Nigeria Needs to Nurture SMEs, Scrap Cash Transfer Programmes

Nigeria’s plan to restart direct cash transfers to the poorest and most vulnerable citizens has got us wondering what this would achieve given the high cost of living in the country.

Development Diaries reports that according to the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, about three million people are already recipients of cash transfers, but the government anticipates that an additional 12 million households could qualify for the next direct payments.

The government implementing direct cash transfers in an economy where the strength of the naira has drastically reduced the purchasing power of citizens could be an effort in futility.

How about the government prioritising social welfare programmes that directly target the root causes of the high cost of living instead of solely relying on cash transfer programmes, which may not even provide temporary relief?

Addressing the high cost of living requires a holistic approach that goes beyond traditional cash transfer programmes.

First, the government should focus on implementing policies aimed at improving the country’s economic stability, like investing in infrastructure development to reduce transportation costs, creating a conducive environment for businesses to thrive, and promoting agricultural productivity to ensure food security and stabilise food prices.

What is also a concern for us is that the funds might not even get to the intended targets due to poor data gathering and the poor implementation of policies by the ministries involved.

As of December 2023, the World Bank revealed that only 0.1 percent of targeted poor and vulnerable households in Nigeria had received the federal government’s launched cash transfer of N25,000 per month.

Nigeria needs to strengthen its targeted efforts on economic prosperity enablers, not cash transfers, where there is a high prevalence of poverty.

Development Diaries calls on the Minister of Finance to consider creating specialised credit products that can nurture more small and medium enterprises, which are the backbone of any economy. Inequality and poverty would be reduced in the process.

Photo source: Min of Humanitarian Affairs


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