A lot of Nigerians have expressed their anger over the planned disbursement of the $322 million recovered from the loot of the late Gen. Sani Abacha to 302,000 poor households in Nigeria.
A lot of Nigerians have expressed their anger (and rightly so) over the planned disbursement of the $322 million recovered from the loot of the late Gen. Sani Abacha to 302,000 poor households in Nigeria.
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As the argument of those opposed to the planned disbursement goes, it appears unreasonable to just take out money and share out to people that did not work for it. For them it makes no economic sense when that money, amounting to about N115 billion, could be invested in tangible projects that will generate revenue for government, employment for the youths and goods for the household.
Some of the opponents of the policy have even gone ahead to recommend psychiatric tests for the government officials that proposed the disbursement on the grounds that it looked rather insane to share out money in that fashion.
Politicians and their followers have also taken the bait from there and are making political meat of it. But I must say at this point that in the absence of clear cut and realistic projects on which the fund can be spent, sharing it out to the very poor stands out as the best option of utilising that fund.
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It is the most potent economic action that the Federal Government may yet take to empower people and revive the economy that is still suffering from the battering by the recession of 2016 and 2017.
Elementary economics teaches that government expenditure raises aggregate demand. By making expendable funds available to households, government will be empowering the families to make purchases and pay bills which will directly impact the economy.
This way, businessmen, traders, investors and people that have services to sell can actually find people to patronise them. There is no better way of approaching economic revival than by putting money into the economy. Money in the hands of the poor remains within the economy. The people spend the money on essential consumer goods, which have a direct bearing on the domestic productive sector. There is no better way of boosting the domestic economic other than by empowering people that are not likely to take the money abroad and cause capital flight.
True, people may think that by giving free money to people, government is wasting investible funds. But that argument is a fallacious.
Money is a living thing and it is liquid like water. It finds its own level no matter where you place it. If money is given to someone that does not know how to spend it, through his indiscretion, the money flows from such people to people that know how to spend money wisely.
What we should rather worry about is whether the money will not be diverted by corrupt officials who will corner it and perhaps return it abroad. We should also worry that government is not equitably spreading the money, having chosen only 19 states to which the fund will be disbursed.
One may at this point want to ask what happened to previous Abacha loots returned to the country. Some of the loots were actually shared among the three tiers of government, which many know ended up in the pockets of corrupt government officials.
And for the arguments in favour of using the fund to finance industrial projects, build infrastructure and finance social institutions, the question is still the same. How many government projects in the country have been logically completed and commissioned in a manner that they are running and supporting the economy?
When government projects are done, they are done haphazardly and never really completed to the point that they, like the Ajaokuta Iron and Still and the complimenting steel rolling mills in the country, become productive and provide employment. They rather become yet another drain pipe to which funds are budgeted endlessly to sustain their non-productive staff, maintain installed equipment and secure the premises.
Most of those that have criticised the direct disbursement of the Abacha loot to the poor have rather been more political than realistic. The truth is that given Nigeria’s peculiar scenario where project funds ultimately get diverted, funding government projects with the loot or spending it on some ill-conceived social services programme may never pay off.
I think what Nigerians should worry about is to ensure that the funds actually get rightly to poor households and as many of them as possible. This is because if it does, it has the potential of reviving the ailing local industries and the real sectors. And that is what is really needed to jumpstart the economy.
Empowering the masses is what government should have done years back when the economy ran into recession. Government expenditure, as economics says, boosts aggregate demand.
People should actually see the wisdom in the government gesture, especially as it was a precondition for releasing the looted fund. It is important that government empowers the weakest citizens in an economy where subsidies on social welfare and essential commodities have been taken away.
It does not only better the lives the people, it enhances their purchasing power, which is what is needed to keep the economy rolling. Economics should come clean of politics.