ECONOMY - 02 SEP 2020

Lifting the 90 million: the impact of Npower and other programmes

Lifting the 90 million: the impact of Npower and other programmes
A motorcycle park. Source: Keleenna Onyeaka provided by GOA54, Stears' Stock Image Provider

When you evaluate an economy, two major questions usually come to mind. You ask: how big is it? or how unequal is it?  

The question you care about most will inform the economic policies you advocate for.

If you pay more attention to size, you will naturally support policies that should increase economic growth. If you care more about equity, your concern would be related to poverty alleviation and measures to reduce economic inequality.

Let us imagine that Nigeria’s economic welfare is a cake.

The main difference between development via economic growth or poverty alleviation is that the former attempts to increase the size of the cake i.e. it creates more opportunities and wealth of varying levels for people. The latter, on the other hand, focuses on reserving some of the cake for the most disenfranchised people, ensuring they are taken care of.

In Nigeria's case, It is fair to say that the Buhari administration is focusing on the second route.

In 2019 when Nigeria’s Vice President, Yemi Osinbajo was asked what the government was doing to boost the economy, he said, “We started the largest investment programme for social investment in the history of this country.”

Osinbajo was talking about the National Social Investment Programme (NSIP) — the umbrella that houses the government’s four main welfare programmes.  

(i) the Home Grown School Feeding (HGSF) Programme, a nationwide school feeding programme; 

(ii) a Conditional Cash Transfer (CCT) programme where cash is given to beneficiaries that meet specific criteria, done in collaboration with the World Bank;

(iii) N-power, a programme targeted at the youth, where stipends are provided to beneficiaries who are then assigned to jobs that serve the public;

(iv) Government Enterprise and Empowerment Programme, a micro-lending intervention for farmers (FarmerMoni), small traders (TraderMoni) and small businesses (MarketMoni).

All of these programmes attempt to reduce poverty in different ways. But questions we should ask as concerned citizens are: how good are these programmes as solutions for addressing poverty? Are they well executed and implemented? Most importantly, have they worked? 

 

How good are these solutions for addressing poverty? 

Each programme attempts to meet needs in different ways, and before we discuss how they have fared, we need to figure out if these are good ideas in the first place.

First, the Home Grown School Feeding Programme. A school feeding programme is not new to Nigeria. It was piloted by the federal government in 2004 in 13 states.

School feeding programmes have been embraced by most of the developing world. The World Food Programme (WFP) strongly recommends them as policies to address Sustainable Development Goal (SDG) 2 (on ending hunger, achieving food security and improved nutrition, and promoting sustainable agriculture) as well as SDG 4 (on quality education).

A review of studies shows strong evidence that school feeding programmes have positive impacts on some education metrics such as school enrollment and attendance rates, particularly for girls. The review claims that the link between these programmes and agricultural development is not clear. Still, increased school enrollment and attendance rates are good enough goals. Attaining them in Nigeria will be very welcome.

Next, the Government Enterprise and Empowerment Programme (GEEP). It is simply a microcredit programme. Microcredit is very popular in the developing world, and as a result, has been the focus of a lot of academic research.

The results are not conclusive. There is research that supports either side of the argument. A review of these papers shows that if the credit is priced well, some business creation and expansion can occur. However, it shows insignificant impacts on consumption and income or other welfare metrics like education and health. 

A new paper published this year argues that we still can't tell if microcredit works or not because previous studies have not been statistically powered to know for sure.

So while the research on the matter is not definite, it does imply that microcredit might just not be the transformative development strategy people thought it might be.

N-Power and the Conditional Cash Transfer (CCT) are both cash transfer programmes. Here we have clearer evidence.

Cash transfers have positive and long term impacts. CCTs produce better outcomes in the short term than unconditional cash transfers. They have positive impacts on education, health and nutrition, savings and investments, employment, empowerment etc. In short, cash transfers have proved to be effective.

But evidence is one thing. What matters is how the programme is designed and implemented. 

 

The CCT

Going by the available information, the Conditional Cash Transfer has met its objectives. 

According to its implementation report, the programme has reached 5.8 million beneficiaries of which 50% are female. This surpasses its 5 million benchmark and meets its gender target. 

In addition, beneficiaries receive the cash transfers on time, with 96% of payments made within a month of the due date.

Records of the National Social Registry (NSR), that captures the details of the Poor and Vulnerable households (PVHHs) has substantially increased as over three million households (about 15 million individuals) in 35 States and FCT were added.

This NSR has even helped the government’s COVID response because of the existing structures in place. The government has been able to reach these PVHHs to support them through the pandemic.

From research, we know CCTs are good, and this one seems to have been designed and implemented well. Let us cross our fingers and assume that the program will continue to have great results. 

 

The HGSF

With the Home Grown School Feeding Programme, there is more good news. The initial goal was to feed five million students. According to HGSF, as of September 2019, it was feeding 9.8 million school children in 32 states, while engaging with about 100,000 food vendors. Its new goal is now 12 million students.

The 2018 Central Bank annual report showed that about ₦40 billion had been spent on the programme from its inception up till that point. Dr Tayo Aduloju, a senior fellow at Nigeria Economic Summit Group also shared that teachers in schools with the feeding programme reported about a 13% increase in school enrollment. 

More progress.

 

The N-power and Moni programmes

The Government Enterprise and Empowerment Program self identifies as Africa’s largest microcredit institution. The Bank of Industry's 2019 Annual report claims that just over 2.3 million people have been beneficiaries across the three Moni programmes (Trader Moni, Farmer Moni, Market Moni). They also report that ₦37 billion has been shared since the program's first disbursement in 2017. Only ₦5.9 billion has been collected back. This suggests a repayment rate of 16%. Quite low.

For N-Power, ₦69 billion was spent in 2017. The program has now grown from 200,000 to 500,000 beneficiaries, all entitled to monthly stipends of ₦30,000 naira. We can assume that the 2017 bill would have significantly increased today.

The little information that exists show documented fraud with N-Power and TraderMoni. In response to the N-Power expose, Afolabi Imoukhuede, senior special assistant (SSA) to the president on job creation and youth employment, denied the alleged fraud, claiming that independent monitors provide reports to the government.

However, the government's updates acknowledge that there some challenges regarding exploiting the end beneficiaries, although it seems to lay the blame at the feet of state and local government officials.

 

Not enough evaluation

The federal government attempted to evaluate NSIP, engaging the Nigeria Economic Summit Group who set up the National Policy Innovation Unit to help improve the welfare programmes.

The milestones the NESG shared only compare different subgroups of treated beneficiaries. While this can help improve the implementation of the programmes, it also means they can't make a judgement on the impact of the welfare programmes as a whole. 

Statements from Dr Tayo Aduloju, senior fellow, Nigeria Economic Summit Group (NESG) suggest that some publicly unavailable reports could contain more information about NSIP. Asides the previously mentioned impact on school enrolment, he claimed Tradermoni beneficiaries increased savings in bank accounts but also claims the amount saved decreased. This, he explained by assuming the beneficiaries were in the process of loan repayments.

Here are some questions any rigorous evaluation should try to answer: What is the exact repayment rate for GEEP? What is its impact on income levels for the beneficiaries? Are there any spillover effects on their communities? Outside of the temporary volunteer work beneficiaries are assigned to, how many jobs has N-Power, billed as a job creation scheme, actually created? 

Answers to these questions are absolutely critical to making any sense of the N-power and Moni programmes. 

The Nigeria Institute for Social and Economic Research budgeted ₦6 million in 2019 to answer the N-Power question. If the research was done, it is not publically available.  

N-Power and GEEP are two cornerstones of the government's welfare policies. Considering that the government champions them as their primary approach to economic policy, we must demand more rigorous evaluation. This would help in assessing their impacts and making an informed decision on whether to pursue or abandon them.

 


Subscribe to our WhatsApp channel here to get our Daily Briefing on the go.
 
Soala Ekine

Soala Ekine

Read Latest

Emefiele vs the parallel market

PREMIUM - 27 NOV 2020

Pension funds and the fight for your savings

PREMIUM - 26 NOV 2020

How international record labels make Nigerian artists “twice as tall”

PREMIUM - 25 NOV 2020

Why inflation is always higher in emerging economies

PREMIUM - 24 NOV 2020