Martins Hile, Editor, Financial Nigeria magazine

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How to strengthen NSIP to tackle multidimensional poverty 16 Jun 2019

Nigeria became the ignominious poverty capital of the world in the first term of President Muhammadu Buhari's administration. During the first year of the administration, the National Social Investment Programme (NSIP) was launched in 2016 to provide social protection for the poor through "capacity building, investment and direct support."
According to Vice President, Yemi Osinbajo, who chairs the Steering Committee, the NSIP is not just the largest social protection system in the country's history, it is also the largest in Sub-Saharan Africa. The programme aims to eradicate malnutrition in school-age children, provide affordable credit for micro, small and medium-sized enterprises (MSMEs), reduce rate of youth unemployment, promote access to financial services, and so forth.

As the administration's first term came to an end, the President’s wife, Aisha Buhari, described the NSIP as a failure, particularly because it did not achieve its objectives in her home state of Adamawa and the entire northern part of the country. That the programme has underperformed is not in doubt. But the evidence of, and reasons for, its failure are beyond Aisha Buhari’s remonstrations.

In December 19, 2016, while fielding questions on the status of the NSIP, Udoma Udo Udoma, then-Minister of Budget and National Planning, said the programme would fully commence in 2017. He stated that 2016 had been for consultation and planning. While this was not particularly surprising for an administration that was widely known for being slow, it was worrisome that the government budgeted a whopping N500 billion in that year's budget without knowing how it would spend it.

Moreover, while the intervention programme failed to kick off, poverty was in the ascendant. In January 2016, 78 million Nigerians (43.1 percent of the population) were living in extreme poverty. As at the end of May 2019, 93.7 million people (47.7 percent of the population) were extremely poor. In effect, nearly 16 million people slipped into extreme poverty under Buhari’s first term.

The government also undercut itself by underinvesting in the programme. Between 2016 and 2018, the government budgeted N1.5 trillion for the NSIP’s portfolio of initiatives, namely National Home-Grown School Feeding Programme, Government Enterprise Empowerment Programme, N-Power Initiative, and National Social Safety Net Programme for the Vulnerable Households. As at the end of March 2019, the government had released only N470.8 billion (or 31.4 percent) of the appropriated amounts for the NSIP over the past three years.

Whereas the amount released so far was only a fraction of what the government planned to invest, there was no clear framework for monitoring and evaluating the effectiveness of the social investments or justifying the NSIP’s social rate of return – defined as the social welfare generated by the programme as a percentage of its total cost. Maryam Uwais, Special Adviser to President Buhari on Social Investments, recently said the programme has had 12,069,153 direct beneficiaries and over 30 million secondary beneficiaries. She also said the NSIP is responsible for feeding 9.7 million pupils across 31 states.

If the government considers this a satisfactory report, then the NSIP is hardly an ambitious programme. This report shows that after four years of the administration, the programme is not yet nationwide and it did not achieve up to 50 percent of its spending target. And rather than decline, poverty is also rising precariously, leading to the World Data Lab’s projection that a quarter of the world’s extremely poor people would be in Nigeria by 2030. Paradoxically, 2030 is the year the world is expected to have eradicated poverty in all its forms, based on Goal 1 of the 17 Sustainable Development Goals (SDGs).   

To turn this rising tide of poverty and boost development impacts in Nigeria, it is high time we had more serious discussions about poverty alleviation for no other reasons other than the security and future competitiveness of the country. We can start by implementing effective poverty eradication policies, which require multidimensional approaches.

The standard measure of poverty is often the headcount ratio, which is the proportion of a population that lives below the poverty line of $1.90 per day. But the Multidimensional Poverty Index (MPI) of the United Nations Development Programme goes beyond this income threshold and looks at three key dimensions of poverty, namely health, education and standard of living. Across these dimensions – underscored by the SDGs – are 10 indicators, which are nutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing and assets.

During its second term, the Buhari administration needs to be innovative and find the political will to take a multidimensional approach to tackling poverty. This requires revamping the social protection system by doing the following:

First, devise strategies to mobilise funding for the NSIP. This can be achieved by remodelling the NSIP as a quasi-independent agency in charge of social investments – a role that is currently being handled by the National Social Investment Office. A well-designated agency will function outside the bureaucracy at the presidency. The agency can then raise additional funding from impact investors in the private sector.

Second, designate development professionals – not civil servants – to run the new NSIP. This will curtail corruption, which has reportedly beset the NSIP, and foster efficiency, which is necessary for achieving high development impacts.

Third, increase social spending. Over the last three years, social spending was merely 0.1 percent of Nigeria's GDP. This is quite low compared to East Asia where social investment as a share of GDP is 1 percent and 0.3 percent in China. The minimum living standard guarantee programme (Dibao) of the Chinese is considered to be the world’s largest social protection programme. China succeeded in leveraging social protection, improved access to social services and strong economic growth to achieve the remarkable feat of lifting over 800 million Chinese out of extreme poverty in four decades. From 88.3 percent in 1978, extreme poverty rate in China has dropped to 0.4 percent in 2019.      

Fourth, integrate innovative social insurance, social pension and social housing schemes into the NSIP. As China has proved, modern social protection frameworks go beyond compensating the poor. Social insurance, social pension and social housing programmes help to address poverty and vulnerability. People who are vulnerable also need to be catered for as they are one sickness or one disaster away from slipping into extreme poverty.