Nigeria does not present any credible or imaginative fiscal and macro policies for investments and economic development. This is because the structures to handle such efforts are absent coupled with the political will. This seems like an authoritative statement but, we shall determine how authoritative or otherwise the statement is as we move further.
Our economic structure is shallow because we lack accurate data or records, fewer funding equity channels for private enterprises, fewer new investments and over 80% of our real estate are dead capital because they are undocumented. Funding or government stimulus packages for the private sector are not well implemented since such funds end up in private pockets. Capital is destroyed without investments and the difficulties of finding investments remains a challenge for economic development. In order not to continue sounding authoritative, I wonder if this is all about institutional unaccountability or just lack of political will.
I won't detain us here but will discuss public expenditure. Increasing government expenditures is key because of lack of incentives for the private sector which has reduced private expenditure in Nigeria for the past 10 years. Government expenditure has also not risen to splendid levels and one wonders how economic development will come. The World Bank reported that government expenditure in Nigeria has remained at an average of 12% to GDP since 2014. Military Expenditure (MILEX) has also been at less than 1% to GDP for the same period regardless of MILEX being captured under the Service Wide Envelope for Security and Intelligence operations. The latter is a cesspit of corruption because it's largely unaccounted for.
Let's bounce on the Social Investment Programme (SIP) of government. This programme has had mixed reactions from the people even when it's classified in distinct names. SIPs around the world are socialist programmes transplanted to neo-liberal and capitalist systems to temper the inherent contradictions in Capitalism. Subsidies meant for the poor on certain products and services are demonized by Capitalists, removed and replaced with Conditional Cash Transfers (CCT). CCT ordinarily should be a robust policy deployed to deliver social wealth to the weak and vulnerable but in Nigeria, it is grossly insufficient and fraught with institutional failures and unaccountability. The release is untimely,transparency zero, monitoring and targeting weak or non-existent. CCT is meritorious for rebasing socioeconomic inequalities and disrupting the vicious cycle of intergenerational poverty as a form of social safety net. It attempts to integrate the causes of poverty with the symptoms but it does not overcome loss of productivity and dignity. So, where does this leave us? In Nigeria, the implementing Ministry has been a fraud shop.
The government has not done well in job creation and rural development. This failure has permitted the prosperity of insecurity in Nigeria. Our national security strategy has no strategy for job creation as a driver of economic development or a plan for rural development. Our rural economy contributes about 21% to GDP yet,we have no national strategy for rural development with about 48.88% of Nigerians living in the rural areas. This means there is no economic programme for almost half of our population.
There is no credible and integrated strategy for private enterprises in Nigeria as the engine of growth and job creation except a tax plan. We forget the private sector is the productive arm while the government being the highest employer of labour offers service employment or employment for poverty alleviation. We should be asking these questions:
What is happening to incentives for private enterprises? How do we reinforce the devolution of power? How do we rework our judicial system? How do we increase the incentives for new investments? How do we battle corruption and corrupt acts? How do we diversify our economy? How do we improve and enhance technology penetration and industrialization?
As long as these questions remain unanswered, Investments and Economic Development in Nigeria shall remain a mirage.
Credits: Dr Ody Ajike, Esq.,
0 Comments