The federal government’s cash transfer programme, while providing immediate relief, does not offer a sustainable solution to poverty and hardship in Nigeria.
Development Diaries reports that the National Social Investment Programme Agency (NSIPA) recently announced the disbursement of N24.78 billion under the National Cash Transfer programme to 991,261 poor households as part of efforts to alleviate poverty in Nigeria.
According to media reports, the agency, in September 2024, shared N20.96 billion among 838,223 households and each beneficiary household received N25,000 through their designated financial service providers.
The question now is: how will this alleviate the deep-rooted poverty in Nigeria?
In its ‘Macro Poverty Outlook for Nigeria: April 2024’, the World Bank noted that rising inflation and weak earnings have pushed ten million Nigerians into poverty in 2023.
The report also disclosed that Nigeria’s international poverty rate, which is pegged at $2.15 per day, now stands at 30.9 percent, and that lower middle-income poverty threshold of $3.65 per day shows that 63.5 percent of the population lives in poverty, while a staggering 90.8 percent fall below the upper middle-income poverty line of $6.85 per day.
With this glaring statistics, alleviating poverty goes beyond just sharing cash.
Cash transfers are just short-term interventions, more like band-aid solutions that address the symptoms of poverty rather than the root causes. The distribution of funds to households only offers temporary relief.
Without structural changes to the economy, infrastructure, and education, the underlying issues remain unaddressed.
Sustainable development requires policies that empower citizens economically, such as skills acquisition, job creation, and investment in critical sectors like agriculture and manufacturing.
The Bola Tinubu-led government should instead focus on nurturing small and medium-sized enterprises (SMEs), which are the backbone of any economy, as a more sustainable solution.
By investing in SMEs through access to credit, capacity building, and business-friendly policies, the government can empower entrepreneurs to create jobs, foster innovation, and drive long-term economic growth.
This approach would stimulate local economies, reduce unemployment, and enable households to become financially independent.
Empowering SMEs, on the other hand, builds resilience and creates a ripple effect, enabling communities to thrive economically.
Moreover, cash transfer programmes are susceptible to inefficiencies, corruption, and mismanagement. The logistics of ensuring equitable distribution of funds across 36 states and the FCT can be challenging, leading to potential leakages and diversion of funds.
Development Diaries reiterates its call to the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, to consider creating specialised credit products that can nurture more small and medium enterprises.
In the long run, a thriving economy driven by skilled workers and industries will provide the sustainable development needed to reduce poverty and improve living standards.
Photo source: Bola Tinubu
