The Lesson from Argentina for Nigeria, on Scaling Poverty via Mindless Reforms

This is a lesson for Nigeria. There is no record of any country where removal of critical subsidies has ever worked. Argentina joins that case study: “More than half of Argentina’s 46 million people are now living in poverty, new figures indicate, in a blow to right-wing President Javier Milei’s efforts to turn around the country’s beleaguered economy” – BBC

I am a Democrat but a social conservative. I like how Democratic cities function in America. If you look at the records, everything is self-evident: more than 80% of top ranked US universities, largest cities, etc are run by Democrats. Even in conversative haven like Texas, check, their best universities are likely under Democratic city controls. 

Why? Democrats share the goodies, opening opportunities via public infrastructures which end up helping many. They build roads, train stations and many enablers which help everyone. Sure, taxes are high, but those rich people are not running away because they get value.

So, when the new Argentine leader came and focused on cutting out the “poor”, I felt that he did not get the memo. In America, from Republicans and Democrats, they subsidize and subsidize, and ramp up the national budget. Trump spent more than Biden (Committee for a Responsible Federal Budge data) even though some may think that there is a difference between a dozen and 12 when it comes to US federal government spending to drive the future:

“President Trump approved $8.4 trillion of new ten-year borrowing during his full term in office, or $4.8 trillion excluding the CARES Act and other COVID relief. President Biden, in his first three years and five months in office, approved $4.3 trillion of new ten-year borrowing, or $2.2 trillion excluding the American Rescue Plan. President Trump approved $8.8 trillion of gross new borrowing and $443 billion of deficit reduction during his full presidential term. President Biden has so far approved $6.2 trillion of gross new borrowing and $1.9 trillion of deficit reduction.”

If you visit China, it is the same thing. Russia, check it. Tell me a prospering country and I will tell you that you do not balance budgets by removing basic necessities from the poor. What you do is to find money, spend to ignite growth, but NEVER balance budgets on what keeps people going.

Just as it makes no sense to balance your bank account by asking for a thinner chequebook, you cannot fix a country by scaling poverty through austerity! 

During covid, America was falling into a rough poverty line as many lost their jobs. What did Trump do? The “conversative” leader printed cheques and sent them to millions of the citizens. Many state governors, from blue to red states, did the same. And when Biden took over, he repeated the party. 

But come to Africa, people think hunger will freeze, visiting families will pause, etc because you want to balance budgets. My position is clear: find ways to raise capital to ignite growth but do not put ordinary citizens under the bus. That is a lesson I share for Nigeria as we remove subsidies across industries. Subsidies are NOT bad; what is bad is the corruption in subsidies. Fix the corruption and you will see abundance for all.

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