Iran, the world’s 18th most populous country, is no doubt weighed by sanctions, yet it has achieved so much in about a decade with mostly state-sponsored investment in areas that Nigeria, which has no sanctions against it, couldn’t even commission quick-wins not to talk of achieving results.
The Western Asian country, despite being squeezed by punitive sanctions from the United States and confronting its most severe economic challenge in 40 years, boasts of a better GDP per capita of $5,555 in 2018 ($265 higher than its 2017 figures of $5,290) in comparison to Nigeria whose GDP per capita as at 2018 stood at $2,366 using recent population estimate of 201 million by United Nations Population Fund (UNFPA).
Under American pressure, dozens of European companies abandoned operations in Iran that they had started after the signing of the nuclear agreement, leaving thousands of Iranians jobless. Re-imposed banking sanctions have sharply curtailed foreign investment and access to international credit, and oil sanctions have more than halved Iran’s crude exports, its main source of income.
But Iran is being touted as a haven for medical and health tourism, thanks to the Caspian region country’s diverse climate, natural resources like mineral springs and medicinal herbs, as well as high-quality medical services at costs lower than those in the west and regional countries.
According to Iran’s Health Ministry, 105,000 inbound tourists visited Iran for medical purposes between March 2016 and March 2017, bringing $588 million in revenue to the country.
However, Mohammad Panahi, vice-president of the Association for Development of Iranian Medical Tourism Services, said revenues from health tourism were “around $1.2 billion” in 2016.
Despite waves of sanctions over the past four decades which started in 1979 and have spilled over into daily life, Iran’s capital city, Tehran, boasts the largest “hotel hospital” in the Middle East, while an entire complex, called Healthcare City, is being built in Isfahan. The project, which is worth $260 million and kicked off last month, offers services in beauty treatments as well as traditional medicine.
Another $260 million was invested in the construction of a hospital in the city of Urmiya, in northwestern Iran, which will become the country’s first “smart hospital” capable of being connected with similar hospitals in the world, achievements Nigeria can only dream about despite huge resources.
Iran boasts of a health insurance system that covers about 90 percent of the population while more than 90 percent of its pharmaceutical needs are produced domestically by 62 local pharmaceutical companies. This is unlike Nigeria which, despite oil revenue, can’t boast of quality health facilities.
“I am afraid to contemplate what will happen if you sanction Nigeria the same way Iran was sanctioned. 80 percent of Nigerians will probably migrate to other West African countries because of the hardship. Within a year the country might even suffer severe famine,” Charles Akinbobola, finance analyst at Sofidam Capital Limited, said.
In 2015, the Iranian government earned more from tax than oil for the first time in almost half a century as the country shifted from its traditional reliance on crude to taxation revenues in the face of plummeting oil prices. In the same year, just 23 percent of its real gross value added came from oil and gas. Nigeria and other petro-dollar countries can only dream.
Bloomberg News ranked Iran 30th most efficient healthcare system ahead of United States and Brazil in 2016. The report also showed life expectancy in Iran is 75.5 years and per capita spending on healthcare is $346.
According to United Nations Children’s Fund (UNICEF), more than 85 percent of the population in rural and deprived regions of Iran has access to primary health care services while automotive industry, which happens to be Iran’s biggest sector after oil and gas, accounts for about 10 percent of GDP and employing about 4 percent of the labour force.
To meet the demand, Iran’s automotive production rose by more than 18 percent in 2017. Iran produced 1.4 million cars and commercial vehicles, ranking 16th in the world. However, by June 2018, a month after sanctions were renewed, car production dropped by 29 percent compared with the same month a year earlier due to the currency crisis and other by-products of sanctions.
Iran ranked first in scientific growth in the world in 2017 among 25 top countries, according to the latest statistics released by the Clarivate Analytics websites. It has a high literacy rate by regional standards, and in comparison to many other countries at similar levels of development, is a very educated society.
The country’s adult literacy rate stood at 84.6 percent in 2013 (UNESCO), compared to 85 percent worldwide and 78 percent in the neighbouring Arab states, while the literacy rate among 15-24 year-olds is even higher at 98 percent as at 2015.
Nigeria, on the other hand, needs $12 billion each year to achieve full primary school enrolment and completion within eight years at an annual cost of $930 million, a UNESCO report suggested.
Iran is also developing a master plan to beat sanctions after the US ended all waivers on importing oil from Iran, designated the Islamic Revolutionary Guard Corps (IRGC) as a foreign terrorist organisation, and sanctioned 14 individuals and 17 entities linked to Iran’s shadowy Organisation of Defensive Innovation and Research.
“The IRGC believes that its only chance of avoiding this fate is to widen the existing divisions between the US and the European Union (EU) so that it can generate export revenues from Europe, in addition to those it can rely on from the historically sanctions-busting states of Asia,” a senior source who works closely with Iran’s Petroleum Ministry exclusively told OilPrice.com last week.
Unlike Iran which despite sanctions is making efficient use of scarce resources, Nigeria without sanctions is struggling to close infrastructural gap despite being Africa’s biggest oil producer and boasting of a huge population of 201 million people.
“Iran boasts of relative better infrastructural facilities although the economy is struggling because of sanctions. However, Nigeria’s economy is not under any sanctions but it’s struggling with huge infrastructural gaps,” said Precious Chijioke, analyst at CreditVille Limited.
For Nigeria to close its infrastructure gap in power, transport, water and ICT over a 10-year period, it would cost $51 billion each year, said a report by African Development Bank’s (AfDB).
Last month, the Federal Government said a minimum of $3 trillion investment would be needed if the country is to bridge the infrastructure gap in the next 30 years.
Alex Okoh, director-general, Bureau of Public Enterprises (BPE), said the country would require an average of $100 billion per annum for the next six years to meet that target.
“Nobody is asking the government to do everything. All we are saying is there should be a well-structured Public-Private Partnership (PPP) which could provide higher infrastructure investment efficiency, and at the same time, free up government resources for other areas,” Okoh said.
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