Democracy, as practiced in advanced capitalist countries, is often seen as a more responsible system that improves decision-making and increases the dignity of its citizens. It provides fundamental rights such as the freedom to speak, assemble and participate in governance. On the economic front, democratic governments have the potential to alleviate poverty through policies that benefit their people. Ideally, democracy should lead to economic development, improved living standards, and political stability, as seen in countries such as the United States, Canada, and Germany.
However, the question remains whether the return to democracy in Nigeria in 1999 has brought economic prosperity to Nigerians.
Before 1999, Nigeria’s leaders and people aspired to democracy and desired development and economic growth. The transition from military to civilian rule was achieved through fierce struggle and international support. However, the constitution created to guide this democracy had fundamental flaws. Despite the opening phrase, “We are the people of Nigeria,” this constitution was imposed without any real input from the Nigerian people.
When democracy returned in 1999, Nigeria’s economy was in trouble. From 1996 to 1999, the GDP growth rate fell from 4.2% to 0.58%, and the unemployment rate hovered around 4%. The inflation rate peaked at 29.3% in 1996, but fell to 6.6% in 1999. However, 24 years later, in 2023-2024, GDP growth contracted by 3.2%, unemployment fell to 3.9%, and inflation skyrocketed. to 34.2%. Agriculture’s contribution to GDP decreased from 34.3% in the late 1990s to 19.63% in 2023.
Nigeria once boasted a robust industrial sector, with manufacturing hubs in cities such as Lagos, Kano and Kaduna contributing significantly to employment and economic growth. However, many of these industries have since collapsed, leading to increased unemployment and income inequality.
In the first eight years of democracy, Nigeria’s foreign exchange reserves grew to almost $43.1 billion. This was a period of optimism as the country hoped to break free from the economic mismanagement of military rule. However, as the years passed, the expected benefits of democracy did not fully materialize. Even as oil revenues and foreign exchange reserves soared, the benefits did not trickle down to average Nigerians.
Under President Goodluck Jonathan, oil revenues exceeded $454 billion. However, economic growth slowed from 8% in 2010 to 2.3% by the end of his term. Foreign exchange reserves declined to $28.6 billion and the naira depreciated from 148 to 195 to the dollar. This economic decline was caused by poor planning, excessive spending, and widespread corruption.
Economic conditions worsened under President Muhammadu Buhari. Foreign exchange reserves have stagnated at $32.2 billion, and public debt has ballooned from about $30 billion in 1999 to $42.5 billion in 1999 and $85.9 billion in 2021. By 2023, Nigeria’s total public debt reached $91.46 billion, with a debt service-to-revenue ratio of 96.7. %. Mismanagement and corruption plagued the country, and scarce foreign exchange resources were being allocated to government cronies as the naira continued to depreciate.
Manufacturers struggled to access raw materials forex, leading to factory closures. Inflation rose to over 34% and unemployment continued to rise. Unable to find work, many young Nigerians have turned to motorcycling and fraud.
Although Nigeria’s higher education system was relatively well managed before 1999, many institutions now produce graduates with degrees that have little value in the job market. Despite the expansion of federal and state universities, the quality of education has declined significantly.
Similarly, Nigeria’s infrastructure deficit is worsening. Democracy is supposed to lead to improved infrastructure, but many projects were initiated without public benefit in mind. These projects often served as a means for the ruling elite to siphon off public funds.
The election of President Bola Tinubu brought hope to many Nigerians who were hoping for policies that would boost the economy. However, his administration quickly implemented International Monetary Fund/World Bank-inspired policies, such as eliminating oil and energy subsidies and floating the naira. These decisions, taken without proper preparation, pushed Nigeria further into economic hardship. Inflation soared to 34%, unemployment rose, and the value of the naira fell dramatically, reaching 1,670 naira to the dollar by the end of 2023.
Despite the minimum wage being raised to N70,000, most Nigerians continue to suffer from the rising cost of living. Fuel prices have soared from N900 to N1,100 per liter, putting public transport out of reach for many. The government’s mitigation measures have been widely criticized as insufficient and self-serving.
On the security front, Nigeria is plagued by insurgencies such as Boko Haram, as well as widespread criminal activity that has fueled unemployment and poverty. The oil sector, a key driver of the economy, has been hit by large-scale theft and mismanagement, further reducing national revenues.
Meanwhile, the political class is becoming increasingly corrupt and selfish. Elected officials and government agencies show little concern for the welfare of the people and are instead focused on enriching themselves. The National Assembly, which is supposed to provide checks and balances, has become a base for self-enrichment.
Therefore, rather than bringing economic prosperity, Nigeria’s democracy is associated with corruption, political instability, and economic decline. Democracy should lead to higher human capital accumulation, economic growth, and political stability, but the opposite is true in Nigeria. The ruling elite, driven by personal interests, has failed to utilize the country’s rich resources to improve the lives of ordinary Nigerians.
As of 2024, Nigeria’s population has grown to approximately 220 million people, but infrastructure and employment opportunities have not kept pace. Electricity supply remains unstable and Nigerians often have to pay exorbitant prices for power that is unavailable. The cost of living continues to rise and many people are struggling to survive.
Indeed, Nigeria’s democratic system, once envisioned as a beacon of hope in 1999, has been hijacked by a self-serving political class. Despite the country’s rich resources, successive governments have failed to realize the economic prosperity promised by democracy. Instead, they plundered the economy and left the majority of Nigerians in poverty. The social contract between rulers and leaders has broken down, and many Nigerians are disillusioned with the democratic system.
The question that remains is whether democracy, as currently practiced in Nigeria, can deliver the economic growth and development that its people desperately need.
Ogunrosoe is a lawyer and political economist.
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