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Poverty and electoral democracy in Nigeria 13 Apr 2022

The relationship between economic growth and democratic politics has been a lasting debate in political economy. The consensus could be taken to be that a democratic politics that promotes effective conflict prevention or resolution (Adam Przeworski) or political equality (Robert Dahl) would lead to sustained economic growth more than an authoritarian politics. Empirically, democracies have created wealth in larger and sustainable scale more than non-democracies. But the best performer in poverty reduction is a non-democracy. This means that anti-poverty requires more than formal democracy; it requires a democracy with the incentive for economic growth and fair wealth distribution.

Nigerian democracy doesn’t have that, and its poverty is growing. In continuation of its commitment to fight poverty in Nigeria, the World Bank recently issued its 2022 Poverty Assessment Report on Nigeria. It confirms that more than 40% of Nigerians are very poor. That is an estimated 80 million Nigerians. In terms of multidimensional poverty, more than 160 million of the estimated 200 million Nigerians are absolutely poor. With inflationary pressure arising from the global economic meltdown and the impact of insecurity in farming communities, the Bank estimates that more than 5 million Nigerians will join the club of the extremely poor.

Nigeria is the country with the fastest increase in poverty rates in Sub-Saharan Africa. 30% of its population are youths that need jobs but cannot find them. Nigeria has advertised its economic reform both in the National Sustainability Plan and the National Development Plan (2022-2035). More short-term reform policies include deregulation and commercialization of its energy sector. The removal of subsidy in the oil and gas sector reform has been put on hold because of adverse politics. But even if it restarts the reform in the oil and gas sector, it will not make much dent to poverty. Only about 1% of Nigerians are employed in the sector.  

The report notes that government policies against poverty are failing. Social intervention is small, inefficient, and poorly targeted. Productivity is not increasing because of the political economy of rent-seeking and the misalignment of policies and institutions. The report raises the alarm that as Nigeria enters an election year, failed policies and aggravating insecurity means that poverty will worsen. Considering that Nigeria’s fiscal fragility is worsening and its debt to revenue ration and subsidy payments are increasing exponentially, it faces a horror future and a difficult path to recovery.

Moving away from its neoliberal market fundamentalism, the World Bank thinks the way out of Nigeria’s rising poverty is to expand production through enhanced human capital, enhance household earnings through productive job creation and sustain and expand social protection.

But the big elephant in the room that the report did not mention is politics. The week that the report came out, the ruling party organized its first convention to elect its executives. After much rancor and subterfuges, the party settled on consensus mode of electing officials to its offices. The governors entered a deal with the president to compile a list of candidates to occupy the National Executive Committee (NEC) offices. Aspirants to political offices were asked to withdraw and consent to a list signed by Governors elected on the party’s platform. They are the real owners of the party. They have struck a deal with the President, and that is all that matters.

This is the model of electoral democracy that the ruling party has adopted for a country trapped in extreme poverty. The logic is the preference of order over the ‘disorder’ of democracy. But it goes with complete loss of voice of ordinary people, the very people that democracy ought to enhance their voice. The utility of democracy to economic growth and social inclusion is that it provides incentives for politicians to be, as Robert Dahl puts it, “completely or almost completely responsive to all its citizens”.

If the electoral democracy dispenses with the voices and votes of the poor, what mechanism ensures that political elites will invest in productive jobs, enhance human capital, and expand social protection, as the World Bank urged?

Nigeria’s pervasive poverty inheres in the structure of its political economy. Historically, elite capture of the state has hindered fair distribution of resources. National budgets have been captured by ruling elites, and labour laws have eroded protection for the poor. There is no disciplinary mechanism to force policies that build human capital and enhance earnings for the 80 million extremely poor Nigerians.

The notion of electoral democracy that results in sustained economic growth and fair wealth distribution is not possible in Nigeria today, unless the voice of the poor is amplified in political contest through radical electoral reform.

The APC Convention tells that this will not happen soon, and macroeconomic reforms will falter on account of bad politics. Politics again will trump economics.    

Sam Amadi, PhD, a former Chairman of the Nigerian Electricity Regulatory Commission, is the Director of Abuja School of Social and Political Thoughts.