BusinessDay 21 Aug 2018

BUSINESS DAY
INSIGHT/INNOVATION
OGHO OKITI
Dr. Okiti is the president,
Time Economics Ltd
@ Dr_Okiti 081.7153.0058
A
recent Brookings report found
that Nigeria has overtaken India
to become the country with the
largest population of people
living in extreme poverty. The
report, authored by HomiKharas, Kristofer
Hamel, and Martin Hofer, all associates of
the World Data Lab (see Brookings.edu),
claims that Nigeria has 87 million people in
extreme poverty category and that this number
is increasing by 6 people every minute.
So, by the time you have finished reading
this report, there will be 60 more Nigerians
living in extreme poverty.
The report was based on surveys conducted
in April this year, recent economic
growth data from the International Monetary
Fund (IMF), and computed poverty
trajectories for 188 countries in the world. It
concluded that the rise in Nigeria’s poverty is
driven by three parameters – low economic
growth, high inequality, and population
growth. Nigeria’s population growth rate,
currently at 2.6 percent according to the
World Bank, has been growing above Nigeria’s
economic growth rate except for one
quarter in the last three years. This report is
thus one of many recent issues that demonstrate
the seriousness of the implications of
Nigeria’s population dynamics for poverty,
growth and jobs.
At the current growth rate, the United
Nations Department of Economic and Social
Affairs (UN DESA) estimates that Nigeria’s
population will have grown to 410.6 million
by 2050, making Nigeria the third most
populous country in the world, after China
and India. The median age of these 410.6
million people is projected to be 22.5.
In the past, many analysts and public
officials have regarded Nigeria’s rising
52.7%
The percentage of
Nigerians aged
15-34 years who are either
unemployed or under
employed.
population, especially young population,
combined with its vast natural resources,
as a concrete basis for the attraction of
investments. This view was based on the
notion that a rising population will feed,
wear clothes and require shelter, all fundamental
bases for investments. Also, a large
and youthful population, it is argued, will
provide a labour force that can turn Nigeria
into the world’s next manufacturing centre.
Expanding the argument, it is assumed
that, with a large population, Nigeria can
follow the established sustained economic
NEWS YOU CAN TRUST I TUESDAY 21 AUGUST 2018 C002D5556
10.5m
The number of out school
children in Nigeria,
Africa’s
largest oil exporter
Nigeria’s population: Asset or liability
growth pattern in developed economies of
the movement of surplus labour from low
productivity sections of the economy into
high productivity ones, raising incomes,
providing jobs, and provide a platform for
sustained economic growth.
However, that view is now being questioned.
As Nigeria’s population continues
to grow, the country is confronted with a
combination of domestic and international
developments that means that the growth of
its population is now seen, more as a disaster
waiting to happen, rather than a blessing.
Technological changes, unpredictable and
unsustainable economic policies, poor and
weak education, out of school children, immigration
dynamics and populist policies in
the West are few of the dynamics that have
the possibility of turning Nigeria’s population
boom into an unmanageable doom.
How many are there?
According to the Nigeria Population
Commission (NPC) and the National Bureau
of Statistics (NBS), Nigeria’s population
is currently approaching 200 million. The
last census was conducted in 1991, following
the promulgation of Decree 23 of 1989,
which established the NPC. The results of
the census, and that of the 2006 population
and housing census that followed have
never been widely accepted. Indeed, since
the first Nigerian census in 1963, it is widely
accepted that Nigeria has manipulated her
population figures, and doubts have been
cast on successive census. For instance,
Yemi Kale, the Statistician General stated in
a tweet that he doesn’t “think [the population
figures] are correct” and has repeatedly
called for a valid census to ascertain the
correct population of the country.
Nigeria’s census data figures is not only
underpinned by irregularity, since it has
not met the United Nations 10 year benchmark,
but also lack of trust, due to political
reasons, data fragmentation, poor data
management, and Nigeria’s very week data
on birth, deaths, and migration – three key
parameters responsible for the dynamics
of population. Therefore any extrapolations
made on the assumption that Nigeria’s
population is currently 190 million are suspect,
given that it starts from a potentially
inaccurate base.
Notwithstanding, it is clear that Nigeria’s
population is large, it is rising, growing rapidly,
and that the majority of these people
are young; driving up competition for scarce
resources, and resulting in hunger, poor
access to health care and education and
high rate of unemployment and underemployment.
This has been compounded by
1.47m
The number of applications
Nigerian universities
receive yearly out of which
only about 400,000 are
admitted.
Zhexembayeva, a strategist and Founder
of Chief Reinvention Officer, in her TEDx
talk argued that “disruptive” inventions
now happen every three and a half years,
whereas it used to be over 30 years, just 20
years ago. While these shifts are providing
basis for increasing productivity and income
growth, they are also driving the polarisation
of the current and future of work, according
to a May 2017 briefing of McKinsey Global
Institute (MGI) – Technology, Jobs, and
the Future of Work. We are now seeing a
huge gulf of highly and lowly skilled work,
inequality and unemployment.
Indeed, in a developing and emerging
economy like Nigeria with very low technology
adoption, there are concrete examples
that technology is displacing and changing
the nature of work required. For instance,
just in a matter of few years, the number
This “army”, with hopelessness
as their weapon,
are responding with migration,
both legally and
illegally, robbery, advance
fee fraud (419), and kidnapping;
by abusing drugs
such as codeine and Tramadol;
or by engaging in
militant activities in order
to demand a larger share of
government revenues
of low skilled “recharge card” sellers that
have been displaced by the emergence of
the possibility to buy airtime on our phones
from bank application platforms is huge. In
Games Village, one of Nigeria’s largest enclosed
estates, situated in Abuja, there used
to be about 12 young men “fighting” for customers
just two years ago. These days, you
rarely see up to three, and they often sit idly.
Similarly, the emergence of Uber, and
its competitors such as Taxify, international
ride sharing service providers, are driving
unprecedented changes in commercial
rides in Nigeria’s urban areas. Consequently,
traditional taxi drivers, usually of middle age,
are giving way to upwardly mobile youths
taking advantage of the technology changes
that underpin ride-sharing services. From a
customer perspective, Uber and competitors
alike such as Taxify are removing the challenges
associated with traditional taxi such as
haggling, unpredictable behaviour, anonymity
and security problems associated with it.
But technological changes do not happen
in isolation. They are driving social,
economic and cultural changes around the
globe. As technological changes have made
some jobs redundant while enabling outsourcing
of others, there has been increasing
discontent by working class people in developed
countries, which has led to a marked
cultural attitudinal change on immigration.
The last decade has not only seen an increasingly
hostile environment to immigration in
Europe and the US, but this has coincided
with rising unemployment and inequality
in developing countries, which is in turn,
driving up migration from these countries.
For instance, according to Frontex, the
European Border and Coast Guard Agency,
between January 2016 and December 2017,
56,120 Nigerians were detected attempting
to illegally enter Europe. Many do not even
reach Europe, and either die attempting to
cross the Sahara, end up enslaved in Libya, or
die crossing the Mediterranean. In addition
to the Nigerians leaving illegally, increasing
numbers of middle class professionals are
migrating to Canada, the UK, and other countries
where their skills are needed. According
to the Canadian Government, the number
of Nigerians admitted into Canada through
its Express Entry program in 2016 was 1036,
more than ten times the number in 2015.
If technological changes and attitudinal
changes in developed countries are imposed
on Nigeria, soft, weak, and poor economic
policies have certainly contributed to deliver
disastrous job figures. According to the latest
NBS unemployment report, 40% of all
Nigerians, or 34 million people, were either
unemployed or underemployed in the third
quarter of 2017, demonstrating Nigeria’s inability
to create jobs for its citizens. Worse, as
bad as the figures look, our estimation is that
the underemployment is double the current
figures, when the number of redundant public
sector employees is taken into consideration.
For instance, whereas it is common to
see 20 – 30 immigration officials at our Lagos
and Abuja airports, all involved in checking
passports, you typically find about 5 in bigger
entry points in developed economies.
Unemployment and underemployment
is just one of the challenges that Nigerian
youths face. Violent crimes ranging from
kidnapping to robbery and terrorism have
been on the rise in recent years. According
to the NBS, the total number of reported
crimes increased by 7% between 2016 and
2017. Although there is no data available
for the years before 2016, it is likely that the
situation has worsened from earlier years
given the economic deterioration since the
data was published. As increasing numbers
of young people look towards a bleak future
with no light at the end of the tunnel many are
choosing to escape Nigeria either physically
or mentally. According to estimates by the
Nigerian Senate, over three million bottles
of cough syrup with codeine are consumed
every day in just two states, Kano and Jigawa
, while some ignoring the high possibility
of kidnap, rape, slavery, and even death, to
cross the Sahara and the Mediterranean for
a chance at a better life in Europe.
Demography is not destiny: Lessons
from China
In the future, therefore, population growth
may not provide the platform for sustained
economic growth as it did in the past. In theory,
a young and large population should be an
asset for Nigeria. Global manufacturing has
tended to move from richer, more developed
countries, which have high labour costs to
poorer countries with lower labour costs and
large labour forces. Therefore, given its low
wages and large population, Nigeria should
be able to attract a sizeable portion of global
manufacturing from other more developed
countries where wages are rising. Put another
way, as countries develop, average wages rise,
but capital becomes cheap. The movement
of that capital towards cheap labour often
leads to increases in growth, then incomes,
then cheap capital in previously cheap labour
countries.
But this is not given. Policies matter.
Demography is not destiny. Let us look at
the Chinese example. In modern history,
China has always had the largest population
significant and serious economic shifts in
the last two decades.
Technology, jobs, and immigration
Today, the economic shifts are strongly
underlined by technology changes. More
than ever before, these changes are having
serious implications for the number, the
nature, and the location of jobs. These technology
shifts, underpinned by automation
and digital platforms and similar innovations,
are changing the face of work. They
are peculiar because the shifts are faster,
on a huge scale, and transnational. Nadya Continues on page 33
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