Martins Hile, Editor, Financial Nigeria magazine

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Lessons from U.S. and Brazil on how to reduce poverty in Nigeria 16 Apr 2021

As a presidential candidate in 2015, Gen.  Muhammadu Buhari said his administration would provide social investments to eradicate poverty in Nigeria. To begin to fulfil this campaign promise, his administration in 2016 launched the National Social Investment Programme (NSIP), which Vice President Yemi Osinbajo described as the largest social protection scheme in Nigeria's history.
Over the next three budget cycles, N1.5 trillion was allocated for the NSIP’s portfolio of initiatives, including the Government Enterprise Empowerment Programme and N-Power. But instead of reducing, the number of Nigerians living in extreme poverty has been growing, making the problem seemingly intractable.

President Buhari seemed to acknowledge the magnitude of the poverty situation in the country when, after his reelection for a second term in 2019, he promised to implement policies to lift 100 million Nigerians out of poverty in 10 years. But in nearly mid-way through his second term, the reality looks more like the previous four years. 17.1 million jobs vanished between the second quarter of 2015 and the fourth of 2020. With the national unemployment rate increasing from 8.9 per cent to 33.3 per cent in the period, poverty has become an epidemic in the country.

The NSIP has underperformed for various reasons, including underinvestment. But it is also because poverty alleviation has never been a top priority of the administration, based on its budgetary allocations. Infrastructure investment has received by far greater funding. Evidently, the impact of direct interventions to alleviate poverty has been absent in the infrastructure projects.

President Joe Biden set a different priority in the United States. On assuming office in January, his administration made as its immediate priority the massive $1.9 trillion American Rescue Plan to tackle the economic impacts of the COVID-19 pandemic and address long-term structural poverty. Bi-den’s direct anti-poverty measures, which amongst others provided $1,400 paychecks to American families, is expected to cut adult and child poverty, lifting about 16 million people out of poverty. Only after this, is the White House getting set to intro-duce a $3 trillion spending plan for infra-structure.

With regard to social investment strategy for poverty alleviation, Brazil provides important contrasts to Buhari’s NSIP. The Brazilian Bolsa Família, a conditional cash transfer programme, is focused on providing financial aid to poor families, as opposed to individuals. Using a multidimensional approach to eliminating poverty, parents are given a monthly stipend on the condition that they send their children to school and ensure they get regular health checkups. Besides providing immediate relief, the programme improves access to education and healthcare, while increasing opportunities.

Launched in 2003, the Bolsa Família – and the Brasil Sem Miséria introduced in 2011 to expand the earlier programme – helped in lifting 14.4 million families out of poverty in a decade, as the poverty rate reduced from 9.7 per cent to 4.3 per cent, according to the World Bank. Unemployment rate fell from over 12 per cent in 2003 to 4.3 per cent as of December 2013.

While the NSIP lacks a framework for monitoring and evaluating the effective-ness of social investments, the backbone of Brazil's social programmes is the Single Registry called Cadastro Unico. Unlike Nigeria's Conditional Cash Transfer (CCT), which relies on members of communities to identify beneficiaries for the programme; the Brazilian single registry system identi-fies and registers the poorest families who are beneficiaries of social investments.

The registry system provides for better targeting and implementation of social pro-grammes. In addition, it ensures transparency, and enables tracking of those who eventually make the transition to upper in-come brackets that put them above the eligibility thresholds.

Observers of the successful outcomes of Brazil’s social programmes described the South American nation as an “exporter of social policymaking,” according to a 2014 World Bank report. Today, Brazil is a high human development country, with a gross national income (GNI) per capita of $14,263 (compared to Nigeria's $4,910), according to the 2020 Human Development Report of the United Nations Development Programme (UNDP).

The poverty alleviation policy of the Buhari administration is not on track to achieving its targets. However, with rising poverty and its impact on security in the country, it is necessary to fix the design flaws of the government’s programme. The architecture of the NSIP was incapable of supporting the delivery of the COVID-19 palliative programme of the government. This was essentially because the system does not know the prospective beneficiaries, even though they were virtually everywhere around the country. The country needs a data-driven and evidence-based poverty alleviation system that tar-gets beneficiaries transparently and pro-vides a credible monitoring and evaluation framework.