Nigerian Local Companies and the Trickle-down Economics - How Far has the Masses Benefited?
No matter the analytical prism through which it is viewed, the economy of Nigeria has for long been run on the principles of trickle-down economics. Quasi, some may argue, but the capitalistic modus operandi on how policies are crafted and executed favors the rich or those who are already fairing well as middle-income earners to the detriment of the growing millions of indigent citizens that live in less than$2 dollar daily which comparatively is a global low.
Trickle-down economics is a theory that encourages whatever the wealthy benefits through government policies, tax cut on businesses, business incentives, capital gains, savings and dividends should trickle down to everyone and help spur the economy. These are based on the philosophy that investors, entrepreneurs and company owners are the core drivers of economic growth when operated evenly in an equitable manner. These savings or gains are supposed to stimulate the economy in the way of creating jobs, micro businesses for the masses and translates to increasing their purchasing power as consumers.
This system works better when there is political will power, a sustainable environment and infrastructural base to pedal growth and ensure that economy trickles down evenly. There must be local manufacturing center avenue to sublet contracts, domestic companies handling critical front end designs, EPC projects, capacity building instead of engaging mostly expatriates, and operating a dynamic supply chain.
Although the largest economy in Africa , Nigeria is recovering from recession which it slipped into in 2016, and currently has a 1.4% economic growth. Nigeria is the 21st largest economy in the world in terms of nominal GDP and 20th largest in terms of purchasing power parity.
While percentage of Nigerians living under poverty level could be said to have reduced below 50% since the past 5 years much still need to be done in this new economy through diversification, creating transformational economic policies, strengthening institutions for it to benefit the masses.