• Monday, November 11, 2024
businessday logo

BusinessDay

Without data, Nigeria’s safety nets leave the poor behind

In Nigeria, the promise of economic reform has echoed through decades, from the Structural Adjustment Programme (SAP) of the 1980s to the recent Renewed Hope Agenda. Each initiative has been hailed as a transformative solution to the nation’s persistent economic struggles.

Yet, despite these reforms—Vision 2010, National Economic Empowerment and Development Strategy (NEEDS), Seven-Point Agenda, Transformation Agenda, and the Economic Sustainability Plan (ESP)—millions of Nigerians remain trapped in poverty, left untouched by the benefits these reforms were supposed to bring.

Why the poor are left behind

Each of these policies had the potential to drive growth, but a critical flaw persisted: they were crafted and implemented without sufficient data on the populations they aimed to serve.

This oversight resulted in a misalignment between policy design and on-the-ground realities, leaving millions without the safety nets needed to weather economic shocks.

Consider the Renewed Hope Agenda’s 2023 removal of fuel subsidies. It aimed to redirect government funds toward critical infrastructure and social investments.

However, without accurate data on household energy consumption and income distribution, compensatory measures like cash transfers missed their targets.

As a result, low-income Nigerians faced skyrocketing fuel prices and inflation with little support.

Despite the National Bureau of Statistics (NBS) reporting a decrease in inflation from 33.4 percent to 32.15 percent in August, the most vulnerable have felt no relief.

“The effectiveness of government policies should not be measured by macroeconomic indicators alone but by the number of vulnerable people lifted out of poverty,” an economist said.

Data gaps and safety nets: The numbers speak

The numbers are telling. According to the NBS, over 133 million Nigerians—more than 63 percent of the population—are classified as multidimensionally poor, lacking access to basic needs like food, healthcare, education, and sanitation.

Yet, despite this alarming statistic, programs like the National Social Investment Programme (NSIP) remain woefully underfunded, reaching only a fraction of those in need.

In 2022, the government allocated just ₦500 billion ($1.2 billion) to social investment programmes, a paltry 0.27 percent of Nigeria’s GDP. Given the country’s population of over 200 million, this is far from sufficient.

Moreover, the funds are often mired in inefficiency and corruption, further diluting their impact.

A 2023 World Bank report found that only 2.5 million Nigerians benefitted from the Conditional Cash Transfer program, a mere 1.25 percent of the population. This significant gap between policy intentions and real-world outcomes underscores the need for more robust data to guide social investment.

Economic reforms and short-term shocks

The unification of the naira exchange rate in mid-2023 is another example of how reform, when not supported by data-driven safety nets, can cause economic shocks.

While the policy aimed to attract foreign investment and improve government revenue, it also triggered the highest inflation in 28 years, driven primarily by food prices.

For households surviving on less than $2 a day, the impact has been devastating. Higher costs of imported goods and basic necessities have pushed many deeper into poverty, despite efforts by the Central Bank of Nigeria (CBN) to stabilise the naira.

“The living conditions are unbearable,” Femi, a Lagos-based banker, lamented. “From transport fares to food prices and rent, it’s becoming impossible to survive.”

His experience reflects the broader struggle of millions of Nigerians grappling with economic challenges that seem insurmountable without proper social protection.

A way forward: data-driven policies for inclusive growth

If Nigeria’s reforms are to have any lasting impact, there must be a shift toward data-driven policymaking. Investing in data collection systems—especially in underserved rural areas—is essential.

Comprehensive data on income, consumption patterns, and demographics can help the government design policies that better address the needs of the vulnerable.

Take the 2023 fuel subsidy removal: had accurate data on household energy consumption been available, the government could have implemented more targeted relief, like energy vouchers or tiered pricing for low-income households.

Similarly, better data on poverty dynamics could lead to more inclusive and transparent social investment programs.

“The National Identification Number (NIN) should function like a Social Security Number (SSN),” Alawode Olugbenga, an IT economist, suggested. “Until it’s integrated with employment, income, and tax data, policies will continue to fail the vulnerable, and saboteurs will undermine relief efforts.”

Examples from countries like Brazil and India show how robust data can be a game-changer. Brazil introduced its Bolsa Família program in 2003, aiming to provide direct financial support to low-income families.

By 2021, the programme had reached approximately 14 million households, lifting about 26 million people out of poverty, demonstrating the program’s effectiveness through its reliance on accurate household data.

Similarly, India launched its Aadhaar system in 2009 with the objective of streamlining welfare distribution. As of 2023, over 1.3 billion people have enrolled, significantly reducing duplication and fraud in welfare programs.

Studies estimate that Aadhaar has saved the government around $9 billion annually by ensuring resources reach those who need them most. These examples highlight the transformative power of data in shaping effective social programs and fostering inclusive growth.

Conclusion

Nigeria’s decades-long journey through economic reform has been marked by missed opportunities to lift the most vulnerable out of poverty. The absence of reliable data has widened the gap between policy and impact, leaving millions exposed to economic shocks without adequate protection.

As the country moves forward, policymakers must recognise that data is not just a tool—it’s a lifeline. It bridges the gap between well-intentioned reforms and tangible improvements in the lives of ordinary Nigerians.

The urgent needs of vulnerable populations—who face rising food prices, inadequate healthcare, and dwindling opportunities—demand immediate action. Inaction not only exacerbates their plight but risks entrenching poverty for generations.

Only by placing data at the heart of its reform agenda can Nigeria truly begin to tackle poverty and build an economy that works for all its citizens. Policymakers should prioritise investments in comprehensive data collection systems, ensuring that every initiative is informed by accurate insights into the lives of those they aim to support.

This proactive approach can lead to targeted relief measures, empowering Nigerians to rise from the shadows of economic hardship.

Oluwatobi Ojabello, senior economic analyst at BusinessDay, holds a BSc and an MSc in Economics as well as a PhD (in view) in Economics (Covenant, Ota).

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp





Exit mobile version