PHOTONEWS: Monumental Fraud Discovered In Award Of Abuja Millennium Tower Project | Sahara Reporters
Originally Posted by Waves
I used the example of cliche 'Capital vs Recurrent' to illustrate the point that you need a very local perspective to apply a western concept. You need a.much deeper level of analysis to determine the quality (not the classification) of the spending. Which of the spending helps create jobs, has multiplier effect or reduces poverty. Most states (especially the Northern ones) have a better Capital / Recurrent expediture ratio than the FG. That is why any traveller to the North from the South is usually amazed by the level of infrastrucutre (especially roads) in th North. But look at the people and the quality of life they live, level of umemployment and poverty and you may have an idea of what I am talking about. I used to work for a telecom company and part of my brief involves looking at revenues on an LGA and State level. If you assume that Telecom spending is a good proxy for wealth and business activity, then you will be amazed what you will see if you trend the numbers over the last 10 years side by side with the so called Capital expenditure.. You may begin to question the idea whether infrastructure spending in Nigeria really boosts growth and employment. The biggest ticket item in FG's capital budgets is usually roads and that is why I used that example.
I don't think Madam can be held responsible for spending on the VPs house. But by going about talking about 'Capital Expenditure', she may well be reminded that the house is a major part of the FGs capital expenditure. NOI is rather disconnected now and is not the NOI that served OBJ. She is either disillusioned or simply tired.
This is a good example of the problem with 'Capital Expenditure' in Nigeria. A N69 billion project creating only 304 menial direct jobs for Nigerians and the best jobs for foreigners. So when this project is eventually completed, what economic impact will it have?
The most successful poverty reduction program in the world of recent was in Brazil. And what did they do? The simply shared money (Bolsa FamÃ*lia - Wikipedia, the free encyclopedia
). It may be counter intuitive to a western trained mind but it has been widely successful in not only reducing poverty but boosting economic growth. And the reason is simple. If you give a poor man money, he will likely buy garri, maize or sugar. This kind of expenditure will boost demand for such basic products that are produced domestically. Simple 'demand-side' economics will tell you that this will lead to more production and employment which will lead to additional income and more demand and so on and so on. If you take the money, and invest it in "Capital Projects' like this useless tower, the owner of Salini (an Israeilite) will import the most of the items, employ few Nigerians and ship out the bulk of the money as profit. You will now be left with the Tower and its accompanying recurrent expenditure. Iran has also shown a very ingeneous way of removing subsidies and boosting growth (Iran's bold economic reform: Economic jihad | The Economist
). During the FSR demostration, i highlited this and suggested it be used instead of the useless Sure-P program which is turning in to a fiasco (... NASS considers SURE-P a rip-off
). So much for Ivy league.......