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November 5, 2016

Posted by seunfakze in CHANGE, ECONOMICS, EDUCATION, POLITICS.
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GIVE THIS SOCIAL INTERVENTION A BEFITTING FACE!

Aliyu (not his real name) has just settled in Abuja. He is one of Nigeria’s poor, he barely spends $2 a day on feeding. $2 daily post-inflation is N940, that is N28,200 monthly. How can an intervention scheme at N30,000 involving jobs suffice if you add transport fare of N8,000 (N400 daily) to his feeding cost! This besides other personal and family issues (clothing, and health challenges)

When exulting the policies and programs of government, numbers are important. The Federal Government of Nigeria this week announced the provision of 200,000 jobs in which N30,000 will be paid as monthly allowance.

Launched under the Social Investments Programmes (SIP), the program aims to “effectively and efficiently touch the lives of Nigerians especially the poor and unemployed.” This is intended to run for a period of two (2) years. The impact of this on the budget will amount to a sum of N144 billion. This is a massive 28.8% given the whole SIP is N500 billion, one which the President already asked for N180bn intervention.

The impact of economic stimulus injection in the economy in the United States of America is most salient as the November 8 elections draw to a close. The Labour Department of the United States announced an added 161,000 jobs for the month of October, a 73-months of consecutive job gains contrasted with October 2008 where 603,000 people increased the number of unemployed to 10.1million people.

In a country with sparse economic data on jobs provision or real unemployment rates (considering that not all unemployable are captured within the National Bureau of Statistic’s unemployment claims), there is a need to accurately turn the page and offer new narratives on the provision of jobs and especially, the impact of such jobs on the economy. N144 billion is a lot of stimuli if well utilized, especially in an economic downturn. Thus, while the jobs provision scheme is laudable, questions arise:

  • How did the government arrive at or derive the N30,000 for the unemployed and poor since the criteria for programme intervention draws on “effectiveness and efficiency?” What analysis is being provided to reach this monetary conclusion?
  • What is the selection criteria for the poverty alleviation policy program: efficiency and or effectiveness issue, or equity? How exactly will N30,000 effectively and efficiently touch the lives of these beneficiary Nigerians? This is significant especially seeing the inflationary trends (and Aliyu’s case study)
  • Given it has not been expended and seeing we are already in the third quarter of a recession, what led to the delay of this program? How serious is the government and lawmakers about injecting life into the economy?
  • How will the program be sustained? Given N144 billion will have been expended in 2 years, will the recipients be abandoned after 2 years? What happens after the 2 years expiration of the project? Are recipients absolved into jobs program across board? What is the transition into full labour market economy? Or is this another NYSC beautifully rebranded?
  • Who implements these projects? How are middlemen and corrupt practices avoided? What monitoring and evaluation mechanism are employed?
  • What economic impact will these social intervention program bring to the economy: is it taxable or is it pension-viable (doubtful because of its short term)
  • What productivity improvement will it result into? How engaged will they be in impacting the economy? What lifelong skills are they being trained with? How will these skills impact the economy on a long-term basis? How does this fill the void for skills needed within the workforce?

The SIP represents a social transfer scheme, and I believe that this policy will result in an overall positive social impact if well implemented. Given scarce or dwindling resources, economic efficiency is the most important rationale for analyzing social cost benefits. Thus, the efficiency of implementing a policy/program differs greatly from a policy program criteria selection based on efficiency.

As such, a much better argument (by the FG) for effectiveness and efficiency of the poor as criteria selection would mean a reduced number of projected employed (100,000) and improved monthly (N60,000) pay, which helps Aliyu while retaining the N30,000 monthly pay justifies equity as criteria selection! Both still arrive at N6 billion monthly pay.

Again, the Nigerian Government loses the narrative of this “laudable” economic injection by not fully expatiating on the ripple implications of these job provisions given it is an attempt at expansionary fiscal spending. Provision of jobs boosts spending confidence and helps families (social intervention) and equipping of workforce contributes to human capital development.

Other ways the Federal Government would have leveraged on this program implementation to shape national conversation include:

  • Net social benefits: taken the social benefits on the people vis-a-vis cost analysis to the state (especially with numbers and implications on families)
  • Economic impact of this project on the economy: given that these jobs helps to restore confidence in spending and in the markets. (Government spending – especially on productive sectors of the economy – adds confidence to the market and improves aggregate demand)
  • Long-term implications of the intervention: economic growth is the number of people involved in a productive economic activity, and these definitely qualifies for long-term growth if well designed.
  • Equipping a competent workforce, bridging skills and improving the employability of citizens in Nigeria. Low skills remains a crucial challenge for employers of labour in Nigeria, as they have to grapple unemployable people with low value adding skills within the workforce.

Using crunched data, projected economic forecast and overall social impact and channeling the crucial takeaway from the economic program to Nigerians through its communication channels; the government would have effectively managed the narrative of short/middle term social rejuvenation and long-term economic impact of the stimulus.

By failing to expand and stir crucial conversations while expatiating on the benefits of job provision and sustainable plans, the government again loses control over encouraging critical discourse which will embolden and validate its actions as well as an opportunity to allow citizen’s inputs, participation, and engagement in government programs.

Amongst other qualities, this administration came to power as a viable alternative to an ineffective incumbent. So far, it is losing the core strengths of its overwhelming mandate, worsened by a terrible communication gap: a similar ineffectiveness with which predecessors were measured. How these lapses escape this government dumbfounds me!

Oluwaseun Fakuade

@seunfakze

 

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