After 59 years of independence, a large portion of the Nigerian population lives below the poverty line. In this interview, former Chief Economic Adviser, to then President Olusegun Obasanjo, Prof. Magnus Kpakol, says that only a refocus on human capital development can help defeat poverty in Nigeria.
Kpakol who also headed the Poverty Eradication Programme (NAPEP) also lamented that without accurate data, government policy decisions are often based on political and other sentiments.
Excerpts:
When you came to government at the beginning of this current experience of democracy under Chief Olusegun Obasanjo, what were your expectations and what were your goals, what were you hoping to achieve returning from the US to work in the Nigerian government?
I had very high expectations because you would recall at that time, we had just come out of military rule and everybody was excited that we had democracy, although I didn’t come right away, I came a couple of years after that had happened. Also I never had any intention of coming back to work. I probably thought I could do some consulting down the road but as things happened, before I knew it I was in Nigeria as Chief Economic Adviser to the President.
I had great inspirations from President Obasanjo because I saw in him a man that was completely dedicated to the redemption of Nigeria after those many years of military rule and so that gave me a lot of excitement and there was this great aspiration as a result to achieving great things and I was privileged to go with him round the world. We travelled quite a bit, meeting strategic partners. So I had very high hopes for Nigeria. And then the President had a very good team, very solid people, most of the areas were occupied by the right kinds of people. So we had great hopes for Nigeria.
Looking back, you were at National Planning, NAPEP; what would you say were your experiences in terms of planning and execution of government programmes and projects?
I think that people mean well but we don’t often work from practical realities. From the point of view of having correct information. So often times you find a government that is making decisions that are not evidence-based because the data are not readily available. I think we have a little bit more data now than at that time, some of the data we had you couldn’t depend on them.
With all due respect, at that time it was called The Federal Office of Statistics I was over it, it was more of my parastatal and I told the President that we had difficulties with the data. You may recall I had a little skirmish trying to bring it to Abuja because it was extremely important for me that we are able to get good data.
So often times we end up making decisions that are more emotional and more political than are practical because they don’t have the data. I want to be exact. One of the real big things, if you really don’t have the data, then sentiment and emotions can move decisions because if I have the data I can tell you this is what the number shows and this is what it has to be.
But when the data are not available then it is a matter of ‘I believe’, ‘I think’, ‘you think’. Somebody said our people are suffering. Okay your people are suffering, I am not able to prove to you that they are not suffering because I don’t have the data. Okay, this people are suffering more than the other people.
In my tenure at NAPEP (National Poverty Eradication Programme), I wanted to focus more on the North, I wanted to shift a lot of the resources to the North because I felt that they were poorer but I was told that you couldn’t because people are also equally poor elsewhere and you couldn’t really argue too much.
In terms of statistical analysis, not that you wouldn’t give anything to the other person or other parts of the country but I felt that we should bring more focus to where the problem was but I didn’t have good enough data.
With all due respect to the NBS, sometimes our poverty data till today I am not so sure how correct they are; maybe the latest ones are correct. But like I used to tell the President, this is the data that you have and you have to use it but if you don’t like this data then go bring another one, so that is the problem. So you have to work on the basis of what we have.
On that issue of the poverty data, it appears to be worsening at least from what is coming out from the NBS; why do you think this is so?
I think it is the number one problem facing Nigeria. It is the poverty issue because you have the situation where I would safely say well over 50% of the people are terribly poor, there are people who take the number to 70%, that is why I say I am not sure of the data.
Official data is about 46% but then you have data from the World Bank- that is not official data. It doesn’t mean that because it is form the World Bank that means that it is correct, they don’t do primary research, I depend more on what the NBS has.
Why is poverty getting worse in our country?
The reason I think we are poor is because of serious deficiency in human capital. If we have to try to find one reason and pin it down and say this is what it is, I mean people can say it is mismanagement, we don’t have infrastructures, but as the World Bank has recently found, two third of the wealth of nations is really human capital.
So our problem is that we have not historically put a lot of emphasis into preparing the type of human capital that can create the economic value. What I mean by human capital is the body of knowledge that we have, the skills that people have, skills for being creative, innovative and be able to perform to create economic goods and services, to create value.
If you have to create a television or whatever you have to do, you have to first of all conceive it in your mind, then you process it, then giving your skill sets, you would be able to know where you can get the necessarily technologies to use, and knowledge and information, then you understand the season, the climate and the facilities that you can use.
Another very serious problem that we have is that sometimes we get so focused on the statistical numbers and we don’t see the substantive or practical numbers. Let’s say you have a country of 10 people and the poverty rate is 40% that means 4 out of ten are poor and you say okay that is bad. Supposed within that same space where you used to have 10 people you now have 100 people and the poverty rate is even 35% that means you have a large number of people who are poor, so you see a lot of it around and it has demoralizing effect that creates disillusionment, people then see so much poverty and they begin to see defeat and then they get overwhelmed and you don’t have the resources it takes.
So if you don’t grow your economy from when you had 10 persons to now that you have a 100 people then you are not going to be able to handle the situation, just like we have in Nigeria currently.
The government capacity to handle the economy is significantly reduced from how it used to be and you can see it very clearly in terms of the government budget or government revenue as a percent of GDP that has been going down and we have one of the poorest rates in the world. So that means the government does not have the capacity to be sufficiently catalytic in the economy.
So what do we do in this circumstance?
There is really not much magic you can do because if you really want to do what you should do, you should begin to put a lot of emphasis in human capital building but it takes a long time, you have to wait for like 20years or so. If you invest in a baby born today, it will take them up to about 16 to 20 years for the child to grow and be able to make contributions to the economy. the whole definition of human capital is the amount of investment put in for these people so that by age 18 you try to measure it. Your ability to be productive, your work force to be productive, so you have to wait.
But when you cannot wait or when you should not wait, you should begin to have strategic partnerships and I don’t think that we have done well in gaining strategic partners. What we tend to do is that we tend to have strategic policy governmental partners that speak in New York, or Tokyo or London but it does not affect the guy on the ground and how do we know it is effecting the guy on ground is when we start to see these foreign nationals, let’s even start with the Nigerians in the Diaspora, when we begin to see them in our villages doing stuffs. So the kind of strategic partnership that we want is the kind of partnerships that effect our communities.
I have a programme that I have in partnership with the University of Texas, Dallas and what we are trying to do is to bring professors and business people and policy makers to meet with professors, business people and policy makers in the US. So we want to see how we can have partnerships amongst our professors in Nigeria and those outside the country, likewise with business people and policy makers.
In fact in a couple of weeks I am taking some government officials on a trip like this because of what I found, in Nigeria and much of Africa we don’t do much research and development. So we need to create more attention, we need to sensitize our policy makers and stakeholders, so that policy makers should be more active and stakeholders should demand more that we do research.
Many Nigerians are concerned that Nigeria was the same level of economic development with countries like Singapore, India, Brazil and Indonesia, at independence but Nigeria has been left behind. What basically is wrong with our country?
The human capital like I said before is the problem. If you go and see those countries, in India for example, you can say they have poverty too but their poverty rate is coming down drastically, even China is coming down to like 3% from 80% not up to 30years ago and the reason is because they invest in their people, they recognised that is where the issue is.
If there is one thing I want to be known for now is the promotion of human capital development because I have discovered that is where the problem is. People say teach me how to fish and don’t give me fish and that is what it is. So give me human capital. The government should be very serious at the local and state government levels about this, in addition to the work at the federal level.
So what our organisation really wants to do is to try to get local government chairmen and state to understand that. We have met with ALGON many times because of this issue to try to cause them to see that there is something they can do- then they can demand that the state and federal government have partnership with them.
The strategic partnership that we talked about should start from home then we begin to get people from outside. The Koreans, Singaporeans and all those other countries succeeded from strategic partnership.
Most of the strong companies in the United States of America that are working are American companies, they are British companies and they are in China they are working. Also you have a lot of American, British companies in Hong Kong, in mainland China, so there is a lot of interface taking place between Hong Kong and mainland China and of course in Singapore it is the same thing.
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