Solomon2day

Nigeria's chronic budget deficit has brought about an unhindered increase in the national debt. Indeed, the multiple taxation by the government at all levels may now be too embarrassing for an economy that majorly revolves around the motive of personal gain. Without doubt, the redistribution of disposable income from the well-to-do to the indigent would increase the average propensity to consume, since the marginal propensity of the indigent to consume is higher than that of the well-to-do. Sadly, this approach is not in the thoughts of the government, although the budget deficit may have stimulated private investments. The government ought to cut down on expenditure on political office holders. However, in view of the fact that the economy is ailing, the government at all levels must be decisive and proactive in interventions in health, transport, electricity, unemployment, hunger and poverty. Of course, the protection of sectors such as education, health and agriculture which hav...

Foreign loans obtained for capital expenditure by Governments could be applied for domestic economic development. However, this must be in tandem with a well-drawn-out program of action. Foreign loans primarily serve the needs of the creditor economy and systematically neglect the domestic economy of the debtor country. It is instructive to note that Japan obtained loans between 195 to 1914, externally, and was at liberty to use the funds in accordance with the dominant ideas of national economic development. Interestingly, these foreign loans were a relatively minor and not a major source of capital for the Japanese economy as a whole. During this period, Japan was able to direct between 12 percent and 17 percent of its national income into capital formation. rom the 1920s Japan began to receive some form of direct investments from abroad, while the government borrowing from abroad visibly ceased. The same sequence applies to a number of other countries that have attained a substan...