The World Bank has warned Nigeria against the danger of putting trust in the prices of crude oil going up again and making its economic growth projections based on same.
The President of the Bank, Jim Yong Kim, gave the warning on Thursday at the opening press briefing for the annual meetings of the Bank and the International Monetary Fund (IMF) in Washington DC, United States.
Kim tasked Nigeria to shift focus from oil as a source of economic growth, though admitting that “things are just now getting better” after the prices of crude oil plummeted in the wake of a five-quarter recession.
The price of Brent crude, which once peaked at about $140 a barrel about three years ago, has been hovering around $40 in the last three years.
He declared that investment in human capital development, particularly looking at investment in health and education, which he said remained the major drivers of future economic growth, should be the focus of the country now.
“Nigeria, of course, has suffered from the drop in oil prices and things are just now getting better. The conversation we need to have with Nigeria in many ways are related to what is about investment in human capital. The percentage of GDP that Nigeria spends on healthcare is less than one per cent.
“Nigeria has to think ahead and invest in its people. Investing in the things that will allow it get thriving and rapidly growing economy in the future is what the country has to focus on right now.
“It can’t rely on just oil prices going back up again. It has to think whether oil can be a source of growth in the future. Nigeria surely should be among the digital economy. This is also true for most of Africa.
“One thing we know is that a better health and education for its people are very critical for economic growth. These are the drivers of economic growth for the future.
“Over the next few years, Nigeria and African countries must focus on accelerated investment in human capital development, in health and education. This is how Africa can prepare itself for the next phase in global economy,” he said.
The Bank noted that although global economy had made considerable recovery after years of “disappointing growth”, investment, it said, remained weak.
It also raised concerns that “the rise of protectionism, policy uncertainty or possible financial market turbulence could derail the fragile recovery.”
“Overall, we are seeing growth rise in most developing and advanced economies – which is why countries need to make critical investments now. This is the time to implement the reforms that ae going to insulate against potential downturns in the future.
“Countries need to build resilience against the overlapping challenges we face today, including the effects of climate change, natural disasters, conflict, forced displacement, famine and disease
“All countries need to invest more in their people…this is so critical and I introduced an accelerated effort called Human Capital Project that we are undertaking at the World Bang Group to help countries invest more- and more effectively-in their people,” Kim said.