SOME THINGS IN COMMON PART I

MUTUAL UNDERSTANDING A TALE OF TWO COUNTRIES 

AUSTRALIA POLITICAL AND TOPOGRAPICAL

Landmass :7,682,300 Sq. miles 7th Largest in World

Population :22,751,014 July 2015 Est.56th Largest in World

NIGERIA  TOPOGRAPHICAL

LANDMASS   910,768 SQ.MILES        32nd Largest in World.

Population  : 181,562,056    July,2015 Est.   8th Largest in World

TO BEGIN:  

I have a large number of Friends on Facebook in Nigeria, and of course in my home country of Australia too.

Our two countries are very different in many ways, yet in some ways, they have faced, and do face some similar problems, although the sum of the problems of each is very different.

Please bear with me as I try to sketch out some comparative facts, trying to see in which areas, if any our mutual understanding can increase. In this exercise, not only human physical and activity differences are relevant, but also, to some extent, historical experience and present-day circumstances.

Fundamental Realities

Australia is, as you see very large and sparsely populated with 2.96 people per sq. mile. Most of these people are located much more densely in large coastal capital cities and a larger number of near coastal provincial cities. Australia is located in the South-West Pacific Ocean on the East Coast,  and the Eastern Indian Ocean on the West Coast. 

It is a country with a maritime perspective and psychology - even though that fact is not widely considered by, most of its people.

Nigeria is not nearly so large - in fact it is close to the size of the State of New South Wales where I live. But its population density is enormously greater with 199.35 people per sq. mile. But, according to statistics available to me, 68% of Nigeria's population lives in "Rural" areas, including towns with a population of 100,000 or less

On the other Hand:

 15.1 % 0f the urban population lives in Lagos City. 

That leaves                

84.9% 0f the urban population living in provincial cities and it seems that only three of these:

Kano, 
Ibadan and
Abuja (the Capital) exceed 3,000,000 
with a total population of 9,826,068 between them. 
                                       
They are followed by 7 Cities of more than 1,000,000                                                (for a total of  17,673,140), and

 62 cities between 100,000 and 900,000 population( for                                          a total of   15,561,046 between them).  

Gasp! Already the figures are, to this Australian, mind-boggling! 

But, let us see: that makes in total an urban population of  :
58,160,254 or 32% of the national population.

This means that 123,401,802 people live in Rural areas in Towns under 100,000 and in villages and they constitute 68% of the population.
 (Just to get back to our comparisons, that is far more than five times the total population of Australia.)   

Geographically, Nigeria is in West Africa with an Atlantic coastline on the Southern Coast of West Africa in the Gulf of Guinea. It shares land borders with Benin to the West, Niger to the North West and North, Chad to the North East and Cameroon to the East.   

So we see immense differences in consequence of population density and geographical location.

Yet, even in these differences, some elements of similarity can be noticed, Both Countries suffer large areas of inhospitable land. In Northern Nigeria there is the problem of large areas of the Sahara desert intruding - and that reportedly expanding. In Australia, the greater part of the Country is inhospitable desertified by the lack of reliable, or any, natural water supply.

Geographically, Nigeria's land borders are a source of trouble from overland intruders, even though its relations with the cross border nations are not often actively hostile.   Australia's situation is not as isolated as one might think, and the relative proximity of the mainly Mohammedan Indonesia with its hundreds of islands and its hostile takeover of half of New Guinea to our North is a source of intermittent trouble - mainly through the Indonesian laxity (corruption) in allowing illegal immigrants ("boat people") mainly from the Middle East -Mohammedans) to pass on toward Australia. This has been stopped by firm Australian Naval patrols. Our relations with Pacific Island States are generally good because of our foreign aid grants. Our next-door neighbour to the East is New Zealand, with which we have generally good relations and strong sporting rivalry. 

Economic Activity

Australia is rated

12th or 13th in the World by GDP measured in USD Dollars depending on which list you choose, based on figures varying between 1.223 Billions and 1.471 Billions depending on the reference dates- always complex in these matters. Nigeria is rated between 

22nd and 24th on the same basis on amounts varying from 493 Billions to 568.499 Billions.

GDP PER CAPITA

Obviously on a GDP per Capita basis, Australia will fare much better than Nigeria. For Australia, the ranking is between

 10th and 16th in the world based on amounts of USD 45,926 through to  USD 65,400  again depending on the date chosen, but also exchange rate variation and major commodity prices.

 Nigeria ranks between 

121 and 129 based on amounts of USD 5,911 and USD 6,400 again depending on dates chosen and exchange rates and major commodity prices.

In international trade, Australia is ranked in USD  

24th in the World for Exports at USD 191.2 Billions. 

Nigeria is ranked    

40th at USD 93.010 Billions.

INTERNATIONAL TRADE

In international trade, Australia is ranked 

20th for imports at USD 245.9 Billions ( based on 2014 Est figures). 

Nigeria is ranked 50th at USD 54.6 Billions (But this is based on 2012 Est Figures)

The value of Australian Exports FELL by AUD 318.7 Billions in 2014 whilst actual volumes INCREASED by 6.6 per cent. This was mainly due to declining values for minerals and fuels exported down 13.8% ( a large fall) but greatly offset by rising values in rural, manufactures, other goods and services especially - thus cutting the overall decline in values to only 3.8 %.

Unprocessed Minerals accounted for 28.2 % of export AUD values, their AUD value having declined 21 per cent in the year 2014/15. Fuels accounted for 18.1 % of the AUD Export values despite an 8.6 % decline in AUD values in 2014/15.

 The value of Australian Imports in AUD actually INCREASED by 0.7 % while volumes INCREASED by only 0.1% - so we see adverse currency values at work.

It is noted that Nigerian Exports consist of Crude Petroleum: 74.3% of the Total and Petroleum Gas: 13.3% of the Total , the two energy commodities totalling a massive 87.65% 0f the Total Exports.

OVERALL TRADE PERSPECTIVE

We see both Countries are significantly dependent on commodity export earnings. But in the case of Nigeria, the dependency on only two fuel commodities is at an extremely vulnerable level of 87.65%. On the other hand, in the event of a marked turnaround in global economic activity, Nigeria should reap a rapid unearned improvement in income from these same exports. There seems no great hope of that in the immediate future.

In the case of Australia, a broader spread of Export types has led to greater resilience in handling a very difficult decline in minerals and fuel Sales and values. Likewise, a marked turnaround in global economic activity would rapidly deliver a huge unearned improvement in income from these same exports. But a significant vulnerability is the Australian dependence on trade with China, which Country has become a recognised military security risk. However, this issue is tempered to a large degree by China's dependence on Australia as a relatively near, politically-stable, low-cost source of high-quality raw materials.  

DEBT

We should consider this factor which restrains Government policy and National potential from the National Accounts aspect and then the International aspect. This is easier for me regarding Australia where I am more familiar with accessing the official figures which appear at regular intervals on a consistent basis.

The National Accounts figures are of interest on two bases :

in absolute numbers,and

in relation to the GDP.

AUSTRALIA : DEBT - ABSOLUTE NUMBERS;

At 22nd January 2016 : 405.988 AUD BILLIONS 

                                 (2010 : 147.122 AUD BILLIONS)

                            : DEBT - PERCENTAGE OF GDP    

                              In 2015                               36.8%

                                    2010                              2o.5%  

Comment

The Global Financial Crisis of 2007-2008 can be quickly seen to have had a strong adverse effect on the Australian National Debt situation as the Federal Governments of the day borrowed heavily to sustain economic activity. Radically different views are held about the wisdom of the level of the borrowings and the purposes on which the funds were spent.

From 2007 to 2013 Australia had Labor Governments under Prime Ministers Rudd to 2010 Gillard to 2011 and again Rudd to 2013. The effect on the debt absolutely and as a percentage of GDP is obvious. Since 2013 Liberal/National Party Governments have been in power., under Abbott to 2015 and now Turnbull at least until 2nd July,2016 Federal Election. The returning Conservative Government has found it difficult to correct the situation in view of policies committed to funding in the Labor years and the marked collapse in Export revenues. 

NIGERIA              National Debt         Absolute Numbers

2015                      USD     $56.74 Billions

2010                                     $26.273Billions 

                                   National Debt         As a Percentage of GDP

2015                                        10.19 %

2010                                         15.04%

I am far less confident in the above Nigerian figures since I have had to collect them from varying sources - all respectable in themselves, but lacking consistency in approach.   However, it does seem that from the period when Pres.Goodluck Jonathan assumed office in 2010 from U.M. Yar'Adua (2007-2010), until he handed over to Pres.Buhari in 2015, although the National Debt rose markedly, it was responsibly done in terms of GDP relationship which declined to historic lows. Since the Buhari administration has taken over, it appears GDP has collapsed and debt in Absolute Numbers has increased as the economy has collapsed, so that Debt to GDP can be expected to have soared once again.

FOREIGN DEBT

Australia              Foreign Debt              In Absolute   Amounts

  Mar. 2016                             AUD $1,012,100,000,000 

             2015                             AUD $1,620,000,000,000

Comment

This enormous sum is owed approximately 25% by Australian Governments Federal and State , and 75% by public and private companies. Most of it Government and corporate is denominated in Australian Dollars - minimising any foreign currency exchange risk. In addition , most of the debt is very long term, minimising the repayment burden. Finally, due to huge and continually growing Superannuation investment, Australia has greater investments in foreign assets than foreigners have invested here - this is a reversal of remote historic trends. In effect, much of this foreign debt at low-interest rates has been used to invest overseas at very good rates of return.

Nigeria                 Foreign Debt                 In Absolute Amounts  

2015                                          USD        9,700,000,000     

                                                   

                                                                    (GDP is  USD  492.986,000,000  ) 

Comment  

The vastly healthier Nigerian position, reflects the conservative stance of the Johnathan Government, and the different historical necessities imposed by Australia's more advanced economy over a long period of time and its very heavy defence commitments in actual Wars in support of our Allies , in extensive defence re-equipping and in very heavy foreign aid to neighbouring Asian and Pacific Island States. 

The Nigerian situation would be the great envy of the Australian Federal Treasury.

FOREIGN RESERVES

Australia                USD $ 49,264,000,000   MAR 2016    Rank 37th  

Nigeria                    USD $ 26,500,000,000   MAY 2016     Rank 50th

Comment

Given Nigeria's relatively smaller GDP it has performed far better in retaining Foreign Reserves at the level it has, and this again seems to be a reflection of the past conservatism shown in Foreign Debt obligations compared to the Australian approach, again because of differing imperatives.

SO FAR

On a very , very storm tossed day I have worked on this to this point. I have also made a good start on the Historical Background - but I have decided to make that Part II.    

I have even refrained from summarising the above, though I am tempted to do so.  But I am hopeful of some feedback that might make that summarisation more accurate and meaningful and useful to someone, somehow.  or have I laboured in vain?