New reports by global development institutions show that human capital spending in Nigeria—the poverty capital of the world after recently overtaking India—is among the worst in the world.
In the second ever Commitment to Reducing Inequality (CRI) index compiled by Development Finance International (DFI) and Oxfam, Nigeria placed bottom in a ranking of 157 nations. The CRI Index ranks the commitment of national governments to reducing the gap between rich and poor citizens by measuring three factors considered “critical” to reducing the gap: social spending, tax policies and labor rights. Nigeria ranked bottom of the index for the second consecutive year.
The report says Nigeria’ social spending (mainly on health, education and social protection) is “shamefully low.” And those meager levels are reflected in reality as Nigeria is home to the highest number of out-of-school children. Nigeria also scores poorly on labour rights (133 out of 157) but recent progressive tax policies—such as a tax amnesty scheme—were noted and expected to reflect in the next index.
While the CRI index measures current realities, the World Bank’s first ever Human Capital Index (HCI) predicts future expectations but it is just as grim: ranks Nigeria 152nd out of the 157 countries.
The index measures “the amount of human capital that a child born today can expect to attain by age 18.” That prediction is based on five indicators: chances of a child reaching age five, healthy growth, expected years of schooling, quality of learning available and the adult survival rate.
Nigeria’s HCI value of 0.34 (countries are scored between zero and one) is lower than the global average (pdf) of 0.57. It’s also lower than the regional average and the average for nations in Nigeria’s income bracket. As such, the report predicts that “a child born in Nigeria today will be 34% as productive when she grows up as she could be if she enjoyed complete education and full health.”
Reducing inequality and developing human capital is crucial to any efforts to eliminate poverty in Nigeria but data shows it is an area where successive governments have been lagging: the number of Nigerians living in extreme poverty increased by 35 million between 1990 and 2013 alone.
For its part, Nigeria’s government under president Buhari has launched social intervention programs, including cash transfers to its poorest people, in a bid to reverse its extreme poverty problem. Nigeria’s efforts at reducing poverty will have to yield immediate and long-term results given it’s ballooning population: the country is set to become the world’s third largest by 2050.
Nigeria’s petro-economy, which has typically been buoyed by rising oil prices has remained in the doldrums even after exiting a five-quarter recession last year. But the longer-term dire outlook of both reports reflect the poor planning and mismanagement by successive governments over many years.