The International Monetary Fund (IMF) has urged Nigeria to expand its cash transfer program to include rural areas in response to the country’s growing challenges of food insecurity and rising poverty.
This recommendation was stated by Julie Kozack, Director of the Communications Department at the IMF, during a recent press briefing.
According to the transcript, which was published on the IMF’s official website and seen by Nairametrics, Kozack stressed the importance of broadening the scope of the cash transfer system to ensure that vulnerable populations, particularly in rural communities, receive necessary support.
On government reforms
In Kozack’s response to a question, the Nigerian government’s ongoing reform efforts aimed at promoting economic growth while controlling inflation were acknowledged as crucial steps toward creating opportunities for citizens and alleviating the growing rates of poverty and food insecurity.
In addition to the discussion on Nigeria, Kozack touched on the IMF’s assessment of potential investment inflows and the likely evaluation of the China-Africa Forum’s outcomes.
She said that this assessment will likely be part of the IMF’s upcoming World Economic Outlook, especially the Regional Economic Outlook for Sub-Saharan Africa.
On flooding
The IMF highlighted the significant strain placed on Nigeria by recent floods, which have exacerbated the country’s already critical food insecurity crisis.
“Our thoughts are with the Nigerian people, especially those that are most affected by the devastating floods that occurred from exceptionally heavy rains,” Kozack said.
She further noted that around 31 million Nigerians are currently affected by food insecurity, a situation worsened by the recent floods, particularly in the hardest-hit regions.
In response to the crisis, Nigerian authorities have provided support to affected communities at the local level.
However, Kozack emphasized that more needs to be done, particularly in terms of expanding the government’s cash transfer system.
She pointed to the urgent need for targeted interventions in regions most vulnerable to the impacts of both economic instability and climate-induced disasters.
She said: “From our perspective, what is important is for the government to continue to roll out the cash transfer system. This is really important to provide relief to affected households. And given the nature of this crisis, it will require broadening this cash transfer system to cover people in rural areas as well.”
What you should know
The World Bank recently said that cash transfers can help save Nigerians from intergenerational poverty traps as inflation and low economic growth adversely affect the poor.
The International Monetary Fund (IMF) has repeatedly called on the Nigerian government to scale up its cash transfers to help poor Nigerians manage the cost of living crisis.
This was as the IMF acknowledged the pain Nigerians are going through due to rising inflation and ongoing reforms.
Nairametrics earlier reported that at least 83% of the beneficiaries of the Nigerian government’s cash transfer program, funded by an $800 million World Bank loan, are located in urban areas.
According to a document on the National Social Safety Net Program-Scale Up (NASSP-SU) project obtained from the website of the World Bank, over three million poor and vulnerable households received cash transfers as of May 2024.
This total includes 700,000 rural households and 2.5 million urban households, indicating a significantly higher number of beneficiaries in urban areas.
