Nigeria: Economic and Human Health Lending Institutions, Healthcare, and Human Capital

Nigeria is the largest country in Africa and is home to 47% of the continent's population (World Bank, 2013). Nigeria is the largest oil exporter and holds the most natural gas reserves of any African country. According to the World Bank, these human and natural resources gives Nigeria the necessary ingredients for becoming one of the more prosperous nations in Africa and globally. Fueled primarily by oil exports, the Nigerian economy seems to be meeting this expectation by growing an average of 7.6% between 2003 and 2010; however, a recent softening of the oil market, which represents 75% of state revenues, has restricted the ability of the government to stabilize economic growth. Yet, foreign debt represents only 3% of the nation's gross domestic product (GDP).

Despite the apparent success of Nigeria's economy the levels of poverty and unemployment remain high (World Bank, 2013). For example, an estimated 50 million youth are underemployed in a country of 158 million people (World Bank, 2013) and child labor, including slave labor, is not uncommon (Kim, Muntaner, Chung, Benach, and EMCONET Network, 2010). Nigerian leaders have invested in infrastructure, improved agricultural productivity, and are creating more relevant post-secondary training and educational opportunities (World Bank, 2013). The World Bank, however, views the decentralized form of governance in the country, along with the diverse ethnic, cultural, and religious communities, as a significant barrier to improving the quality of the labor market. In Nigeria, there are 36 states and 774 local governments enjoying a large measure of official autonomy. These state and local governments are also responsible for spending 50% of federal revenues and delivering most public services.

Nigeria's relatively low external indebtedness is a recent...

Beginning in 1978 the country was encouraged to borrow large amounts from private lenders in what could be viewed as international predatory lending. By 1982 Nigeria's external debts represented 160% of the GDP. The servicing of this external debt has been characterized as a "… self-perpetuating mechanism of poverty aggravation, work overexploitation, and a constraint on [economic] development" (p. 286). The overall effect of this borrowing frenzy was an increase in unemployment and underfunding of public programs like education and healthcare services. One recommendation was privatization of some government programs, eliminating export duties, restructuring financial markets, and asking for debt relief from the World Bank and International Monetary Fund (IMF) (Edo, 2002).
Adegbite and colleagues (2008) examined the impact of debt forgiveness granted to Nigeria in 2006 by the Paris Club and found that the historically high levels of external indebtedness had discouraged investment by foreign firms, suppressed economic growth, degraded social and economic infrastructures, and increased poverty and inequality. The authors concluded that there is a tipping point where external borrowing no longer provides a benefit to social and economic programs and instead begins to corrode these efforts. The debt forgiveness by the Paris Club, according to the authors, appears to have allowed Nigeria to transition back to the positive side of this tipping point.

With close to 80% of Nigeria's external debt owed to multilateral banks like the World Bank and African Development Bank, along with bilateral sources like China and France (Amaefule, 2013), Nigeria appears to have ended the practice of borrowing from predatory private international lenders. The biggest concern currently, according to Director General Dr. Abraham Nwankwo, is the…