Nigeria’s rebased GDP: Lessons from Poland
Nigeria’s rebased GDP has put it on equal footing with Poland, thanks to the massive contribution of the service sector. A threefold increase saw the contribution of the service sector jump to 53 percent from 29 percent.
Though Nigeria is now comparable with Poland, in terms of size, there are many other areas where it lags behind the economic powerhouse of Eastern Europe. With a population half the size of Nigeria Poland is the sixth-largest economy in the EU.
Poland’s strategic location in continental Europe is an advantage it frequently markets; likewise its domestic market, young well-educated labour force and investment incentives.
Companies that locate in Poland take advantage of tax exemptions in its 14 Special Economic Zones, increasing labour productivity and proximity to 250 million and 550 million people within a radius of 1,000 and 2,000km respectively.
For example, a skilled workforce in the local mechanical industry, local production of car parts and opportunities to set up assembly plants buoyed by incentives that attract foreign investment have turned Poland into a vehicle exporting country. The number of vehicles exported from Poland is expected to increase to 1 million in 2017 from 597,000 in 2012.
Poland’s skilled and cheap labour provides a magnet for investors. And this has been a major driving force behind Poland’s economic growth in the past 20 years. In 2010, for instance, in the construction and services sector, a Polish worker is paid 7 Euros an hour compared to 38 Euros for his Belgian counterpart.
Such competitive advantages have made Poland the heart of Samsung’s European operations. A profusion of PhDs convinced Samsung to make Poland its largest European location for manufacturing and research and development. Samsung’s factories in Poland have transited from making cheap fridges and washing machines to designing applications for smart TVs.
What’s more the quality and quantity of Poland’s skilled workforce means there is no shortage of talent. Hence other companies can set up factories in the country. Besides, these skills are not concentrated in one part of the country. Poland’s main universities and technical institutions, dispersed across the country, produce 430,000 graduates every year.
Though most undergraduates enrol for degrees in construction, economics, law, education and management there is an increasing number of engineering undergraduates admitted in faculties such as electronics and telecommunication, electrical technology, mechanics and machine design and mechatronics.
Hard infrastructure e.g. roads are being constructed to complement soft infrastructure: education and investment incentives. Consequently, foreign direct investment (FDI) topped $11.5 billion in 2009. According to the UN, the key factors attracting FDI to Poland are: the size and rapid expansion of the domestic market; flexible and skilled labour force and a high quality-to-cost ratio.
How Poland converts FDI into jobs is instructive. For example, the incentives available for manufacturing projects require that companies that get the grant generate a minimum number of new jobs.
The most useful lesson Nigeria can draw from Poland is how to reform the education system. A country’s economic growth is inseparable from its education system. Since 1999, following in the footsteps of Singapore and South Korea, Poland has successfully reformed its education system. It revamped the overall level education by increasing access and improving quality.
Poland overhauled its education through a 6-3-3 system i.e. 6 years of comprehensive primary education followed by 3 years in junior secondary school. In senior secondary school, students either spend four or three years in general or technical education. The new Polish secondary education system laid emphasis on competencies required for a knowledge economy. It also allowed secondary schools to come up with their own curricula so long as it contained three core dimensions: acquiring knowledge, developing skills and shaping attitudes.