THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Nigeria

Ranked 135th of 149

At a glance

Ranks

135 th on the Legatum
Prosperity Index™

139th
85th
121st
117th
142nd
145th
123rd
59th
106th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Nigeria performs best on Social Capital and Business Environment and scores lowest on the Safety & Security sub-index.

Visit our Rankings table to see how Nigeria compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Nigeria is a lower middle-income country that is substantially under-delivering prosperity given its wealth. Since 2007, the country has more than doubled its prosperity deficit, due to particularly poor performances in the Economic Quality, Health, and Safety & Security sub-indices.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

The Index captures Nigeria as a country that continues to face daunting tasks in several sectors. Not only has the security situation worsened since 2007, but the government is also struggling to translate its economic development into inclusive and sustainable growth. Despite the previous oil boom, Nigeria’s poverty rate remains high.

Unsurprisingly, the worst performance for Nigeria comes in the Safety & Security sub-index, where the country has posted a 14 rank decline over the past ten years. The prosperity gap in this sub-index is considerable, as well as the biggest of the Index, having increased by 180% since 2007. The main factors behind this are the Boko Haram insurgency, on the one hand, and the consequent worsening of living conditions for the population of the most affected areas, on the other. This has resulted in a massive increase in refugees and IDPs. It is estimated that there are now over 2.15 million people displaced because of insurgency and counterinsurgency, but also the religious clashes between Muslims and Christians in Nigeria’s central region, not to mention weather-related shocks such as flooding and droughts.

The emergence of Boko Haram has affected the security situation in the country, as shown by the declining Safety & Security performance in the last decade.
The emergence of Boko Haram has affected the security situation in the country, as shown by the declining Safety & Security performance in the last decade.

Strictly linked to the deteriorating security situation is that of Personal Freedom. Social religious restrictions and tolerance towards ethnic minorities have consistently worsened since 2007, as the fighting against Boko Haram became more intense.

When it comes to the Economic Quality sub-index, Nigeria’s performance appears rather poor. Despite being Africa’s largest economy, the country has actually had difficulties in exploiting its vast resources for the benefit of its population. The Index captures several factors limiting Nigeria’s full development in its economic sector. GDP growth has fallen consistently since 2007, due to insecurity in new investments in the non-oil sector, and lower oil prices. Oil is fact the dominant source of income for the country, which has the largest reserves in Africa. Like many of its oil peers, Nigeria's economy is highly dependent on oil, and export diversification quality is rather poor. More importantly, the rising tide of economic growth that the country has experienced has failed to lift all boats: one Nigerian every two lives in poverty, the highest rate in all OPEC countries. The new government of President Buhari should concentrate on a better diversification, as well as on making the country more open to private investments. To address chronic issues such as lack of infrastructure, and pervasive corruption, the government must work hard to implementing effective policies.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.

Special Analysis

Special Analysis

OVERALL

Although richer in absolute terms, Nigeria has become less prosperous since 2007, falling 13 ranks down to the 135th. The country has been affected by a deteriorating security situation, as well as a poorly developed health system: these two sectors in particular are behind Nigeria’s overall weak performance.

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Areas of Success
Areas of Success

Nigeria is currently in its longest period of civilian rule since independence. Although this is not reflected by an overall improvement in the Governance sub-index, it can nonetheless be considered as a success, as shown in the Index by increased score in the level of democracy. Other progress worth noting has been recorded in the Natural Environment sub-index: in the last ten years, the percentage of Nigerians with access to an improved drinking water source has risen from 60% to 68.5%.

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Areas of Little Change
Areas of Little Change

Little movement has been recorded by the Index in Nigeria’s health sector, which has remained one of the country’s weakest sub-indices. The improvement in life expectancy of birth, from 49.8 to 53 years, does not prevent Nigeria from being among the ten countries with the lowest values. Another area for concern is the low levels of immunisation against measles and DPT, among the worst in the region. Little change has been recorded also in the Education sub-index. Here, improvements in literacy rates have not been accompanied by equal progress in primary completion rate, nor by more people with secondary or tertiary education.

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Areas of Improvement
Areas of Improvement

It comes as no surprise that the area mostly in need of improvement is the security situation. Since 2009, with the rise of Islamist group Boko Haram, Nigeria has been ravaged by continued deadly attacks in different parts of the country. This has caused a rapid deterioration with severe effects on the living conditions, but also on the economy and the business climate. Additionally, the increasing number of IDPs and refugees from neighbouring countries has represented another challenge for the Nigerian government, which has now to face internal threats on the one side, and to protect displaced people all over the country, on the other.