Human capital flight remains a major concern in Nigeria and other developing nations, a report has stated.
The report noted that the number of people leaving the country for greener pastures has continued to rise.
It stated that the development was largely due to the poor state of health in the country, high level of unemployment (18.8% in third quarter 2017) and rising poverty rate in the country (80% below the poverty line) as well as insecurity.
Lagos-based Financial Derivatives Company Limited stated this in its latest economic bulletin.
It also noted that the educational system was designed to be dynamic as well as to accommodate societal needs with high cohesion between policies and implementation.
In 2017, the World Economic Forumâ€™s Global Human Capital Index ranked Singapore, an economy with about 5.6 million people, 11th out of 130 countries while Nigeria, with a population of about 193 million, was ranked 114th.
Nigeria was ranked 122nd and 124th respectively in development and know-how sub-indices.
â€œIndeed, the role played by human capital in the development process of a nation cannot be over-emphasised. It is especially critical in creating an enabling environment for job creation to combat brain drain.
â€œHowever, Nigeria is yet to invest fully in developing a skilled labour pool with technical skills,â€ the report added.
According to the FDC, despite Nigeriaâ€™s consistent population growth at about 2.5 per cent presently, the economy was yet to unlock the full potential embedded in such a great asset.
â€œThis is owing to a number of factors. While human capital flight comes with the benefit of increased remittances in the country (by 10% in 2017 to $22 billion from $19.4 billion in 2016), the rise in the number of emigrants has reduced the number of skilled workers in the country. This ultimately deprives
â€œNigeria of the even greater potential benefits if the human capital were to remain. Furthermore, the quality of the Nigerian educational system deteriorates day by day.
â€œThis coupled with the frequent strike actions has led to an increase in the number of people who leave the country to acquire education outside the country.
â€œUnfortunately, a greater proportion of these people fail to return to the country after the completion of their studies.
â€œAdditionally, a huge number of experts in the formal sector leave the country in search of better opportunities in more developed nations,â€ the report stated.
It highlighted improving access to credit as one of the ways to address the situation.
According to the National Bureau of Statistics (NBS), it was estimated that small and medium scale enterprises (SMEs) account for about 90 per cent of businesses, employ more than 30 million people, and contribute 50 per cent to the GDP. However, the full potential of this sector remains relatively untapped owing to low access to financial resources (credit facilities).
Credit to the private sector (CPS) has remained constrained owing to a growing level of risk aversion by Nigerian banks.
â€œAlso, most SMEs operate in the informal sector, as they fear the administrative and financial burden of regularising their status.
Also noteworthy is the fact that most SMEs do not possess the financial capacity to expand their businesses.
â€œThis is despite the increase in financial inclusion rate to 60.3 per cent in 2012 from 50 per cent in 2008. Efforts need to be geared toward reducing brain drain in the country.
â€œTo achieve this, the government needs to revamp the real sector and integrate the informal sector fully into the economy.
Stringent policies that negatively impact efficient business administration in the formal sector and constrain further expansion of economic activities should be revisited and improved upon.
â€œIn addition, technical skill acquisition programs need to be fully integrated into the curriculum. This will help to develop entrepreneurial capacity in graduates and help to reduce the unemployment rate.
â€œThis is a major lesson that can be learned from Singapore. Its ability to integrate vocational and technical education in its curriculum helped to develop human capital which had an exponential impact on job creation, both through expedited job placement and encouraging the start-up of new businesses,â€ it added.