity and achieve Vision 20:2020 and the MDGs.

The report identified a key challenge among others, and one that the best performing emerging economies have been able to address - the need to maintain discipline, consistency and continuity in the setting of priorities and policies over a sufficiently long period of time to secure an irreversible momentum towards growth with equity.

The launch was graced by top government officials including the Minister of Health, Prof. Babatunde Oshotimehin, the Senior Special Assistant to the President on MDGs, Hajia Amina Az-Zubair, who gave a goodwill message, the Director General of the Budget Office, Dr. Bright Okogu, several ambassadors and members of the diplomatic and development community, civil society and the general public.


Human Development Report

Nigeria 2008 - 2009

Achieving growth with equity

Published for the United Nations Development Programme (UNDP), Nigeria

[Excerpts only. For full summary and full report, visit http://www.ng.undp.org]

Overview

Focus

This edition of the Nigerian Human Development Report focuses on achieving growth with equity. In its simplest form, this concept refers to growth which enables the largest number of people, especially those less advantaged and poor, to participate in wealth creation and benefit proportionately more from the increased availability of public and private resources. In other words, growth with equity aims for a society which is fairer in the distribution of opportunities and rewards. This approach contrasts sharply with "orthodox" growth strategies which are focused principally on increasing the quantum of wealth in a country and the average level of income of the population. They are less concerned with whether or not the poor gain relatively more (or less) from this increased wealth and whether the gap between the rich and poor either widens or narrows as a result of the "orthodox" growth path.

Growth with equity, therefore, holds out the promise of a faster reduction in poverty and inequality, enabling more of the poor to gain access to productive and stable jobs, improved health and literacy, higher incomes and increased opportunities to engage actively in the life of their communities. As a result, growth with equity helps a society and country to progress from merely raising incomes to achieving a higher level of human development.

Guided by these perspectives, the Report makes three essential points: first, that the development debate in Nigeria over the past few years seems to have focused too narrowly on growth for its own sake rather than as a means to improved human development; second, that this narrow focus is likely to reduce the prospects of achieving the 7-Point Agenda and the National Vision 20:2020 because it will fail to tap the potential of countless millions of Nigerians who are poor today but can be highly productive in the future with the right combination of public and private policies and investments; and, third, that the most effective development strategy for the future is one anchored on growth with equity. The Report marshals the evidence and provides the analysis to make this central case to Nigeria's policy-makers, opinion-leaders and general public.

...

Nigeria's Growth Strategies, Outcomes and Implications

...

Growth performance has improved significantly since the return to civilian rule in 1999. The last seven years witnessed an average growth rate of about 6 per cent. However, economic growth has not resulted in appreciable decline in unemployment and poverty prevalence. This situation is attributable to a variety of factors that have persisted as important policy challenges. Human development has remained unimpressive in Nigeria ...

Some of the factors responsible for the low response of poverty and human development generally to economic growth may be found in the structure of production and nature of growth. Nigeria's top two primary products, agriculture and oil, continue to dominate both sectoral contributions to GDP and, in the latter case, exports. Agriculture continues to account for more than 50 per cent of employment while the oil sector accounts for over 95 per cent of foreign exchange earnings and 80 per cent of government revenue. The declining share of agriculture in GDP in the mid and early 1970s has been reversed since 1999: agriculture's share of GDP rose from 30 per cent in 1981 to about 36 per cent in 2000 and 42 per cent in 2007. The share of oil in GDP also rose during the period to about 24 per cent in 2007. The two sectors therefore account for more than 60 per cent of GDP. In contrast to the relative performance of agriculture, the manufacturing sector has been relatively stagnant and losing its share of GDP from 6 per cent in 1985 to a range of between 4 and 5 per cent during 1990-2007. ... Overlaid by sustained high inequality, Nigeria's overall economic growth improvements has translated to little or insignificant improvements in the welfare of the poorer segments of the population.

...

Inequality

Between 1985 and 2004, inequality in Nigeria worsened from 0.43 to 0.49, placing the country among those with the highest inequality levels in the world. Many studies have shown that despite its vast resources, Nigeria ranks among the most unequal countries in the world. The poverty problem in the country is partly a feature of high inequality which manifests in highly unequal income distribution and differential access to basic infrastructure, education, training and job opportunities. Sustained high overall inequality reflects widening income gap and access to economic and social opportunities between genders; growing inequality between and within rural and urban populations; and widening gaps between the federating units/economies.

Inequality between genders stands out as a key policy challenge. The female gender is generally disadvantaged in access to education and employment, agricultural wage and access to land, among other things. Gender inequality is fuelled by many factors, including sociocultural practices, low economic status, patriarchy and low education. Conditions that prevent the girl-child from receiving early education or that totally undermine her right to education are still prevalent in Nigeria. These conditions include early marriage and the vulnerability of the girlchild to menial jobs as a coping mechanism among poor households. Evidence abounds that gender inequality affects growth and perpetuates poverty among the disadvantaged groups. Clearly, inequality hurts the economy and women and girls in particular.

High inequality points to corruption, the absence or failure of redistribution policies, significant institutional shortcomings in the provision of basic services as well as many years of mismanagement of public resources, among many other causes. Concern about inequality is strong in Nigeria, and has prompted a variety of past and ongoing re-distribution programmes woven around poverty reduction and women's empowerment, but improvements have been slow in coming. ...

Poverty

The number of poor people in Nigeria remains high. The total poverty head count rose from 27.2 per cent in 1980 to 65.6 per cent in 1996, an annual average increase of 8.83 per cent in the 16-year period. However, between 1996 and 2004, total poverty head count declined by an annual average of 2.1 per cent to 54.4 per cent.

...

Relationship between Growth, Poverty and Inequality and Implications

Three key relationships emerged from the analysis of data on Nigeria. First, changes in poverty and inequality move in the same direction, suggesting that as inequality deepened, the poverty situation deteriorated further; second, economic growth and poverty move in opposite directions, implying that as growth improves, poverty incidence reduces; and third, inequality and growth are positively correlated, i.e., they move in the same direction.

Positive correlation between growth and inequality potentially suggests that some kind of trade-off has to be accepted. To reduce poverty, the situation suggests, would entail choosing between promoting growth and accepting higher inequality as a consequence or focusing on reducing inequality at the expense of growth. This would be a poor choice as neither can permanently lead to poverty reduction on a sustainable basis without the other. The situation is a reflection of institutional fragility and some fundamental weaknesses in the management of resources and governance (both economic and political). These weaknesses inhibit the effectiveness of distributional policies and mechanisms while promoting rent-seeking behaviours and corruption. To achieve both growth and inequality reduction simultaneously, economic policies must be complemented by social and governance reforms aimed at removing these weaknesses.

From 2000 to 2007, the employment growth rate failed to keep pace with expansion in economic activity in the key sectors and overall. In the manufacturing sector, employment growth rates were lower than the sector growth rates, except in 2001 and 2003. ...

These developments and challenges suggest that the task of achieving growth, poverty reduction and equity needs to be viewed in broader terms, including the following:

  • First, the challenge of making the growth process more pro -poor suggests the need to focus on ways of increasing opportunities for the poor to participate more fully in the growth process not just by increasing agricultural incomes but also through off-farm employment.
  • Second, greater dispersion of the poor suggests there may be a case for rebalancing the focus of poverty reduction efforts from poor areas to poor people.
  • Third, the rapid increase in inequality between as well as within rural and urban areas suggests that fostering equity cannot be delinked from the overall poverty reduction agenda.

The changes and trends described above have not gone unnoticed in government circles. Indeed, a number of recent policies indicate an increasing commitment of the government to a broader poverty reduction, social protection, and human development Agenda.

...

Policies to Achieve Growth and Equity

1. Create an environment for high levels of investment and growth Economic growth remains a critical factor in improving people's welfare in Nigeria. Currently, the country is pursuing a vision of becoming one of the 20 largest economies in the world by 2020, and so the need to quicken growth beyond the current 6 per cent average is not debatable. It is estimated that Nigeria would require overall growth of above 10 per cent on a consistent basis to attain this vision. What is more urgent and important, however, is that sustainable human development would require that growth becomes increasingly pro-poor going forward.

...

The immediate focus of the government's growth strategy should be on reforms and investments that will improve investment returns and efficiency, particularly improving power supply and enhancing access to efficient infrastructure. ...

2. Make Growth Pro-Poor and Inclusive

In spite of the economic growth recorded in recent years, progress in human development has been quite unimpressive in Nigeria considering various indicators such as poverty incidence, inequality and access to basic social services. As earlier noted, poverty incidence is still very high. The manifestation of disparities includes gender inequality in educational attainment with female primary and secondary school enrolment rates being consistently lower than the national average, and inequality in asset distribution such that 20 per cent of the population own 65 per cent of national assets.

Additionally, there is unequal access to basic needs and social infrastructure by sector (urban and rural) and within sector (urban poor versus urban non-poor, and rural poor versus non poor). Growth in Nigeria, therefore, has to incorporate distributive features and a higher level of inclusiveness.

...

3. Achieve Effective Multi-Tier Cooperation

This report lays out
an expansive agenda of policy actions and investments which can have a significant impact on Nigeria's human development indices over the medium term as long as there is persistent, focused, and determined leadership to make the difference. More importantly, the fact of federalism, marked by the overlapping of economic and political responsibilities among tiers of government, makes intergovernmental co operation essential, if not inevitable, to achieve the goals of human development in a federation.

In the Nigerian federation, the 36 states, the Federal Capital Territory as well as 774 local governments share about 45 per cent of consolidated revenue while the federal government controls the rest. However, the federal government has no statutory powers to control the sub- national governments for the purposes of macro stabilization. Apart from this, areas such as primary and secondary education, primary and secondary healthcare services, rural roads and infrastructure, water and sanitation and community services, with direct implications for human development, are assigned to these lower tiers of government in Nigeria.

However, the federal government often provides services in most of the areas where the sub-national governments have responsibilities, thus resulting in conflicts, waste and inefficiencies the adoption of a cooperative approach to governance is, therefore, essential. Towards this end, strengthening of institutional coordination across the three tiers of government, particularly the national councils on planning and the sectoral councils, should be given strong emphasis. Progress on these fronts will enable a pattern of accelerated growth of an inclusive kind in the country.


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please write to this address to subscribe or unsubscribe to the bulletin, or to suggest material for inclusion. For more information about reposted material, please contact directly the original source mentioned. For a full archive and other resources, see http://www.africafocus.org


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