Why is unemployment and poverty rising in Nigeria, despite over a decade of robust economic growth? According to new research from, Naji P. Makarem, the organized private sector (OPS) has the opportunity to leverage its clout and political influence for urban governance. To do so however, it must strengthen its urban organizational capacity and shift its political attention beyond pure-efficiency to broader conceptions of functional urban agglomerations. A failure to do so risks locking Nigeria into a ‘low-productivity trap’, long after it has overcome its chronic ‘efficiency-crisis’.

 

Since its independence in 1960 Nigeria has been struggling to industrialize and diversify its economy away from low-productivity agricultural employment and dependence on Oil & Gas export revenues.  It has adopted numerous government strategies from import substitution to market liberalization; yet the economy continues to be highly dependent on oil reserves and imports of food and consumer goods from abroad.

 

It is estimated that 70% of households are currently living on less than $2 a day and a similar proportion is employed in the informal economy. Impressive GDP growth and considerable diversification into new sectors such as ICT, Real Estate and Professional, Scientific and Technical services over the past decade have failed to translate into sufficient employment generation, with unemployment rising significantly over the period to well above 20 percent according to government figures.

 

 

Jobless growth over the past decade can be attributed to two aspects of Nigeria’s industrial structure: About a third of the growth in output since 1990 has been driven by Oil & Gas, ICT and Real Estate, which together employ a mere 1.4% of formal sector workers. These are highly productive sectors with considerable impact on employment within the cities where they are concentrated, such as Lagos, but they do not generate sufficient employment to absorb Nigeria’s growing labour market.

 

 

On the other hand, manufacturing, which suffers from low productivity even compared to countries within the same development club, such as Kenya, India and South Africa, has contributed a mere 5% to GDP growth since 1990. Today Nigerians import the vast majority of the products they consume. They also import the machinery and high value inputs of the few products which they do produce, such as foam, steel pipes and pharmaceutical products. If Nigerians produced more and imported less (or developed favourable terms of trade) more of the money going into tills and ending up in the pockets of investors, entrepreneurs and workers abroad could be going to Nigerian workers, investors, entrepreneurs and the government. Tradable industries in general, and the manufacturing sector in particular, offer Nigerians the opportunity of generating employment, income and public revenues, which are all necessary for poverty reduction.

 

Nigeria’s 55 year struggle to boost its tradable industry is hampered by the country’s chronic ‘low-efficiency’ trap. Consider the following thought experiment to illustrate: take a successful exporting firm in China and place it and its managers and employees in Nigeria. It would not operate anywhere near as efficiently. Here’s why: In Nigeria the same firm would struggle to find serviced industrial land, having to build or fix its own slip roads, dig its own bore hole to access water, build its own sewers system, run its operations on costly diesel generators and hope the land it acquired is not claimed by somebody else, it would have to contend with often negotiated and opaque duplicity of taxes, inconsistent government regulations, a user-unfriendly bureaucracy, competition from counterfeit products produced locally or that enter the market illegally through poorly regulated international borders, an unreliable judiciary, poor quality roads connecting cities across the country with multiple check-points for informal bribes, slow clearing of imported intermediate goods at ports, tariffs on imported inputs which are not locally available, the risk of arbitrary increases in import tariffs for dubious reasons, double-digit interest rates and precarious access to finance and foreign exchange (Although this month, June 2016, the government floated the exchange rate).

 

These dysfunctional aspects of the business climate are well known and well researched by the World Bank’s ‘Doing Business’ reports which in 2016 ranks Nigeria 169 out of 189 countries in terms of ease of doing business. They are substantiated by our 77 interviews with business and civic leaders in Lagos, Kano and Port Harcourt, as part of DPU research for a DFID-funded project called Urbanization Research Nigeria (URN).

 

Yet the dysfunctionality of Nigeria’s economic development context runs much deeper than these ‘efficiency-related’ aspects of its urban and national contexts. Economic development theory highlights agglomeration economies, the home market effect (local demand) and productivity drivers as engines of industrial development and productivity growth, the essential conditions for income growth and quality jobs. Efficiency, while extremely important especially in contexts of cost-based competition, is just one of many development drivers urban regions and countries produce, and which firms draw on to compete.

 

The question is how can Nigeria break out of its chronic ‘low-efficiency trap’? While conventional wisdom would point to the need for good governance, this is not very useful advice in and of its own (it’s too obvious). Our research takes a different approach. Drawing from economic sociology, we argue that business-civic leadership has the potential of influencing policy and governance. Moreover, the perceptions and world views of the business community and business civic leadership can shape the formal institutions that govern them (see Figure 1). So we investigate the degree to which the private sector in Nigeria is organized, and the scope of their political attention.

 

 

Our research found the Nigerian business community, from small to large firms across different industries, to be highly organized. The peak business association which has been gaining power and influence since independence is the Manufacturing Association of Nigeria – MAN. The political attention of the organized private sector (OPS) focuses almost exclusively on efficiency-related aspects of the business climate. However, they overlook aspects of the urban context related to agglomeration economies and non-efficiency related productivity drivers; both indispensable features of functional cities for people and businesses.

 

These overlooked urban features include access to affordable, secure and serviced housing which are essential for human capital development; public transport which is indispensable for worker access to work places; education and skills development which are essential for human capital development and innovation; public R&D in related industries to support knowledge creation; firm- and industry-level support strategies for facilitating coordination and knowledge sharing; public space and cultural amenities to enable interaction, identity formation and innovation; and initiatives designed to bridge fragmented communities and develop appropriate and widely shared perceptions and world views in pursuit of social capital.

A failure to focus political attention on investing in functional cities risks locking Nigeria into a ‘low-productivity trap’, long after it has overcome its chronic ‘efficiency-crisis’.

 

 

This is a Blog about a recently submitted URN report to DFID. It will be publicly disseminated soon.

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Naji P. Makarem is co-director of the Msc. Urban Economic Development at the Bartlett School’s Development Planning Unit (DPU) at UCL, and a lecturer in Political Economy of Development.

 

The use of social media by people to assert their citizenship rights and make demands of their government has been enabled through the emergence of a variety of platforms such as Twitter, Facebook, change.org and avaaz.org.

This can be traced back to incidents such as the Arab Spring, and the ‘Occupy’ movements seen in some western countries such as the United States of America (Occupy Wall Street being perhaps the best known). More recently political crises in Spain and Greece, and significant campaigns such as #bringbackourgirls and Je Suis Charlie have found a global audience online. Social media as a mobilising tool continues to gain in currency.

The successes of social media have varied from locality to locality based on different factors and contexts. What cannot be denied is that such practices have increased the ability of citizens to rally around solidarity not only locally but global issues.

#bringbackourgirls: Global visibility shrouds local action

One recent incident that is especially close to home for me, as a Nigerian, has been the #bringbackourgirls campaign. This originated in Nigeria due to the kidnap of 276 girls by the Boko Haram sect from a school in Chibok located in North-eastern Nigeria on April 14, 2014.

Reflecting on the #bringbackourgirls campaign: its gains were its ability to solicit global support and situate the blight of those impacted by the Boko Haram insurgency into the international consciousness. However, its key pitfall has been the inability to elicit concrete response and action from the Nigerian government.

My conclusion is that the reason for this can be attributed to several factors among which is the fact that the global support garnered was not matched by sustained local pressure. Additionally the politicisation of the issue by both the government and the opposition has meant that in the process the voice of the victims been muted somewhat.

Silencing the victim’s voice

Before delving further into reasons for the limited success of the #bringbackourgirls campaign, I would like to expand on this critical issue; the silencing of the victim’s voice, which came to the fore. This is not particular only to the #bringbackourgirls campaign but its reflective of various mass movements of activism in the developing world.

Vyncent Elvin Eebee highlighted this in an article titled “For Whom Does the Speaking Woman Speak?”, where she concluded that rural women’s voices are submerged by the voice of urban female advocates, which result in rural women becoming invisible due to the articulation of their voices by the other.

She further stated that when the rural woman participates in action, it is upon trumpeted and highly advertised invitations, which are not conducive to effective participatory mass movements.

To me this was visible in the #bringbackourgirls campaign, because these trumpeted and highly advertised invitations were tools utilised by the campaigners, government, and the opposition to publicise themselves while the plea of the victims was not concretely tackled.  

The ‘digital divide’

In my opinion key factors that contributed to the limited success of social media in Nigeria and developing countries as a whole relate to the digital divide.

This is not only in terms of penetration but also with regards to access and understanding of how to utilise these tools and platforms, especially when the literacy rates in many countries are taken into consideration.

This was reflected upon by Merridy Wilson who acknowledged that

“the problem of the growing technology and/or knowledge gaps between and within countries, places certain groups of people further in the shadow regions of global information flows. These gaps persist both at the level of access to ICT infrastructure, and in terms of the form of information conveyed and who is able to use, understand and produce the information and knowledge which ICTs potentially make accessible.”

We need conscious, strategic approaches to effectively use social media for change

My conclusion therefore is that social media can become an enabling and transformative tool for people to assert their citizenship rights and make demands in developing countries, such as Nigeria. But it calls for prudent adaptation of techniques and tactics for effective strategies towards mass mobilisation.

This can only be attained by being conscious of local realities in the African continent, as in other climes, and supported by concerted and sustained pressure on ground to match the global support a social media audience provides.

What this therefore requires, as put in the words of Andrew Burkett,

“are much more difficult, time-consuming and probably not as glitzy as ICT development efforts – that is, political will, recognition of personal and social responsibilities, and ultimately action on the part of governments and civil society.”

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Olusegun Ogunleye is a development practitioner with several years working experience in the field of town planning in Nigeria. He has also taken part in urban-based research in Nigeria, London and, Dar es Salaam. His passion lies in the area of urban governance as he sees it as a veritable tool to ensure and enhance the wellbeing of citizens. He also believes in the potential inherent in community-led development as a means of ensuring sustainable development. Olusegun graduated from the MSc Urban Development Planning in 2014.

The past years have led to one of the most dramatic transformations in how we create, manage and deploy information. In fact, a large percentage of all the information generated throughout human history has taken place in the last five years.

This can be attributed to one thing: the rise of digital technologies, its accessibility, and dwindling implementation costs.

Yet changes have been so rapid, that it is difficult to see how the advent of digital technologies are changing our daily lives and what the future will look like in the next 10-20 years. One thing is for certain, these technologies aren’t going anywhere.

A Digital Revolution, not just in the ‘developed’ world

While much of the talk around this so called “digital revolution” has traditionally come from the developed world, we have started to see the unexpected: that digital technologies are also surging in the developing world.

From mobile micro-financing to platforms empowering voices and public discord through social media, digital technologies are no longer an exclusivity of the developed world.

Enablers of social mobilisation

These changes have come too fast and too soon in the eyes of many. As I was undertaking postgraduate studies at the DPU in 2010/11, I remember how commentators and analysts began to realise the power of digital technologies as major enablers of social mobilisation. And it was only a matter of time before these technologies played a greater part in major events such as the Arab Spring.

Markets were flooded with the tools for communities to effectively communicate, organise, do, deploy (and son on) and to reach out to the highly connected and globalised world. In essence, millions of voices now had channels through which to make their concerns heard.

Social movements like this might have been an easy sell. However, many people havesince questioned real use of these technologies when it comes to policy and building for a better future. Mainly because, as it goes, communities, cities and regions, need basic services to grow economically and socially, services such as water, roads, legal and political frameworks. Following this logic, infrastructure for digital technology comes as a low priority in many contexts.

Opening new channels for citizen engagement

As a technophile running a social media platform during the last three years to promote sustainable development, I have noticed that some digital technologies are already enabling communities in cities across the world.

Firstly, in the areas of policy and citizen engagement, we are experiencing direct lines of communication between citizens and authorities; most common practices are usually riddled with red tape processes wherever you are.

Citizens are voicing their concerns, they are more active than ever, better organised and participating in the public debate in real time like never before. So far I’ve seen grassroots projects from Copenhagen to Durban and from Lagos to Medellin that are bypassing traditional channels and actually achieving their goals; people reporting potholes through photo sharing platforms, crowdfunding for public space improvement, data sharing for traffic reduction, and so on.

Can everybody be connected?

Secondly, hardware has flooded the market, be it for the good or for the bad. It is not by coincidence that mobile phone manufactures and digital giants are trying to reach every single person on earth and have them connected within the next two decades – think of latest comments by Facebook and Google.

This may seem an overstatement, but look at the numbers and where the industry is growing: 14 out of the top 20 countries with the highest mobile phone penetration are so-called developing nations. Additionally, getting connected to the network is not the expensive endeavour it was in the 90s.

Telecommunications, mobile phone manufacturers and tech giants are deploying “off the grid” solutions to reach the furthest corners of the world. This is a game changer if you think of education, health checks, access to information and having a voice in the ever increasingly connected world.

Digital tools are not silver bullets

Thirdly, social media, Internet of Things, smart cities, the Mesh, etc, are being evangelised as the tools to end all the world’s maladies. But the truth of the matter is that they are buzzwords that get everyone excited without having full understanding of what they mean or do; at the moment they are just tools that enable and should be treated as such.

The Internet and web platforms won’t build the cities of the future, won’t solve social issues, and certainly won’t make the most pressing matters go away. They are excellent channels that act as enablers and policy makers, practitioners, businessmen and women, community leaders should understand that.

Here to stay

Digital technologies’ role in our daily lives will only continue to grow as demand increases, prices drop, and as their distribution channels expand to reach most of the world’s population. I don’t believe this trend will disappear as is clearly indicated by the ways in which governments, private enterprises and others are including these into their agendas.

Whatever angle, be it bottom-up or top down, developed or developing, Global South or Global North, city or region, digital technologies are here to stay.

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Alejandro has been working for the past 3 years with This Big City, a online social media platform for the promotion of sustainable development in cities across the globe; to date he has helped over a dozen grassroot projects achieve scale. He works for the Mayor of London’s office on economic development issues through innovation and consults European cities on creating long term cultural visions for urban regeneration purposes as an independent professional. He also enjoys playing video games.