Kunle Aderinokun, Chika Amanze-Nwachuku, Obinna Chima and Nume Ekeghe in Washington DC
Worried about the Nigeria’s abysmally level of investment in human capital development, particularly in health, education and social protection, with healthcare getting a spend of less than one per cent of the GDP, the World Bank has concluded plans to massively invest in the country’s manpower.
President of the World Bank Group, Mr. Jim Yong Kim, disclosed this thursday while responding to a THISDAY question, during the opening media briefing at the on-going World Bank/International Monetary Fund (IMF) annual meetings in Washington DC.
The Nigerian economy grew by 0.55 per cent in the second quarter of 2017, signposting the end of a crippling recession after five consecutive quarters of contraction, caused mainly by dwindled revenue from oil.
To this end, Kim urged policy makers in Nigeria to look beyond oil prices and start to develop strategies that would ensure sustainable growth for the economy.
“Over this next year, not only in Nigeria but in all of Africa. We’re going to focus on accelerating investments in human capital we call it but investments in health, education, social protection, so that Africa can prepare itself for the next phase in economic development,” Kim said.
“You know, in my very first meeting with President Buhari, he said specifically that he would like us to shift our focus to the northern regions of Nigeria and we’ve done that. Now, it has been very difficult. The work there has been very, very difficult. I think Nigeria, of course, has suffered from the dropping oil prices. I think things are just now getting better. But the conversation we need to have with Nigeria, I think, is in many ways, related to the theme that I brought to the table just this past week which is, investment in human capital. The percentage of GDP that Nigeria spends on healthcare is less than one per cent,” he explained.
“Despite that, there is so much turbulence in the northern part of the country, and there is the hit that was taken from the drop in the oil prices. Nigeria has to think ahead and investing in its people, investing in the things that will allow Nigeria to be a thriving, rapidly growing economy in the future, is what the country has to focus on right now. It can’t rely just on oil prices going back up. It has to think, what are going to be the sources of growth in the future for Nigeria in what will surely be a more digitalised economy,” the World Bank boss advised.
The situation in Nigeria, according to Kim, was also same with most other African countries.
He noted: “If you look at the numbers in terms of how successfully African countries have invested into their human beings versus other regions, there is a real issue,” he said.
“But the one thing we know, the one thing we know, is that better health outcomes, better education outcomes will be critical no matter what the global economy looks like. So, yes focus on the north, hope that as commodity prices stabilise, oil prices come back up and the economy will grow a bit more but very, very much focus on what the drivers of growth in the future will be,” he added.
Kim expressed optimism that as commodity prices rose, the Nigerian economy would sustain its growth path, just as he stressed the need for the policy makers in the country to focus on sustainable growth drivers for the future.
“In Africa, we have to be much more creative. Again, investing in people is important. That is a major direction we have to go. It is not just about commodity prices going up or down,” he said.
Earlier in his opening remark, Kim said this week, finance ministers and central bankers from the bank’s 189-member countries would be discussing the challenges and opportunities in the global economy.
These discussions, according to him, would help countries chart the path forward for how to improve the lives of their people – and in doing so, they should help set the agenda for the world’s economy in the coming year.
“Here’s what we’re seeing now: after several years of disappointing growth, the global economy has begun to accelerate. Trade is picking up, but investment remains weak. We’re concerned that risks such as a rise in protectionism, policy uncertainty, or possible financial market turbulence could derail this fragile recovery.
“Overall, we’re seeing growth rise in most developing and advanced economies – which is why countries need to make critical investments now. This is the time to implement the reforms that are going to insulate against potential downturns in the future.
“Countries need to build resilience against the overlapping challenges we face today, including the effects of climate change, natural disasters, conflict, forced displacement, famine, and disease.
“To help countries address these challenges, we’re working to maximise finance for development. We’re pursuing private sector solutions whenever they can help achieve development goals, and reserving scarce public finance for where it is most needed – particularly investments in human capital,” he added.
Meanwhile, the Managing Director of the IMF, Christine Lagarde, in a separate media briefing, noted that Africa was one of the continents where growth had remained sub-optimal.
She urged Nigeria and other countries in the continent to take advantage of their youth population.
“What we are seeing is a recovery in the global economy that is stronger, that is broad-based, and we expect higher growth this year and next.
In order to help Nigeria and other low-income countries (LICs) counter their lacklustre prospects, she said the fund would identify policies to unlock their growth potential and enhance resilience to shocks, including through advancing economic diversification, enhancing domestic revenue mobilisation, and containing rising public debt vulnerabilities.
To support such efforts, the IMF boss said the fund would be integrating the 2030 Sustainable Development Goals (SDGs) and the Financing for Development Agenda into its work where relevant to its mandate, including scaling up capacity development (CD) on domestic revenue mobilisation; continuing to build fiscal capacity in fragile states; deepening financial markets; and fostering data quality and availability.
“And, as it reviews its LIC facilities, the fund will examine its role in helping countries, including small states, deal with the burdens of natural disasters and conflicts, while ensuring that the Poverty Reduction and Growth Trust’s (PRGT) self-sustaining framework is maintained. Work will also continue to ensure sufficient Fund loan resources for concessional lending. Help broaden the benefits from technological progress and integration.
“The Fund will help members achieve inclusive growth, working with other institutions to analyse the macroeconomic and fiscal implications of technology and integration. Staff will build on the recent studies of policies to tackle inequality and other associated adjustment costs, including by deepening analysis of youth labour market prospects.
“To promote sustainable policies, staff will explore how to shape, where macro-relevant, policies on climate change, inequality, gender, migration, population-ageing, and access to financial services,” Lagarde said.
According to her, strong institutions and policy frameworks are central to promoting trust and resilience for Nigeria and other LICs.
She pledged that the fund would strengthen its engagement on governance and corruption issues, including by bolstering its framework for assessing corruption and its macroeconomic impact.
Furthermore, Lagarde said the fund would develop new analytic tools to support a candid assessment of corruption where it is undermining macroeconomic performance and allow for more granular policy advice to help tackle corruption while ensuring even-handed treatment across the membership. Key areas include enhancing public financial management, fiscal transparency, and regulation.