Will the design of a direct cash transfer in Nigeria ensure its ongoing popularity and sustainability? Guest blogger Gbenga Shadare considers the issues.
In the course of the last presidential campaign in Nigeria, which saw the People’s Democratic Party overthrown for the first time since the return to democracy in 1999, the candidate for the All Progressive Congress promised a direct cash transfer to the poorest citizens. While pundits and critics generally viewed it as an unrealisable promise designed to win votes, it seems that, following Buhari’s election, Nigeria could be on the cusp of a social protection transformation.
A few months into office, the new administration created the National Social Safety Net Coordination Office (NASSCO), placed under the department of the Vice President. NASSCO has the responsibility of coordinating all social assistance programmes in Nigeria. The administration also organised several summits in collaboration with the World Bank and DFID to share social protection practices and experiences from other countries, to support the design of a scheme appropriate for Nigeria. Unsurprisingly, given the lack of consensus on the benefits of universal welfare schemes, a conditional cash transfer (CCT) was found to be the most appropriate mechanism. The first budget released by the Buhari administration contained earmarked funds for a CCT. Last year, the World Bank loaned half a billion dollars (US$500million) to support the CCT.
The CCT – part of the administration’s Social Investment Programmes – has now taken form: it will provide a cash transfer to households living in poverty throughout Nigeria, identified through a combination of geographical and community-based targeting. Each household will receive a base transfer of NGN 5,000 ($16 per month), while the most vulnerable households will be eligible for an additional monthly benefit of NGN 5,000 ($16) on condition that they attend skills training, attend medical appointments and ensure that their children remain in school. The entire project is national in coverage and federal in funding, but the registry holding beneficiary information is state-based, with communities choosing the beneficiaries.
By December 2016, the government had begun payment, initially in nine states with existing registries identifying the most vulnerable citizens: Borno, Oyo, Kogi, Cross-River, Bauchi, Kwara, Ekiti, Kwara and Ogun. The Office of the Vice President announced, in January of 2017, that other states had begun to develop their own registries and would be included in subsequent phases of the CCT implementation.
It is evident that the administration has the determination to follow through with its promise: the question is the wisdom of the policy and the methods used. The World Bank Country Director for Nigeria, Rachid Benmessaoud, once observed that it is commendable that Nigeria is dedicating a significant part of its budget to social protection at a particularly challenging economic time, given that the country is in a dire economic state given the sharp drop of oil prices which has affected everything from the value of the national currency – and, in turn, the price of goods and services– to government revenue collection.
Some critics argue that it is not the right time to pursue social protection because the resources earmarked for cash transfers could be used for investments such as upgrading public infrastructure. This argument places investment in social protection and other spending as mutually exclusive and, furthermore, it is during challenging economic times that we find the strongest rationale for investing in social protection. In reality, the spending on social protection does not preclude the administration from undertaking other tasks and, anyway, it is a small budget at only roughly about NGN500 billion in 2016 or 0.33 per cent of GDP (or less than a third by proportion of the investment in social protection by the much poorer country of Nepal). It remains to be seen, though, whether the budget will be sustainable in coming years.
We can ask: why has the Nigerian government decided to pursue what some observers consider a flawed social protection trajectory and a programme design – targeting the poor – that has been proven to be unpopular across the world, since it excludes the majority of the population (Kidd, 2015)? In many developing countries, social protection programmes are being introduced as inclusive schemes for citizens rather than targeting the poor (which is an impossible task, anyway). Does the non-inclusive programme design demonstrate that the government does not fully appreciate the principle that investment in social protection is an essential component of a successful market economy and a right for all citizens?
In conclusion, while superficially, the social protection programme, as pledged by the current administration, appears to be a popular agenda with the Nigerian masses although, when the majority realise that they are excluded, this may not last. Nonetheless, given this current political leverage, there is a chance of continuity and possible programme expansion by subsequent administrations, as long as more popular and inclusive designs are adopted. There is a growing space for research to capture shortcomings and proffer solutions. The place to begin is to analyse the current system and propose an alternative vision of social protection for the Nigerian government. This will be the subject of a future post.
Also published on Medium.