Speech by Bill Gates, Co-Chair of Bill & Melinda Gates Foundation, at the National Economic Council, Aso Rock Presidential Villa, Abuja on Thursday March 22, 2018.
Your Excellency Muhammadu Buhari, President of the Federal Republic of Nigeria; Professor Yemi Osinbajo, Vice President of the Federal Republic of Nigeria; Senator Bukola Saraki, Senate President; Honorable Yakubu Dogara, Speaker of the House; Your Excellencies, executive governors of the Federal Republic of Nigeria; Royal fathers; Distinguished ladies and gentlemen; and as you say in Nigeria, all other protocols observed.
3. One in three Nigerian children is chronically malnourished.
I also mean continuing to open up opportunities in the agriculture and microenterprise sectors, as the government has proposed in the ERGP. I mean creating the conditions where Nigerians can reach their goals while adding value to the economy—the win-win scenario. Our foundation doesn’t invest directly in education here, but the World Bank World Development Report that just came out makes it clear that education leads to improvements in employment, productivity, and wages.
Today, though, more than half of rural Nigerian children can’t read and write. The conclusion is inescapable: Nigeria’s economy tomorrow depends on improving its schools today. The same is true of health, our foundation’s primary focus area. In 1978, Dr. Olikoye Ransome-Kuti, who later became the Nigerian minister of health, helped establish primary health care as the global standard. We now know that a strong primary care system takes care of 90 percent of people’s health needs.
Tragically, 40 years after Dr. Ransome-Kuti helped other countries set a course for the future, the Nigerian primary health care system is broken. The evidence for this can be found in the epidemic of chronic malnutrition, or stunting. As the name suggests, chronic malnutrition is not a disease children catch. It is a condition that develops over time because they are deprived of a diverse diet and the services a strong primary health care system provides. The consequences of stunting are devastating. Though stunted children are defined as shorter than average, we’re not particularly concerned about their height. What we’re concerned about is their brains, or what Akin Adesina calls “gray matter infrastructure.” This is a picture of the brain of a single normally developing infant. And next to it is a picture of the brain of a single chronically malnourished infant. Every brain and every child are different, but you can clearly see the difference in the number of neural connections in these two brains. And once this kind of damage is done, it’s very hard to repair. In Nigeria, one in three children is chronically malnourished and could therefore be at risk.
This is a tragedy for each one of these children; it is also a huge blow to the economy. According to the World Bank, addressing the stunting crisis in Nigeria would add almost $30 billion to the GDP. So what will it take to solve stunting? It will take a focus on agricultural development, nutrition, and primary health care. A functioning primary health system has six features.
As many of you know, we’ve been very close partners in your fight against polio. As you can see on this graph, the hard work of hundreds of thousands of local leaders and health workers since the turn of the millennium has paid off. Nigeria has not had a case of wild polio virus in more than a year. But the graph also shows that you’ve reported zero cases before, only to learn that the disease was still circulating in tiny pockets hidden by insecurity. It would be catastrophic to let your guard down when you’re on the verge of eliminating the disease once and for all.
I believe—because I have seen your work in the field as recently as yesterday—that you will do what it takes to end polio in Nigeria. We will be here, working side by side with you, until you do. Though health is our foundation’s primary area of expertise, it’s not the only thing we do, and it’s not the only thing I mean when I say Nigeria should invest in its people. Healthy people need opportunities to thrive. One of the most important of these opportunities is agriculture, the sector that nourishes Nigerians and supports half the population, especially the poorest.
The agricultural sector is a pillar of the Nigerian economy. It accounts for a large proportion of your GDP, and during the oil price collapse and recession, it helped cushion the economy. But it still has a lot of potential to grow. The majority of Nigerian smallholder farmers lack access to the seeds, fertilizer, and training they need to be more productive, and they lack access to the markets they need to profit from their labor. The government has taken important steps to fill these gaps, with both more investment and a series of smart policies to encourage private sector investment.
These reforms lay the foundation for a booming agricultural sector that feeds the country, helps end chronic malnutrition, and lifts up tens of millions of smallholder farmers. I urge you to build on this good work. One of the barriers that continues to prevent smallholders from thriving is their lack of access to finance. Like good roads, finance connects farmers to opportunity, yet only 4 percent of Nigerian farmers currently have a loan to grow their business. In a country where three quarters of people have mobile phones, digital financial services provide a solution to this problem. In fact, digital finance offers the potential to boost the economy from top to bottom. Right now, more than 50 million Nigerian adults are at the whim of chance and the informal economy. With access to digital financial tools, they can cope better with disasters that threaten to wipe them out, build assets and a credit history, and gradually lift themselves out of poverty.
Consider the impact this would have on businesses. Of the 37 million micro, small, and medium enterprises in Nigeria, more than 99 percent are micro. Their lack of access to finance is a leading reason why these businesses can’t grow. With digital payments, savings, and credit, they will finally have the resources to plan for the future. According to the best estimates, digital financial services will create a 12.4 percent increase in Nigeria’s GDP by 2025. Meanwhile, oil accounts for about 10 percent of Nigeria’s GDP. Imagine adding another oil sector and then some to the economy, but one whose benefits spread far and wide and reach almost every single Nigerian.
There is another benefit to digital financial services that will make everything I’m urging you to do much easier: it will vastly improve the government’s ability to tax and spend efficiently. Let me pause for a moment to say, I am confident that one thing you’ve been thinking as I’ve been talking is that, while you would like to spend more on health and nutrition and education and agriculture, you don’t have the money to do everything. I appreciate the fact that what you can spend is a function of what you raise. Nigeria’s government revenue as a percentage of its GDP is by far the lowest in the world, at 6 percent. That makes investing in your people difficult.
The next lowest country, Bangladesh, collects 10 percent of its GDP. If you got yourself up to second-to-last in the world, you would have an extra $18 billion to budget. Obviously, you’re aiming higher than that, but it gives you some idea about the scale we’re talking about. We want to support you in your work to mobilize more resources to invest in your country.
That’s why our foundation is working with the Nigeria Governors’ Forum to help states track internally generated revenue. Ultimately, raising revenue to invest in growth will require delivering on the government’s commitments to the Nigerian people, and convincing them that they will get a return on their taxes. Right now, Nigeria’s fiscal situation is at what you might call a low equilibrium. In return for low levels of service, people pay low levels of tax. We hope to help you reach a higher equilibrium rooted in effective and transparent investments in people.
This equilibrium would trigger a virtuous cycle. More government revenue would lead to more money to spend on health and education. Better health and education, and investment in sectors like agriculture, would lead to more productive farms and factories. More productive farms would lead to more prosperous farmers who could expand their farms or invest in other businesses, especially if they had access to credit and other financial tools. These thriving farms, factories, and new businesses would lead to more government revenue. And the cycle would start again. Triggering that cycle will require bolder action—action you have the power to take as leaders, governors, and ministers focused on Nigeria’s future. Nigerians are known around the world for their big dreams and big ambitions. Together with the Dangote Foundation, we will be here to help you achieve your dreams and ambitions. You have the support of the international community.
The Nigerian private sector will continue to invest. We are eager to help, but we know we can’t lead. You must lead. I believe in the grand vision of Nigeria’s future. I believe in it because I’ve seen it. It’s represented by this line—the line that depends on healthy, educated people and the surge of economic activity they will unleash. And that means that the future depends on all of you—and your leadership in the years to come. Thank you.