Professor of Economics at the Lagos Business School, Dr Bongo Adi, has said Nigeria’s greatest obstacle to development is not a shortage of money or access to financing but a leadership culture devoid of conscience and accountability, arguing that the country’s governance crisis has made meaningful economic progress almost impossible.
Speaking during an interview with ARISE NEWS on Tuesday, Adi explained that debates over whether the country should rely more on domestic or foreign financing miss the real issue, insisting that leadership failure and weak institutions remain the fundamental barriers to development. “But the issue here is that we have a culture, a shameless culture. People don’t have shame, people don’t have conscience. So they will be listening to you and they are laughing at you. Even as we are speaking, they may be listening to this, watching this. But are they moved by what you are saying? The answer is no, they don’t care.”
He argued that while the proposal for Nigeria to depend more on domestic financing was worthy of consideration. “I don’t know if I would say I agree or disagree, but, I mean, saying that we need to move to domestic sources to finance development implies that the ones we’ve done before, you know, from the outside really worked. So the issue, the question here, I think, should be, how do we even finance our development? How do we execute development? Because it won’t be any different whether we mobilise funding or financing from inside or from outside. It doesn’t make any difference.”
Adi recounted that Nigeria possessed sufficient resources to finance its own development but stressed that the country had repeatedly failed to manage those resources effectively. “The answer is, it is no. We haven’t managed the ones we have received well, I don’t know if I would say I agree or disagree, but, I mean, saying that we need to move to domestic sources to finance development implies that the ones we’ve done before, from the outside really worked. So the issue, the question here, I think, should be, how do we even finance our development? How do we execute development? Because it won’t be any different whether we mobilise funding or financing from inside or from outside. It doesn’t make any difference.”
“The answer is, it is no. We haven’t managed the ones we have received well. So I don’t think it is difficult actually to mobilise domestic funding, because when you talk about domestic finance, you are looking at the capital market, taxes, you know, and different resources from the population. So Nigerians can finance their own development.”
He identified weak domestic revenue mobilisation as one of the country’s structural challenges. “Currently, despite the good efforts of the current administration with tax reform and other reforms, tax to GDP ratio is just 10 percent, which is the lowest in the world. It’s approximately 10 percent, lowest in the world. And the target of this administration is to raise it to even 18 percent. So 10 percent is below that of Ghana, which is 14 percent, and it is below the West African and sub-Saharan African average of 16 percent. So it’s extremely low.”
Adi argued that the biggest burden on Nigerians was not taxation alone but the high cost of providing services that government should ordinarily supply, particularly electricity. “So what we found is that to self-generate electricity, the average consumer in Lagos spends 600 naira per kilowatt. Now, for the best that the grid offers, which is band A, they spend just 200 naira per kilowatt.“
He said the enormous cost of self-generation effectively amounted to another form of taxation on Nigerians. “That is tax. That is an indirect taxation. You’ve already paid. So if anybody’s asking you to pay more, that is killing you. It’s like, you know, bleeding people.”
Rather than imposing additional taxes, Adi said government should invest in infrastructure that lowers living and production costs. “There is this impression that Nigerians don’t pay enough tax. But that is far from the truth. People pay so much. But the thing is that how much of what people pay finds its way to the government coffers? Very little.”
“Supposing we have a system, a structure such that, okay, we have electricity provided by the public system using public infrastructure that gives us energy at 300 naira per kilowatt. If you ask someone who’s been paying 600 and now paying 300 for electricity, it means the person has a disposable income of 300 naira per kilowatt. Then you can take 100 naira as tax. That person will be a happy taxpayer, you will improve voluntary tax compliance.”
He noted that private investment, which drives employment and long-term economic growth, had remained largely stagnant for over a decade because investors were unwilling to risk their capital in an uncertain environment. “Gross fixed capital formation in Nigeria has been stagnant over the last 10 to 15 years. It has not grown, meaning that we have not created new jobs, but the population is increasing. And then why have we not created jobs? Because there are no investments. Why are people not investing? Because of the risk. The cost that businesses… there is no money to be made when you are running certain businesses, say manufacturing, because you have to take care of all these costs, not just the infrastructure, you also have to care about your security and all of that. You can’t attract businesses, you can’t attract investments.”
Adi said many investors now preferred government securities to investing in productive sectors because of the country’s difficult business environment. “You don’t want to risk your capital, your hard-earned money. So what do you do? Yes, the government instruments, the same government. So it’s compounded. Yes, and that’s why what we have are portfolio investments.”
“Why are people not investing? Because of the risk. The cost that businesses, there is no money to be made when you are running certain businesses, say manufacturing, because you have to take care of all these costs, not just the infrastructure, you also have to care about your security and all of that. You can’t attract businesses, you can’t attract investments. So the people we are all risk averse. You don’t want to risk your capital, your hard-earned money. So what do you do? Yes, the government instruments.”
He maintained that meaningful reform would require government to strengthen institutions, improve transparency and ensure public funds are used efficiently. “A strong state is one that is able to fully control its sources of revenue and then government has transparent and accountable framework to use that, such that it is, you know, it’s verifiable.”
Turning to the broader question of governance, Adi said Nigeria’s problems ultimately came down to the quality of leadership. “We need good leaders. We need people who have conscience, who have the interest, who have vested interest in the growth and the development of Nigeria.”
He urged professionals and credible citizens to become more actively involved in politics rather than leaving governance to individuals who lack integrity. “Politics is the most important matter in any society… If we don’t go there… those kind of people who will be telling you those stories, who will be setting line items without any moral qualms. Those are the ones that will keep dominating the system.”
According to him, sustained public criticism alone would not transform the country unless more competent Nigerians entered public office. “We can keep boiling and crying on TV as we did the other day. Nothing will change, I think we need to do more by, you know, getting our hands dirty. Let’s get into the game.”
Adi insisted that Nigeria’s development challenge had little to do with where financing originated and everything to do with governance. “It’s not about mobilising, maybe, whether domestic or foreign capital. That is far from the question. We have enough resources. We can do it. But then the government needs to stamp its legitimacy. And then the class of people we have who are in leadership cannot do that.”
Erizia Rubyjeana
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