Nigeria is lagging behind comparable economies on nearly every major measure of shared economic prosperity, according to an assessment by global audit and advisory firm KPMG, meeting only two of 15 indicators assessed by the firm.
In its report presented in Lagos on Thursday at BusinessDay’s CEO Forum titled Nigeria: From Stability to Shared Prosperity eponymous with the conference’s theme, KPMG measured Nigeria’s effort to translate macroeconomic growth and reforms into better living standards across four prosperity pillars including Inclusive Economic Growth, Well-being & Living Standards, Equity & Inclusion, and Access to Opportunity.
To assess Nigeria’s progress towards shared prosperity, KPMG selected Indonesia, Vietnam, Malaysia, Chile, and Singapore as benchmark countries based on “sustained shared prosperity performance, using the World Bank’s October 2024 Global Database
of Shared Prosperity (GDSP), which measures income or consumption growth among the bottom 40 percent relative to the overall population,” it said.
Global averages were derived from all available World Bank WDI country data, supplemented by EIU data where applicable, it added.
The four pillars draw on indicators from international bodies like the World Bank and International Monetary Fund.
The Inclusive Economic Growth pillar assesses whether the economy is generating broad-based and sustainable growth based on Real GDP Growth Rate, GDP per Capita, Labour Productivity, and the Inflation Rate.
Nigeria recorded a 3.87 percent GDP growth rate falling short of the benchmark target of ≥4.12% (calculated as at least double the population growth rate.
On GDP per capita, KPMG found that Nigeria’s $1,224 is significantly lower than the select benchmark average of $10,0001. Its labour productivity, at 1.114 percent, is well below the benchmark average of 4.2 percent. Meanwhile, Nigeria’s end-of-period inflation was 15 percent, compared to a benchmark average of 2.5 percent.
The second pillar of well-being and living standards evaluates whether households are experiencing meaningful improvements in their quality of life based on real personal and household disposable income, the percentage of the population living in multidimensional poverty, the percentage living in extreme poverty, and out-of-pocket health expenditure.
Nigeria saw a 2.63 percent contraction on real personal disposable Income against the global benchmark average of five percent growth, the firm found. 33 percent of Nigeria’s population live in multidimensional poverty, more than double the global average of 16 percent.
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In extreme poverty, Nigeria’s rate is 63 percent, much higher than the global average of 10 percent. And in out-of-pocket health expenditure, KPMG reported that Nigerians pay over 70 percent of health costs directly, compared to a global average of 17.3 percent.
The third pillar of equity and inclusion focuses on whether the benefits of growth are reaching all people and regions bases. It is measured by the Gini Coefficient, the rate of Youth Not in Employment, Education or Training (NEET), the percentage of Adults with Formal Financial Accounts, and the Female Labour Force Participation Rate.
Nigeria performed better than the benchmarks in Youth NEET, with a rate of 12 percent (as of 2024) compared to a global average of 21 percent and a benchmark average of 13 percent. Similarly, Nigeria outperformed global benchmarks on female labour force participation, scoring a high 80.7 percent, compared to both the global average of 50 percent and the benchmark average 65-70 percent.
On the metric of adults with formal financial accounts, Nigeria reached over 63 percent, trailing the global average of 69.1 percent and the benchmark average of 75.3 percent.
KPMG’s final prosperity pillar on Access to Opportunity examines the distribution of growth benefits across the population and regions tracking out of school children, access to electricity, digital connectivity and penetration (internet penetration), and access to credit.
Findings show that Nigeria has an out of school children rate of 18 to 24 percent, which is much higher than the benchmark average of 3 percent.
On access to electricity: Nigeria provides access to 51-61 percent of its population, while benchmarks average 99.8 percent. Research also found that at 41 percent, Nigeria is behind the global average of 73.6 percent for internet penetration and the benchmark average of 89 percent.
On access to credit, measured as credit to the private sector as a percentage of GDP, Nigeria scored 12 percent, compared to a global average of 140.3 percent.
The findings suggest that while Nigeria has recorded pockets of progress in its macro economy three years after it enforced sweeping reforms, structural weaknesses continue to limit broad-based prosperity.
KPMG outlined four priorities that it said are essential to turning macroeconomic gains into tangible improvements in citizens’ welfare.
First, the firm called for faster implementation of reforms, arguing that policy announcements alone will not deliver results unless execution improves. It recommended prioritising high-impact reforms with clear implementation roadmaps, accelerating power, tax and trade reforms, removing bureaucratic bottlenecks across ministries, departments and agencies, and improving coordination between the federal, state and local governments.
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KPMG also urged the government to direct scarce public resources towards sectors with the greatest impact on long-term growth and social welfare. It identified healthcare, education, electricity, agriculture and micro, small and medium-sized enterprises as priority sectors where investment generates economy-wide benefits. It further recommended protecting capital expenditure on these sectors through a legislated spending floor to shield development projects from fiscal pressures.
On governance, the report argued that the success of reforms should be measured by outcomes rather than intentions. It recommended establishing measurable national shared prosperity key performance indicators, publishing periodic implementation scorecards and public progress reports, and linking funding decisions to measurable improvements in citizens’ welfare.
KPMG further said achieving shared prosperity would require stronger private sector participation. It recommended expanding public-private partnerships to finance infrastructure and improve public service delivery, creating greater regulatory certainty to improve the ease of doing business, and encouraging businesses to play a larger role in skills development, digital transformation and industrialisation.