Metropole Magazine

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07 Oct Written by  Japheth Omojuwa

Making Growth More Meaningful

Africa is the last frontier of global development. There are certain indices that make Africa’s future look very much like a cascading stream of opportunities. One of such indices is that half of Africa's one billion population is under the age of 20. This has informed projections that Africa will be home to the world’s largest working population by the year 2040.

Most of the continent has democratized and there is a general acceptance that the level of intra-Africa trade must improve from its current 12 per cent. However, all of these will not matter if Africa’s growth continues to exclude the larger part of its population.

Nigeria’s GDP has grown by an average of about six per cent over the last ten years. This is despite a period of global recession, slow trade, and significant fall in oil price in 2008 and 2009. Nigeria’s growth of itself has been impressive, with the country now in the group of ten fastest growing economies in the globe.

But that is where the good story ends. There are as many poor Nigerians today as there were people living in the country in 1998: 112 million. This is some 70 per cent of the country’s current population.

Reasons for Nigeria’s paradox of growing GDP amidst growing poverty rate are not far-fetched. Oil sales remain the primary catalyst of Nigeria’s growth. And the economy depends on oil for as much as 95 per cent of its foreign exchange earnings.

When you relate these facts with the reality of the oil sector contributing just 14 per cent of the GDP, agriculture 40 per cent and services 30 per cent, you begin to see the underlying reason for the failings of the Nigerian economy.

As long as Nigeria’s economy is not diversified to improve the earnings of agriculture and the services sector, the country’s growth will leave more people behind, and development will remain a pipe dream, and the poverty numbers will remain high.

South Africa is Africa’s biggest economy. It looks rosy and beautiful from the outside but it has its own seamy sides. Its foreign exchange earnings come mostly from the mines. But historically, and even today, most of the miners come from its poor population.

Access to land for the black population remains a challenge. One of South Africa’s greatest dilemma is the land problem: how does the country re-calibrate the balance of land ownership so that land which once belonged to the black people but got lost to white South Africans in the course of the apartheid years is returned or redistributed? This is a big challenge and it is a charged, political one.

South Africa is one of the most unequal countries in the world. It is a nation of many beautiful cities and countless ugly slums. White South Africans take home six times more pay than their black counterparts. To be sure, there is a growing black middle class. But it is not growing fast enough to make South Africa an inclusive society within a decade.

There are always costs to non-inclusive growth. Terrorism is one consequence. Seven out of 10 people in Yobe, one of the hardest hit states, are out of work. Nigeria’s Northeast is the poorest part of the country.

Apart from the reality of terrorism, Nigeria continues to battle several societal menaces. There is kidnapping in the Southeast; there is militancy in the South-South; and, though not as pronounced, there is a high level of petty crimes in the Southwest. In a country with the world’s highest number of children out of school, the dangers of tomorrow look more menacing than what we see today.

South Africa has one of the highest crime rates in the world. The reasons are explained above. From all these, one begins to see the fundamental reasons for the irony of GDP growth occurring side by side with growing poverty in Africa. There is a way to grow a society. Growth must be inclusive to matter.

Nigeria and South Africa are two of Sub-Saharan Africa’s biggest economies. While the rest of the continent looks to copy the best of what make these countries big economies, it must grow inclusively to avoid a big-for-nothing reality of a few rich, privileged people in the midst of a multitude of poor people. Growth must be inclusive for it to count beyond mere statistics.