Data mining and the Nigerian Economy

Erumebor Rume Wilson

Email: erumebor@yahoo.com, wilson@valuefronteira.com

Data mining simply involves extracting and The question is how can a criminal be caught
analyzing data in order to discover trends, if you don’t have his basic bio-data?
patterns and correlations. Data collection is
This brings us to the importance of a cashless
faced with diverse problems in Nigeria. This
or credit society as seen in most developed
is because in most cases its importance is not
countries. America for instance operates an
emphasized in many developing nations.
economy in which people do not need to
Data collection no doubt is a complex
hold cash all the time before they purchase
process that involves the use various
items on the street. The use of credit cards
statistical methods and sophisticated
by individuals which is a common way of
computers; in most cases it requires constant
settlement facilitates easy transfer of funds.
update overtime. In the committee of
But this is often used in monitoring the
nations, only developed countries
movement of individuals in advanced
continuously emphasize and use data for the
economies. Once an individual uses his credit
growth and development planning. Most
card or ATM card, his current location is
developing countries pay lip service to the
known to security agencies such as the CIA,
use of data for such endeavours. In Nigeria
FBI among others. This however does not
for instance, there are few recognized
mean that having accurate data on the
agencies which collect and accumulate
citizens instantly reduces crimes rate but it
personal data of citizens both within and
enables criminals to be easily apprehended
outside the country; where these records
which in turn instil in them the fear of the
exist they are often fragmented and almost
law. Also the issue of dual personality or
useless. Hence government agencies have no
changing certain personal information like
holistic record of the names, address,
date of birth seldom occurs since national
occupation, location, records of place of
records can be easily accessed. Conversely
birth, finger prints and other relevant record
operating a ``cash full economy’’ does not
of citizens. The absence of these vital
imply that data collection and management
information have seen people go missing
isn’t as important as it is in a credit economy.
without being found, criminals fleeing with
Its importance would be highlighted in
the securities agencies not being able to
subsequent paragraphs. Also applicable in
apprehend them and cases where people can
the corporate environment, data collection
easily change their identity and personal
and management has helped many small and
details hence promoting forgery and theft.
large corporations in risk management. The

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whole idea of the “know your customer research. Also most firms in the country lack
(KYC) strategy” helps detect fraud and a well functioning research department
improves the products and services rendered which ideally should provide quantitative
by these institutions. information needed for empirical
investigations. Secondly, technological
Data collection and management has posed
backwardness plays a part in the non
greater challenges in most developing
existence of robust data in the country. Since
countries. We would broadly categorize the
data collection involves the use of highly
problems associated with data management
sophisticated modern computer equipments,
in Nigeria into three: Lack of data, the
the absence of modern technological
existence of “outdated data” and data
facilities such as software and internet
manipulation. The problems of data update
facilities has over the years limited the
and delay in data publication all centres on
quality of data in Nigeria. But it must be
these three categories.
noted that there are giant strides at bridging
The absence of data has been a stumbling the gap; but the pace at which government
block in the growth of firms in both the parastatals are being computerized is
public and private sectors of the economy. alarmingly slow. Thirdly, high level of
Managers and stakeholders of these firms illiteracy which affects the collection of data
and agencies do not understand the from primary sources is a problem in Nigeria.
usefulness of having robust database. The
Until recently, most data released by
government and businesses need data for
government agencies in Nigeria were usually
the purpose of making future decisions
outdated hence they were irrelevant for
based on past trends but when these data
researchers and businesses because they do
are not available there is no empirical guide
not cover recent period. Even now it is not
to decision making. Various reasons can be
news to key into government database and
attributed to lack of data in the country. One
find them replete with data that is too far
of such reasons is low investment in research
backward to be relevant to current decision
by government and the private sector. The
making. The data are sometimes delayed in
number of research institute owned by the
publication and they are not made available
government has not grown over time. The
when needed by other agencies. A case in
American government recently revealed a
point is the CBN annual report for 2009
plan to embark on a research to enable the
which is still unpublished. NBS Annual
country divert from the use of crude oil
Abstract for 2009 which was published in
energy to using clean coal, solar energy and
mid 2010 has for most of its variables data
wind energy. This would be attained by the
ending from 2004 to 2006. Data for 2008 and
year 2035. Nigeria and other African
2009 can barely be got from a 2009 report.
countries should commit huge investment in
Similarly the NNPC which is the apex

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regulatory body in the oil and gas industry
has no recent data as regards oil and gas
exploration, production and exportation on
its website. This however reveals the priority
placed in the use of data by the government
and its agencies.
Besides the problem of outdated data is the
manipulation of existing or available data.
Manipulation of available data would
somewhat mislead the future on past
happenings. Economic data for instance
should reveal the true nature and
performance of the nation’s economy
likewise other types of data. Many
researchers have experienced discrepancy in
data of the same category published by the
CBN and NBS. Data users are sometimes
faced with the decisions of choosing which
data is accurate and represent reality.
Sometime in 2010, the CBN governor was
summoned before the Senate for making a
statement that about 25.4% of the
government overhead goes to the
lawmakers. The Senate in attempt to
disprove the governor released “their own”
data showing that the “CBN governor’s
data” was inaccurate. Most government data
are usually subject to manipulation and they
do not show the reality of the Nigerian
situation. According to existing data, the
Nigerian economy has over the years grown
above 7% despite the economic hardship and
negative business conditions which tend to
reduce output growth. Robust data has a
plethora of uses in every society.
February 2011
Collected data is not restricted to economic
variables. Data mining can be extended to
other field of human endeavour. As an
instance, data gathered on social
phenomenon is used to analyze past
behaviour of individuals and predict human
behaviour based on the law of rationality.
This has been proven to aid crime detection
and prevention. Research and empirical
studies show that human beings always
strive to maximize their satisfaction and as a
result they exhibit similar pattern with
reference to past behaviour even if what
gives them satisfaction changes. Data
management has overtime aided various
intelligence agencies such as the CIA, MI6
and also the FBI in profiling criminals and has
led to their capture.
Economic data if efficiently collected reveals
the status of the economy and shows
whether the economy is improving or not.
The downward trend in economic variables
during the global financial crisis is a valid
indicator of how data can reflect downward
trends in the economy. Major economic
indicators such as consumption, investment,
output, income experienced downward
movements and unemployment rates shot
upward in most parts of the world. Stock
prices were down and large financial
institution could not declare large profits as
much as they did in previous years. All these
problems were revealed by the movements
of these indicators. Some investors on the
other hand took advantage of the situation
and added to their portfolio while others
quickly responded by disposing their
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portfolio for cash even though their value
was diminishing. Similarly, once the current
economic situation is known, necessary steps
can be taken to reveal future possibilities and
plan ahead. Accurate data also aids in
revealing problems as well as making it
easier to make good decisions in solving such
problems.
Another major importance of data is in the
role of research and development. Since past
data reflects past information, past trends
and activities, they can be used relatively to
predict the future. Many Nigerians for
instance believe that the country’s economic
problems began in the early 1970s when
crude oil became the mainstay of the
economy following the total neglect of
agriculture. How did this belief erupt? This
was revealed by the rapid growth in the oil
share of GDP and the sharp increase in oil
revenue together with a decline in the share
of agricultural revenue to government
revenue and foreign exchange in the country
at that period.
Also another important thing to understand
is that data when best used helps businesses
to understand their customers better and
stay ahead of their competitors. Businesses
need to understand their environment in
which they operate their customers and
clients and also their competitors which
invariably affect their growth. Improvement
in research such as investing hugely in
research and development and having a
robust database would help improve
February 2011
company’s operative capabilities and drive
these companies towards efficiency.
Solving Nigeria’s data problems
Having analyzed the importance of data, it
has been made clear that both the public and
private sector need data for their growth.
However both sectors need to participate
actively in ensuring data collection and
management is efficient. To begin with, each
sector in the public sector should have
quantifiable data on the output produced in
that sector, the number of employees, ratio
of output per employee, number of dealings,
number of customers and business partners
so as to enable reasonable future decisions
such as when or when not to hire labour;
when output should be increased; and to
ensure efficient price control and rationing
between and among sectors of the
economy. For example before recruiting
individuals into the Nigerian Police Force,
proxies for accessing the performance of
members of the police force should be
developed so as to examine the efficacy of
already existing members in the force. In a
situation where the top management like the
DPO is extremely corrupt, certainly newly
recruited members would increase rather
than reduce crime rate simply because they
have to pledge allegiance to their corrupt
bosses. Also, knowing fully well the
importance of policing in a country, the
existence of personal data -which cannot be
manipulated- of individuals before
recruitment such as criminal records, places
worked, unions or associations joined by the
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government would reveal past information Fourthly, the private sector should be given
about the individuals whether or not they are full immunity to partake in the provision of
fit for the job. public data so as to reduce the
overdependence on governmental agencies
Secondly, investment in research and
for the provision of data of various forms.
development should be supported by the
This would also reduce the manipulation of
Nigerian government. This can be done by
data by the government and enable data to
establishing research centres fully equipped
be presented or made available as they really
with modern equipment, trained and
are.
experienced personnel in schools, colleges of
education and universities around the Lastly, corporate organizations need to
country. Enlightenment programs should be imbibe the culture of having an efficient
done on the importance of research even at research department within the
the secondary level of education. organization. Also, having qualified
personnel in such department would enable
Thirdly, creating a profile and detailed
the organization utilize efficiently the data
information on each citizen in the country
available to her especially in the area of
and storing such information in a secured
improving the company’s corporate
database is as well important.
performance in the industry.

Erumebor Rume Wilson holds a Bachelor’s Degree in Economics from Delta State
University, Abraka, Delta State, Nigeria

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