PwC Nigeria has released a new report titled The Future of Nigeria: Three critical levers for improving HDI which identifies the most critical issues that must be focused on to enable Nigeria reach its HDI target and thereby translate economic growth into real improvements in the lives of average citizens.
HDI (Human Development Index) is a composite measure of development based on an assessment of education, life expectancy and income per capita indicators.
The report noted that in 2015, Nigeria was Africa's largest economy with GDP at $490billion in Market Exchange Rate (MER) terms with the potential of being among the top ten global economies by 2050 according to PwC's estimates. In addition, prior to the now protracted decline in global oil prices, Nigeria was growing at a CAGR of 5.3% post rebasing. Yet, this growth did not translate into social development as high poverty and inequality levels persist.
The report argues therefore that national polices should be guided not only by improvement in GDP but also a broader measure of development for which the firm has adopted the HDI.
Dr. Andrew S. Nevin Ph.D, Advisory Partner and Chief Economist, PwC Nigeria says:
"This research draws on a more direct and measurable approach to tracking improvement in human development. Using qualitative analysis, academic reviews and country case studies, we identified three critical levers that need to be improved for the average Nigerian to feel the impact of any growth in the economy."
The three critical levers identified by the study includes improving the ease of doing business, enhancing labour productivity and reducing the overall level of corruption perception.
Progress across these three levers the report concludes, could result in a significant improvement in Nigeria's HDI score thereby attaining a high human development status by 2030. Specifically, PwC posits that Nigeria should target to improve Ease of Doing Business ranking through a higher Distance to Frontier score of 61 by 2030 (45 as at 2015). Similarly, Labour productively currently at $3.61/hour should be improved to $12.05/hour by 2030 while Corruption Perception Index (CPI) score should be improved from 26 in 2015 to 34 by 2030.
The report provides details on what policy makers can do to achieve these improvements in each case.
Dr Nevin concludes:
"Translating economic growth into real improvements in the lives of the average citizen poses a real challenge for policy makers. Tracking progress across these three levers has the potential to boost the attention on HDI as priority in the public agenda. An analysis of these levers can identify areas requiring policy attention and specific strategies targeted at improving overall wellbeing can be formulated.
PwC will commence the publication of annual, monitoring reports on the performance of these three identified levers with policy suggestions centered on each category"
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