FALLACY OF CONSTITUENCY PROJECTS

I must acknowledge that there are numerous fallacies that require correction. Firstly, crude oil prices during President Olusegun Obasanjo’s growth period were not impressive, hovering around $25. It was during President Goodluck Jonathan’s tenure that crude oil prices surged to $100. I don’t agree with Obasanjo on many things but they was a lot of fiscal discipline under him.

Secondly, many individuals misunderstand Keynesian theory, which advocates for increased spending and constituency projects to stimulate growth and development. However, a crucial aspect of Keynesian theory is the presence of functional institutions with adequate accountability; otherwise, the funds will be squandered. For instance, I recall a former governor who claimed that his solution to unemployment was infrastructure development, but I argued that this approach does not create jobs but rather targets interventions. I was correct,today his state still has a high unemployment rate. It’s not about throwing  money around.

In a Keynesian framework, he believed that building infrastructure was sufficient, but the money failed to boost aggregate demand due to limited circulation. Therefore, I reiterate that effective Keynesian institutions cannot exist without accountable institutions; it is akin to burning cash on a barbecue stake. Moreover, I am astonished that my comparison of LAPO’s impact to constituency projects was intentionally distorted. My argument is that instead of allocating funds to constituency projects, it would be more beneficial to invest in a viable credit scheme for development. If all constituency funds per local government were channeled into a credit bank with proper oversight and loan repayment, it would ensure sustainability rather than the one-off distribution of items like Keke Marwa, which lacks accountability. Local government autonomy has already been established by the Supreme Court, making it a law that requires implementation and adherence to the rule of law. This further supports my argument, as a society that disregards its highest court cannot effectively operate a Keynesian model, and the funds will remain in the hands of politicians. Finally, it is essential to acknowledge that Keynesian spending leads to inflation, which offsets any intended gains, highlighting the need for structural intervention.

Rufai Oseni, rufaioseni@gmail.com