In most areas, Nigeria has been faring much worse than South Africa. The Inclusive Wealth Index (IWI) published by the UN measures the growth of produced capital (for example, GDP) against the stocks of natural resources that are depleted inthe process. For the IWI, Nigeria is by far the worst performing country. When the gains in terms of GDP are offset against the depletion of human capital and natural resources, the Nigerian miracle evaporates altogether. Rather than increasing its overall wealth, the West African country has been accumulating economic losses at an average annualrate of 1.8% since 1990. Nigeria has also overtaken South Africa in the costs associated with environmental degradation: 2.51%, compared with the 2.24% of the Rainbow Nation. During the period 1990 to 2008, Nigeria destroyed 41% of its forest resources, one of the highest deforestation rates in the world. According to the Resource Governance Index, Nigeria falls at thebottom of the global ranking, with a very poor record in terms of transparency and accountability in the management of its oil riches, more than 20 places below South Africa. We all know about the dire effects of multinational companies’ systematic exploitation of oil fields in the Niger delta: environmental destruction, political destabilisation and human displacement. Role model for the continent But GDP regards these phenomena as“positive” for the economy, with paradoxical consequences for the way in which most African economiesare designed and run. No surprise, therefore, that one of the world’s least sustainable societies is now touted as a role model for the continent. As the UN recognises, GDP focuses exclusively on the “cash” being generated by market activities (that is, present income and production flow) whereas alternative measures of inclusive wealth highlight the importance of stocks of assets and their changes over time. The politics of GDP makes countries blind by rewarding short-term consumption and wholesale exploitation of natural assets at the expense of social justice and sustainability. There is no economic success withoutsustainable progress, and African economies would be better off if their leaders realised that GDP-based frameworks are very misleading. If South Africa is serious about leading the continent towards a brighter future, it should develop a more comprehensive wealth-based accounting system and help the rest of Africa, including Nigeria, to do the same. Lorenzo Fioramonti is the director of the Centre for the Study of Governance Innovation, University of Pretoria, and author of Gross Domestic Problem: The Politics Behind the World’s Most Powerful Number (Zed Books, 2013) This article was first published in the Mail & Guardian. We have the paper’s and Mr. Fioramonti’s permissions to republish here.
Posted on: Tue, 02 Jul 2013 11:05:35 +0000
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