Conditional cash transfer as motor park economics, By Jideofor Adibe

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Reading Time: 11 mins read

A recent report that the Federal government has approached the World Bank f

A recent report that the Federal government has approached the World Bank f

or a fresh loan of $400m for a

or a fresh loan of $400m for a

conditional cash transfer

conditional cash transfer

for supposedly

for supposedly

15 million

15 million

households

households

is raising serious concerns among many Nigerians.

is raising serious concerns among many Nigerians.

The new $400m loan will bring to $1.2bn the amount that the Federal Government is borrowing from the World Bank for its cash transfer programme

The new $400m loan will bring to $1.2bn the amount that the Federal Government is borrowing from the World Bank for its cash transfer programme

aimed at

aimed at

cushion

cushion

ing

ing

the harsh impact of removing fuel subsidies and floating the Naira, having earlier secured a loan of $800m for the same purpose.

the harsh impact of removing fuel subsidies and floating the Naira, having earlier secured a loan of $800m for the same purpose.

The government claims that the Conditional Cash Transfer scheme, part of its National Social Investment Programme, will

The government claims that the Conditional Cash Transfer scheme, part of its National Social Investment Programme, will

transform the lives of millions of Nigerians living in extreme poverty, upgrade their standards of living and improve the economy

transform the lives of millions of Nigerians living in extreme poverty, upgrade their standards of living and improve the economy

.

.

The

The

Government said it would commence

Government said it would commence

the payment of N25

the payment of N25

, 000

, 000

monthly to

monthly to

the said

the said

15 million households for three months

15 million households for three months

,

,

from October to December 2023.

from October to December 2023.

It further claims that the scheme

It further claims that the scheme

, now

, now

rechristened “the Renewed Hope Conditional Cash Transfer for 15 million households”, will get to 62 million Nigerians.

rechristened “the Renewed Hope Conditional Cash Transfer for 15 million households”, will get to 62 million Nigerians.

There are several issues raised by the scheme –

There are several issues raised by the scheme –

from

from

its design

its design

to the likelihood of its effective i

to the likelihood of its effective i

mplementation down to its

mplementation down to its

broader implications for the Nigerian economy. Some of the areas of concern include:

broader implications for the Nigerian economy. Some of the areas of concern include:

One,

One,

is

is

the scheme, as

the scheme, as

currently designed,

currently designed,

capable of achieving the

capable of achieving the

objectives attributed to it?

objectives attributed to it?

It should be recalled that

It should be recalled that

the

the

government claims that

government claims that

under the

under the

Renewed Hope Conditional Cash

Renewed Hope Conditional Cash

Transfer for

Transfer for

15 million households

15 million households

the sum of N25

the sum of N25

, 000

, 000

would be transferred to the beneficiaries on a monthly basis for three months, which amounts to N75

would be transferred to the beneficiaries on a monthly basis for three months, which amounts to N75

, 000

, 000

for each of the beneficiaries. The Minister of Humanitarian Affairs Betta Edu was quoted by The Punch of 21 October 2023 as saying “the conditional cash transfer was a proven way to alleviate poverty, as it would give households the financial support to start micro and small enterprises, provide basic health care and food, keep their children in school and attend to the immediate needs of the households.”

for each of the beneficiaries. The Minister of Humanitarian Affairs Betta Edu was quoted by The Punch of 21 October 2023 as saying “the conditional cash transfer was a proven way to alleviate poverty, as it would give households the financial support to start micro and small enterprises, provide basic health care and food, keep their children in school and attend to the immediate needs of the households.”

A cynic might justifiably ask: Did the Buhari government not tell us the same thing, in even more elegant language? For instance then Vice President Professor Yemi Osinbajo was

A cynic might justifiably ask: Did the Buhari government not tell us the same thing, in even more elegant language? For instance then Vice President Professor Yemi Osinbajo was

quoted

quoted

in

in

January 2021, nearly t

January 2021, nearly t

hree years ago, as declaring in the following words, with respect to the Buhari government’s version of the scheme

hree years ago, as declaring in the following words, with respect to the Buhari government’s version of the scheme

:  “Following the successful activation of the Economic Sustainability Plan’s (ESP) Cash Transfer scheme aimed at delivering financial support to at least 1 million urban-based households using technology, the Buhari administration’s vision of reducing extreme poverty by lifting at least 20 million Nigerians out of poverty in the next two years is now within reach.”

:  “Following the successful activation of the Economic Sustainability Plan’s (ESP) Cash Transfer scheme aimed at delivering financial support to at least 1 million urban-based households using technology, the Buhari administration’s vision of reducing extreme poverty by lifting at least 20 million Nigerians out of poverty in the next two years is now within reach.”

Despite the scheme, figures from the Nigerian Bureau of Statistics showed that the number of people living in multidimensional poverty had ballooned to 133 million by

Despite the scheme, figures from the Nigerian Bureau of Statistics showed that the number of people living in multidimensional poverty had ballooned to 133 million by

2022.

2022.

In essence, even if there is any proven impact assessment of the previous programmes which suggests the need for its continuation, the fact that more Nigerians have fallen into the

In essence, even if there is any proven impact assessment of the previous programmes which suggests the need for its continuation, the fact that more Nigerians have fallen into the

multidimensional poverty

multidimensional poverty

bracket despite the programme

bracket despite the programme

,

,

would negate the conclusion of any of such reports – if they exist.

would negate the conclusion of any of such reports – if they exist.

Two

Two

, it

, it

is important to underline that the scheme promises more than it can deliver.

is important to underline that the scheme promises more than it can deliver.

The scheme

The scheme

,

,

a mere N25,000

a mere N25,000

per month over three months

per month over three months

,

,

does not  just promise to lift people out of poverty but also that it would give the beneficiaries  “the financial support to start micro and small enterprises, provide basic health care and food, keep their children in school and attend to the immediate needs of the households.”

does not  just promise to lift people out of poverty but also that it would give the beneficiaries  “the financial support to start micro and small enterprises, provide basic health care and food, keep their children in school and attend to the immediate needs of the households.”

Haba, Minister!

Haba, Minister!

In addition to this

In addition to this

unrealistic objective

unrealistic objective

, the

, the

scheme does not even get to up to half of those which the government’s own figures describe

scheme does not even get to up to half of those which the government’s own figures describe

as being

as being

in multidimensional poverty.

in multidimensional poverty.

For instance w

For instance w

hile the NBS

hile the NBS

’ figures

’ figures

as published in November 2022 said 63 per cent of Nigerians (or 133 mil

as published in November 2022 said 63 per cent of Nigerians (or 133 mil

lion people) suffer from multidimensional

lion people) suffer from multidimensional

poverty, the government claims that the 15 million household it is targeting covers 62 million Nigerians. This raises the question of what happens to the remaining 71 million Nigerians that were regarded as being in the multidimensional poverty bracket as at November 2022 – not to talk of the

poverty, the government claims that the 15 million household it is targeting covers 62 million Nigerians. This raises the question of what happens to the remaining 71 million Nigerians that were regarded as being in the multidimensional poverty bracket as at November 2022 – not to talk of the

additional millions

additional millions

that must have slipped into that bracket since the removal of fuel subsidy

that must have slipped into that bracket since the removal of fuel subsidy

and flotation of the Naira by the

and flotation of the Naira by the

Tinubu government.

Tinubu government.

Three, t

Three, t

here is equally a related question of w

here is equally a related question of w

hat happens

hat happens

to the

to the

beneficiaries after

beneficiaries after

the three months

the three months

duration of the

duration of the

scheme have

scheme have

elapsed

elapsed

.

.

Is the government suggesting that within three months it would have stabilized the economy

Is the government suggesting that within three months it would have stabilized the economy

enough

enough

that there would no longer be a need for

that there would no longer be a need for

this extra financial support or that the beneficiaries,

this extra financial support or that the beneficiaries,

from supposed savings from the cash transfers

from supposed savings from the cash transfers

, would have been able to set up viable micro businesses

, would have been able to set up viable micro businesses

that would sustain them?

that would sustain them?

I feel

I feel

that the conditional cash transfer

that the conditional cash transfer

scheme would actually

scheme would actually

increase rather than attenuate the misery of the recipients. For

increase rather than attenuate the misery of the recipients. For

instance,

instance,

let us assume that

let us assume that

prior to the cash transfer the recipients were able to feed only once a day but

prior to the cash transfer the recipients were able to feed only once a day but

that

that

with the

with the

cash

cash

transfer

transfer

, they

, they

would be able to eat twice a day or would start adding a piece of meat to their meals.

would be able to eat twice a day or would start adding a piece of meat to their meals.

My belief is that w

My belief is that w

hen the transfer is stopped

hen the transfer is stopped

and they have to revert to eating once a day or without meat, their

and they have to revert to eating once a day or without meat, their

sense of deprivation would actually

sense of deprivation would actually

increase and they would feel worse off than if they had not benefitted from any cash transfer at all. In essence

increase and they would feel worse off than if they had not benefitted from any cash transfer at all. In essence

,

,

the conditional cash transfer is

the conditional cash transfer is

very unlikely to achieve its

very unlikely to achieve its

ascribed goal

ascribed goal

of alleviating poverty or even effectively cushioning the harsh effects of the current economic hardship exacerbated by the removal of fuel subsidy and flotation of the Naira.

of alleviating poverty or even effectively cushioning the harsh effects of the current economic hardship exacerbated by the removal of fuel subsidy and flotation of the Naira.

Four

Four

, given the Nigerian

, given the Nigerian

factor and

factor and

despite all the talks about improving the efficiency of delivery of the cash

despite all the talks about improving the efficiency of delivery of the cash

transfer

transfer

and

and

the

the

debate about

debate about

the authenticity

the authenticity

or otherwise

or otherwise

of the social cash register

of the social cash register

,

,

chances

chances

are that many politicians and government agencies will see the huge

are that many politicians and government agencies will see the huge

sum

sum

borrowed for the scheme as

borrowed for the scheme as

just an

just an

other

other

opportunity for primitive accumulation

opportunity for primitive accumulation

. For many politicians, their ability to get their minions and constituents as beneficiaries of the scheme will count as part of their achievements.

. For many politicians, their ability to get their minions and constituents as beneficiaries of the scheme will count as part of their achievements.

This means that administrators of this fund are likely to be an important locus of the struggle for state capture by politicians and other people of influence in the country.

This means that administrators of this fund are likely to be an important locus of the struggle for state capture by politicians and other people of influence in the country.

Five

Five

,

,

following from the above,

following from the above,

is a question of the economic logic of

is a question of the economic logic of

borrow

borrow

ing

ing

for consumption

for consumption

.

.

It is trite that when we borrow for consumption rather than for productive ventures, we will struggle to find means of repayment. I feel it is right for the government to continue the conversation started under the Buhari government on how to reduce the number of people in the extreme poverty bracket. I feel however that a better option is to start developing a social security programme especially given

It is trite that when we borrow for consumption rather than for productive ventures, we will struggle to find means of repayment. I feel it is right for the government to continue the conversation started under the Buhari government on how to reduce the number of people in the extreme poverty bracket. I feel however that a better option is to start developing a social security programme especially given

the weakening of our extended family system that in the

the weakening of our extended family system that in the

past performed that function. The government

past performed that function. The government

can decide to start this with a known demographic

can decide to start this with a known demographic

(say people caring for the aged or terminally sick individuals who have no relatives to care for them) and then

(say people caring for the aged or terminally sick individuals who have no relatives to care for them) and then

gradually

gradually

add

add

more demographics as it

more demographics as it

learn

learn

s

s

from practices

from practices

and mistakes

and mistakes

.

.

But this should not be funded from borrowed funds.

But this should not be funded from borrowed funds.

Borrowing $

Borrowing $

1.2 billion 

1.2 billion 

to fund the so-called cash transfer is, in my opinion, money just flushed down the drain.

to fund the so-called cash transfer is, in my opinion, money just flushed down the drain.

The money would have been better utilised if it is used to train, support and

The money would have been better utilised if it is used to train, support and

mentor about 100

mentor about 100

young people from each of the 36 states of the federation and the Federal Capital, with each getting about N2m to help them take off

young people from each of the 36 states of the federation and the Federal Capital, with each getting about N2m to help them take off

effectively

effectively

. Even if only 56 per cent of beneficiaries succeed and go on to employ other staff

. Even if only 56 per cent of beneficiaries succeed and go on to employ other staff

, it would still be considered a success. It is

, it would still be considered a success. It is

certainly

certainly

easier to monitor 100 beneficiaries of a scheme than to search for 15 million

easier to monitor 100 beneficiaries of a scheme than to search for 15 million

(mythical?)

(mythical?)

households that the government claims will benefit from its cash transfer scheme.

households that the government claims will benefit from its cash transfer scheme.

Six, is that the Conditional Cash Transfer scheme seems to be an opportunity

Six, is that the Conditional Cash Transfer scheme seems to be an opportunity

for the Tinubu government to uncritically

for the Tinubu government to uncritically

continue with

continue with

the brand of economics

the brand of economics

practised by

practised by

the

the

Buhari

Buhari

government which

government which

was

was

hinged on

hinged on

binging on

binging on

de

de

bt

bt

and ingratiating itself

and ingratiating itself

to the Bretton Woods institutions

to the Bretton Woods institutions

(the

(the

IMF and the World Bank).

IMF and the World Bank).

For instance, the World Bank is

For instance, the World Bank is

Nigeria’s biggest multilateral creditor, with the country owing about $14.51 billion as of 30 June. The Debt Management Office recently said the country’s total public debt stood

Nigeria’s biggest multilateral creditor, with the country owing about $14.51 billion as of 30 June. The Debt Management Office recently said the country’s total public debt stood

at N87.38tn

at N87.38tn

at the end of the second quarter of this year,

at the end of the second quarter of this year,

representing an

representing an

increase of 75.29 per cent or N37.53tn compared to N49.85tn recorded at the end of March 2023

increase of 75.29 per cent or N37.53tn compared to N49.85tn recorded at the end of March 2023

.

.

A major issue with this huge accumulation of debt is its sustainability and the country’s ability to repay.

A major issue with this huge accumulation of debt is its sustainability and the country’s ability to repay.

In its 2022 Debt Sustainability Analysis Report, the

In its 2022 Debt Sustainability Analysis Report, the

Debt Management Office

Debt Management Office

(

(

DMO

DMO

)

)

warned that the Federal Government’s projected revenue of N10tn for 2023 could not support fresh borrowings.

warned that the Federal Government’s projected revenue of N10tn for 2023 could not support fresh borrowings.

Despite this warning

Despite this warning

,

,

the

the

Tinubu

Tinubu

government seems

government seems

intent

intent

on continuing

on continuing

with

with

the Buhari

the Buhari

government’s debt

government’s debt

binge

binge

.

.

My feeling therefore is that the logic

My feeling therefore is that the logic

used

used

to justify the conditional cash transfer

to justify the conditional cash transfer

scheme is at best derived from motor

scheme is at best derived from motor

park economics

park economics

.

.

Jideofor Adibe is Professor of Political Science and International Relations at

Jideofor Adibe is Professor of Political Science and International Relations at

Nasarawa

Nasarawa

State

State

University,

University,

Keffi

Keffi

and Extraordinary Professor of Government Studies at North Western

and Extraordinary Professor of Government Studies at North Western

University, Mafikeng South Africa. He is also the founder of Adonis & Abbey Publishers

University, Mafikeng South Africa. He is also the founder of Adonis & Abbey Publishers

(

(

www.adonis-abbey.com

www.adonis-abbey.com

)

)

an

an

d

d

Publisher of the online newspaper, The News Chronicle (

Publisher of the online newspaper, The News Chronicle (

www.thenews-chronicle.com

www.thenews-chronicle.com

). He

). He

can

can

be reached on 0705 807 8841

be reached on 0705 807 8841

(Text or WhatsApp only).

(Text or WhatsApp only).

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