February 6, 2019

A leg-up from the FGN

In the FGN’s 2019 budget proposals, the allocation to social intervention projects was retained at N500bn, with N350bn intended for recurrent items and N150bn for capital expenditure. This special intervention vehicle is split into five categories: job creation, school feeding, conditional cash transfers, an enterprise programme, and education grants for science and technology. We expect that full implementation would provide a clear boost to productivity and growth, particularly in the rural economy.

  • The government estimates that 20 million people (10.8% of the population) will benefit from this vehicle. The conditional cash transfer, one of its arms, is targeted at low-income households, supporting them with a monthly payment of N5,000. This initiative is currently implemented in 26 states, with about 298,000 beneficiaries. One positive has been the creation of savings cooperatives among this group, and we understand that more than 3,500 such cooperatives have been established on the back of this initiative.
  • Another arm of the vehicle is the homegrown school feeding programme (HGSFP). This provides daily balanced meals to students in public primary schools. The initial target was 5.5 million school children but we hear that as at June 2018 about 9.3 million students had benefitted under the feeding programme.
  • The ripple effects from the HGSFP include boosting human capital as it contributes to equipping the future labour force. We understand that the enrolment rate across participating states has visibly picked up. In addition to providing nutrition to underprivileged students, the HGSFP has created additional jobs across the value chain as local farmers are supplying the products used in meal preparation. Furthermore, 97,000 cooks have been engaged under this initiative.
  • Another arm of the social intervention vehicle offers affordable loans to traders through a scheme called TraderMoni. The state-owned Bank of Industry acts as the executor. The loan package is interest free and runs up to N100,000. Loan repayment qualifies the borrower to submit new loan requests. Over one million traders have benefitted from this initiative. This has assisted with boosting the capacity of micro enterprises in the informal economy.
  • The N-power programme within the vehicle aims to improve the employability of out-of-work youth. We gather that there are about 500,000 deployed beneficiaries of this programme serving as teachers, health practitioners, agriculturists and tax monitoring personnel. They are paid N30,000 monthly stipends.
  • Social intervention programmes aimed at households with little or no income can have a positive impact if properly implemented. It is difficult to judge their impact on poverty alleviation in Nigeria, however, due to deficiencies of data.