When Mrs. Laura Bush first came into the White House and received bill for the food her family consumed she was shocked to the marrow. The USA, the worlds number one symbol of economic strength can't even afford to give free food to her President and their family. With a GDP of about 19 trillion dollars and a per capita income of $58,000 dollars, the United States Presidents only have free accommodation in the White House but pay for everything they need from tooth paste to Laundary .
Ironically Nigeria with a GDP per capita of about $2,000 dollars, will spend 18.1 billion (see 2016 budget ) to run the presidential villa in 2016, an amount 11.1 billion higher than the 6.6 billion, last government spent in 2015 ( see 2015 budget). I'm sure many people do not know that about 43 states charge prisoners for food they eat in US prisons. Some states like Florida have a $50 daily detention fee. Arizona even adds your medical bill if you fall sick in prison and take medication. The land of freedom offers you nothing for free. On the other hand, there is so much free lunch in Nigeria that some states aren't even allowing its citizens, the responsibility of paying for their own refuse disposal.
In Nigeria, one government, in a bout of populism, demolished all the toll gates across the country and roads deteriorated. The wave of free education swept through our governors some few years back as they struggled to out do one another to lunch the populist program. But look deeply inside every free education program and you'd see its part of some government officials strategy to steal public funds. These are huge fraud avenues as so much is appropriated to get the lowest quality education and because it's free, nobody questions the government. In a south south state, an ex governors wife made billions over invoicing free school uniforms, free school bags, free sandals and free books. The hallucination of being a wealthy nation was so intense in the 70's that an ex head of state said our problem was not knowing what to do with money.
Now we are in a recession. If this continues in three consecutive quarters, we'd go into a depression.
The Nigerian economy is currently in trouble with GDP growth rate declining to all-time low of -0.36 percent. Inflation and unemployment are currently rising at rates of 16.48 percent and 12.1 percent as reported in Q1:2016 National Bureau of Statistics report. In spite of this, we are still not only sponsoring pilgrims, but also subsidizing their foreign exchange currency. Let's look at Venezuela, country that has 18% of the worlds proven oil reserves, nearly 300 billion barrels of oil. This is supposed to be a blessing, but Juan Pablo Alfonzo, a Venezuelan diplomat referred to it as 'the devils excrement'.
Venezuela felt so rich at a point that former President Hugo Chavez's government was giving out free laptops and washing machines to citizens . Houses were being built for citizens as mega hospitals were built and catered for the citizens for free. Chavez populist government excited the masses who were enjoying free things without really improving themselves. Venezuela became a country of the 'happy poor'. Private companies were expropriated and became national assets as the citizens hailed the populist actions. Prices of goods were fixed as government used oil money to subsidize the people's ostentatious taste buds ( Remember the Nigerian subsidy regimes ).
Today Venezuela has become hell as oil prices dropped from $140 to $40 dollars. Ration lines are disappearing as the rations have vanished. Mega international corporations like Cocacola and Macdonads are closing shop. The country has dried up and become a failed state equal to war torn countries like Iraq and Syria. Crime rate escalated and 96% of the crimes are never investigated. The citizens cry as they sight food after trekking long hours to Colombia, while the government struggles to exchange oil and food with Jamaica.
The irony is that despite this, the government still spent 400,000 dollars recently just to attend Fidel Castro's birthday. The major challenge in Nigeria now is that the current government was elected under a populist people's mantra. Promissory notes of feeding school children and paying 5000 naira to unemployed youths were sent to the masses. In a country that has lost its major revenue earner, the best decision government would have taken now is to begin the privatization of some of its national assets.
The sale of LNG alone can give the government up to $20 billion dollars and this will automatically crash the exchange rate to a little above 200, fund critical infrastructure which spiral effect will bring back the vanishing middle class. But the government is rather planning to acquire more national assets by re-establishing a government funded National airline carrier like Nigerian airways just for the sake of national pride and populism. What government has failed to understand is that United States airways, Kenyan airways and even Ethiopian airways are all owned by the private sector. After selling off the refineries, President Yardua in a bout of populism cancelled the sales as Nigerians jeered.
Today, the portharcourt refinery is still producing at 20% capacity while the privatized Eleme petrochemicals which was at the same capacity is now at 80% capacity. With a huge budget deficit, it's ironical that we'd rather borrow $20 billion dollars from China to fund the budget rather than privatizing national assets that are run like civil service companies. Even government officials know that government has no business doing business, but government has to remain popular and this automatically maintains our free lunch entitlement mentality. God will help us .
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