The Federal Government plans to spend 2% of its 2024 budget on poverty reduction and social development.
This is about N534 billion out of the N27.5 trillion budget, according to the Breakdown & highlights of the 2024 executive budget proposal presentation document by the Minister of Budget and Economic Planning, Abubakar Atiku Bagudu.
Nairametrics observed that the amount is far less than what the World Bank said Nigeria needs annually to tackle rising poverty.
In its ‘Nigeria Country Economic Memorandum: Charting a New Course’ report, the World Bank said that it would cost Nigeria N3.7 trillion to eliminate poverty.
This means that the Federal Government should have allocated about 13.45% of its 2024 budget to tackle the high poverty rate in the country.
The National Bureau of Statistics (NBS) in its National Multidimensional Poverty Index report disclosed that 133 million Nigerians are multi-dimensionally poor.
It noted that 63% of Nigerians were poor due to a lack of access to health, education, living standards, employment and security.
The rising poverty defied the former administration’s plan to lift 100 million Nigerians out of poverty in 10 years.
In its ‘Macro Poverty Outlook: Country-by-country Analysis and Projections for the Developing World’ report, the World Bank said that inflation and low economic growth would add 2.8 million people to poverty by the end of 2023.
It was also disclosed that an estimated 37.5% of Nigerians live below $2.17 per day (international poverty rate) while about 70.4% of Nigerians live below $3.65 per day (lower middle-income poverty rate) in 2023.
Security allocation dominates, getting 12% while infrastructure gets 5% of the 2024 budget
Nairametrics further observed that security allocation dominates the budget, getting the largest share of 12% (about N3.25 trillion), due to the security challenges in the country.
The infrastructure budget gets only a 5% allocation (about N1.32 trillion) despite the huge infrastructure deficit in the country.
Over the years, the Federal Government has been spending more on security to the detriment of infrastructure and social development.
Earlier, while presenting the 2024 Appropriation Bill, themed ‘Budget of Renewed Hope’ on the floor of the National Assembly on Wednesday, President Bola Tinubu said the 2024 budget is designed to complete critical infrastructure projects that would help address structural economic problems while reducing the costs of doing business for companies and the cost of living for the average Nigerian.
He said:
- “The 2024 Appropriation has been themed the Budget of Renewed Hope. The proposed budget seeks to achieve job-rich economic growth, macro-economic stability, a better investment environment, enhanced human capital development, as well as poverty reduction and greater access to social security.
- “Defence and internal security are accorded top priority. The internal security architecture will be overhauled to enhance law enforcement capabilities and safeguard lives, property and investments across the country.
- “Human capital is the most critical resource for national development. Accordingly, the budget prioritizes human development with particular attention to children, the foundation of our nation.”
More Insight
At his inauguration, Tinubu said that his administration would focus on an economic development model that prioritises job creation, food, security, and ending extreme poverty.
So far, the Federal Executive Council (FEC) has approved the creation of a $5 billion annual trust fund dedicated to humanitarian and poverty alleviation initiatives.
It was disclosed that 30% of the funding will be provided by the Federal Government, while the remaining 70% will come from donor agencies.
Recently, Tinubu launched a social safety net programme that will distribute N25,000 to 15 million homes for three months in observance of the 2023 International Day for the Eradication of Poverty.
Of the $800 million authorised for the National Social Safety Net Program-Scale Up, the World Bank released about $299.99 million to Nigeria recently.
The World Bank gave its approval to the National Social Safety Net Programme-Scale Up on December 16, 2021, and it is anticipated to continue until June 30, 2024.
The Federal Ministry of Humanitarian Affairs and Poverty Alleviation is tasked with carrying out the $800 million initiative.
The elimination of fuel subsidies and other recent policies have had a disproportionate impact on Nigeria’s poor and vulnerable, who stand to benefit greatly from a monthly cash transfer system that the Federal Government intends to fund with this loan.
The World Bank said that cash transfers can help save Nigerians from intergenerational poverty traps as inflation and low economic growth adversely affect the poor.
The Washington-based lender also said about 7.1 million poor Nigerians would become poor if the Federal Government failed to compensate or provide palliatives for them, following the removal of fuel subsidy.
