As the World Bank upgrades Nigeria’s economic growth forecast to 4.2 percent for 2025, citing improved macroeconomic stability and reforms under President Bola Tinubu’s administration, renowned economist and public affairs analyst Professor Adi Bongo has cautioned that these gains come at a steep social cost: escalating poverty and diminished citizen power to hold leaders accountable.
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Speaking during an interview on ARISE News on Thursday, Prof. Bongo analyzed the Bank’s latest Africa’s Pulse report, which projects GDP growth rising from 4.1 percent in 2024 to 4.4 percent by 2026-2027, driven by sectors such as ICT, finance, and real estate. While acknowledging fiscal deficit reduction and foreign exchange stabilization linked to government reforms, he urged policymakers to consider the “distributive consequences” of these changes.
“Nigeria is not a taxpaying democracy; we are more like a revenue-sharing democracy,” Prof. Bongo stated emphatically. He argued that this fundamental distinction shapes different incentives and norms, leaving ordinary citizens largely voiceless in demanding transparency. In a taxpaying system, citizens contribute directly through taxes, fostering accountable institutions. “You can demand accountability as a citizen because you have a voice,” he said. But in Nigeria’s revenue-sharing model where government funds flow mainly from oil and shared allocations leaders face little pressure to explain their actions.
Prof. Bongo illustrated this with a recent ministerial interview, where questions about the cost per kilometer of infrastructure projects went unanswered. “You are being forced to accept their own conditions,” he lamented, adding that this lack of scrutiny perpetuates opacity in public fund management, even as reforms like tax adjustments aim to broaden the revenue base.
Linking this to the poverty crisis highlighted by the World Bank where 139 million Nigerians now live below the poverty line, the highest in the nation’s history Prof. Bongo warned that upcoming tax reforms could worsen inequality. Pre-2023, Nigeria’s per capita income was around $2,000 in purchasing power parity (PPP) terms; today, post-devaluation, it has fallen to about $800. While new tax brackets exempt the lowest earners (zero tax on up to ₦800,000 annually), middle-income groups face higher effective tax burdens relative to their shrunken incomes.
“For instance, the 15 percent tax bracket now applies at ₦3 million, roughly $1,700–$1,800 today, down from over $6,000 pre-May 2023,” he noted. “We are taxing more on diminished incomes, which fuels higher poverty levels.” He added that low purchasing power deters investors in a competitive global market, as consumers “do not have deep wallets to purchase goods and services.”
On social protections such as conditional cash transfers, Prof. Bongo was equally critical, describing them as “too little, too late” and often politicized. Drawing on successful models like Mexico’s Progresa and Brazil’s Bolsa Família where outcomes like school attendance were tied to payments and institutional anchors ensured delivery he argued that Nigeria’s efforts lack credibility. Evidence shows that transfers, often ₦25,000 ($15) per tranche, make a “marginal difference” amid rising inflation.
Prof. Bongo also addressed the government’s decision to borrow for Eurobond maturities rather than deplete $42 billion in reserves, praising it as a rational move to preserve economic buffers and bolster sovereign ratings. “It’s rational to borrow than deplete reserves, which provide credibility,” he said, noting improved naira stability.
Ultimately, Prof. Bongo called for a shift toward a true taxpaying democracy to empower citizens and enforce accountability. “Growth is good, but we need to pay more attention to the distributive lens,” he emphasized. As Nigerians grapple with promises of prosperity under the “Renewed Hope” agenda, his warning underscores a stark reality: without structural reforms in taxation and governance, economic gains may widen the gap between official optimism and everyday hardship.
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