subject: Data mining and the Nigerian Economy [print this page] Data mining and the Nigerian Economy Data mining and the Nigerian Economy
By: Erumebor Rume Wilson Email:erumebor@yahoo.com, wilson@valuefronteira.comData mining simply involves extracting and analyzing data in order to discover trends, patterns and correlations. Data collection is faced with diverse problems in Nigeria. This is because in most cases its importance is not emphasized in many developing nations. Data collection no doubt is a complex process that involves the use various statistical methods and sophisticated computers; in most cases it requires constant update overtime. In the committee of nations, only developed countries continuously emphasize and use data for the growth and development planning. Most developing countries pay lip service to the use of data for such endeavours. In Nigeria for instance, there are few recognized agencies which collect and accumulate personal data of citizens both within and outside the country; where these records exist they are often fragmented and almost useless. Hence government agencies have no holistic record of the names, address, occupation, location, records of place of birth, finger prints and other relevant record of citizens. The absence of these vital information have seen people go missing without being found, criminals fleeing with the securities agencies not being able to apprehend them and cases where people can easily change their identity and personal details hence promoting forgery and theft. The question is how can a criminal be caught if you don't have his basic bio-data?This brings us to the importance of a cashless or credit society as seen in most developed countries. America for instance operates an economy in which people do not need to hold cash all the time before they purchase items on the street. The use of credit cards by individuals which is a common way of settlement facilitates easy transfer of funds. But this is often used in monitoring the movement of individuals in advanced economies. Once an individual uses his credit card or ATM card, his current location is known to security agencies such as the CIA, FBI among others. This however does not mean that having accurate data on the citizens instantly reduces crimes rate but it enables criminals to be easily apprehended which in turn instil in them the fear of the law. Also the issue of dual personality or changing certain personal information like date of birth seldom occurs since national records can be easily accessed. Conversely operating a ``cash full economy'' does not imply that data collection and management isn't as important as it is in a credit economy. Its importance would be highlighted in subsequent paragraphs. Also applicable in the corporate environment, data collection and management has helped many small and large corporations in risk management. The whole idea of the "know your customer (KYC) strategy" helps detect fraud and improves the products and services rendered by these institutions.Data collection and management has posed greater challenges in most developing countries. We would broadly categorize the problems associated with data management in Nigeria into three: Lack of data, the existence of "outdated data" and data manipulation. The problems of data update and delay in data publication all centres on these three categories.The absence of data has been a stumbling block in the growth of firms in both the public and private sectors of the economy. Managers and stakeholders of these firms and agencies do not understand the usefulness of having robust database. The government and businesses need data for the purpose of making future decisions based on past trends but when these data are not available there is no empirical guide to decision making. Various reasons can be attributed to lack of data in the country. One of such reasons is low investment in research by government and the private sector. The number of research institute owned by the government has not grown over time. The American government recently revealed a plan to embark on a research to enable the country divert from the use of crude oil energy to using clean coal, solar energy and wind energy. This would be attained by the year 2035. Nigeria and other African countries should commit huge investment in research. Also most firms in the country lack a well functioning research department which ideally should provide quantitative information needed for empirical investigations. Secondly, technological backwardness plays a part in the non existence of robust data in the country. Since data collection involves the use of highly sophisticated modern computer equipments, the absence of modern technological facilities such as software and internet facilities has over the years limited the quality of data in Nigeria. But it must be noted that there are giant strides at bridging the gap; but the pace at which government parastatals are being computerized is alarmingly slow. Thirdly, high level of illiteracy which affects the collection of data from primary sources is a problem in Nigeria.Until recently, most data released by government agencies in Nigeria were usually outdated hence they were irrelevant for researchers and businesses because they do not cover recent period. Even now it is not news to key into government database and find them replete with data that is too far backward to be relevant to current decision making. The data are sometimes delayed in publication and they are not made available when needed by other agencies. A case in point is the CBN annual report for 2009 which is still unpublished. NBS Annual Abstract for 2009 which was published in mid 2010 has for most of its variables data ending from 2004 to 2006. Data for 2008 and 2009 can barely be got from a 2009 report. Similarly the NNPC which is the apex 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.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 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 company's operative capabilities and drive these companies towards efficiency.Solving Nigeria's data problemsHaving 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 government would reveal past information about the individuals whether or not they are fit for the job.Secondly, investment in research and development should be supported by the Nigerian government. This can be done by establishing research centres fully equipped with modern equipment, trained and experienced personnel in schools, colleges of education and universities around the country. Enlightenment programs should be done on the importance of research even at the secondary level of education.Thirdly, creating a profile and detailed information on each citizen in the country and storing such information in a secured database is as well important.Fourthly, the private sector should be given full immunity to partake in the provision of public data so as to reduce the overdependence on governmental agencies for the provision of data of various forms. This would also reduce the manipulation of data by the government and enable data to be presented or made available as they really are.Lastly, corporate organizations need to imbibe the culture of having an efficient research department within the organization. Also, having qualified personnel in such department would enable the organization utilize efficiently the data available to her especially in the area of improving the company's corporate performance in the industry.http://www.articlesbase.com/business-articles/data-mining-and-the-nigerian-economy-4301435.html
