If you’ve not seen it on your television, you must have come across it on the internet, listened to it on the radio, read it in newspapers, or even just heard about it through word of mouth, that there is a proposed conditional cash transfer for 12 million Nigerians by President Bola Ahmed Tinubu.

Last Thursday, the Senate approved the request of President Bola Tinubu to borrow a $800m loan from the World Bank. It also amended the 2022 Supplementary Appropriation Act to accommodate the provision for N500bn for palliatives to mitigate the effect of petrol subsidy removal on poor Nigerians. In recent times, Nigerians have been facing heightened economic hardship following the government’s decision to remove the long-overdue fuel subsidy which had historically kept the prices of PMS (Premium Motor Spirit) affordable for citizens. Post subsidy removal, fuel prices have more than tripled. In the same breath, the floating of the Naira, which has seen the official exchange rate jump from N461 to around N780, and the prohibitive inflation, presently at 22.79 per cent has led to significant economic repercussions. The prices of goods and services have soared, and the low purchasing power of many Nigerians has made it hell to survive the economic moment. So it is reasonable for the government to take a bold step to provide palliative for its struggling citizens.

According to President Tinubu, the $800m loan will be used to cater for the welfare of the vulnerable and poor households in the country under the National Safety Net Programme, while the sum of N8,000 will be transferred monthly to the bank accounts of 12 million poor and low-income households for six months. But serious concerns have been raised regarding the loan facility and the distribution of palliatives to Nigerians. 

Numerous voices contend that providing N8000 to households may not suffice to meet reasonable basic needs, especially amid soaring inflation figures. On the plus side, it is economically harmful to make people receive money for consumption rather than production. The present economic reality of the country is a pointer that N8000 alone cannot lift people out of poverty, and cash transfers without any focus on productivity can undoubtedly fuel inflationary pressures. As always, this has always posed a challenge to the Nigerian economy, as we have seen with the fuel subsidy – a consumption expenditure that has plunged Nigeria into a troubling cycle of debt.

Apart from that, there have been concerns regarding the lack of data on poverty in Nigeria. In 2016, the Buhari administration launched the National Social Register (NSR) to identify and register poor and vulnerable individuals. The register currently includes over 50 million people from more than 12 million impoverished and vulnerable households across over 150,000 communities in all 36 states of the country and the Federal Capital Territory (FCT).

While it is logical to assume that data from the National Social Register (NSR) will be utilized, it falls short in addressing the needs of 10 per cent of the 133 million Nigerians considered multi-dimensionally poor by the National Bureau of Statistics. However, the real issue lies elsewhere. There is a high possibility that conditional cash transfers won’t reach those in dire need. Nigeria has a troubling track record with cash transfer initiatives. Marketmoni, Tradermoni, and cash disbursements during the COVID-19 period are just a few examples of the numerous failed attempts in this regard.

But let’s look ahead and consider how the government can improve and make sure the impact of palliative is felt by as many Nigerians as possible. First, the N500 billion fund should focus less on cash transfers and more on tangible investments. For example, transportation is a major expense for households, be it rural or urban. And we have seen that this sector is a significant determinant of commodity prices. The higher the prices people pay for transport, the higher the prices of goods and services they render. Thus, the government should prioritize investing massively in this sector. An example to follow is Borno’s intervention initiative, where the government provided 50 luxurious buses and 30 pick-up vans to transport farmers to farmlands for free. This initiative for instance could positively impact food prices, effectively reducing food inflation.

Last week, the FG declared a state of emergency on food, a step in the right direction. Per the government’s plan, this initiative would swiftly provide farmers with the prompt release of fertilizers, lands, and grains to farmers and households to counterbalance the negative impacts resulting from the removal of fuel subsidies.⁣ Often, high inflation in Nigeria can be linked to a decrease in the supply of agricultural products to the market. However, with the intervention program in place, alongside other measures, this problem can be mitigated. 

Also, the government should prioritize the increase of the basic minimum wage. The stagnant remuneration of both government and non-government workers has exacerbated the economic hardship in the country. As prices continue to rise, people struggle to make ends meet, living from one paycheck to another, and some may not even have a steady paycheck. It is crucial to address this issue to alleviate the financial burdens faced by the citizens.

President Bola Tinubu has made a commitment to offer a living wage during his administration, recognizing the inadequacy of the current national minimum wage. However, promises alone cannot alleviate the struggles faced by the hungry and struggling demographic. What is crucial now is effective implementation. While a minimum wage of N200,000 might be considered ambitious, it is essential for the government to take tangible steps and enact a reasonable increase to ease the impact of the ongoing economic hardship

However, another concerning issue persists. As of February 2023, approximately 15 state governments have not implemented the previous N30,000 wage. Shockingly, over 70 per cent of workers in the private sector and some government ministries, departments, and agencies (MDAs) are yet to receive the mandated wage. If the FG decides to introduce a new minimum wage, it must be enforced at the state level as well. Ensuring uniform implementation across states is essential for effectively addressing the wage disparity and providing meaningful support to the workforce in both the public and private sectors. Only through these approaches and more can citizens truly experience the impact of any palliatives or relief measures.