Conditional Cash Transfers (CCTs) have been largely used in the world during the past decades, since they are known for enhancing children’s human development and promoting social inclusion for the most deprived groups. In other words, CCTs seek to create life chances for children and the vulnerable to overcome poverty and exclusion, thus reducing inequality of opportunity. CCTs were initially implemented in Mexico, Brazil and Bangladesh in the 1990s, but they have been largely used in the world during the past decades, including programs initiated in more advanced economies such as the United States of America.
Additionally, Conditional Cash Transfers are regular money transfers to poor households given under conditions related to the use of health services, the uptake of food and nutritional supplementation, the enrollment and attendance of children and adolescents in school. Their success is based on the assumption that they are able to enhance children’s human development through improvements of health, schooling of poor and vulnerable children, contributing to breaking the intergenerational poverty cycle and social inclusion of the deprived groups.
The President of the Federal Republic of Nigeria, President Bola Ahmed Tinubu (GCFR) had in his maiden Independence Day broadcast to Nigerians on October 1, 2023 announced the cash transfer programme which he said would target vulnerable citizens. The 15 million households, according to the then Humanitarian Affairs Minister, Dr. Beta Edu, represent 62 million Nigerians.
For the record, the Federal government approached the World Bank for a fresh loan of $400 million for a conditional cash transfer for presumably 15 million households which 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 aimed at cushioning the harsh impact of removing fuel subsidies and floating the Naira, having earlier secured a loan of $800m for the same purpose.
However, the federal government claims that the Conditional Cash Transfer scheme and 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”.
The Government said it would commence the payment of N25, 000 monthly to the said 15 million households for three months, from October to December 2023. It further claimed that the scheme, now renamed “The Renewed Hope Conditional Cash Transfer for 15 million households”, will benefit 62 million Nigerians. There are several issues I found not appropriately raised by the scheme, these issues range from its design to the likelihood of its effective implementation, to the yardstick used in determining the vulnerable people in Nigeria, to if the CCT truly got to the vulnerable, and down to its implications on the Nigerian economy.
I am particularly concerned and interested in knowing the yardstick used in measuring the vulnerable people. A household is considered poor if they are deprived in more than one dimension, or the equivalent share [26%] of the weighted indicators measured in the multidimensional poverty index (MPI). That is, living standard, work, health and education. Meanwhile, the lack of awareness about the conditional cash transfer program among potential beneficiaries led to a very low uptake, while poor communication and information dissemination strategies also resulted in eligible individuals not being aware of the available assistance.
Given the fact that the CCT program is targeted at about 62 million vulnerable Nigerians, it is expected that if one randomly walks the street to a close-by suburb where the vulnerable people live and take a sample opinion or interview of those who have been beneficiaries of the CCT, it is believed that out of every 10 sampled opinions of the vulnerable people, at least three should attest to have received the grant or heard about it or are expecting to be paid.
However, that was not the case when The Sight News visited several suburbs in Pyakassa, Sauka, Tudunwada, Angwan Dutse, and Karamajiji to find out the credibility and accessibility of the CCT to the vulnerable people in some communities in Abuja. Most people who spoke to The Sight News said they had not heard about the CCT and those who have heard, said they have never benefited.
A petty trader and an FCT indigene, who simply gave her name as Mama Zugwai said, “I have never heard about the conditional cash transfer program but I have heard that the federal government will give people loans to support their businesses. “I sell charcoal and fry akara but nobody has told me and my family anything about the conditional cash transfer or even registering for it. I am not aware of any Rapid Response Register (RRR) at all”, she said. Similarly, Sarah, a single parent from Pyakassa community in Lugbe, while noting that she knows nothing about the conditional cash transfer program, but is aware that the government is giving out loans, said she is not interested in what will be a debt on her neck in the near future.
Also, Mr. Audu Sambo, a businessman in Karamajiji who explained that he got the information of the CCT through a fellow businessman sometime in October 2023, noted that he was told the federal government would send an enumerator to the community to take their details to the federal government for the N25,000 monthly payment.
“I kept waiting for the person to come and enroll us for the scheme but I did not see anyone. I was in need of a small capital to clear my son’s school fees but I have not heard or seen any such person in our village”, he lamented.
For Mr Tamuno Adeyemi from Tudunwada suburb in Lugbe, he only heard about the CCT through a friend who had benefited only N25,000 of the N75,000 promised by the federal government. Mr Adeyemi said, “My friend called me from Durumi village and said that he was given N25,000 as conditional cash transfer, hoping to get the remaining N50,000 but he never got it as at the last time we spoke in mid January. As for me, I have not heard about any enumerator coming to Tudunwada to enroll people for the payment and I was told I cannot enroll online when I asked about it”, he said.
One is left to wonder if the scheme as currently designed is capable of achieving the objectives attributed to it. It should be recalled that the government claimed that under the ‘Renewed Hope Conditional Cash Transfer for 15 million households’ the sum of N25, 000 would be transferred to the beneficiaries on a monthly basis for three months, which amounts to N75, 000 for each of the beneficiaries. 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 the then Vice President, Professor Yemi Osinbajo was quoted in January 2021, nearly three 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.”
Despite the presumed success of the scheme, figures from the Nigerian Bureau of Statistics (NBS) showed that 63% of persons living in Nigeria are poor, hence, the number of people living in multidimensional poverty had bloated to 133 million by 2023. 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 bracket despite the programme, would negate the conclusion of any of such reports – if they exist.
Given the Nigerian factor and despite all the talks about improving the efficiency of delivery of the cash transfer and the debate about the authenticity or otherwise of the social cash register, chances are that many politicians and government agencies will see the huge sum borrowed for the scheme as just another opportunity for primitive accumulation. For many politicians, their ability to get their peons 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.
There is equally a related question of what happens to the beneficiaries now that the three months duration of the scheme have elapsed? Is the government suggesting that within three months it would have stabilized the economy enough that there would no longer be a need for this extra financial support or that the beneficiaries, from supposed savings from the cash transfers, would have been able to set up viable micro businesses that would sustain them? It is becoming evident that the conditional cash transfer scheme would actually increase rather than alleviate the misery of the recipients.
For instance, assuming that prior to the cash transfer the recipients were able to feed only once a day but with the cash transfer they would be able to eat twice a day or would start adding a piece of meat to their meals, there is no doubt that when the transfer is stopped and they have to revert to eating once a day or without meat, their sense of deprivation would actually increase and they would feel worse off than if they had not benefited from any cash transfer at all. In essence, the conditional cash transfer is very unlikely to achieve its 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 floatation of the Naira.
There is also the question of the economic logic of borrowing for consumption. It is unoriginal that when we borrow for consumption rather than for productive ventures, we will struggle to find means of repayment. The government might want to consider continuing the conversation started under the Buhari government on how to reduce the number of people in the extreme poverty bracket.
Meanwhile, a better option is to start developing a social security programme, especially given the weakening of our extended family system that in the past performed that function. The government 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 gradually add more demographics as it learns from practices and mistakes. But this should not be funded from borrowed funds.
Borrowing $1.2 billion to fund the so-called cash transfer feels more like money just being wasted or flushed down the drain. The money would have been better utilized if it is used to train, support and 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 effectively. Even if only 56 percent of beneficiaries succeed and go on to employ other staff, it would still be considered a success. It is certainly easier to monitor 100 beneficiaries of a scheme than to search for 15 million households that the government claims will benefit from its cash transfer scheme.
Furthermore, it appears as though the Conditional Cash Transfer scheme seems to be an opportunity for the Tinubu government to uncritically continue with the brand of economics practiced by the Buhari government which was hinged on binging on debt and obsequious itself to the Bretton Woods institutions (the IMF and the World Bank).
For instance, the World Bank is Nigeria’s biggest multilateral creditor, with the country owing a total external debt which stood at N33.25 trillion (US$43.16 billion) in Q2 2023, while total domestic debt was N54.13 trillion (US$70.26 billion). The Debt Management Office recently said the country’s total public debt stood at N87.38 trillion at the end of the second quarter of 2023, representing an increase of 75.29 per cent or N37.53tn compared to N49.85 trillion 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. In its 2022 Debt Sustainability Analysis Report, the Debt Management Office (DMO) warned that the Federal Government’s projected revenue of N10 trillion for 2023 could not support fresh borrowings. Despite this warning, the Tinubu government seems ambitious on continuing with the Buhari government’s debt spree. It is therefore evident that the logic used to justify the conditional cash transfer scheme is at best described as a sham and unrealistic roadside program that further plunge Nigerians into poverty with a sense of unrealistic dependency on the scheme.
