FG Urged to Tackle Poverty through Financial Inclusion
The federal government has been advised to promote financial inclusion, equitable distribution of resources and infrastructural development as tools to drive Nigeria’s post COVID-19 economic recovery and to reduce poverty in the country.
The advice was given by The Boston Consulting Group (BCG), a global management consultancy firm, in its report that was titled: “How to Forge an Inclusive Post-COVID-19 Recovery in Nigeria.”
The report, which was authored by a Partner at the BCG, Mr. Tolu Oyekan, stated that the tools would stave off the COVID-19 induced economic contraction that could further compound the poverty situation in the country.
Oyekan also posited that financial inclusion through infrastructural intervention projects would reduce the percentage of Nigerians that are living below the poverty line and have positive multiplier effect on the economy.
He listed the electrification of rural households through a pay-as-you-go (PAYGo) solar service and cashless transactions via telecom propelled mobile money platforms as examples of infrastructural intervention projects that could be used to tackle poverty in Nigeria.
The report stated that those with existing mobile money account would have a higher chance of accessing new home solar power systems and minigrids the federal government is targeting to install for over five million low-income households by the end of 2023.
Oyekan said: “Our analysis shows that a PAYGo loan would make solar kits affordable for about half of the 31 million households that do not have reliable electricity and may also considered being in the low-income bracket.
“What’s more, we found that 3.2 million out of 17 million households currently using kerosene and candles as their lighting source could afford the monthly PAYGo payments based on their current spending on lighting, plus about 10 per cent of their nonfood budget.”
He highlighted a recent USAID research which estimated that between 15 to 30 per cent of PAYGo solar customers would create a credit history for the first time when they purchase a solar home system with a PAYGo plan, adding that “credit history could, in turn, lead to other loans for large expenses, such as school fees, which can consume up to 40 percent of a family’s annual income.
“Credit histories are also a critical driver of growth for small-business enterprises and first-time business entrepreneurs.
“We continue to believe that the best course for the government is to accelerate economic policy reforms and investments that accentuate inclusive development and position the country for a stronger post-pandemic economic recovery.”
He, therefore, stated that inclusive approach to economic recovery could protect the most vulnerable populations in the short term and improve their prospects in the long term.
Commenting on the probable economic fallout of the COVID-19 pandemic in Nigeria, Oyekan made a strong case for
The federal and state governments have commenced critical engagement towards the review of the existing social protection policy. Speaking at a workshop in Illori, Kwara State, with representatives of various states in the North Central zone of the country, the Permanent Secretary, Federal Ministry of Budget and National Planning, Mrs. Olusola Idowu, said the consultation sought to harvest state-level input on social protection issues, gaps and challenges to ensure a robust and all- inclusive policy going forward.
Represented by the ministry’s Director, Department of Administration, Mr. Lanre Adekanye, Idowu, however, commended the United Nations Development Programme (UNDP), UNICEF and other key development partners for their faith and buy-in for the programme.
She said the programme acceptance had been demonstrated by their attendance at the workshop despite obvious challenges.
In a statement by the ministry’s Information Officer, Mrs. Imaobong Udoh, the perm sec further urged participants to ensure domestication of the policy in their various states in order to ensure effective implementation and sustainability.
Also, speaking at the workshop, the Director, Department of Social Development, Federal Ministry of Budget and National Planning, Mr. Abdulkadir Sa’adu, pointed out that the zonal consultations on the policy was important for a comprehensive national social protection framework that would convey the needs of Nigerians.
He was represented by Deputy Director, Social Development, Dr. Sanjo Faniran. Also, the representative of Federal Ministry of Humanitarian Affairs, Disaster management and Social Development, who is also the Coordinator of National Safety Net Programme, Alhaji Kabir Abdullahi, enjoined participants to make implementable contributions in order to provide the basis for institutionalising the policy in their states. He also tasked participants to strive to ensure legislation of the policy as this would guarantee appropriate budgeting provision and cash backing. According to the statement, representatives of UNDP and UNICEF jointly maintained that social protection policy would boost human capital development, adding that it remained a key aspect of human rights.
The development partners also maintained that all levels of government needed to contribute to the programme.
They commended the Federal Ministry of Finance, Budget and National Planning for coordinating the workshop, stressing that it would offer states opportunity to understand the importance of social protection in the country while identifying challenges peculiar to their various states as well as proffering appropriate solutions.