ECONOMY - 14 MAY 2019

Is Nigeria's Brain Drain Actually a Net Gain?

Is Nigeria's Brain Drain Actually a Net Gain?
The furore around Nigerian doctors continues to grow, even as the Nigerians left behind struggle to find good medical care. Source: MCSP

A few weeks ago, Nigeria's Labour and Employment Minister appeared on TV claiming to be unbothered about the outflow of Nigerian doctors to developed countries. In his words, "We have surplus doctors, if we have a surplus, we export."

This shocked many.

Mainly because of the long-held view that the brain drain phenomenon deprives home countries of part of their human capital, which is essential for growth.

However - as the labour minister went on to argue - could the brain be an opportunity as opposed to a curse for developing countries? 

 

Down the drain

Well for starters, it is important to see why people might worry about an outflow of skilled labour. Often, most individuals who migrate from developing to developed countries are the very ones that the former cannot afford to lose: the highly skilled and educated.

Case in point is Nigeria's healthcare sector. With about 72,000 doctors registered with the Medical and Dental Council of Nigeria (MDCN), more than half practise medicine outside the country. That leaves a population of about 180 million Nigerians with 35,000 doctors. That comes to around one doctor per 5,000 people. The global recommendation is one doctor per 600 people.

 

Tax on brains

The numbers above are shocking, so how then can one argue that there are gains to this human capital flight? 

The brain drain hypothesis has real and serious implications, but discussions often fail to account for the positive effects of people relocating. When individuals migrate, they become a part of the diaspora and can make economic contributions to their home country, formally known as remittances. These flows of money have increasingly become more significant for developing countries' public finances.

For example, in East Africa, foreign remittances have outpaced foreign direct investment as the largest source of external financing. Bringing it closer to home, diaspora flows exceed gross oil revenue receipts in Nigeria. In 2018, Nigeria earned $18.2 billion from oil exports, compared to earnings of $25.1 billion from Nigerians living abroad. That's more than triple our capital expenditure budget.

We can then argue that the mass exodus of highly skilled people could result in a net benefit for the country. So even though 9 out of 10 doctors choose to move out of Nigeria, we could still win because of the huge amount of foreign currency inflows.

Besides remittances, some economists also argue that the possibility of being able to migrate to greener pastures encourages people to get more education. Essentially, more young people in Nigeria are likely to aspire to reach higher levels of education if they know there is a possibility they can go abroad to live a better life. According to this theory, even after emigration happens, developing countries like Nigeria would be left with more educated people than they would have had if there was no option to leave.

 

So drain or gain? 

Ultimately, the answer to if Nigeria ends up with a net benefit depends on what remittances are spent on. Are remittances used by Nigerian foreign doctors to develop social benefits such as setting up medical centres in Nigeria (as the labour minister suggests) or miscellaneous private spending by family members? 

There are also certain considerations that cannot be ignored.

First, the depletion of professionals within a single industry would mean that citizens have to go elsewhere to "purchase" these services. To illustrate this point, look again at our healthcare sector. The shortage of medical consultants contributes to the fact that Nigeria spends about ₦359.2 billion annually on healthcare abroad. And that's only a handful of Nigerians (and our President) spending about ₦19 billion more on healthcare in other countries than our total 2018 healthcare budget.

When you then think about the 70% of Nigerians living below the poverty line and can't afford to travel to receive medical treatment, can we afford to let doctors go?

Even if the goal of migrating creates more well-educated Nigerians at home, of what use are they if the job market is unable to absorb their human capital? Skilled labour is only useful to an economy when it is employed, and Nigeria's high unemployment figures indicate that the jobs market is struggling to do this. So even if the possibility for potential doctors to "sell" their human capital abroad generates incentives to invest more in getting a medical degree, the job environment doesn't create the space to use it.

Migration might be the only route for some. The way Nigeria is set up, the best course could be to go abroad and make enough money to set up a medical centre in Nigeria, thereby creating your own Nigerian job. 

There might be gains to be reaped from the brain drain occurring, but it would be misguided to act like this is not a pressing issue. It also wouldn't be right to have policies which only focus on limiting or prohibiting emigration. Rather, more proactive policies like encouraging brain creation and circulation should be considered, while making use of remitances to improve social welfare. 

Follow this Writer on Twitter @FadekemiAbiru.

Fadekemi Abiru

Fadekemi Abiru

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