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A huge amount to fund social security system

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By Nicole

Nigeria needs N7 trillion yearly to adequately fund social security system.

Nigeria needs between N5 to N7 trillion per year to fund the operation of a comprehensive, well-managed social Security system as one of the options to escape the Poverty trap. According to experts, Nigeria, the largest country in Africa with a Gross Domestic Product (GDP) of $440 billion, needs to reconsider social safety that is well-organized, carefully planned, and supported by national Legislation because it is enmeshed in a severe poverty cycle. Poorly designed social protection measures, limited coverage, a lack of consistency, a lack of data, and Corruption are some of the factors contributing to insufficient social protection, according to a report on “Nigeria’s Poverty Trap – And How to End It” by the Institute for Governance and Economic Transformation (IGET).

It was said that in order to stop leaks brought on by Fraud and corruption, such a comprehensive social protection system is required to be independently and expertly inspected, reviewed, and monitored. The paper asserts that by putting the measures into action alongside structural changes, it will be easier to limit the emergence of poverty as a “growth industry” in the short term, with structural improvements beginning to bear fruit in the medium term. The report, which was written by Kingsley Moghalu, the founder and president of IGET, and Damian Ude, an IGET research fellow, said that the failure of nationhood and governance was to blame for the country’s poverty trap.

A broken and corrupt political system has created the wrong priorities.

People live in poverty for a variety of reasons, according to the report, including inequality and marginalization, conflict, a lack of Education and skills, a lack of employment or other sources of support, high Food Prices that reduce their purchasing power, Climate Change effects like floods and droughts, a lack of savings, insufficient social welfare and social security programs offered by the government, and unchecked population growth. They claimed it was as a result of the political elite giving much more weight to self-serving state capture for patronage and sectarian interests than to a true desire to eradicate poverty. They contend that the incorrect priorities have been produced by a dysfunctional and corrupt political system.

They bemoaned the fact that knowledge and skill in public affairs are superseded by sectarian interests and the dominant partisan political incentive system. They claimed that it has also slowly weakened state structures and capacity, fostering ignorance and ineptitude in positions of power. It brought to mind The World Bank research, which predicted that by 2022, 95 million Nigerians—an increase from the current national average of 89 million or 43% of the population—would be classified as extremely poor. In comparison to the $5.5 daily poverty threshold, the computation, which they claimed is based on the Extreme Poverty mark of less than $2.15 a day, this reveals that more than 90% of Nigerians live in poverty.

Nigeria won’t be able to end extreme poverty for 35 million people by 2025.

According to the paper, the poverty trap in Nigeria is intergenerational because of the country’s unrestrained population expansion and the country’s high poverty rates right now. It was said that the future of Nigeria will suffer if the trend was not corrected. Gendered poverty, a substantial contributor to Nigeria’s poverty trap, is described as being generated and maintained by gender-specific problems such as gender inequity, discrimination, and exclusion. As stated in the National Development Plan and other official policy statements, Nigeria would not be able to eradicate extreme poverty for 35 million people by 2025 or for 100 million Nigerians during the following ten years, according to the report.

In order to start making significant progress in the eradication of poverty, the authors advised that the nation needs a new elite development consensus on development that transcends partisan political and other divides, as well as a unity of purpose that is focused on the human development of its 216 million citizens. The two contend that the goal of this agreement should be to build a broadly prosperous society, stressing that achieving this goal would require millions of Nigerians to be lifted out of poverty and placed in the middle class through wealth creation.

Infrastructure projects should be done by public-private partnerships.

They also suggested bold fiscal reforms to increase government Revenue through effective Taxation and the elimination of wasteful fuel Subsidies, while mitigating the potential effects of subsidy removal on already poor citizens, among other measures, as additional and carefully targeted investments in healthcare and education, creating an environment that promotes the creation of jobs in the Private Sector, and other measures. According to the research, Infrastructure projects should primarily be financed through public-private partnerships, with the exception of rural infrastructure, in order to save money in other sectors of government. It also recommended lowering the cost of governance. It was suggested that Nigeria could learn from Brazil and China, both of which provided noteworthy case studies on the successful eradication and reduction of poverty. In these countries, the political vision of their leaders contributed to the creation of a national consensus that was necessary to put an end to poverty.


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