Market News

Damilola Aina

The World Bank has faulted the Federal Government’s conditional cash transfer programme, stating that the initiative failed to reach millions of Nigerians in need of urgent economic relief, as only 37 per cent of the targeted households had so far benefited from the scheme.

It said the scheme launched in 2023 after the abrupt removal of fuel subsidy and unification of the foreign exchange market by the current administration, only reached 5.6 million households out of the planned 15 million, two years after the launch.

The global lender disclosed this in its latest Nigeria Development Update report titled “Building Momentum for Inclusive Growth”, released in Abuja.

The World Bank had approved a loan of $800m for the programme.

According to the report, a combination of surging inflation and sluggish economic growth has pushed an additional 40 million Nigerians into poverty since 2019, raising the poverty headcount to 46 per cent of the population.

“Successive years of rising inflation and sluggish growth have increased poverty and hardship levels. Since 2018/19, an additional 40 million people fell into poverty, and nearly half of all Nigerians (46 per cent) are estimated to have been living in poverty in 2024.

“Labour incomes have not kept up with inflation, depleting the purchasing power of Nigerians. Poverty has deepened and broadened, especially among urban Nigerians,” the report stated.

In response to the deepening hardship, the Federal Government had launched a temporary cash transfer programme aimed at supporting 15 million vulnerable households.

But the World Bank said the roll-out has been slow and inadequate. It stressed that efforts to urgently provide support to the poorest and most economically at-risk households should be redoubled and expanded.

“Only 5.6 million households—around 37 per cent—have received at least one tranche of direct transfers. Further expansion of the programme remains dependent on biometrically verifying at least one adult member of the household with a foundational digital identity. Also, efforts to urgently provide support to the poorest and most economically at-risk households should be redoubled and expanded,” the bank noted.

It warned that unless urgent efforts are made to scale up support, millions of poor and economically insecure Nigerians risk being left behind amid rising living costs and eroding incomes.

The bank advised the Federal Government to urgently improve its social protection framework, accelerate cash transfer distribution, and reallocate a portion of its recent revenue gains to targeted social programmes.

The report added, “Alongside macroeconomic reforms and emergency cash support, stronger growth and a robust social protection framework are essential to promote productive livelihoods.

“Leveraging early dividends from macroeconomic reforms, Nigeria’s social protection system should be structurally strengthened, with a focus on providing the foundation for human capital investments, promoting economic inclusion, building resilience, and breaking the inter-generational cycle of poverty.

“This needs to be complemented by growth-oriented reforms and higher, more efficient investments in public services, especially in health, education, and infrastructure.

“With more than half of the population below the poverty line, poor and economically insecure households need assistance to regain economic agency and cope with shocks.”

It recommended the creation of up-to-date social registries with verified digital identities as the foundation for targeting pro-poor initiatives. Beyond emergency interventions, the Bank stressed the need for structural reforms and investments in public services to ensure long-term poverty reduction.

“Leveraging early dividends from macroeconomic reforms, Nigeria’s social protection system should be structurally strengthened with a focus on promoting economic inclusion, building resilience, and breaking the inter-generational cycle of poverty,” it said.

The report also called for increased and more efficient investments in critical sectors such as health, education, and infrastructure, to support inclusive and sustainable economic growth.

Recall that President Bola Tinubu, in 2023, formally launched the conditional cash transfer program targeted at 15 million households across the country, each set to receive N75,000 within three months. The formal launch was held during the International Day for the Eradication of Poverty.

Government officials said each household was scheduled to receive N25,000 per month thrice in a year. But the initiative hit a hiatus after allegations of misappropriation of funds by the former Minister of Humanitarian Affairs, Disaster Management, and Social Development, Betta Edu, caused the suspension of the initiative.

But in February 2024, the Government said it was restarting the scheme and is targeting an extra 12 million households that could qualify for these direct payments.

The project has since battled with administrative challenges. Last week, the Vice President, Kashim Shettima, inaugurated an inter-agency task force to fast-track and address challenges delaying the conditional cash transfers to vulnerable households in Nigeria.