Inflation: Don’t distribute cash palliatives to vulnerable families, experts warn Presidency

They also observed that the employment of the strategy by the previous administration failed to achieve the desired result, arguing that repetition of a failed strategy would not augur well for the economy.

Amidst the economic hardship in the country, fuelled by skyrocketing inflation and Naira devaluation, the federal government had revealed plans to distribute N75,000 cash transfer to an estimated 70 million “poorest of the poor” this year.

The measures, according to the Minister of Humanitarian Affairs and Poverty Reduction, Prof. Nentawe Yilwatda, was as part of President Bola Tinubu’s directive to address extreme poverty and create a more social safety net.

The ministry, according to Yilwatda, aimed to deploy the programme across all 36 states of the federation by the end of January 2025, targeting the registration of up to 18.1 million Nigerian households through the National Identity Number (NIN) system.

“We want to deploy by the end of January across 36 states to ensure we start harvesting the NIN number of up to 18.1 million Nigerian households that we need to capture as fast as possible so that we can make payment for them.

“The target of the president is that we should target 15 million households. And an average household is about 4 to 5. We are discussing here roughly about 70 million households with about N75,000 per person this year,” the minister noted.

But speaking with Saturday Vanguard, the experts opined that poverty was still rife in the country despite the deployment of cash sharing measures in the past. They said that the resulting inflation from the cash sharing initiative would hurt the economy.

It will fuel inflation, foster dependency —Victor Chiazor, FSL Securities

Victor Chiazor, Head, Research, FSL Securities, argued that though the initiative would offer immediate financial relief, albeit minimally, it would foster the culture of dependency. He stated that a more sustainable approach would be to create access to cheap credit facilities and foster entrepreneurship to create jobs that stimulate local economies. “The plan to disburse cash palliatives to the poorest as a means of poverty alleviation is a commendable initiative, as it offers immediate financial relief.

Economically, it has the potential to stimulate aggregate demand and ease the immediate financial burden on vulnerable populations. However, concerns remain regarding its effectiveness, as it could contribute to inflation and foster dependency rather than sustainable economic empowerment,” he said. He stated that the initiative also has significant flaws, as the majority of the extreme poor remain unbanked, limiting the reach and effectiveness of the programme.

He remarked that the initiative could also serve as an opportunity to misappropriate funds by some of the political class.

“Furthermore, a similar approach was implemented by the previous administration, yet poverty levels remained largely unchanged, highlighting the need for a more impactful strategy. A more effective approach to poverty alleviation would be investing in human capital development like education and skill acquisition, enhancing access to quality healthcare, access to cheap credit facilities and fostering entrepreneurship to create jobs that stimulate local economies. These measures, if effectively implemented, would provide long-term economic benefits, ensuring self-sufficiency rather than short-term financial relief “ Chiazor added.

It will increase consumption amidst supply gap —David Adonri, Highcap Securities

Speaking in the same vein, David Adonri, Vice Chairman, Highland Securities, said: “Cash palliative and trader money presumably distributed to alleviate poverty and empower petty traders by the failed administration of President Muhammadu Buhari was a conduit pipe used by persons in that administration to loot the national treasury. What President Tinubu is now planning will consume N525 billion which will further damage the financial health of the federal government, which is currently in an excruciating debt trap.

Nigeria is a poor country without the financial wherewithal to undertake such an exercise without hurting the economy. The initiative is worthless as the amount proposed cannot feed a poor recipient for more than two days. It is wasteful and capable of increasing consumption amidst a huge supply gap which may fuel inflation. Whoever thought of this idea does not have the interest of the economy at heart. It is a politically motivated policy which has no benefit to the economy.

The only way to alleviate poverty is to invest in jobs that offer gainful employment. If the N525 billion about to be needlessly lavished and probably embezzled by the Federal Government is used to support production, it will have multiplier effect on the economy in terms of closing the supply gap that is fueling inflation, creating wealth and generating massive productive employment for poor and rich people.”

To address the issue of mass poverty in Nigeria, Adonri emphasised the need for the government to mobilize all the domestic factors of production to build a self-reliant, self-regenerating, and an import independent producing economy that would generate mass employment and maximize domestic wealth creation. He noted that without a secured and enabling environment, production is not feasible.

It is weaponization —RenaissanceAfrica

In his own submission, Ejike Nwuba, CEO, The RenaissanceAfrica, said that giving out paltry “handouts” to indigent people “has never and can never ameliorate poverty. It is a total sham and it is a total waste of resources,” he said.

According to him, “The implication is that our political actors are, inadvertently, weaponizing poverty to keep the people in their stranglehold.

If we are sincere about alleviating poverty, we must teach our people how to fish instead of giving them fish to survive on. The government should invest in quality education, capacity building, vocational skill acquisition, power, infrastructural development, incentives for small and medium scale businesses, and implementing policies to improve ease of doing business in Nigeria if they are serious about ameliorating poverty”.

It’s not sustainable — Eze Onyekpere

The Director of Centre for Social Justice, Eze Onyekpere contended that there was nothing wrong in distributing palliatives but the manner in which the government is going about it is wrong. He said, “The first challenge is to understand the concept of the proposal by the Federal Government in the name of poverty alleviation which is called a palliative. The dictionary meaning of a palliative is ‘of a medicine or form of medical care relieving symptoms without dealing with the cause of the condition’. Thus, we are not discussing attacking the root causes of poverty but merely attacking its symptoms.

“The second challenge is the lack of credible, transparent and verifiable register of poor Nigerians. What we have is an opaque manipulated register only known to those in the corridors of power and serving their interests which incidentally do not coincide with the interests of the poorest of the poor. A credible register should be open to the public for scrutiny but the current register is not open.

There is not one iota of guarantee that the money will reach the poor. The third challenge is that you do not use borrowed money for palliatives and distribution to the poor. Such an exercise is done from the proceeds of savings and income earned from retained revenue.

It is not sustainable to borrow for such exercise and this raises the poser; how will the nation pay back these borrowed funds? To confirm the lack of transparency in this exercise and similar exercises in the past, there is a clear lack of impact from previous rounds of cash distribution.

There is no empirical basis to determine impact. This is a clear waste of resources which could have been channeled to growing and developing sustainable means of livelihood in agriculture, skills and other value adding interventions.”

Palliative should reduce cost of living — Aigbe

Senior Program Officer at the Centre for Development of Democracy, CDD, Aigbe Austin, said, “If you ask the Nigerian government today where the poorest of the poor are located, they’ll tell you, in rural areas.

But we don’t even know where our poor people are located, we don’t have them synchronized in a database that we can say there are 10 people with disabilities in this area or there are 10 people who earn less than a dollar a day that we want to reach. We’ve seen the corruption in the so-called cash transfer in the previous administration. Even at the commencement of Tinubu’s administration, his own minister was involved in the same charade of corruption.

I think what should be palliative is to reduce the cost of living. It is wrong to just hand over money to people without earning it, even if it means digging the ground and refilling it and paying them for it. Any money handed over freely does not really produce any results.

Poverty not about lack of cash, but lack of opportunity — Global Rights

The Executive Director, Global Rights Nigeria, Abiosun Bayeiwu, asserted that, “The promise of N75,000 cash transfers to 70 million Nigerians may sound ambitious, but experience has shown that one-time or short-term financial interventions rarely create lasting economic change. Poverty is not just about a lack of cash, it is about a lack of opportunity. To put things in perspective, in 2019, the TraderMoni and MarketMoni schemes were launched, offering small cash loans to petty traders.

The hope was that these funds would stimulate micro-businesses and lift people out of poverty. However, without long-term economic reforms, the impact faded quickly. Today, the situation is even more dire. Inflation is above 28 per cent, the Naira is unstable, and fuel subsidy removal has worsened hardship. You need to understand that more than 60 per cent of the population are multidimensionally poor.

The core problem lies in the structural issues that make poverty hydra-headed and self-replicating. How far can N75,000 go when a 50kg bag of rice now costs about N60,000? Even if every naira reaches its intended recipient, the relief will be short-lived. Without policies that drive industrialization, job creation, and access to affordable healthcare, education, and security to ensure their stability, these types of intervention will, at best, provide momentary relief that may last at best – a week, but will continue to leave millions in the same cycle of hardship”.

On how the cash palliatives will really get to the targeted poorest of the poor Nigerians, considering the pervasive corruption, she said, “History gives us little reason for optimism. In 2020, during the COVID-19 pandemic, the government announced cash transfers to the most vulnerable. But there is no evidence that its intended recipients, those in rural areas and urban slums–the real “poorest of the poor”—ever received a kobo. Instead, cases of ghost beneficiaries, political favouritism, and outright embezzlement marred the process. Similarly, in 2022, the National Social Investment Program (NSIP), meant to provide financial aid to the needy, was riddled with scandals. Even the Humanitarian Minister at the time, Sadiya Umar Farouq, admitted that funds had been mismanaged, yet no real accountability followed.

“If this new N75,000 transfer programme lacks a foolproof distribution mechanism, it risks becoming another opportunity for elite capture, where politically connected individuals siphon funds while the intended beneficiaries remain neglected. Who is verifying the beneficiaries? Who is monitoring the disbursement? If these questions remain unanswered, we may simply be watching another cycle of economic injustice unfold.

However, she recommended that, “The government must stop looking for cheap scores and instead address multidimensional poverty by investing in and strengthening structures for human capital development; give communities quality schools, ensuring housing security, access to quality healthcare.