Of Poverty and Cash Transfers

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THE HORIZON BY KAYODE KOMOLAFE,     kayode.komolafe@thisdaylive.com

It is astonishing how some members of the Nigerian elite find the idea of giving money to the poor revolting. The more charitable ones among them would say it is impracticable or non-sustainable. It is also a philosophical riddle that the same members of the elite belong to the great religions in which alms -giving is ordained.

More weapons were inadvertently provided to the arsenal of the elite by President Muhammadu Buhari last week.  He said in Saudi Arabia that he would rather empower the poor by funding infrastructure and developing agriculture and mining than giving N5, 000 monthly to those “who don’t work.”

In a clime where informed policy-making process reigns supreme the least that could be said is that the President’s declaration would be eminently suitable for a rigorous policy debate. Unfortunately, there is now a rash of out- –of- context amplifications of the President’s statement.

To be sure, the President has not deleted from the budget proposals before the National Assembly the N500 billion allocated to social intervention from which the cash transfer is expected to be drawn. So the discussion should be on what is to be done to make the programme achieve its purpose.

Even the President has not denied that it is a programme of the All Progressives Congress (APC), the party in power. Of course, on the Election Day it was APC’s name that was on the ballot paper. Who knows how many   of those who voted for the party might have been attracted by the cash transfer element in its manifesto? However, the perception in some quarters is that cash transfer to the poorest and the most materially vulnerable is a brain wave of some policy do-gooders.

The other day, someone called the proposed programme a “poisoned chalice” and advised Buhari to be wary of it. There are those who just loathe the idea of a dole. Some commentators   talk as if cash transfer is a Nigerian invention. Yet this is a poverty-alleviation   programme that has been implemented in some countries of Latin America, Asia and Africa to the applause of the World Health Organisation (WHO) and even the World Bank.

In fact, the right-wing London newspaper, The Economist, made a case for cash transfer in a July 29, 2010 editorial simply entitled “Give the Poor Money.”  This is how the journal aptly put the matter: “Celia Orboc, a cake-seller in the Philippines, spent her little stipend on a wooden shack, giving her five children a roof over their heads for the first time. In Kyrgyzstan Sharmant Oktomanova spent hers buying flour to feed six children. In Haiti President René Préval praises a dairy co-operative that gives mothers milk and yogurt when their children go to school.

 

These are examples of the world’s favourite new anti-poverty device, the conditional cash-transfer programme (CCT) in poor and middle-income countries. These schemes give stipends and food to the poorest if they meet certain conditions, such as that their children attend school, or their babies are vaccinated.

Ten years ago there were a handful of such programmes and most were small. Now they are on every continent—even New York City has one—and they benefit millions”. That was the picture as seen by this highly influential organ of global capitalism six years ago.  And to our neo-liberal elite, all that can be said is simply this: you cannot be more market forces-oriented than The Economist.

For the debate to be helpful in policy-making, the question should be properly framed. The argument should not be about which constitutes a priority – funding infrastructure and agriculture or social intervention.  The government should assiduously implement its programmes in   infrastructure, agriculture, mining and other important areas. The poverty situation in the country demands that the government should implement programmes of social protection for the poorest segment of the society as envisaged in the budget.

Instead of cavalierly killing the idea of this   humane programme by saying it is impractical; policymakers should face squarely the challenge of policy comprehension, articulation and implementation. This challenge is evident in respect of other programmes of the administration. You don’t solve the problem by dropping the programme.

 Cash transfers have been implemented successfully in countries as far apart as Brazil, Philippines and South Africa. In fact, in Africa health-related cash transfers have been implemented Ethiopia, Zambia, Malawi, Lesotho and Tanzania among other countries. With proper policy comprehension and articulation, it would be determined which is suitable and implementable given the Nigerian condition  – conditional cash transfers or unconditional cash transfers? The conditions could be making poor parents in remote areas   play their roles in keeping children at school or ensuring immunisation of babies.

If conditional cash transfer were the choice of the policymakers, then the challenge would be   how to ensure an accurate targeting of the beneficiaries. This is probably the greatest basis of the skepticism about the programme. But then it is really a matter of developing the capacity for policy   implementation.

The perennial question of data and management of figures would be thrown up again. As the Chairman/Editor-in-Chief of this newspaper, Nduka Obaigbena, often remarks: Nigeria still faces the challenge of counting its people, counting votes and counting money. It is not impossible to prepare the database for those who are deserving of cash transfer.

It is quite practicable   to keep the statistics of the poorest. You should not kill an idea because of the fear of shoddy implementation of the programme or the corruption that it could engender. Census would   still be conducted periodically despite the controversy that trails every exercise just as elections still take place notwithstanding the bloody activities of electoral offenders.

What serious nations do is to tackle these problems headlong as the programme is implemented. Brazil, which has implemented the biggest and one of the most accomplished cash transfers, has demonstrated the national passion for this programme. The result: poverty has been significantly reduced.

Social protection should be central to the socio-economic agenda of this administration because of the enormity of poverty in the land. Issues of social protection are not to be discussed glibly. When a nation does not make social protection a central issue of development, inequality worsens.

Widening inequality is a social scourge afflicting mankind with all that it portends. Cash transfer is just one-minute aspect of social protection. Those who perceive Nigeria as a Darwinian garden where only the fittest materially should survive cannot possibly imagine the great difference N5, 000 can make to the monthly real incomes of some families.

The challenge is how the administration can competently design a programme of cash transfer that could be targeted at the poorest segment of the society without corruption and other leakages.

  • gohen

    We have to understand the real situation about the 500 billion naira you talked about. President Buhari said he would prefer to spend the money on infrastructure, while the VP said the money will be given to the poorest 1 million Nigerian.These are two clear differing statements. How do we even determine the poorest 1 million nigeria.
    It is more than clear that Buhari and his party are at variance as regards how to move the nation forward.

    Personally I think that President Buhari needs real help on how to run the economy. It is clear that he does not posses the capacity to take nigeria out of this economic/infrastructural toddler we have become. Lies and discrediting of past government will not help.

    Sincerely this is not about underestimating the president , but just about reality.President Buhari has not involved in any personal initiative or capacity building ventures since leaving power 30 years ago, all he has been doing is serving in already made parastatal. I don’t think he has written any policy paper or involved in the organisation of such. Take a look at all past presidents, you can see what they have achieved in their post presidential lives. It is either they have work places that have provided employment, or they have been delivering capacity building lectures and related activities.

    The most frustrating part of these whole saga are those people ready to defend the actions of President Buhari be it bad or good, if these kind of people are always available,tell me how will Buhari know he is heading the wrong direction ? For example, when APC denied promise giving money to jobseekers, the supporters said yes, APC never said so, later when the VP said 500 billion has been earmarked for the poorest 1 million people, those same people came out to tell that the APC is keeping its promises, now Buhari said he will rather put the money in agriculture and infrastructure, and those set of people are now saying that it is the best move by mr president !. but unfortunate for them, we have two differing promises, the promise of the VP,and the promise of the president, so which one of the promises will those supporters hold on to this time around…

    • Dayo Akom

      Just any one that make Buhari look good. The amount of lies and deceits going can only be imagined and it is very unfortunate. Buhari cannot be blamed for whatever befall the country under his leadership. It beat my imagination how Nigerians expect Buhari to perform when it is obvious that he lacks intellectual capacity and required training in governance.

      • gohen

        Dayo you simply captured it all in this statement and I qoute :

        ‘ It beat my imagination how Nigerians expect Buhari to perform when it is obvious that he lacks intellectual capacity and required training in governance.’… end of quote.

  • KWOY

    You voted Buhari because Jonathan marginalized your race in political appointments, not because of any damned cash transfers. And you know exactly that because of the politics around data, cash transfers won’t work, although it is highly desirable. Jonathan had among other things planned a true census. But the north was prepared to have it over their dead bodies. And as usual, Yorubas were ready allies!

    • Jon West

      The truth shall set you free, but first it will exasperate you and make you angry. That is why it is called the truth. Like bitter medicine, it is good for the body and the soul. Kayode Komolafe and other born-again sophists and hypocrites may do well to listen to the truth.

  • Thompson Iyeye

    There is nothing wrong in charitable actions such as giving money to the poor. Secondly, money can be given to the poor in several ways, including direct hand out of the money or through ways and means to benefit the poor. The success or failure to meet desired objectives will depend on the preparation to administer the exercise and also to a far extent, the environment in which the exercise is being implemented. After all, fuel subsidy in Nigeria was a way to help the not so strong in our society. At the end of the day, it is the strong in the society that benefited, albeit corruptly.

    Any attempt to implement the N5,000 monthly stipends for the poor or unemployed today, will fail woefully because of the lack of up front preparations required to administer and ensure the right people truly benefit. It is of no value mentioning the number of countries that have implemented similar exercises. Today, we lack the basic database. Our tools and systems are immature and prone to corruption of the exercise. The first step is to put these in the right shape and knowing what we are as a nation, it will take a hell of a long time. How long has it taken us on providing basic ID for the citizens of this country? After decades, the ID exercise is still on going.

    Until appropriate work is done up-front to ensure the exercise will truly benefit those it is meant to, the provision in the budget should be channeled to providing jobs in whatever form or in whatever sector of the economy. To go ahead and dole out money without pre-requisite preparation is again to corruptly enrich government officials and their cronies, as experienced with our infamous fuel subsidy.

    • amador kester

      If efforts were made to control and address the issues you raised above the programme would have brought some succour to the lowest rungs of the socioeconomic ladder for whom it should been targetted after a meticulous data collection and verification process.. The programme in brazil is helping a bit to narrow the wide income disparity,, the worst in the world that is capable of precipitating tempestous social upheavals,, although such programmes if well implemented do not intend to make the dynamic,,able bodied youths lazy but target the most vulnerable economic and demographic groups at risk. Nigeria,,s income disparities methinks should have high standard deviations and i dont know if economists conduct meaningful research in this area,,everyone talks oil,oil,oil! like a parrot that choruses only one tune ( and of course the nation inadvertently sorrows for it) but i think a targetted pilot implementation experiment could flatten a bit ( in the experimented zone) the ubiquitous lorenz income distribution curve that is the operational referential tool applied by economists in researching such matters