Why President Buhari’s 5,000 Naira Payment Scheme is a Right Step in the Wrong Direction
January 11, 2017
On Tuesday, the Nigerian federal government announced that it has commenced its Conditional Cash Transfer Programme, which would see it pay a monthly stipend of 5,000 naira to one million Nigerians. The development is said to be the fulfilment of a campaign promise made by President Muhammadu Buhari during his campaign for the 2015 elections.
Nigeria has a high poverty rate, with 110 million Nigerians living below the poverty line and 60.9 percent of its population suffering from absolute poverty –defined by the United Nations as a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education, and information.
However, how far can 5,000 naira go to ameliorate a poor, unemployed person’s problems? The value of the naira has been falling harder than a rock and the inflation rate rising. With an inflation rate of 18.48 percent, what would the value of 5,000 naira be in the next one year? When in 2016, a bag of rice increased from 10,500 naira to 17,500 naira.
“Currently 5 litres of palm oil is 4,200 naira, transportation within Lagos weekly is more than 5000 naira, not to talk of PHCN monthly bill. Apparently, 5,000 naira monthly stipends will not solve the problem,” says Lukmon Akintola. How does this stand for an average Nigerian who goes to the market today and by tomorrow, the prices have increased? What is the end game here, seeing that this scheme is in no way sustainable?
Another boggling concern is the selection process for the one million Nigerians. The government claims that the citizens were selected from an existing Social Register that successfully identified the most vulnerable and poorest Nigerians but it failed to explain when and how this social register was collated. Considering the fact that 110 million people in Nigeria live below the poverty line, what can be defined as the metrics for the most vulnerable and poorest people in its country?
Nigeria suffers from a lack of proper data collation and management. The Nigerian government has lost a huge sum of money to ghost workers in previous years. In 2016 alone, the Nigerian government said they got rid of 50,000 ghost workers saving 200 billion naira. It is compelling to say that if the government does not have accurate data on its own staff, how does it want to generate the data for the whole country. And if there is an existing register, when last was it updated, considering that the last census was in 2006 (10 years ago)?
With 110 million Nigerians still living below the poverty line, a monthly stipend to just one million people is just a pinch from a sea of salt. Disbursing this money to a specific, undefined few would distort the egalitarian motive of the government.
Does Nigeria need a functional social intervention programme?
The Nigerian government has taken the method of copying the West in adopting a social welfare scheme to Nigeria. However, the government should observe that most of the developed countries have lower unemployment rates as compared to that of Nigeria. Social welfare serves as the bridge to cover the dividing gap between the unemployed people in those economies and the employed people. With a social welfare program, citizens can continue their daily lives and still have a mode of survival.
Nigeria, in contrast, has an acute unemployment problem. By the third quarter of 2016, the Nigerian Bureau of Statistics stated that 49.7 percent of Nigeria’s youth labour force population are unemployed. Nigeria has a youth labour force of 40.16 million that stands at almost 50 percent of the total labour force population.
Creating a social intervention program would the require the government to provide an equitable scheme for all the unemployed populace rather than just a few. Allowing only a few to benefit from these programs just creates more mediums for corrupt practices. Processes for applications become influenced and even allowing these limited slots to be bided for.
Nigeria’s trend of social intervention programs has proven unsustainable in previous years as most of the programs conducted by the government end up not being achievable in the long run. This is because the government fails to tackle the real issues that would ensure poverty and “absolute poverty” is truly eradicated. Rather than invest in infrastructural development and creating viable policies that help stimulate growth, the government keeps engaging in unsustainable short-term schemes such as this one.
A 5,000 naira monthly stipend for a million people amounts to 5 billion naira monthly. In 12 months, that would be 60 billion naira. On Wednesday, Nigeria’s Minister of Power, Works and Housing, Babatunde Raji Fashola, SAN, stated that the government would be spending 270 billion naira in the next three years for the rehabilitation of 50 bridges across the country. Reviewing this, the proposed amount to be spent on Nigeria‘s bridges yearly is 90 billion naira which is slightly above the amount the government plans on spending in fulfilling a crippling campaign promise. Can’t the government substitute this funds to be spent on infrastructural development or providing better health-care services?
Rather than pay 5,000 naira monthly to vulnerable Nigerians, the government should intensify efforts in creating an enabling environment that will promote investments in key sectors of the economy, says, Godmin Eohoi, Registrar, Chartered Institute of Finance and Control of Nigeria.
If Nigeria is able to improve its infrastructure and create a more enabling environment for businesses to thrive, then a social intervention program could be considered. The government could rather adopt Curitiba’s model of providing for the poor. In Curitiba, Brazil, rather than just giving poor people free foodstuffs, they are made to bring junk items in exchange for food items. Nigeria has a terrible waste problem with waste being ubiquitous in the country. The poor Nigerians should be made to exchange waste for food. The government in adopting this model would need to construct waste plants where these waste could be processed and converted for renewable purposes.
Nigeria’s current economic state would not make cash viable but rather products. Distributing foodstuffs would help provide a steady income for farmers who would earn income from selling their farm products to the government.
If Nigeria is going to adopt this social intervention programme, there must be an up-to-date database to ensure the program. A proper database would enable the government to truly access who the vulnerable and poorest people and thereby ensure that the items to reach these beneficiaries.
The motive of the Nigerian government comes as a positive development but the sustainability of the scheme stands unfeasible. Promoting an egalitarian society requires the government to provide long-term development strategies by creating an environment whereby people are empowered to succeed rather than being dependent on surviving.