Shock Value

Shock Value

The Nigerian economy, like any other, experiences “shocks”— events or policy decisions that can send a ripple of changes through the system. This column zooms in on these ripples in a range of sectors to explore how and why these shocks matter.

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Should Nigeria Invest in People or Infrastructure?

Ebehi Iyoha

Ebehi Iyoha

Ebehi is an avid reader seeking insights in unexpected places. Her research interests include economic development, political economy and trade.

Earlier this year, Bill Gates suggested that Nigeria does not invest enough in people, i.e. in health and education. A look at Nigeria's Human Development Index backs up his claim; we rank 152 out of 188 countries, behind Ghana (139) and South Africa (119). The expected years of schooling for the average child is ten years, and adult life expectancy is 53 years, almost a decade below the average in low-income countries. Given that education and health expenditure represent only 7% and 4% of the proposed 2018 federal budget, it is hard to disagree with Gates' assessment.

The world's 2nd richest man suggested that Nigeria's focus on infrastructure came at the cost of human capital. But the infrastructure picture is equally gloomy. Each year, the average South African enjoys 35 times as much electricity as a Nigerian, and the density of Nigeria's road network is one-ninth of India's. Infrastructure stock is less than 25% of GDP, far below international benchmarks of 70 percent; yet, public investment in infrastructure from 2007 and 2017 was about 3.6% of GDP, lower than the African average of 4.3%.

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