Impoverishing Nigerians into prosperity
By KELECHI DECA
I HAVE studied in great detail the economic policies and trajectory of over 35 countries that moved from low income to middle and high income in the last 50 years. There is nowhere on earth where their people were ‘Impoverished into Prosperity’. This clearly reminds me of that evergreen quote by the wartime prime minister of Great Britain, Sir Winston Churchill, against the incessant recourse to taxation as the only tool in improving the economy of a country. According to Sir Churchill: “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Writing in the Forbes Magazine of May 10, 2021, Frank Holmes, CEO and chief investment officer of U.S. Global Investors reechoed Churchill’s words and went further to affirm that: “On the contrary, countries have found prosperity by eliminating taxes.” He cited an example with China under the leadership of Deng Xiaoping which in 1978 created special economic zones, SEZS, along the coastline, in cities such as Shenzhen, which made it possible for millions of dollars in foreign investment to pour in. Holmes added that: “It’s hard to imagine China becoming the second largest economy had this decision not been made.”
So many countries from the United Arab Emirates, UAE, to Qatar, South Korea, Chile, Vietnam and even the Baltic states of Estonia, Latvia, and Lithuania, all adopted similar measures in their journeys from backwater countries to global prominence. The preponderance of available results and statistics of countries that have worked are self-evident that conceiving and executing wrong policies and expecting great results belong to Yabaleft. That policies aimed at curtailing the government’s huge expenditure, plug loopholes, and address issues of high overhead do have a lift effect on the economy, and may help lift people out of poverty in any country is not in doubt. But that is not enough.
For the so-called reforms by the Nigerian government to have much desired effects, there must be concerted efforts at cutting government’s expenditures, both the ones captured on line items of the budget, and the ones that are hidden from the public’s eyes. Second would be what to do with money saved. Unless there are honest commitments to plough back such funds into sectors that could have direct bearings on the birthing pains occasioned by such policies on the people, especially in the areas of health, transport infrastructure, education and general welfare, the results would be mass impoverishment.
Let us take a moment to focus on Argentina. When Javier Milei was campaigning last year to become the president of Argentina, he moved around with a chainsaw, sending the message that he is determined to cut public spending, and plough back funds to areas most in need of it. He wasted no time as soon as he was sworn in. He started by devaluing Argentina’s currency, the peso, by 50 per cent, slashed state subsidies for fuel, and cut the number of government ministries by half. That initial effort yielded massive results. Argentina went from a fiscal deficit – the difference between the government’s spending and income of $120 billion in December of last year to a surplus of $271 billion in April. The President pointed out that high inflation is “the most regressive tax that most afflicts people”. Inflation has dropped from double digit to single digit.
Interestingly, Argentina was in a far worse state than Nigeria, and the present administration in Nigeria came into power earlier than President Javier Milei of Argentina. Argentina is not out of the woods yet, the pains of the reforms are still biting, but with a tinge of hope. A hope that is actually being renewed, and compared to Nigeria, it is like day and night. What’s happening in Nigeria reminds me of that Yoruba saying that “a medicine that should be the cure for headache shouldn’t require the severance of the head”. Unfortunately that’s where we are, impoverishing the people into prosperity by saving their money for them while they are starving to death because you’d use the savings to give them a befitting burial instead of using it to save their life.
Do people even understand the full ramifications of poverty and its unintended consequences and drag effects on virtually everything within its spheres of influence? How can the present policies induced mass impoverishment eventually lead to prosperity when over half of the population is fully baptized into multidimensional poverty with no escape route? How do you think that policies that have raised energy poverty rates on a people under the cloaks of a food inflation that’s the highest in 28 years would suddenly extricate themselves from the holds of that chain when basic supporting infrastructure is absent?
Go and do a small survey from the numerous interstate motor parks in your state or region. Ask the drivers the extent they have experienced drops in patronage. That is if you understand, maybe they didn’t teach you, that there’s a correlation between free, affordable movement of persons, and goods, with economic activities and growth. Policies that cut access to movement also deny people access to opportunities.
Our people say that: “Anaghi ano ofu ebe ekiri mmanwy”. Because life is an unleashed masquerade in motion, the people are spectators in a huge conundrum. Your ability to move unhindered and unencumbered by the vicissitudes of your own existence determines how vantage your views would become. And that anything that disrupts or reduces such movements, also affects economic activities, thus earnings and incomes.
You can’t reduce people’s abilities to move around, reduce their incomes through massive shutting down of economic activities and windows of“opportunities, keep their wages stagnant while inflation is unleashed through high cost of fuel, energy, food, medicine, and school fees among others. Then promise them that you are working their prosperity. Ko le work!*Deca, a journalist, wrote from Lagos.
The post Impoverishing Nigerians into prosperity appeared first on Vanguard News.
