The cash transfer strategies initiated by the Muhammadu Buhari administration to lift Nigerians out of poverty has got thumbs down.
Vice Presidential Candidate of the People’s Democratic Party, PDP, in the 2019 elections, Mr. Peter Obi who faulted the initiative said it would not achieve the desired result.
Speaking in an interview on Arise Television on Tuesday, Obi stressed that the planned N5,000 disbursement to 24 million people for a period of six months would not achieve the desired results of pulling people out of poverty.
Obi, a former governor of Anambra State, argued that for one to be classified as living in poverty, the person would be earning $1.9 or less per day, which is approximately N800. He said that the N800 when multiplied by 30 days amounts to N24,000, thus giving someone N5,000 a month, when he needs at least N24,000 to survive, will have little or no effect, let alone pulling them out of poverty.
“Now if you divide N5,000 with N400 exchange rate, it will give you $12.50. When you divide $12.50 by 30 days, it gives you .42 cents. So by sharing N5,000 per month to them, you are only giving them about 20% of the $1.9 they require to live above poverty. Worse still, you are only paying them the money for six months.
“Any government that desires to pull its people out of poverty should adopt a properly articulated fiscal and monetary stimulus to support micro, small, medium entreprises and also provide jobs that will pay people at least N25,000 per month”, Obi submitted
Recalling his experience in Bangladesh where some aggressive poverty eradication strategies worked well, Obi said “In 2008, I traveled to Bangladesh, with a team of professionals, where we studied poverty eradication strategies as employed by their government. We had encounter with the locals in rural areas, and we saw first hand the techniques they employed to pull their people out of poverty.
“They had micro credit facilities at the rural level, supervised by the government but driven by the private sector. These credit institutions support the locals in their trades and agricultural endeavours. The government also steps in to buy whatever is produced by the rural residents, which are in turn exported.
“The consequence of this is that as of 2008 when we were there, the per capita income of Bangladesh was $635. Today, after 12 years of aggressive poverty eradication, their per capita income is $1900. Their literacy rate was 58% in the same 2008, today they are at 75%. Their human development index (HDI), has also moved from low to medium.
“If you compare Bangladesh with Nigeria, in the year 2008 our per capita income was $2240, while today, after 12 years, it is $2220. So our per capita income, instead of growing, reduced after 12 years. This is because there has not been a well articulated, implementable and measurable policies that can take people out of poverty.
Obi said that apart from Bangladesh, many other countries had followed that same poverty eradication model and moved their citizens out of poverty. He said it would be wrong for the Federal Government to simply decide to pay 24 million people N5,000 each for six months, hoping that it would be enough to pull them out of poverty.
Obi said what is more worrisome about the whole cash transfer project is the lack of transparency and uncertainty that has characterised the whole process. He urged the government to invest in critical areas of development if they truly desire to move people out of poverty. He said that supporting small businesses with fiscal and monetary stimuli will be more effective in eradicating poverty in the country.
The PDP vice presidential candidate also lamented that the alarming level of insecurity in the country had not only negatively impacted on national development, but equally affected the quality of human life.
He urged the newly appointed service chiefs to aggressively tackle the menace of insecurity ravaging different parts of the nation.
“One of the most urgent issues we need to address in this country is the issue of insecurity. Aside from scaring away the much-needed Foreign Direct Investment, high levels of insecurity as we have today, discourages local investors from driving the economy forward.
“No rational investor will invest in an unsecured environment, no matter how profitable the business may appear, because you need to be alive to enjoy the proceeds of your investment. So we must fight insecurity to a stand still, to be able to drive the nation forward”, Obi stressed.