Nigeria: IntelServe CEO Traces Nigeria’s Socioeconomic Challenges to Poor Funding in Human Capital Development.
Roman Oseghale, Head Consultant and CEO of IntelServe Inc. a Canadian Business Analytical Services Company spoke at the Oct. 2nd, 2017 edition of The Platform under the topic “Education Funding and it’s Socioeconomic Impact” where he reiterated the importance of Human Capital Development using data to back up his research. He stated that no nation among over 100 countries that has been surveyed in the research relegated education and prospered, everything Nigeria is facing today is as a result of poor education funding, he stated that the blue print for national development was Human Capital Development and that the answer was right in front of everyone but no one is looking in the right direction.
His research and presentation at The Platform revealed how the socioeconomic activities of the country is falling apart because of governments inadequate investment in Human Capital Development (Education and Skills) in the youths of the country. In 2017 with a projected GDP of USD$408.3 bn, a population of 182 million, Nigeria’s education budget is USD$1.77 bn representing 7.4% of the budget and 0.43% of expected GDP at the end of the year compared to USD$3.038 bn in 1981 with a GDP of USD$61.1 bn with a population of 75.7 million which represented about 30% of the budget and 4.97% of the GDP.
Compared to other countries that were surveyed, Nigeria has only spent USD$52.79 bn from the federal level in 46 years despite being one of the most populated countries. Brazil has spent USD$1.6 tn, Chile has spent USD$131.2 bn, Mexico USD$939.8 bn, Canada USD$1.68 tn, United Kingdom USD$2.88 tn, Germany USD$3.74 tn, USA$ 18.01 tn, Egypt USD$161.3 bn, South Africa USD$372.6 bn, Thailand USD$234 bn, Indonesia USD$282.6 bn, and Malaysia USD$214.4 bn to mention a few.
He pointed out that investment in the knowledge economy was the main driver of economic growth, he made it known that because of lack of education investment, Nigeria has continued to slip down the Global Competitiveness Index, from 83rd position in 2005, to 127th position in 2010 and has remained at 127th since…he stated that countries that invest heavily in education were moving up the ranks, examples were Indonesia from 69 to 41, China from 48 to 28, Malaysia which stayed at 25, Singapore from 5 to 2, and Philippines from 73 to 57.
He stated that Nigeria was relatively stable in the 60’s, 70’s and early 80’s and had a balance in its socioeconomic activities because the country was investing in Human Capital Development which reached its peak of 4.97% of GDP approximately 5% of GDP as stipulated by the United Nations in 1981. He stated that the country may not understand the concept of education beyond an institution, a place where knowledge is obtained, certificate and degrees are given, and a tool that moves a child out of poverty, he argued that education was the weapon used in balancing all facets of the socioeconomic activities and as education funding continued to drop those facets of the society started falling apart creating a threat to both social and economic stability of the country.
He pointed out that education is an investment and not an expense, a tool used for economic growth and sustainability and that education is the weapon used to balance the socioeconomic activities of any country, if you destroy education you destroy everything. He stated that once public education is underfunded and destroyed, the country invariably destroys the socioeconomic activities and every facet of the socioeconomic factors starts to fall apart. He stated that education is the glue that holds the socioeconomic activities of a country together, whIle education is the lifeblood of the socioeconomic system, funding is the lifeblood of education.
The research showed that from 1982 education expenditure started dropping and dropped below USD$1 bn in 1986 and stayed below USD$1 bn, it wasn’t until 2006 that education expenditure climbed above USD$1 bn again in 20 years. He pointed out that education expenditure did not reach USD$3 bn again until 2011, the sane amount government spent in 1981…..it took government 30 years to spend the same amount they spent in 1981 on education. And all the while education expenditure was reducing, population was increasing.
Through his research he was able to point out how Nigeria was ahead of many Asian countries in per capita income in the 60’s, 70’s, and early 80’s because of Nigeria’s investment in Education, but as soon as Nigeria stopped investing in education and the Asian countries picked up, their per capita income grew and surpassed that of Nigeria. He stated that government has abandoned Human Capital Development and it was destroying all facet of the society.
He developed a model which he used in his presentation to show what happens when education is underfunded and how the socioeconomic activities of the country falls apart: Stating that underfunding education leads to fall in Per Capita Income, which leads to population explosion, increase in poverty, with poverty leading to crime, at the same time with poverty also leading to social unrest, and social unrest leading to state/regional instability which leads to economic loss for the country. On the other hand population explosion also leads to environmental degradation which leads to health issues and leads to economic loss for the country.
The research showed how Nigeria’s per capita income started falling after we stopped investing in education, Nigerians were poorer for 25 years without knowing it through fall in per capita income. In 1980 per capita income was USD$871 and from 1981 per capita income started dropping and did not go above USD$871 until 2006 when it reached USD$1,015, first time in 25 years. This is because as level of education and skills dropped, people’s earning power also dropped while spending on education is also recorded in the Adjusted Net savings of the country as investment assets and not expense.
He explained that as people’s earnings dropped population soared, this is because prosperity caused people to have smaller families, uneducated people saw many kids as their assets for old age, educated women used contraceptives, families often choose to educate the male child when in the midst of poverty, and also education delays marriage……women on average stop having kids at age 40, so a girl child given out in marriage at age 15 has a window period of 25 years to keep having kids unlike a girl child that pursues education and graduates at age 24, marries at 26, and starts having kids at age 28….as a working class mother, she only has between 10 to 12 years to have kids. Also working class mothers space out their kids so fertility rate is much more lower compared to a stay at home and uneducated mother.
He stated that Nigeria’s had one of the lowest annual growth rate in the 60’s and 70’s with 1.99% in 1960, Egypt, South Africa, Thailand, Indonesia, Malaysia Chile, Brazil, Mexico, Canada, to mention a few among the surveyed countries all had higher population growth, but the reverse is the case today, Nigeria’s Population growth as at 2014 was 2.66% with an average of 2.52% in 55 years and fertility rate of 5.6% is among the highest in the world, and as population increased poverty also increased.
He stated through his research that Poverty leads to increasing population, and increasing population leads to increasing poverty, as population increases, per capita income continues to fall…from 47% living below the poverty line in 1981, representing 35.6m of the total population, Nigeria’s population living below the poverty line increased to 70% in 2010 representing 114.7m of the population and reaching 120.4m in 2013. By 2014 Nigeria was ranked the 6th country in the world with the highest percentage of people living below the poverty line. He explained that all the agitations, kidnapping, instability in the country today is as a result of poverty which was caused by our lack of investment in Human Capital Development.
The research highlighted the worrisome part, extreme poverty has continued to drop in the world and by region, total living in extreme poverty as a percentage of population in the world dropped from 52.7% in 1981 to 10.7% in 2013. While the largest regions with extreme poverty has also continued to drop…Sub-Saharan Africa has dropped from 52.8% in 1981 to 41% in 2013, South Asia from 61.4% to 15.1%, East Asia/Pacific has dropped from 78% to 3.5% in the same period.
Nigeria share of extreme poverty as a percentage of people living in extreme poverty in Sub-Saharan Africa has continued to increase….from 17.6% in 1981 to 28.4% in 2011, and to 32.2% in 2013….while Nigeria is 18.8% the population of Sub-Saharan Africa, Nigeria share of extreme poverty is 32.2%…..which means that as at 2013, one in every three persons living in extreme poverty in Sub-Saharan Africa was a Nigerian while in 1981 it was one in every 5.6 persons….while extreme poverty is reducing in Sub-Saharan Africa, that of Nigeria is increasing. Nigeria share of extreme poverty increased by 83% between 1981 and 2013.
The research also showed that among all the largest world developing nations: China, India, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh, Russia, Mexico, Philippines,…..NIGERIA IS THE ONLY COUNTRY WHERE GDP IS GROWING AND EXTREME POVERTY IS ALSO GROWING. China reduced extreme poverty from 84% of population in 1981 to 6% in 2017, Indonesia from 72% to 12% with all other countries reducing as well, but Nigeria moved from 47% to 70%.
He stated that as poverty increases, crime increases…..data showed that Nigeria’s prison population increased by 26% between 2011 to 2015 while population increased by 10% during the same period, with offence against properties and offence against persons being the highest. He further stated that as at today, Nigeria has under aged children in prisons because of petty stealing and street trading, stating that while the country has refused to invest in these kids, the country is incarcerating them.
He further explained that the social unrest in the country today, from the North East, South-South, South East, and South West is as a result of poverty and lack of Human Capital Development. He stated that no educated person who is prosperous will become a miscreant to the society.
“The War against Terror is Bound up in the War against Poverty”…..General Collin Powell
The research showed that as at 2013, Nigeria had 10.5m kids outside school which represented 20% of their age bracket, while many claim the number is now more. He warned that Nigeria had the second largest number of kids outside school in the world after Pakistan. While Nigeria is 2.5% of world population, it holds 4% of the total number of kids outside school in the world from the 263m kids as estimated by the United nations.
He stated that of all the countries survey where terrorist cells operates, the countries with terrorist cells had three things in common: Low education expenditure, high poverty rate, and high number of kids outside school. He further warned that we must start to consider the consequences to both state and regional stability as only 87 countries out of 196 countries of the world have populations greater than 10.5m. He pointed out that between 2014 and 2017, a total of 125 kids have been used as suicide bombers in Nigeria with 83 in 2017 alone…..increase of 96.7% in just one year. Group like Boko Haram is using financial incentives to lure kids due to poverty.
Boko Haram has killed over 20,000 since 2010, while over 2 million has been displaced, which has caused the economic loss and stagnation of the North East of the country, while the Gulf of Guinea is now rated the most dangerous waters in the world due to kidnapping and ransom. In 2016, 54 attacks were carried out costing over USD$ 700 in economic damage while about 1000 seafarers were subject to attack in 2015, all were blamed on poverty and lack of economic opportunities with the youths.
Nigeria is also slipping down on all worldwide indexes….from a rating of 118 amongst 163 countries in the Global Peace Index in 2008, Nigeria has slipped down the ladder to 149th position, while the country has also slipped down the United Nations Human Development Index from 142 in 2010 to 152 amongst the 188 countries rated. This also led to the economic loss for the country which saw FDI reduce from USD$8.84 bn in 2011 to USD$3.13 bn in 2015 (65%) at the height of the Boko Haram Insurgencies.
He urged the government to make every efforts to register kids that were not in school, and also those that are past high school age to be registered to train for one skill or the other to reduce crime, he warned that all global rating on Nigeria was not looking good and government must invest more in Education if the country is to survive global competition as the Global Competitiveness index is mainly driven by education, hence the country will become a dumping ground. With 182 million population, if the youths are not empowered to create wealth, they will become a threat to national security in the country and region as it is already happening.
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