Fiscal failures the priceless costs of lessons ignored

When I read about South Africa's challenges, I see Nigeria's reflection. Stadiums that stay empty, power cuts despite endless spending, and promises that more money will finally fix it.

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As a Nigerian, I know too well the frustration of power cuts, failing infrastructure, and wasteful projects that begin with loud promises but end up half-finished or abandoned. Though I have never lived in South Africa, these woes make the struggle of the average South African strangely familiar. The details may differ - different names, different companies, different politics - but the disappointing outcomes of heavy government spending feel painfully close to home.

Wasted billions and white elephants

It's such a tragedy that Nigeria, South Africa, and other countries keep facing these unpleasant results, when Ludwig von Mises described the cause and even pointed towards the cure about a century ago. Reading about Eskom, the stadiums left empty after the 2010 World Cup, and stimulus packages that promised jobs but fell short, I couldn't help but see echoes of what we experience in Nigeria too.

From what I've gathered, South Africa's power company Eskom has received enormous state bailouts, yet blackouts remain common, and households and businesses still live with load shedding. Then there are the stadiums built for the 2010 World Cup which, are used much less than one would've expected, given the money spent building them.

In Nigeria, we see the same pattern. The Ajaokuta Steel Complex, started in the late 1970s, has consumed billions without ever producing commercial steel, as the “project that never ends.” The National Stadium in Abuja was built to the tune of hundreds of millions of dollars but now mostly sits unused and neglected.

Mises and the economic calculation problem