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Human Capital or infrastructure? Disagreeing with Asiwaju

Asiwaju Ahmad Bola Tinubu recently joined the debate many of us don’t even know we are having on the importance of infrastructure and or versus…

Asiwaju Ahmad Bola Tinubu recently joined the debate many of us don’t even know we are having on the importance of infrastructure and or versus human capital development (HCD).

At the colloquium to celebrate his 67 years birthday at the International Conference Centre Abuja and in the presence of President Muhammad Buhari, the former governor of Lagos said:

“The single most important sector for the government’s focus is infrastructure. The most important of our infrastructural demands is power. This has been the greatest discovery of humanity in the last thousand years.”

I disagree.

Asiwaju’s submission needs revision. While Tinubu’s point is valid (we all need infrastructure, including electricity) but manic focus on infrastructure the way Tinubu has done and the way Nigeria has been doing for decades is the reason why the country has relegated what is even more important than infrastructure: human capital.

And because we’ve paid scant attention to human capital, our country wallows in poverty where over 130 million are poor.

Let me start with a story.

The World Bank used to calculate the wealth of nations using physical resources such as institutions, natural resources and so forth.

“But last year, we asked our people to include human capital,” Christalina Georgieva, CEO of the World Bank said on April 11 2019 during a global discussion on human capital.

“When we did that, something outstanding happened. Two thirds of the wealth of nations is us, the people, the human capital.”

Interestingly, when the World Bank did this, arguably the most natural resource-bereft country in the world, Singapore, came tops in terms of human capital or the future potential of its citizens. The country with no natural resources has more resources.

Why is this? Is it because Singapore spends a lot on education? Yes. How much? The tiny city-state spends 20% of its annual budget on education.

Nigeria spends 7%. UNESCO recommends between 15 to 20 percent. Now you see why Singapore has more assets than Nigeria in spite of its oil, land and other natural resources. Singapore was so resource poor that even their drinking water was pumped from Malaysia.

But Because of its human capital, Singapore can create billions of dollars from nothing. It’s the reason why it has the most beautiful airport in the world – receiving over 60 million travellers per year.

It has so developed its education in such an amazing way that other developed countries like the USA visit to learn from them. In particular, Singapore math is popular around the world.  Just google it.

Who has visited us to learn from our education? Why are we not an example for other countries? The answer may lie in the way we handle our education.

Even smaller African countries budget more for education than Nigeria.

Recently, the executive secretary of TETFUND, Professor Bogoro, gave some figures regarding on where we stand on the global ranking on education budgeting:

“Uganda, 4th (27.0%), Botswana, 10th (20.0%), Lesotho,14th (17.0%) and Burkina Faso, 15th (16.8%). Nigeria is 20th (8.4%) in world ranking of education funding.”

This is sad. And it may be the reason why Nigeria’s poverty level increased from 54% in 1999 to 67% in 2010 – estimates from the World Bank showed.

And it inexorably continues to increase; it was 80% in 2017 according to African Development Bank.

Compared that to decreasing poverty level in the world.

“When we compare the extreme poverty now,” the late Professor Hans Rosling said in his speech titled How to End Poverty in 15 Years, “and the time of Napoleon 200 years ago in 1800, the extreme poverty around the world was 85%.”

In 1850, during the Industrial Revolution, it improved to 80%. In 1900, it came down to 70%.

Fifty years later, the world extreme poverty level came down to 55%. By year 1970, half of the world was well off and 50% was desperately poor.

By 1990, it moved quickly to 35%. It was then in 1990 that the world gave itself a target: to half extreme poverty by the year 2015.  Did it succeed? Did the world meet its target?

It did one better: in 2015, the world’s extreme poverty level was 12%.

Now compare the two trends above. While Nigeria has become poverty capital of the world, others have left us behind.

Indeed the world would have fared better without countries like Nigeria that drag down the average.

What does this mean?

We already know that even at a personal level,  education is correlated with higher income. For example, the average annual income of someone with less than a secondary education in the United States is $28,000; but at the other extreme end, someone with a postgraduate degree (master’s or PhD) earns $124,000 yearly.

(This is in a place where there are more opportunities for everyone compared to our situation.)

Then does this correlation also hold at the national and subnational levels? Yes, according to the data coming from OECD and the World Bank. Indeed from the OECD, we learned that natural resources are negatively correlated with performance of children in school.

Therefore, my conclusion here is that, we should prioritise human capital (defined as education, skill acquisition and health) as much as infrastructure. Because while infrastructure endures, human capital endures even longer. Those who invested decades ago are harvesting the benefits now.

It is the reason why “India at a time had 200 million master’s degree holders,” Mal Mahmud Jega of Daily Trust told me.

So it is not surprising that India, a country of a billion people gave us the baton of the poverty capital of the world and freed itself from such ignoble reputation. This should keep us awake at night.

But we carry as if we have no crisis on our hands.

If we don’t do anything about this situation, can it get worse? Yes. How worse? And what can we do to help ourselves? How can we use the case studies of Asian tigers (Singapore, Hong Kong, Taiwan and South Korea) including Malaysia to help us?

To be continued.

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