For decades, GDP was seen as the perfect measure of growth but it is flawed in many ways. It measures income, but not equality and it ignores values like social cohesion and the environment. Boston Consulting Group offered great support to GDP by introducing the Sustainable Economic Development Assessment (SEDA), a diagnostic tool designed to provide government leaders with a perspective on the well-being of citizens, including how effectively their countries convert wealth, as measured by income levels into well-being. Using the SEDA, the global consulting firm, Tuesday, released a report on Nigeria, as it opens a new office in Lagos, the country’s commercial capital.
The report titled Unlocking Nigeria’s Potential: The Path to Well-Being notes that improving Nigeria’s infrastructure through prioritized investments will help to secure its long-term success as Africa’s largest economy. It identifies infrastructure, education, health, governance and civil society as areas that require immediate attention. However, most critical focus should be on infrastructure (especially power, roads & transportation, water supply and sanitation), according to report.
“Economic pressure, including low oil prices, a possible recession, and a declining naira make it imperative that the country move quickly to address major gaps — and infrastructure should be priority one,” says Luis Gravito, Senior Partner and Chairman of BCG’s Lagos office.
Nigeria’s former Finance Minister Dr Ngozi Okonjo-Iweala had while in office said that the country needed $14 billion annually to fix infrastructure.
The BCG report outlines five actions to address Nigeria’s infrastructure challenges: establishment of a central body to oversee and direct the entire life cycle of infrastructure investments; identification of ten high-priority infrastructure projects; international road shows by the government to line up private funding, including FDI for the priority projects; initiatives to ensure flawless execution of the ten projects in order to generate early wins; and leveraging momentum to launch a sustained infrastructure-building drive.
BCG is confident that if the recommendations in the report are followed, Nigeria will effectively improve its SEDA data as the well-being of its people get better. The country currently ranks 142nd out of 149 countries but Hans-Paul Burkner, Chairman of BCG believes in the potential of the country to turn things around. “Nigeria’s challenges are significant — but they are more than matched by the talent and entrepreneurial drive of its people,” he says.
“However, the Nigerian people need better infrastructure, health, education, and institutions to be able to translate their energy and drive into prosperous personal lives and a prosperous society,” Burkner adds.
Also, Nigeria needs better policies and an environment conducive for business growth. BCG will try to play a big role in this by engaging with some top people in government to see if they influence better policies in this regard.
BCG believes that although Nigeria’s growth dropped to 2.8 percent in 2015 from an average annual rate of more than 7 percent, the country’s economic growth would bounce back if Nigeria’s leadership “acts swiftly and adequately”.