The 5,000 Promise…

Oil Price: $62.61
“One of the most striking promises we made during the campaign was the payment of Five Thousand Naira to the poorest Nigerians across the country”,
Professor Yemi Osibanjo 14th June 2015
 
Oil Price: $47.42
“the APC never at any time indicated it has reneged on its promise to pay 5,000 Naira monthly to 25 million most vulnerable Nigerians.”
November 6th 2015 APC statement BY Lai Muhammed
Oil Price: $45.46
“I would want the youth to understand that every promise must be backed up by budgetary provision and our promise to pay N5000 is not contained in the 2015 budget. So, definitely, it is going to begin in 2016 as we have made budgetary allocations for that,”
Solomon Dalong, Minister of Youth November 25th 2015
Oil Price $28.76
“the Conditional Cash Transfer, where one million extremely poor Nigerians will receive N5000 monthly this year, “
Yemi Osibanjo January 19th 2016
Oil price: 34.97
“This largesse N5,000 for the unemployed, I have got a slightly different priority,”
“I would rather do the infrastructure, the school and correct them and empower agriculture, mining so that every able bodied person can go and get work instead of giving N5,000 to those who don’t work.”
President Buhari February 28th 2016…
Look at the statements above, as oil prices fell, the VP, The APC, Minister continued to maintain they will pay N5,000. the APC as a party was even very specific, N5,000 to 25m Nigerians even as oil was $47.42!. The only person that has been circumspect in this regard is the President, as oil has fallen he has correctly said N5,000 is not his priority…. note, not a priority! Not cancelled!
I agree with him.
CCT are not new in Nigeria, the SURE-P ran a successful Maternal CCT where they paid N5,000 to pregnant mother who went to formal clinics, it worked, childhood mortality went down.
For me the N5,000 to Nigerians is a huge government entitlement scheme, a campaign promise, a handout, a redistribution…I oppose it on ideological grounds. I have no problems with Conditional Cash Transfers, they work, they are good, if families are paid to send their kids to school, then this is good. But what we have heard to date is a scheme to take cash from income that is fluctuating i.e. crude oiland meet a liability that is fixed i.e. N5,000 allowances.
Clearly a mismatch of intentions.
As at today you cannot get answers to basic questions on this scheme, e.g.
1. Is it N5,000 per woman
2. Is it N5,000 per man
3. Is it N5,000 per family
4. Will payments follow Federal Character?
5. How will this be funded to keep it sustainable?
These are very basic questions, The FGN have been talking of this massive government spend from June 2015…no details.Also these question have a huge impact on this policy, if you pay per woman, what if I have 3 wives?
So what do we do?
1. Continue the policy,
2. Make it a Conditional Cash Transfer, target educationally disadvantaged girls, only girls for now.
3. Dont pay cash, give the mothers vouchers to take their daughters to private primary schools and hospitals near where the mothers live.
4. The vouchers can be redeemed at any commercial bank by the private schools and hospitals.
5. Increase the N5,000 to N50,000 (Fifty Thousand)
6. Fund this by taxing 100% of gas flaring and a luxury tax on SUVs with V12 engines, Private Jets etc
If you do this, you create an ecosystem of private schools and hospitals in poor areas, a civil servant can resign, move back to his village, start a small school to teach 25 students and get paid N50,000 per child, ditto for small Primary Care Clinics that will be situated in the rural areas.
CCT are a wonderful tool, but we must link it to other goals, we must not seek to pay cash and create a culture of entitlement, we must start small, then gradually scale this up. Take the politics out this this thing, if you can only do for 200,000 Nigerians women and girls, then start it, take your time, add 100,000 every year, by 2019 you will have 400,000 on this scheme. Nigeria will be better for it.
It’s our problem, we can solve it.
Kalu Aja is a Financial Planner and economic strategy consultant with over 18 years’ expertise in the financial services industry. He runs a financial advocacy blog; www.kaluaja.com which focus on personal financial and the economy. his handle is @FinPlanKaluAja

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