Drawing a correlation between poverty and insecurity in Nigeria, public policy think-tank, Nextier, has advise the government of President Bola Tinubu to implement a robust cash transfer programme to provide quick relief to the most affected households and those worst hit by his reforms.
The President should prioritise addressing how fiscal and monetary policies affect employment, prices and productivity to reduce the number of people pushed below the poverty line, said a report published at the weekend by Joshua Biem, Nextier’s Policy and Research Analyst; and Dr. Ndu Nwokolo, a Managing Partner at Nextier and an Honorary Fellow at the School of Government at the University of Birmingham, United Kingdom.
The report, which highlighted the impact of some government policies on the economic fortunes of the populace, stressed the need for the Nigerian government to simulate how the economy would be affected by the unification of exchange rates attempted by Tinubu to estimate the amount of external reserves needed to maintain adopted monetary policies.
“Reforms and the removal of petrol subsidies are critical for rebuilding fiscal space and restoring macroeconomic stability. However, implementing a robust cash transfer programme to provide quick relief to the most affected households is necessary.
“A major limiting factor to interventions is a lack of continuity. Addressing the trend of lack of continuity by various government interventions should take priority.
“There is a need for an all-hands-on-deck approach to make the most from the proceeds of the subsidy removal for fast-paced development. Where development is successful, nations are gradually less vulnerable to violent conflict, facilitating further development.
“Countries are highly susceptible to falling into a conflict trap where fighting ruins the economy and raises the likelihood of more insecurity when development fails”, the report stated.
Biem and Nwokolo insisted from their findings that the ever-increasing poverty rate is one of the major drivers of insecurity in Nigeria, pointing out that “poverty and insecurity are interlinked, just as are wealth and security; as long as people are impoverished, security will remain a phantom.
“In an already tense conflict clime, economic reforms with both long- and short-term benefits require careful consideration and accompanying cushioning measures to achieve the desired goal.
“The establishment of the nexus between poverty and increased insecurity necessitates transparency and focus in the execution of reforms. This can be done with the aim of avoidance of fuelling the existing security challenges.”
Giving a background to the research conclusions, Biem and Nwokolo underscored that “poverty is a direct result of a lack of jobs, poor education, as well as lack of infrastructure and social justice; this, in turn, feeds into sectarian violence, crime, and terrorism which are on the rise today in the country.
“For instance, poverty and unemployment are often graded together and are seen as primary ingredients that are breeding grounds for several conflicts. This is because the nation has a sizable population of impoverished individuals who, in a fit of rage, are readily available and prepared to engage in criminality.
“Against this backdrop, any serious economic plan must relate actions like removing oil subsidies to managing poverty. The policy response of the Buhari administration was a proposed N5,000 one-off cash transfer to about 40 million households. Thus, the absence of resultant cushioning effects implies increased poverty and a scramble to resort to alternative options to make ends meet.
“Drawing from the frustration-aggression theory, the rising poverty levels tend to heighten tensions in the most affected, creating a sense of frustration leading to aggression.”
The Nextier report added that “swinging into action is an expectation that every new administration focuses on. Economic reforms, beckon to question whether these actions have a long- or short-term benefit or are mere political moves to provide a perception of an active government.
“The revelation by the World Bank on the effect of fuel subsidy removal is that over four million people have been plunged into poverty in the first half of 2023. Stakeholders have warned that more Nigerians may fall into poverty if President Bola Ahmed Tinubu does not implement his administration’s changes per the advice of his policy advisory council.
“The withdrawal of fuel subsidies also brings to the forefront the alleged corruption inside Nigeria’s political system. Subsidies have a history of claims of mismanagement, fraud, and fund diversion. Despite subsidies being phased out to reduce corruption by eliminating a main outlet for misappropriation, the abrupt removal has the potential to create discontent among the bottom liners of the populace.”
