World Bank rates Nigeria second poorest nation

[Richard Akindele]

YET, another World Bank report has put Nigeria at the lowest rung of the world's development ladder. The new publication released at the ongoing United Nations summit offers new estimates of total wealth including produced capital, natural resources and the value of human skills and capabilities, which show that many of the poorest countries in the world are not on a sustainable path.



advertisement
It cites Nigeria as a resource-dependent nation, which could have produced capital five times higher than it did in 2000, if only it had made a moderate effort to save.

The document: "Where is the Wealth of Nations? Measuring Capital for the 21st Century" launched by the World Bank listed the top-10 richest countries and top-10 poorest countries. Sub-Saharan Africa dominates the latter, with Nigeria standing on the ninth position only before Ethiopia, which has the lowest level of total wealth.

Switzerland heads a list in which the top-10 performers are all Organisation for Economic Co-operation and Development (OECD) countries. European countries-of which two are Scandinavian-dominate the list and non-European economies are the United States and Japan.

Madagascar, Chad, Mozambique, Guinea Bissau, Nepal, Niger, Congo Republic, and Burundi are ahead of Nigeria in ranking. Their wealth per capital varies from $5,020 to $2, 859 while natural capital stood between 265 per cent and 42 per cent. The produced capital of the countries were put between 180 per cent and 6 per cent, and intangible capital 64 per cent and 39 per cent. Figures for Nigeria's wealth per capital are $2,748, natural capital 147 per cent, produced capital 24 percent and intangible capital is minus 71.

Although the statistics are four years late, World Bank officials defended the document saying, it is relevant as not much has changed in the countries listed in the report. "The calculations show how even a moderate saving effort, equivalent to the average saving effort of the poorest countries in the world, could have substantially increased the wealth of resource-dependent economies.

"In 2000, Nigeria, a major oil exporter, could have had a stock of produced capital five times higher.

Moreover, if these investments had taken place, oil would play a much smaller role in the Nigerian economy today, with likely beneficial impacts on policies affecting other sectors of the economy."

According to the World Bank, "the large share of natural resources in total wealth and the composition of these resources make a strong argument for the role of environmental resources in reducing poverty, fighting hunger, and lowering child mortality. The analysis in this volume proceeds from an overview of the wealth of nations to analyse the key role of the management of wealth through savings and investments. It also analyses the importance of human capital and good governance and engages finance ministries in developing a comprehensive agenda that looks at natural resources as an integral part of their policy domain."

Natural resource stock values are based upon country- Level data on physical stocks and estimates of natural resource rents based on world prices and local costs. Intangible capital, then, is measured as

the difference between total wealth and the other produced and natural stocks. The estimates of natural wealth are limited by data-fish stocks, and subsoil water over extraction are not measured in the estimates, while the environmental services that underpin human societies and economies are not measured explicitly.

"Everyday, decision makers in developing countries are faced with difficult choices regarding the exploitation of natural resources and the environmental impacts of development programmes and

policies," said Ian Johnson, World Bank Vice President for Sustainable Development. "But the tools currently being used are leaving out the natural resources stocks and intangible capital such as knowledge and skills. Sound management of ecosystems is key to a responsible path to growth. This publication challenges common assumptions about how nations generate their wealth."
http://www.odili.net/news/source/2005/sep/16/63.html