Why is Nigeria poorer than Switzerland; or worse still, DRC a ‘nothing burger’ – and why even when both put together they are still no match?

By Crimson Tazvinzwaa

We live on a very unequally prosperous planet with a very mismanaged and inequitable distribution of wealth – which in itself is a very bad thing for everyone to start with.  For one day we shall be the ones responsible for ‘putting it right back together again’ as in the infamous Humpty Dumpty – before we think of moving elsewhere or die. Check this one out; the average citizen of the United States for example, is 10 times wealthier than counterparts in Central America, and 40 times wealthier than residents in some of Africa’s poorest countries. 

Lagos, the city that doesn’t stop growing Credits – BBC

“Something is rotten in the state of Denmark” – the economic and social welfare disparities between and across particularly these three countries:  Switzerland, Nigeria and Democratic Republic of Congo(DRC). Among many others of course; this is not just about trade warfare, trade or budget deficits/imbalances, trade barriers, interest rates  or such other nonsense the bureaucrats, trade czars and economists would rather will us gullible so that we believe them; instead it is all about ‘food on the table,’ about one’s ‘means and ability’ to ‘bake their own cake and eat it till they are satisfied’. 

Nigeria, fondly regarded as ‘The Giant of Africa’, is one of Sub Saharan Africa’s largest economies and relies heavily on oil as its main source of foreign exchange earnings and government revenues.

Following the 2008-09 global financial crises, the banking industry in Nigeria like elsewhere around the world was bankrolled by the state, or rather to put it according to narrative at the time ‘recapitalized’ at taxpayers’ expense to clean up the mess the bankers had wantonly created.  Since then, Nigeria’s economic growth has been driven by agriculture, telecommunications and service industries; sectors that are still in their infancy as far as the integrity of the Nigerian economy is concerned. Economic diversification and strong growth have not translated into a significant decline in poverty levels as was envisaged; hence over 62% of Nigeria’s 186 million people still live in extreme poverty. This is serious business. We are talking of over 115 million people living below the poverty datum line; two-third of the population, and living in the same country, like who else?  Aliko Dangote, Folorunsho Alakija, Abdul Samad Rabiu or ….

The country occupies a Land Area of  923,768 km(356,669 sq mi) and is blessed with enviable human capital – a resource that spreads across a dynamic  inter-ethnic landscape of 186 million people(2016). Not only does the country have so many people (by African standards anyway), it tries to educate them as well.  Oh my God! All of them.  Apparently formative education is free across all levels but not at all compulsory. Nigeria has the highest number of universities in Africa. According to the National Universities Commission (NUC), Nigeria presently has 40 Federal Universities, 44 State Universities, and 68 Private Universities.

Apart from vast farmlands and plantations, Nigeria has enormous oil reserves too. The West African country is the 12th largest producer of petroleum in the world and the 8th largest exporter, and has the 10th largest proven reserves. These stats are not a joke. They are the real deal. They are impressive aren’t they? But lest we forget.  People’s stomachs cannot be filled by numbers or statistics. They need real food on the kitchen table. The country joined OPEC way back in 1971; you know OPEC –  a 12-member global oil ‘cartel’ comprising the ‘unusual suspects’, namely Algeria; Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. These are the guys who decide how much oil to be pumped, refined and put on a global market and at what price tag at the tap. In all fairness oil is not supposed to be that scarce or that pricey for that matter.

For Nigeria,  petroleum  is the ‘turbocharged engine’ or the ‘last man standing,’ laboriously dragging along the country’s ‘economic locomotive’, accounting for 40% of Gross Domestic Product and 80% of Government earnings. The weirdest thing in Nigeria though is that petrol and diesel are extremely expensive to the domestic consumer, that is if they can find it at the pump in the first place;  for it is scarce due to ehor, does Nigeria actually import refined fuel for its domestic consumption? If they do. Why?

The whole Nigerian economy comprising different sectors and industries is worth US$1.161 trillion (2018) per year while an average Nigerian makes a miserly US$5,992 per year.

Switzerland, on the other hand, is a country that espouses geopolitical neutrality, is a prosperous and modern western market economy with low unemployment (2.7% in April 2018), a highly skilled labour force, and a per capita Gross Domestic Product among the highest in the world. Swiss economy benefits from a highly developed service sector, led by financial services, and a manufacturing industry that specializes in high-technology and knowledge-based production.

The economic and political stability, participatory democracy, transparency, exceptional infrastructure , efficient capital markets, and low corporate tax rates also make Switzerland one of the world’s most competitive economies. switzerland-unemployment-rate

The country  covers 41,285 km² of land area available for use to a  population of  8.372 million. 

According to World Bank economic report of 2016 the Swiss economy makes 659.8 billion USD per year while income per capita is at 78,812.65 USD, which is very generous and impressive even  by comparison with mightier economies such as those of Germany, Japan, China and USA. On a different note;  Switzerland has a tradition of direct democracy. Which means for any change in the constitution, a referendum is mandatory (mandatory referendum); for any change in a law, a referendum can be requested (optional referendum). In addition, the people may present a constitutional popular initiative to introduce amendments to the federal constitution. The people also assume a role similar to the constitutional court, which does not exist, and thus act as the guardian of the rule of law. Do they have such things as Presidents or/and Prime Minister? I’ve not heard of such in Switzerland. Which I think is cool.

The economy of the Democratic Republic of the Congo (Land area: 2,344,858 sq km); a  nation endowed with vast natural resource wealth – the story is different and probably in a different language altogether. Systemic corruption since independence in 1960, combined with countrywide instability and intermittent conflict that began in the early-90s, has reduced national output and government revenue, and increased external debt.

With the installation of a transitional government in 2003 after peace accords, economic conditions slowly began to improve as the government reopened relations with international financial institutions and international donors, and President KABILA began implementing reforms. Progress on implementing substantive economic reforms remains slow because of political instability, bureaucratic inefficiency, corruption, and patronage, which also dampen international investment prospects.

The East African country has a population of 83,301,151 who it has to feed on a shoestring budget of 35 billion USD per year. An average worker in DR Congo earns US $444.51 per year. Ironically DR Congo has some of the rarest, precious and expensive minerals in the world. Limitless water, from the world’s second-largest river, the Congo, a benign climate and rich soil make it fertile, beneath  the soil abundant deposits of copper, gold, cobalt, uranium, coltan, oil and of course diamonds which Zimbabwe military is said to have  pillaged during their intervention to prop-up Kabila’s flaggling regime  in 1998 conflict as reported by The Zimbabwean.

“Way before Marange Diamonds in Zimbabwe, Mugabe and his military men had already started rampant racketeering, illegal mafia-style smuggling, double-crossing, double dealing, as well as illegal arms peddling with Congolese rebels. In fact, Mugabe double-crossed Kabila by selling arms to the rebels in exchange for diamonds used to enrich, not Zimbabwe, but Mugabe and his security men.” – The Zimbabwean; 3rd Oct. 2016.

Oh dear! We should discuss Zimbabwe in much more detail but not for now, let us leave it for another day. Shall we? Anyway, DRC also has tantalum, and certainly politcal tantrum too; now tantalum is used to produce essential components required for cellphones, DVD players, laptops, hard drives, and gaming devices. DRC produces tungsten and tin as well. 

One would imagine the abundance of these precious minerals would make DR Congo one of the world’s richest countries.  If not, at least you could readily find finished/value added products from aforementioned minerals widely available in the local markets at affordable prices at that. But nope! It ain’t so.

Clearly Nigeria and DR Congo have  economic competitive advantage against Switzerland. Look at the sizes of their respective land masses;  human capital and natural resources, but still remain obstinately tenfold poorer than Switzerland? It’s unacceptable that an average Swiss earns 79,000 US dollars compared to their counterparts in Nigeria who are on paltry salary of 6,000 US dollars per year while the ‘none the wiser’ Congolese are worse off at 445 US dollars per year.

So why are things going ‘hunky-dory’ for Switzerland, and not so much in any meaningful way for Nigeria and The Democratic Republic of Congo?

By Crimson Tazvinzwa

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