Economic Insight: 50% electricity subsidy for public hospitals and educational institutions: In the right direction

In the 21st century, a nation’s wealth is measured by its human capital—its people’s education, healthcare, and skills—rather than natural resources.

Nigeria’s recent approval of a 50% electricity subsidy for public hospitals and higher education institutions by President Bola Tinubu is a crucial move to alleviate financial strain caused by a 231% electricity tariff hike.

Rising energy costs have led to disconnections at major institutions like Lagos University Teaching Hospital (LUTH) and the University of Ibadan College Hospital (UCH), disrupting critical services.

This intervention is a temporary fix, but it highlights the need for broader reforms to support the country’s human capital development.

Countries with higher Human Development Index (HDI) rankings, such as Germany and the United Kingdom, have adopted similar subsidy measures to combat energy crises and protect essential public services.

In contrast, Nigeria ranks 161st in human capital development, reflecting severe challenges in healthcare, education, and quality of life.

While the electricity subsidy helps ease current burdens, Nigeria’s government must focus on long-term investment in human capital, particularly in education and healthcare.

With 18.3 million out-of-school children and an average life expectancy of just 53.6 years, comprehensive reforms are needed to address the country’s developmental gaps.

Moving forward, Nigeria must invest in modernizing hospitals and schools, providing quality healthcare, and ensuring universal access to education.

This strategy is essential for sustainable growth and improving Nigeria’s HDI ranking.

By prioritizing human capital development, the country can pave the way for a brighter future, ensuring that its citizens are empowered to harness Nigeria’s abundant resources and opportunities.

Business Day