The Human Capital Index of Nigeria and Sub-Saharan Africa

1. THE HUMAN CAPITAL INDEX IN NIGERIA AND SUB-SAHARAN AFRICA
Human Capital is the sum total of a country’s population health, skills, knowledge,
experience and habits. The World Bank Development Report (WDR) developed the Human
Capital Index (HCI). This Index looks at the health and education data of a country and
calculates how much a country’s generation may fall short of achieving their potential. It also
captures the productivity of the next generation of workers.
The Human Capital Index has three (3) components which are:
i. A measure of whether children survive from birth to school age (age 5).
ii. A measure of expected years of quality-adjusted school, which combines
information on the quantity and quality of education.
iii. Two (2) broad measures of health-stunting rates and adult survival rates.

2. According to the World Development Report (WDR), the Human Capital Index (HCI) 2018
for Nigeria is (0.34) and Nigeria ranked 152 out of 157 countries in the world. Also, Africa is
the region with the lowest Human Capital Index (HCI) score of (0.40) Gross Domestic
Product (GDP) per worker, which could be (2.5) higher if everyone in Africa reached the
benchmark of complete education and full health. This also means that business as usual; it
costs Africa 60% percent of its income in the longrun.
Based on the data gotten from World Development Report (WDR), the Human Capital Index
(HCI) of (0.40) for Africa is low because;
i. 2.9 million Children under 5 years die every year.
ii. Low coverage and quality of key interventions.
iii. 50 million children are out of school.
iv. Low completion rates and learning outcomes.
v. 32% of children are stunted on health and nutrition
vi. 200,000 maternal deaths annually.
vii. More than 700,000 deaths annually from Tuberculosis and HIV/AIDS.
viii. Total fertility rate of 4.8-twice the global average.
ix. Of Africa’s nearly 420 million youth aged 15-35, one-third are unemployed.

3. x. Only 20% of the lowest quintile in low income countries are covered by social
protection.

4. In Nigeria, during President Olusegun Obasanjo’s regime, his administration with the
introduction of smart-phones, Nigeria became one of the largest patronisers of smart-phones
in Africa. Because of the smart-phone technology, a lot of start-up businesses have been
created between (2010-2018). This has led to the creation of online business, online shopping
platforms and online payment collection system. A well known shopping platform in Nigeria
is Jumia. Jumia started in Nigeria and they are in almost all the countries in Africa. Paga, an
online payment collection system which started in Nigeria in 2013 have partnered with so
many pharmacies, grocery and pop stores to be collecting their payments and the likes of so
many other start-ups. This has created so many informal jobs in Nigeria as a result of
innovations and technological advancement. Jobs in Nigeria are now shifting from the formal
jobs like government jobs to informal jobs like contract and skill jobs. The informal
employment exceeds 70 percent in sub-Saharan Africa. People in the informal economy
evade their obligations to the state by not paying taxes.

5. With the introduction of automation and artificial intelligence, there is this scare that
machines will take over jobs of humans in the future but it has created so many jobs. In the
banking sector, as a result of the installation of Automated Teller Machines (ATM) by
Nigerian banks in their various bank branches, a lot of people thought that the bank will start
retrenching their workers, but instead, the various banks employed more staffs as they
established more branches in the various states to reach more customers and created more
packages to please their customers
In Nigeria, there is the civil service Commission in charge of recruiting people to work for
the Government in the Civil Service. Jobs in the Civil service are formal jobs which are
permanent and secured with pensions, gratuity and paid leaves but, because of the congestion
of workers in the Civil service, the Government cannot employ all Nigerian graduates to
work in the civil service. This has made some people to be self-employed who make use of
the necessary technology to start their business or companies. It is now a trend in Nigeria that
graduates don’t stay more than 5 years in a particular job as they are majorly looking for
better pays and developing their skills. This is very evident in a state like Lagos State in
Nigeria.
Although a lot people are not well trained in Nigeria to face the technological advancement
of the world, but there are few Tertiary institutions in the private sector with very high
standard of learning that deliver quality education like the American University of Nigeria,
University of Nsuka Nigeria and so any others. This has helped in technological integration
and lifelong learning. The Government of Nigeria haven’t done much in improving the
education sector in Nigeria. The politicians in Nigeria only focus on building structures for

6. schools and not training the teachers and lecturers that impact knowledge on the students that
is why, the quality of education in Nigeria is very low.
In terms of health, the Government of Nigeria has tried a little in improving the health sector.
Although, there are little or few facilities and equipments in some hospitals and care centres
owned by the Government. Because of this, the rich and elite people of Nigeria still travel
abroad for medical treatment.
According to Budgit NG, Nigeria’s commitment to reducing inequality is (0.05%) and ranked
46 in Africa. In Nigeria, more than 54million Nigerians do not have access to safe water
which leads to deaths of more than (70,000) children under 5 years annually. More than 130
million Nigerians lack adequate sanitation despite an annual investment of N82.5 Billion in
water supply and sanitation. 69% of Nigerians still live below the poverty line. The
Government of Nigeria in 2018 spent N71 Billion on Education and N52 Billion on Health
which is a very poor investment in these sectors. Also, 91,600,000 Nigerians are poor, 64%
of Nigerians dwell in rural areas and an estimate of 2million children in Nigeria are suffering
from severe acute malnutrition in which the life expectancy at birth is 55/56 years.
RECOMMENDATIONS
1. SOCIAL INSURANCE AND PROTECTION: The government should make
available;
i. A guaranteed minimum insurance with subsidized coverage against
improverishing losses. This instrument will complement social assistance by
providing coverage against losses that would be too large to cover through
transfers.
ii. A mandated savings and insurance plan which would allow for consumption
smoothing.
iii. A market- based ‘nudged’ or purely voluntary savings that would allow people
to contribute more, if desired. Elements of this model exist in many countries.
iv. Social protection for workers with informal jobs through pensions and health
insurance.

7. 2. LABOUR MARKET AND REGULATIONS: The government should;
i. Recognise dynamic labour markets in which regulations will also cover the
informal workers.
ii. Scrutinise labour regulations for biases against new working forms and make
it less strict to allow easy entry and exist in the labour market.
iii. Amend policies to assist enterprising people overcome market failures and
supports them in making their next move.
3. MORE INVESTMENTS: The government should;
i. Invest $25 billion to lift the 112 million poorest Nigerians out of extreme
poverty.
ii. Increase investment in water supply and sanitation to N215 Billion in order to
meet the standards set by the Sustainable Development Growth (SDGs)
iii. Provide programs that will help in investing in the first 1000 days of a child’s
life. Guaranteeing that every child has access to nutrition, health, education
and protection.
iv. Invest more in the Education and Health of Nigerians which will help improve
the Human Capital of the nation. There should be an increase in the budget
allocation of the Education and Health sectors.
v. Provide more training and support for caregivers, teachers and lecturers that
impact knowledge on students.
4. The government should register various businesses in the country. This will ensure
that businesses especially in the informal sector are paying the value added tax
(VAT).
5. The government should focus on building digital economy as it will help in
technological advancement.