What does true democracy feel like? Wealth!

There are people in the world so hungry, that God cannot appear to them except in the form of bread.

– Mahtma Gandhi

A while back, between late 2017 and 2018, I was part of a key process that defines democracy: elections. The location for this experience was Ekiti, and I served as a communications strategist to a candidate and in extension the party he represented. This experience involved long road trips that were lonely and sometimes dangerous.

One Saturday, as we drove to Iyin-Ekiti (a town in the state), we almost died. Our journey from the capital was peaceful till we approached Iyin. A few kilometers into the prominent town, we came head-on with an opponent. For context, the road back then was super tight. So, drivers usually slowed down when approaching each other. However, upon sighting us, his convoy pressed harder with unexplained rage.

To date, the scene still plays in my head. The intent was clear; to throw us off the road in a dangerous manner. Thankfully, our convoy maneuvered the attack but not without some near-death skidding into surrounding bushes. The fear at that moment was thick enough for us to cut through with chainsaws.

After a while, we got back on track and continued our journey. As we drove, I thought of how to spin a story around the experience but my interactions with voters later showed me the hard facts. Emotions are great, but in the end people will choose survival. And herein lies the ignored part of democracy: autonomy.

What is Democracy?

At the basic level, democracy speaks to equality of access and in extension autonomy. That is, every citizen has equal access to the law, and they also have the ability to make independent political choices. As you know and have seen, ideals hardly get to play out in reality.

Let’s pick things up from autonomy. As a concerned citizen, it is quite easy to nudge people not to sell their votes and similar calls of concern. However, when a mother who has not given her children a decent meal in week is faced with that choice, the probability of her choosing survival is higher.

Contrary to common arguments, her choice (which a million others will also make) is not out of fear from election touts. Rather, her choice to follow through with her end of the bargain is a show of commitment. It is her saying, I am doing this because I expect you to still give me more cash for survival. It is a choice to survive. Does this make it right? No. But once again, there is a clear discrepancy between ideals and reality.

So, if we create a scale with wealth at one end and survival mode at the other we find something interesting: The closer one is to survival mode, the less autonomy they seem to have and vice-versa. In basic economic speak, the measure for this inequality gap is called the Gini Index (Coefficient).

What is the Gini Index?

The brilliant Max Lorenz (a twentieth-century economist) designed something known as the Lorenz curve. It shows the percentage of overall income held by a society. It is upon this that the Gini Index was built. Since no country has a straight Lorenz Curve, this index measures the difference between the ideal and what currently exists.

For simplicity, this index ranges between 0 and 1. The closer a society is to 0, the more equal it is income-wise. Currently, Nigeria has a score of 0.4. At first glance, this is worth celebrating but then the Gini Index is too simplistic to tell such a complex story, which makes its analysis flawed.

A better measure for income inequality is the one managed by the World Inequality Database (WID). It tells a better story and helps us understand how close Nigeria is to a democratic ideal.

How Unequal are Nigerians?

For a more detailed picture, the WID digs into the data to understand how much wealth is owned by the top 10%, middle 40%, and bottom 50% of a country. In Nigeria, according to its latest data, over 40% of our wealth is controlled by the top 10%. On the other hand, just a meagre 12% is controlled by the bottom 50%.

Clearly, one can see that this tells a different story from what the Gini Index presents. And as long as this the case, we will continually have more Nigerians with less autonomy. Consequentially, democracy will exist on paper but choices will be made by a few who influence the many seeking to survive.

How are Wealthtechs Impacting Democracy?

As shown in earlier paragraphs, there is a strong relationship between the spread of wealth and the autonomy of individuals in a society. Hence, the role of wealthtechs cannot be understated and I’ll show you how. When mutual funds were created, they were positioned as an investment vehicle to allow anyone at any income level invest and grow their capital. Sadly, that was far from the truth. The entry barrier was quite high for the bottom 50%.

However, in 2018, we changed that narrative. Today, almost anyone can access mutual funds on Cowrywise with any amount. And when people were worried about currency depreciation, we stepped in and took down the barrier again. From $10,000 minimum investments we brought it down to $10. Now, more than ever, it is easier for the average Nigerian to access dollar-denominated investments.

Thankfully, there are a number of wealthtechs also doing the same and we are extremely proud of the good work they do. Does this mean we have solved the entire puzzle? No. However, we are confident that as the lower percentile makes money we’ll be there to help them protect and grow their money. And as that grows, we will contribute towards their journey of autonomy. Therein lies the power of democratizing wealth management.

What is our Vision for the Nigerian Democracy?

First, let’s revisit the quote at the top of this article. For democracy to be efficient, we need a society where the majority do not see God in a loaf. That is a society where the majority of the individuals are financially independent enough to make their own decisions. When that happens, we can say that we have democracy and not the illusion of it.

So, our work goes beyond just making finance fun and easy. It plays a critical role in defining the progress of our society. Today, it is almost impossible for many to donate to a candidate they love because they don’t have enough. And when they try to save up or invest, inflation does its thing and reduces the value of their contributions. We stepped in from 2017 to fix this, and we won’t stop now. When the vision finally happens, we will also be here to keep it alive!

---

Happy Democracy Day! Share the gospel of autonomy with someone today by showing them this article. Finally, let me know what you think in the comments