Nigeria’s growth is failing its youth
Nigeria’s revised GDP figure continues to draw global attention despite daily news about the insurgency in the north-east of the country. Nigeria has been ranked as the topmost of 70 frontier markets that are attracting the most attention from Companies based in the US and EU.
A new index of corporate sentiment created for the Wall Street Journal by Frontier Advisory Strategy Group, a US-based company, says nine of 20 countries attractive economies are in Africa. About 30 percent of 200 companies that participated in the survey have Nigeria on their watch list.
Being on a company’s watch list may not immediately result in investment decision but it indicates where companies like Coca-Cola, General Electric, Novartis, Dell and Akzo Nobel (some of the clients that FSG advises) are likely to put their money when they decide. Nigerian Bottling Company, a member of the Coca-Cola HBC, for example, lately awarded a contract to build a new bottling line for the production of soft drinks in Nigeria.
Early this month Nigerian stocks surged to a 4-month after when the MSCI Index which measures the performance of equity markets increased Nigeria’s weight on the index to 19 percent from 12 percent, making Nigeria the second-largest frontier market after Kuwait.
The MSCI Index added Forte Oil and Ecobank to its list of large and medium capitalised segments of the NSE. The top 10 companies on the MSCI Nigeria Index are Nigerian Breweries, GT Bank, Zenith Bank, Nestle, FBN Holdings, Dangote Cement, UBA, Seplat and Lafarge.
For investment companies that invest in the Nigerian Stock Exchange (NSE), investing in Nigeria gained additional attraction. The recurring decibels for investing in Nigeria are its youthful population, high economic growth rate and an expanding middle class.
Nevertheless, the island of few rich individuals surrounded by an ocean of poor, socially and economically excluded population is the grim reality. The rebased GDP increased the economy by 89 percent revealed the stark reality of inequality in Nigeria.
Thirty percent of Nigeria’s wealth is concentrated in the hands of 15,705 people: 5 billionaires with 11 percent plus a sliver of 15,700 millionaires who control 19 percent. This leaves millions of mostly young Nigerians at the bottom of a pyramid (the average Nigerian millionaire is a male 61 year-old). The gap between the bottom and top is increasing rapidly – the wealth of Nigeria’s 5 billionaires increased by 812 percent in the past 5 years.
Economic growth is a good thing. Nigeria needs more of it. However the kind of growth Nigeria needs is the re percent of the enough jobs. future is bright, staring at it with rose-tinted lenses tier marinfrastructure-led, agro-allied, job-generating, entrepreneurially-driven, double-digit sort. Such a growth needs more reforms not less; it calls for keeping the eye on the economic ball even though a political World Cup is around the corner. All of this must be coupled with combating corruption, incompetence and inefficiency in the public and private sector.
Ignoring the socio-economic inequality in Nigeria is like constructing the Second Niger Bridge with comprised sand, water, cement and steel. Every naira that is diverted today will reap fruits of insecurity tomorrow.
We cannot disregard that Nigeria’s youth is a resource and a challenge. We cannot pretend and keep saying the future is bright, staring at it through rose-tinted lenses. We must look beyond to see that millions of our young and restless youth can’t see the bright future because they either don’t have the requisite skills or that there are not enough jobs.
We have to treat this problem with urgency. We cannot afford to dash the hopes, the aspirations and ambitions of our young and dynamic population. The insurgency in the north-east and the industrial-scale of oil theft in the south-south are the results of past mistakes that must not be repeated.