Democracy has to be much better than any other forms of Governance for a number of reasons which we don’t need to over flog. But it is not without its flaws and we dare say the flaws are quite a lot. One major flaw democracy has at least from the perspective and experiences of Nigeria is its ability to over bloat the government.

In a democracy, bureaucracy is the order of the day where civil servants and public officials earn a huge chunk of our revenue without any single meaningful contribution to nation building. What suffers the most is capital projects. It is a known fact and one that successive governments have had to deal with over the years.Recurrent expenditure is always higher than capital expenditure. Every single budget is judged on this comparison for obvious reasons. The lower your capital expenditure the harder it is for us to invest in the critical infrastructure Nigeria needs to move forward.

Ironically, the military government performs much better than democracy when it comes to capital expenditure vs recurrent expenditure. In fact, the biggest irony is this….the Abacha government will all its looting spent more on capital expenditure than it did on recurrent expenditure. Just look at the chart below;

Capital Expenditure vs Recurrent Expenditure (including interest payment)
1994-2014
Source: Nairametrics Research/CBN

From above the period between 1994 and 1999 saw capital expenditure as a percentage of government revenue outstrip recurrent by as high as 77%. But from when the democracy took over, things began to change dramatically. The gap simply just widened and today it appears there is no way we can claw it back. So how did Abacha achieve this despite all the looting. One reason this could have happened was due to the influence of PTF at the time. The Petroleum Trust Fund managed by current Nigerian President, Buhari carried out a lot of capital projects in that time. He was basically running a parallel government. This is probably a lesson for Nigerians as they decide who leads them. To get this country moving, recurrent expenditure will have to drop and that could mean rendering some MDA’s moribund.

The post above and its ensuing comments, if any, is purely the opinion of the writer(s). It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.