Lagos (AFP) – Nearly two years after taking office, Nigeria’s President Muhammadu Buhari is making good on an election vow to help the poor, deploying a welfare scheme that is gaining traction across Africa.
From now until the end of the year, one million Nigerians will receive 5,000 naira ($16.4, 15.3 euros) a month in a bank account set up specifically to receive the assistance payments. Up to five million people should benefit by 2021.
Vice-President Yemi Osinbajo has estimated that 110 million of the country’s 180 million people are extremely poor, struggling to put food on the table or pay for healthcare and education.
Nigeria’s official minimum wage is 18,000 naira — not enough given the rising cost of living.
The country is suffering from double-digit inflation, and 18,000 naira is enough to buy just a 50-kilogram (110-pound) bag of rice.
But the government hopes the extra cash will allow beneficiaries to save, buy goats, send their children to school or start small businesses.
“I trust Nigerians and their business-driven spirit,” Maryam Uwais, a special advisor in the presidency for social issues, told AFP.
“It is a start and we are keen on pushing forward the scheme. The poor have always been ignored in this country,” she said.
It is estimated this “social security net” will cost nearly 977 billion naira over three years.
The World Bank is supervising the project and has granted a loan of $500 million, but it still needs parliamentary approval, which is far from guaranteed.
Last November, the upper chamber, the Senate, rejected a request for $30 billion of overseas money to offset the impact of falling oil prices and economic recession.
The recession, which was officially declared last year, has largely been caused by a slump in oil revenue, on which Nigeria depends.
Inflation has soared to nearly 20 percent, especially for consumer products such as palm oil and rice, as well as for transport. Foreign currency is in short supply.
“(The) government is well aware of the issues of funding but hopefully we will meet the target this year,” said Osinbajo’s spokesman, Laolu Akande.
Nearly two years after taking office, Nigeria’s President Muhammadu Buhari is making good on an election vow to help the poor with a welfare scheme that is gaining traction across Africa
Other welfare projects include youth training schemes, food distribution programmes in primary schools, and micro-credit initiatives for women — a first in a country with a free-market tradition.
But unlike elsewhere in Africa, such as in South Africa or Kenya, help is not necessarily provided to older people or the disabled.
To reduce the risk of fraud, the beneficiaries are appointed by community groups, and the funds are transferred directly by the federal government into individual accounts.
In Bauchi State, one of the first three states to benefit from the programme, a committee has been set up to register some 10,800 people and root out fraudulent requests, said Mansur Manu Soto, a local councillor for development.
For Nonso Obikili, a Nigerian economist with the Economic Research Southern Africa programme in South Africa, the initiative was promising but addressed just “a drop in the ocean of poverty in Nigeria”.
“It seems to be an organised system, well monitored and much better on the corruption side,” Obikili said.
“But these cash welfare systems are very easy to get out of control, and when government wants or needs to stop, this leads to crisis.”
“It’s a good thing but it only works when the economy is growing”, he added.
The World Bank is encouraging similar projects in about 30 African countries.
“These type of programmes have been demonstrated through rigorous impact evaluations and shown to increase consumption and protect the poorest against economic shocks,” said the bank’s communication officer in Abuja, Olufunke Olufon.
A similar scheme has been rolled out in Ivory Coast, where 58 percent of the population lives in poverty despite economic growth that hit 7.8 percent last year.
Starting this month, 5,000 poor rural households will receive 36,000 CFA francs ($59, 55 euros) every quarter until 2020. The government expects 35,000 households will eventually benefit.
In Senegal, nearly 300,000 homes — or about two percent of the population — will be given state aid of up to 25,000 CFA francs each quarter, according to the government.