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Nigeria stagnant as world races towards knowledge-based economy

As Nigeria marks its 61st independence anniversary, 23.2 million of its people are unemployed of which 41 percent are youths; another 13 million children are out of school leaving many with little to cheer.

Disillusioned, many of Nigeria’s young people are fleeing the country in search of a better future elsewhere, with current trends on social media being a loud celebration of their departure outside the country’s borders.

A broken educational system and dearth of opportunities abound in a global race for the skills that would make them competitive in a knowledge-based economy.

Experts say a knowledge-based economy relies more on intellectual capabilities than natural resources to enhance economic growth and development.

Some of the jobs of the future are in software engineering, Artificial Intelligence (AI), robotics, payment solutions, creative designs and digital applications, among others, form the foundation of a knowledge-based economy.

In the current digital age, knowledge is a key factor in economic growth, creation of wealth, globalisation, job creation and entrepreneurship development.

Read Also: Fixing Nigeria’s economy from a policy angle

“But Nigeria is not ready for the future of jobs and it is not due to intellectual capacity. The issue is that the government and structure that creates opportunities for these people are not there,” Jennifer Oyelade, director of Transquisite Consulting, a UK and Nigerian registered recruitment and training consultancy, says.

She also notes that the government is not bringing in enough incentives to encourage Nigerians to stay, saying, “People are using the country as a stepping stone to gather what they can in terms of education and taking it abroad, thereby fuelling the economy of other countries.”

According to the US government census data, the Nigerian diaspora is overall the best-educated and its members are more than twice as likely to have secured an advanced degree.

Similarly, Muhammad Sanusi, the former governor of the Central Bank of Nigeria, noted at the closing ceremony of the Kaduna Investment Summit held last week that the whole idea of a knowledge-based economy was to train people – value creators -and not just consumers.

“Digitisation provides an opportunity to level the playing ground, if we are deliberate and shift from consumption to value creation. But part of the problem that we have is that even if we have the solution at hand, we don’t take it,” Sanusi said.

According to the World Bank, knowledge economies are defined by four pillars, which are: institutional structures that provide incentives for entrepreneurship and the use of knowledge, skilled labour availability and good education systems, ICT infrastructure and access, and a vibrant innovation landscape that includes academia, the private sector and civil society.

Some countries, especially oil producing ones, have identified these pillars and by leveraging them, have witnessed high per capita incomes, low unemployment rates and strong economic growth.

The Global Innovation Index (GII), which ranks world economies according to their innovation capabilities, shows these countries in the 132 countries surveyed, United Arab Emirates (UAE) ranks 33rd, Saudi Arabia ranked 66th, and Qatar ranked 68th. These countries have also reported high GDP per capita with $32,686, $20,742 and $55,517, respectively, according to the International Monetary Fund (IMF).

For example, Qatar’s investment in education is commensurate with its National Vision 2030, which advocates finding an optimum balance between the current oil-based economy and a knowledge economy characterised by innovation and entrepreneurship, excellence in education and the efficient delivery of public services.

The government has also begun offering investors tax breaks and other incentives to support entrepreneurship and promote Small and Medium-sized Enterprises (SMEs).

Qatar’s Science and Technology Park focuses on the four priority areas identified by the Qatar National Research Strategy of 2012, namely energy, environment, health sciences and information and communication technologies (ICTs).

To achieve the UAE vision of developing a diverse and flexible knowledge-based economy, it developed its Vision 2021 plan in 2010. The plan is linked to a national strategic plan for higher education and scientific research to set up programmes for tackling problems facing the higher education sector.

The science and technology university education programme is updated to match global standards as well as strengthen scientific expertise in line with private sector requirements and national development needs.

Saudi Arabia is advancing towards a diversified knowledge-driven economy. The country is focused on technology transfer in order to compensate for paucity of various indigenous technological capacities.

In 2016, the country launched Vision 2030, a strategic framework to reduce its dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism.

However, Nigeria has made very little progress in innovation towards its transition to a knowledge-based economy. The country ranks 118th out of 132 countries and its per capita GDP is $2,209.

“The Nigerian government has not really seen the importance of having a knowledge-based economy. In fact, I don’t see us transiting to that type of economy in the next decade,” Damilola Adewale, a Lagos-based economic analyst, says.

Nigeria’s performance in human capital development has not been impressive. According to the United Nations Development Programme (UNDP), the country dropped three positions, ranking 161 in 2019 from 158 in 2018 among 189 countries in Human Development.

Also, over the past few years, budgetary allocation to education has not been more than 7 percent of its total budget. It is no wonder that the United Nations Children’s Fund (UNICEF) said the country had the highest out of school children in the world.

“The completion rate between entry into primary one and completing university is 8 percent. Out of every 100 children who go into primary one, only eight end up coming out of the university. And out of these, 9 percent will get a job. So, this is the reality,” Sanusi emphasised.

A report by International Finance Corporation (IFC) highlights the existence of a skills gap, out-dated curriculum in engineering programmes and lack of opportunities for students to apply skills learned in the classroom in most African countries, including Nigeria.

Ayodele Akinwunmi, senior relationship manager, Corporate Banking Group, FSDH Merchant Bank, says innovation cannot happen without investment in human capital.

“Once you don’t develop your human capacity and you have your natural resources, you will not be able to utilise them effectively to turn them to what is productive. But if you develop human capacity, it will bring income generation, tax for the government and then employment generation,” Akinwunmi states.

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