Evaluation of Impact of New Democracy on Consumption, Income and Growth of the Nigerian Economy

Evaluation of Impact of New Democracy on Consumption, Income and Growth of the Nigerian Economy

Rex Oforitse Aruofor (Benson Idahosa University, Benin City, Nigeria) and Daniel Risiagbon Ogbeide (Entrepreneurship and General Studies, Augustine University, Epe, Nigeria)
Copyright: © 2017 |Pages: 12
DOI: 10.4018/IJCESC.2017070101

Abstract

This article describes how the new democracy in Nigeria has existed for eighteen uninterrupted years and many scholars believe that it has been an improvement over past regimes. The acid test of this claim is to find out if the new democracy has indeed caused a shift in the consumption pattern and a change in the consumption habit of Nigerians. The total differential modeling approach was applied to test the null hypothesis that the new democracy has not impacted the standard of living of the average Nigerian. The results indicated that the new democracy did cause a shift of N6.61E+06 and N9.27E+08 on consumption and income, respectively, in 1999 as well as caused a change in consumption habit of N32.9 million annually. Nominal income also changed by N46.13 million annually as a result of the new democracy. The growth in consumption and nominal income were N22708022 million and N31832692 million, respectively. In addition, the new democracy induced a change of N0.995 mill/annum in real income. Therefore, it will seem that the new democracy has positively impacted the Nigerian economy. However, while the growth rate associated with past administrations is 0.6634%, in terms of real growth, it will seem that there is no significant growth in the economy associated with the current democracy. This article also shares some recommendations that will make this impact manifest on the economy.
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Introduction

Consumption, Income and Growth are critical features in a society that reflect the general living standard of its people. Consumption of commodities connotes the amount of such used up in a particular period which obviously is influenced by available income. This income is the money received in exchange for a service rendered or from investment outlets. Growth entails a positive change in size or volume over a specified period. While consumption and income are more of micro-economic features, growth is more macro-economic.

These three features are however influenced in societies by government expressing the will of the State. The state as “a human community which successfully claims monopoly of the legitimate use of physical force within a given territory” as defined by Max Weber (Anter, 2014) is an abstract concept. Its will and aspirations can only be expressed by government which is a body of persons and institutions serving to execute the functions of the state as its determinate agent. The two principal functions of the state are maintenance of security and ensuring the welfare of the citizens (Raphael, 2010).

To accomplish this task, a system of government adopted can either facilitate or impede the achievement of this governmental goal for the citizens of the state.

Contemporarily, while different types of systems abound, the most highly coveted type is Democracy. All over the world, this term democracy is of a strong appeal. Democracy however is an essentially contested concept because while it is known to exist, there are varied interpretations as to what it actually means in practice. Democracy from Greek words ‘’Demos’’ (people) and ‘‘Kratein” (rule of or by) connotes a majority rule with essential tenets being adoption of human rights and rule of law (Anifowose & Enemuo, 2008). To Christenson (1972), with Democracy, it is believed that people generally agree on the operation of the system and they are key participants in governance. Appadorai (1968) also agrees that “it provides a template upon which people are ruled either directly or indirectly” through representatives.

How well a democratic system of government enables the accomplishment of the key positive functions of the state which include consumption, income and growth levels will determine the success or failure of the system.

Nigeria is a developing country desperate to join the ranks of the developed world. About thirteen (13) different regimes including the Military, have ruled over the country since Independence in 1960 (Aruofor, 2017). The policy regimes were varied and numerous (see Aruofor, 1990, 2001, 2004 and 2007; EDD, 1999 and Ayodele 1999). In spite of this, the measure of development has been very low and has not translated to social emancipation of the Nigerian people (Nnoli, 1981; Aruofor, 2017). However, since 1999, Nigeria has embarked on a new democracy and it is believed that this is the panacea to all the problems faced by the country.

Indeed, according to Gberevebie and Oviasogie (2013), the “first democracy after 1960 failed because it was chauvinistic and was not inclusive of women”. Democracy as a system of government has gained more popularity now in the contemporary society than in the years past. The reason for this being that it abhors segregation and adopts equality of participation in decision- making on issues affecting all segments of society. In the same vein, Aboyi (2014) opined that democracy is “generally accepted by most modern states as the best form of government”. In his opinion, democracy is the voice of revolt raised by human spirit against the application of coercion and imposition in government. It is a political system that is opposed to any form of arbitrary use of authority and tyranny in the management of the affairs of state of society.

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