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Are Nigerians Benefiting From Democracy or is Democracy Simply Robbing and Impoverishing Them?

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___The 2018 Budget, Between President Buhari and The National Assembly…A Critical Look at Data

“As long as Poverty, Injustice and Gross Inequality persist in our world, none of us can truly rest”……Nelson Mandela

In 1981 with a population of 75.7m people and 47% living below the poverty line, Nigeria had 35.6m people living in Poverty. By year 2000, a year after the Country had returned to democracy rule and with a population of 122.3m people, percentage living in Poverty had increased to 65% bringing the total headcount of people living below the poverty line to 79.5m people.

But something happened in the early 2000’s, The Federal Government in trying to cub the growing rate of Poverty, introduced The Poverty Alleviation Program (PAP) and by 2004 with a population of 135.4m people, Poverty as a percentage of population had reduced to 54.4% and headcount reduced to 73.7m people. This means that between 1981 and 2004 a period of 23 years, Nigeria added 38.1m people to poverty, an increase of 107%.

___The 2018 Budget, Between President Buhari and the National Assembly....A Critical Look at Data

In 1981 Nigeria’s GDP was $61.1bn and in 2004 GDP was $87.85bn, between 1981 and 2004 the GDP never went above $87.85 bn, in fact it reached its all-time lows between 1981 and 2004 with $20.7bn in 1986, and $21.35bn in 1993. So between 1981 and 2004 (23 years), Nigeria’s GDP only appreciated by $26.75 bn, an increase of 43.8%.

But in 2004, The Poverty Alleviation failed because the root cause of increasing poverty was not addressed which is investments in Human Capital Development and Infrastructural Investment to help the people create and generate wealth, rather government gave money to the people which was not sustainable.

Between 2004 and 2010 (6 years), Nigeria’s GDP exploded from $87.85bn in 2004 to $369.1bn in 2010, an increase of $281.25 bn and percentage increase of 320.2%, but the interesting thing was that poverty as a percentage of population also increased to 70%, and with a population of 158.6m people in 2010, the headcount living below the poverty line increased to 111m, an increase of 33.3m people in just 6 years.

While Nigeria rebased its economy in 2013 with GDP at $510bn and reaching an all-time high of $569bn in 2014, Poverty as a percentage of population still stood at 70%. As at 2018 and a population of 198 m people, percentage living in Poverty in Nigeria still stands at 70% which means that about 138.6 m people are living in poverty in Nigeria. This means that between 2004 and 2018, a period of 14 years, 64.9m people were added to poverty, increase of 88.1% in 14 years. And between 2004 with a GDP of $87.85bn and 2018 with a GDP of $406bn, Nigeria’s GDP has increased by $318.15 bn, a percentage increase of 362.2%.

Countries With Extreme Poverty

PRESIDENT BUHARI AND NASS

While the President had submitted a budget to boost infrastructure, and use the investment as a fiscal policy to help grow the economy, it is imperative to note that Nigeria has been operating an Expense Budget and not Investment Budgets since the Mid-80’s (Majorly recurrent expenditure) which has made it almost impossible for its citizens to grow wealth since investment in Human Capital Development and Infrastructural Developments are what helps the country create and generate wealth.

Since coming into office, the President has continued to Increase Capital Expenditure as a percentage of the Budget, from 23.8% in 2014 and 15% in 2015, Capital Expenditure has stood at 30% of the Budget since 2016. But the 2018 budget which has taken 7 months to approve by NASS, the legislative arm of government has cut N347bn in the allocations to 4,700 projects from the original budget summited to them and introduced 6,403 projects of their own which amounts to N578 bn, as usual funds are allocated as constituency allowance for projects but they are never executed, as in some cases to be seen to have done something, the projects are so over bloated that even an idiot knows they have been ripped off.

The President had stated that some of the Strategic National/Regional infrastructure which the NASS had cut funding from which was supposed to help the country included the Mambilla Power plant, Second Niger Bridge/Ancillary roads, The East-West Road, Bonny-Bodo Road, Lagos-Ibadan Expressway, and Itakpe-Ajaokuta Rail Project. Others include Abuja arterial roads and Mass Transit Rail Projects, the Rehabilitation of the United Nations building, Interventions in the Health Sector which included Tertiary Health Institutions, Provision of Security Infrastructure in the 104 Unity Schools, Federal Government National Housing programme. Take off grant for the Maritime University, Enugu Airport, Export Expansion Grant and Special Economic Zones/Industrial parks.

While NASS is cutting down on funding of critical projects that will grow the economy and reduce Poverty, they are increasing their budget to put money in their own pockets. NASS through Statutory Transfer has increased its budget by N14.5bn from N125bn to N139.5bn. These are major reasons Poverty will never reduce in Nigeria because funds meant to grow the economy are directed to end up in people’s pockets.

COMPARING NIGERIA TO OTHER COUNTRIES…….

“Poverty is the absence of all human rights. The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society”……Muhammad Yunus

Nigeria is the only Emerging Economy in the world where GDP is increasing and Poverty is also increasing, between 1981 and 2016, other countries that have recorded economic growth have succesfully reduced Poverty. China while recording economic growth has lifted 789.5 million people out of Poverty, Indonesia has lifted out 78.7 million people, Thailand has lifted out 29.4 million people, Bangladesh has lifted out 24.4 million people, Malaysia has lifted out 2.93 million people, and India has lifted out 137.2 million people, but Nigeria added 90.4 million people to poverty between 1981 and 2016 alone and a total of 94.7 million from 1981 to 2018.

While the President wants to invest in Infrastructure to help Nigerians and the Nation build Wealth and get out of the Poverty Trap, the National Assembly world rather Nigerian’s continue to live in Poverty while they divert funds into their own pockets.

Author: Roman Oseghale

Roman Oseghale holds Masters degree in Architecture and a graduate of Executive MBA from the Telfer School of Management and Leadership, University of Ottawa, Canada, he is a Consultant and Business Intelligence Analyst and the CEO of IntelServe Inc. a Canadian Business Consulting Company. He is a passionate analyst and writer on Leadership and Economics, He is a strong advocate of Investing in Human Capital Development to drive Economic Growth and Sustainability. www.intelserveinc.com

One thought on “Are Nigerians Benefiting From Democracy or is Democracy Simply Robbing and Impoverishing Them?

  1. Hi Roman,

    You have some really interesting Stats here. Time will tell how this will all play out for the country

    Best wishes

    P

    Like

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