In a strategic move to alleviate poverty, create jobs and stimulate national economic growth, the federal government of Nigeria is launching an extensive Cash transfer initiative to assist 20 million of the poorest citizens. Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, revealed this plan at the 30th Nigeria Economic Summit, emphasising the use of recent fiscal reforms to support vulnerable communities. Edun explained that the substantial increase in government revenue, recorded for the first half of 2024, drives these social interventions.
With Revenue doubling from #4.06 trillion in 2023 to over #9.1 trillion in 2024, the government is redirecting these funds to improve the livelihoods of the poorest households. The cash assistance programme, aimed at benefiting 60% of the country’s most disadvantaged, has successfully supported 4 million families, which equates to about 20 million people. It is projected that this number will rise to include 15 million households. The monetary assistance programme is part of a social Investment programme to reduce the harsh effects of essential yet challenging reforms on everyday Nigerians.
President Bola Tinubu emphasised the importance of social investments.
Furthermore, the programme is critical as the country struggles with Inflationary Pressures and rising living costs. In his remarks, Edun emphasised that this intervention is one of several efforts by the government to address economic instability and improve living standards for those who need it most. In his address on October 1, 2024, President Bola Tinubu emphasised the importance of social investments. He linked the increase in Government Revenue to several reforms, particularly the use of Technology to improve the gathering of domestic resources. These reforms have enabled the government to finance multiple projects, such as providing direct financial assistance to low-income families.
During the conference, Edun underscored the government’s emphasis on various vital sectors, placing Agriculture at the heart of its approach to managing inflation. By enhancing food production, the government seeks to ensure that food becomes more affordable and available, alleviating the economic strain on the citizens. Besides agriculture, Edun noted that the government prioritises the oil, manufacturing, and Construction industries as essential fields to stimulate growth and generate employment opportunities. The oil industry has undergone major changes that have drawn fresh investments, including a $10 million boost from ExxonMobil to enhance the sector.
Local firms have pledged $4.2b in investments for the manufacturing sector.
This industry continues to serve as a vital source of foreign currency for the nation, and the government believes that increased investments will further strengthen the country’s economic outlook. Meanwhile, regional companies have pledged to invest as much as $4.2 billion in manufacturing, indicating a boost in trust towards the government’s economic strategies. This financial investment will facilitate employment growth and enhance production capabilities, providing additional economic momentum. Edun further stated the government’s efforts to support small and medium-sized enterprises (SMEs) through various financial programmes. The administration has allocated #75 billion in grants and loans to support one million small and micro enterprises, particularly in the agricultural sector.
Larger companies also benefit from the initiative, with #75 billion in loans being disbursed in tranches of up to #1 billion per company. These financial products, available with a 9% interest rate, are designed to assist companies in managing increased operational expenses, especially those resulting from recent fluctuations in foreign exchange rates. An additional important aspect of the government’s extensive reform efforts is the focus on consumer lending projects. These initiatives are intended to help employees acquire home essentials or upgrade their vehicles to operate on more affordable and environmentally friendly compressed natural gas, lower living expenses and encourage sustainable economic practices.
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On his part, Ndiamé Diop, the World Bank’s Country Director in Nigeria, shared an optimistic perspective regarding the nation’s economic reforms. He pointed out the rise in the country’s revenue-to-GDP ratio, recognising that although the region dealt with a significant fiscal deficit in 2022, these new reforms have set the country on a more sustainable path. Diop emphasised that the current initiatives are vital for securing the nation’s Financial Stability and promoting sustainable economic development. Lastly, through the cash transfer program, the government is making notable efforts to tackle poverty, lower Inflation rates, and establish a more stable economic outlook.