Diversification of Nigeria Economy and Applied

Mathematicians as driver
Professor Oyelami Benjamin Oyediran
The Coordinator of Academic Planning
National Mathematical Centre, Abuja.

‘Companies can be very data driven if the right math or analysis is not used, then the data
might not be telling the correct story .Modelling ,analysis, and methodology are need in
order to innovate and create cheaper, better, and faster processes and product’ -
Christopher Cameron

'Life is either a daring adventure or nothing. Security does not exist in nature, nor do children
of men as a whole experience it. Avoid danger is no safer in the long run than exposure' -
Helen Keller, US Blind & Deaf Educator-(1880-1968)

Introduction

There is no gainsaying that the Nigeria economy had been lithered into economy
recession in the past one year. The economic experts had identified Nigeria economy
to be monolithic with about 90 per cent dependent on crude oil .some couple of
months ago there was instability in the Niger-Delta region which significantly led to
cut-off of the supply of crude oil and couple with impulsive nature of oil prices in the
international market led to depletion in the Nigerian foreign reserve. In view of these
problems there was low revenue profile, inflation, increase in national debt and
liability.

Experts suggested that Nigeria economy needs to be diversified and for rapid
industrialisation with great potential for massive employment of people, therefore,
electric supply must be improved. There is great potential for Nigeria in the area of
agriculture, solid minerals, oil and industry and tourism, information and
telecommunication industries and other industrial set-ups.

In the recent times, development of new products has made manufacturer in

developed nations to rely heavily on Applied Mathematicians and Computational
Scientists. Sophisticated models and skills are needed to implement the design of
products and to support investments, manage risks and to optimise of product quality.

Mathematical modelling and computational science are used in almost every

discipline in science, engineering, industry and technology. Every day new
applications are developed and as a result a variety of job opportunities are open to
people in business, science and technology.

Mathematics helps companies to perform better in this computer age. Industries are
developing new products and try to minimise cost for example, the cost of designing
planes, cars with energy efficiency would require advanced statistical skills,
modelling and numerical simulation skills.

Nigeria as a nation
Nigeria is the largest black race in the world on the Gulf of Guinea, has many natural
landmarks and wildlife reserves, dense rainforest, savannah and rare primate habitats.
The Nigeria population has an annual growth rate of 2.63 %. Nigeria demographic
statistic as obtained from the Worldometers is follows:

The current population of Nigeria is 188,854,390 as of Saturday, November 26, 2016,

based on the latest United Nations population estimates. Nigeria population is
equivalent to 2.48% of the population of the world. It is ranked as number 7 in the list
of countries (and dependencies) by population. The population density of the country
is 205 per Km2 (532 people per mi2).The total land area is 910,802 Km2 (351,662 sq.
miles).48.1 % of the population is urban (91,668,667 people in 2016).The median
age in Nigeria is 18 years.

World Bank estimates:

 Life expectancy 52.754(2014)
 GDP 481.066(2015)
 Arable land 37.726(2010)
 Forest area 39991, 336.2 (Sq. Km) declining steadily.

An addendum to the above statistic is:

Total population (2015) 182,202,000

Gross national income per capita (PPP international $, 2013) 5
Life expectancy at birth m/f (years, 2015) 53/56
Probability of dying under five (per 1 000 live births, 0) not available
Probability of dying between 15 and 60 years m/f (per 1 000 population, 2013) 357/325
Total expenditure on health per capita (Intl $, 2014) 217
Total expenditure on health as % of GDP (2014) 3.7
Source: World Bank

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 Forensic analysis of Nigeria Human Development Indices
(HDI)
Considering the population, Nigeria is the African must populous nation. There are
great markets potential in telecommunication, agriculture, education, solid minerals,
and real estate development, tourism and health sectors. The investors should be
involved directly to invest actively in these areas. The Universities could play leading
role in these sectors by organising skill acquisition courses in entrepreneurship and in
applied mathematics and other computational sciences to support the industries in the
production and marketing of products for sustainable development of the nation.

From the Nigerian HDI, 51.9% of Nigerians are rural dwellers; therefore, there should
be an integrated rural development programme for rural people anchored by the Local
Governments and private investors.

Agriculture, experts say, represents an opportunity sector whose huge economic

potential remains largely untapped. Nigeria earns over 80 per cent of her revenue
from the petroleum industry, according to several reports, but the sector actually
accounts for less than 14 per cent of the Gross Domestic Product (GDP), whereas
agriculture commands about 22 per cent of GDP and generates two-thirds of
employment nationwide.

Furthermore, by 2040, Britain, France and other developed countries would face out
petrol and diesel powered automobiles. The implication of this is that post year 2040
will be dominated by renewable energy products; Nigeria by the end of this period
must have fully developed the solid mineral, agriculture and tourism sectors. We
should be investing heavily on Research and Development of renewable energy
products. Many Nigerian should be trained on material science, Nano-technology and
renewable energy engineering.

The forest is fast declining that calls for production of furniture and roofing materials
from non-lumbering products. Investors and Researchers should seek alternative
materials to wood for production of furniture. Applied Mathematicians can work
alongside with Material scientists to develop simulation to optimise the design and
production of furniture. Simple way of doing this is to make use of finite element
analysis facility in Comsol, Simulink, and AutoCAD and MapleSim software.
Beautify designs can be made on tiles, rug, ceramic products using fractals and
plotting facilities in mathematical software.

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The expenditure on health per capita from the government is small; therefore, private
investors need to invest in the health sector. The Nigeria mortality rate is high;
therefore, this should be reduced by fighting diseases like HIV/AIDS, hepatitis,
malaria, typhoid, cancer, diabetics and cardiovascular diseases. Road accidents must
be checked including comprehensive plans to checkmate insurgence and natural
mishaps like flooding. Create peace and harmonious relationship among religious and
ethnic groups. Applied Mathematicians can be used to analyse national human
development data and incorporate the result into nation’s development plans.

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 Greek of derivatives in
Hedging problem
3D

modeling of
circulation composition financial
of air of air problem

Human
Heat in
breathing
tubes
system

How can Applied Mathematics be used to improve

National economy?

The economy of nation, by and large, to become top economy, a new innovation must
be introduce into the mainstream of the economy and new acquisition of latest
technology must be everywhere dominant in the economy. Technology cannot be
transfer but can be bought or stolen. To steel or develop technology the nation must
have pool of mathematical scientists who know the nigh tie gritty of the technology.
Therefore, the prosperity of nation depends on latest technology you have and how
Competence you can apply them.

In the recent times, the finance market is the place where funds are shopped for
investment. Many financial derivatives are traded under organized market system and
traded over the counter. In the stock exchange market financial derivatives like plain
vanillas, Bonds and exotics options are traded.

The volume of trade increases every day and there is the need to analyse the
behaviour or the performance of the market through indices like volatility .drift and
jumps. We need to determine the fair price of an option and payoff for the buyer. We
need to understand the complex cash flow structure in the financial market the risks
involved in managing financial portfolios.

Furthermore, all these need thorough knowledge of computational techniques for

simulating financial models .For this reason, mathematical scientists are needed in the
finance industry to help in calibrating models. Mathematicians and Statisticians are
needed to calculate the financial risk involved in credit derivative. Credit derivatives
are instrument recently traded on the financial markets by means of which the credit
risk inherent in loan, bonds or other risk assets or market risk positions are transfer to
third parties acting as called protection. Hedging of portfolio is very important in
the financial circle these days.

Most predominant models used in the finance industry is of the quantitative type and
financial quantitative analysts are needed to analyse the behaviour of the market daily

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,monthly or calculate day to day volatility of the market and market capitalizations
using the Standard 500 Rich & Poor index. Quantitative analysts are high level
manpower with strong background in Mathematics, Physics, Statistics, Computer
Science or Engineering. These persons often have PhDs in the computational science
with little training in economics and accounting. The quantitative analysts manage the
wealth of the investors and determine best investment profile for cooperate
organizations and the nation.

In view of the above, Nigeria need to invest money to develop high level manpower
in financial mathematics and financial engineering to produce quantitative analysts
and financial engineers. The financial engineers are responsible for development and
managing of the software use in the finance industry. The finance industries
worldwide are linked together through the Application Program Interface (APIs) with
frontend program like excel which makes it possible to get information from the floor
of financial market electronically worldwide. Nigeria needs to train mathematical
sciences to become finance engineers to manage the APIs and to develop indigenous
automated trading system , support and manage our automated stock exchange market
in Lagos and Abuja, and other financial institutions like banks, insurance companies
and mortgage houses.

In other to boost the economy we need to increase our per capita income and one way
in doing this is to empower our local manufacturers to produce high quality products
which will earn the country foreign exchange. The country must have and maintain
quality control products in standard and aesthetics for manufactured goods in Nigeria.
Our products should compete with products from Europe and Asia. Standard
Organization of Nigeria must maintain standard just like NAFDAC does for foods and
drugs. To be honest Nigeria has no standard for manufactured goods compare to
products in the west. As for foods and drugs NAFDAC is doing good job but much is
desired to make sure all certified goods by NAFDAC maintain quality.

Mathematicians and Statisticians are professionally trained for quality control and
could be used in the industries to maintain standard; support researches on industrial
problems and develop strategies for improving products. The use of computer
graphics can be used by computer scientists to improve the beauty of packages for
manufactured products and agricultural produce.

John Von Neumann and Mergestain authored the treatise titled "Theory of games and
economic behaviour" the textbook gives classical approach to game theory which can
be used to develop software for companies to survive under competitive situations.
Mathematical modellers and operations researchers would be useful in companies in
mapping out strategies for survival under competitive situations. Companies must be
made to draw-up business continuity plans and be made to strictly adhere to the plans
in case of occurrence of mishaps.

Nigeria has potential for economic growth in area of solid minerals. Geologists and
Computer Simulators can be used on how to tap the God given gift of the nation in
order to increase the country's per capita income. The use of geostatisticians in
designing of virograms to check the abundance and continuity of minerals for the
country should be encouraged.

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In agriculture and fishery interdisciplinary approach should be encouraged among
scientists in solving marine life problems. There are a lot of potential revenue to be
generated in agriculture and fishery. Applied Mathematicians should be co-opted into
ecosystem (terrestrial and marine) research on species abundance and biodiversity.
Information and telecommunications are areas where mathematical scientists are
greatly needed. The country has achieved a lot in the last five years with introduction
of internet, cell phones and the development of the Nigerian Sta1 with Sta2 on the
pipeline. Several billions of dollars revenue can be got from Information and
telecommunications and many mathematical scientists can be trained and be useful on
traffic control and quality of service in the telecommunication industries. Applied
Mathematicians can be employed in the production of recharge cards using
Random number generators and design of algorithm for mobile phone application

Workers are creators of wealth of the nation hence good wages and staff welfare
needed to be maintained in all sector of the economy. Diseases and syndrome like
Typhoid, malaria and HIV/AIDS should be tackled in the country in order to have
healthy working class for the nations.

Computational methods are essential tool for analysis of simulation data in modern
medical science, industrial mathematics and financial engineering. For the country
should take advantage of this to encourage people to acquire the modern skills in the
computational mathematics and be relevant in the mainstream of mathematics of
finance and simulation of biomedical problems.

The 21 century Challenges as affected Nigeria

The first challenge of this century is to develop alternative source of energy to replace
the fossil oil. USA the world’s major buyer of crude oil is planning to stop
importation of crude oil in ten years’ time. What will become OPEC member
countries like Nigeria?

Saudi Arabia is developing King Abdul Kingdom which serves as tourist haven for
people to bring in foreign exchange to country like United Arab Emirate. Iran is
developing nuclear power plant to generate electricity knowing full well that fossil oil
is gradually outliving its usefulness. China and India using their vast deposits of coal
to generate electricity. One the American presidential candidate in the 2008 USA
election promised to build 34 nuclear power stations if elected.

Tata institute has developed the world cheapest car; Brazilians and Chinese developed
cars using biofuel. Another possible threatening problem is food scarcity because
escalation of petrol price. Agriculture in the West is mechanized a lot diesel is need to
power agricultural machines and most harvested crop like maize were used to produce
biofuel and had led to food scarcity and global food insecurity. In Nigeria, the
government often subsidized agriculture directly or indirectly without actually making
must impact on food production. The local farmers who the subsidy is made for never
actually enjoy the subsidy.

Ways Forward
Complex system specialist and mathematician David Orrell once explained that
weather, human health and economics use similar methods of prediction
(Mathematical models).Their systems-the atmosphere, the human body and the

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economy-also have similar levels of complexities. The Black-Scholes model for
pricing of options the underlying principle is similar to the heat equation. Thus many
economic problems share similar underlying principles as some phenomena in
physics, thus, in the recent times; the discipline called Eco physics has been
developed².

The simple application of Keynesian economics to government fiscal policy has it that
output is a function of aggregate spending and one component of aggregate demand,
so Keynes' model is often applied to conclude that increasing government spending
will have the same positive effect on output as private investment. This model gives
the underlying mathematics for determination of income. Keynes' model, though
simple, and Helen Keller's philosophy have offered us a leeway on how to achieve the
sustainable development in 2030. It is simple, invest more in research and
development, human capita, introduce innovative policies and you will hit the target.
To have national economic growth for Nigeria, several macroeconomic factors need
to be taken care of and some of them are:
1. A more vibrant and well-disciplined fiscal policy that would boost gross
domestic product (GDP).The level of productivity of goods and services. Very
high quality of manufactured products and agricultural produce. Introduction
of skill and innovating labour into mainstream of production in the country.
Policies that encourage increase in saving and limiting consumptions and
others of neoclassical economic techniques that encourage creation of national
wealth must be introduced.
2. There is indeed the need to develop physical infrastructures like road, water,
electricity, railway and other facilities that allow business boom.
3. Increase in the revenue profile of the nation and reduction in national debt and
liabilities. Increase in exportation of domestic’s goods and services. The
difference between export and import of goods and services (trade balance)
should be in favour of the Nigeria.
4. Availability of power and energy and utilization of the nation's solid minerals.
5. Diversification of economy. A monolithic economy of Nigeria with 80 per
cent dependence on crude oil does not augur well for the nation. Since the
future of oil depend on interest and international politics. New emerging
technology is gradually rendering the use of hydrocarbon oil irrelevant.
6. Reduce unemployment and increase health per capita spending.
7. Have open economy drive by active competitions.
8. Reward of labour with good wages as to boost productivity
9. Introduction of innovation through research and development practice
10. Encourage investment through financial markets and attract international
investors to the nation.
11. Zero tolerance for corruptions, money laundering and bankruptcy for financial
institutions.
12. Investment to develop human capita and acquisition of latest technology
should be pursued with vigour.

The solution to the challenging problems is to develop human and financial capita for
the nation. Emperor Alexandra the great makes ancient Egypt a haven for greatest
scientists; the city Timbuktu in the ancient Mali attracted the great intellectuals in
those days; President Mao of China invested a lot of money to develop human capita

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for China. America is the world greatest haven for intellectuals today and even spends
several billion dollars on research and development.

Nigeria needs have in place Science and Technology Think Tank who will determine
areas where human capita would be developed for the nation. They need to determine
the technology that is reining and those that would dominate the future and so
Nigerians can be trained in this direction. Nigerian investors can be encouraged to
invest on new technologies that have potential to enrich our investors.

Nigeria needs to establish the National Simulation Laboratory which would house
data for Scientists and development of the nation. The laboratory can use
mathematical modelling and simulation techniques to solve national problems such as
economic, population, energy, ecological, medical and national planning problems.
The Nation needs to build capacity in information technology, communication
technology, mathematical modelling and simulation, industrial application of
mathematics and other emerging technology like Nano-technology.

Tourism need to be boosted and Nigerian tourism centres should not only be places
containing waterfalls, game reserves, rocks, amusement parks but also house
historical artefacts of the nation or black race. Cleanness of the environment should be
encouraged with many roads tarred and properly landscaped.

Sport is a department that can generate employment for the youth and athletes make
more money abroad these days. We need to develop sport and make compulsory in
higher institution for all students and to be offered throughout the course .The sport
course can be made to be five hour credit units for all students and must all be passed
before graduation. This programme will help Nigerian students to be physical fit,
provide potential employment and improve our FIFA and Olympics performances in
future.

Finally, before we end this write-up, I will like to advice Nigerian to be on lookout for
emerging ideas and new technologies for boosting economic growths. We must adopt
the ideas and the technology immediately!

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