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Should social investment be enacted into law? 09 Jun 2023

A few days before he would hand over to his successor, President Muhammadu Buhari signed the National Social Investment Establishment Act, 2023. According to the former Speaker of the House of Representatives, Femi Gbajabiamila, “the objective of the Act is to provide a legal and institutional framework for the establishment and management of the (sic) National Social Investment in Nigeria.” It is believed that the Act would give legislative force to the National Social Investment Programmes (NSIP), which was created by the administration in 2016 to “tackle poverty and hunger across the country.”

Nigeria, like many other countries, has had different social investment programmes (SIPs), with a change of government affecting the continuity of almost all the programmes. Different SIPs have been implemented in the country since 1962, including Operation Feed the Nation in 1977, Structural Adjustment Programme (SAP) in 1986, and Better Life for Rural Women Programme. The Family Support Programme (FSP) and Family Economic Advancement Programme (FEAP) were launched by former military head of state, General Sani Abacha, and his wife.

The return to civilian rule in 1999 saw the launch of other SIPs. The Poverty Alleviation Programme (PAP) was introduced in 2000 and later metamorphosed into the National Poverty Eradication Programme (NAPEP) in 2001. In 2004, the federal government launched the National Economic Empowerment and Development Strategy (NEEDS). President Musa Yar’Adua had his social welfare programmes included in his seven-point agenda, while the administration of President Goodluck Jonathan launched the Subsidy Re-investment and Empowerment Programme (SURE-P).

The Buhari administration launched the NSIP in 2016 with four key initiatives: Conditional Cash Transfer programme, N-Power, Government Enterprise and Empowerment Programme (GEEP), and Home-Grown School Feeding Programme.

All the social investment and welfare programmes focused on alleviating poverty, unemployment, and economic inequality. That we continue to require these ad hoc interventions raises questions on the effectiveness of the previous ones that have been implemented. Given the resources that have been gulped by the programmes, an evaluation of their impact is more appropriate than a decision to give the framework a sense of permanence by codifying it into law.

The Nigerian constitution, under the fundamental objectives and directive principles of state policy in Chapter II, creates as part of the economic objectives of the state the duty to “direct its policy towards ensuring the promotion of a planned and balanced economic development; that the material resources of the Nation are harnessed and distributed as best as possible to serve the common good; that the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of a few individuals or of a group; and that suitable and adequate shelter, suitable and adequate food, reasonable national minimum living wage, old age care and pensions, and unemployment, sick benefits and welfare for the disabled are provided for all citizens.” Section 17 provides that the State shall direct its social policies towards ensuring that “all citizens without discrimination on any group whatsoever, have the opportunity for securing adequate means of livelihood as well as adequate opportunities to secure suitable employment.” It also directs that “provision is made for public assistance in deserving cases or other conditions of need.”

SIPs, therefore, represent the tools by which the state can ensure the equitable distribution of resources to vulnerable populations, including children, youth, and women. However, the manner and structure of the programmes would determine their effectiveness. As a result of the high rate of unemployment in Nigeria and the attendant increase in poverty levels, employment is a major focus of most of the SIPs. This is either through entrepreneurial skills development or access to finance. Yet, Nigeria’s unemployment, poverty, and human capital development indices are still abysmally poor.

According to the Nigeria Poverty Map, composed by the National Bureau of Statistics (NBS), “7 out of 10 Nigerians living in the rural areas are multidimensionally poor compared to 4 out of 10 in urban areas. Multidimensional poverty is higher in rural areas, where 72.0% of people are poor, compared to 42.0% of people in urban areas. Approximately 70% of Nigeria’s population live in rural areas, yet these areas are home to 80% of poor people. The intensity of poverty in rural areas is also higher, at 41.9%, compared to 36.9% in urban areas.”  

According to estimates from the World Data Lab’s Poverty Clock quoted by the World Economic Forum, about 90 million people live in extreme poverty in Nigeria. In 2018, Nigeria overtook India – a country with more than five times the Nigerian population – as the country with the largest absolute number of extreme poor people in the world.

The haphazard way that SIPs have been created and implemented in Nigeria has denied us appreciable positive impacts the programmes ought to have. Creating another commission to give institutional legitimacy to programmes that are likely to be procedurally – instead of strategically – churned out, would not yield better outcomes. While the need to alleviate the immediate effect of poverty and unemployment in the country cannot be disregarded, the tenets of our welfare policies must transition from programmes that provide temporary, ineffective palliative measures, to truly empowering citizens to be fully integrated into market frameworks.

Labour market integration is a more superior method of achieving social and economic inclusion. SIPs that give short-term monetary benefits and short-lived skills acquisition and are not rooted in a practical and pragmatic plan on improving the standard of basic education and bridging the infrastructure gap, will result in a continuing cycle of poverty.

Nigeria continues to rank low in human capital development. As a result of the appalling state of education in the country, many graduates from the tertiary institutions lack competences that are needed in the workplace. This, along with poor infrastructure, also hinders economic growth in the micro, small and medium enterprises (MSMEs) sector. With a huge part of the economy being informal, the wage jobs that are able to lift people out of poverty, especially in the rural areas, are limited.

There is abundance of evidence indicating a strong relationship between educational attainment and poverty reduction, with poverty decreasing as good education outcomes are increasing. Also, there is a strong and positive relationship between economic growth and investment in education. SIPs such as the Buhari administration’s NSIP, though laudable in the temporary succour it provided its beneficiaries, is limited in its reach, and will have no lasting impact in the absence of adequate investment in education in the last eight years.

As poverty stems from lack of access to basic necessities such as food and shelter, healthcare, and education, the sustainable way to reduce poverty in the country is to increase investment in food security, healthcare, education, and infrastructure. When citizens have access to quality and affordable healthcare, education and economic opportunities, their reliance on monetary aid to meet basic needs will drop. SIPs that do not prioritise these long-term investments are myopic.

While the need to ensure continuity of social investment across administrations to harness the compound effect of the programmes is understandable, there are already legislative and institutional frameworks for such investments, such as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Bank of Industry (BOI), and the Start up Act. A proliferation of agencies, structures or programmes can be counter-productive. There is the danger that social investment programmes would themselves become the endgame rather than stop-gap measures to curb social and economic risks and vulnerabilities that are caused by lack of adequate long-term investments in food security, healthcare, education, and physical infrastructure.

In any event, SIPs are likely to be more efficient when implemented by the structures closest to the people. Local and state governments, with better understanding of the peculiarities of the localities, are better placed to be the drivers of more effective social investments. At these levels – rather than a national programme by the federal governments – the people can be better targetted.

Funmilayo Odude is a Partner at Commercial and Energy Law Practice (CANDELP).