In accordance with the Breakdown and highlights of the 2024 executive budget proposal presentation document by the Minister of Budget and Economic Planning, Abubakar Atiku Bagudu, the Federal Government of Nigeria plans to allocate 2% of its 2024 budget, totaling N534 billion out of N27.5 trillion, towards poverty reduction and social development.
USAfricaonline.com observed that this allocation falls significantly short of the World Bank’s recommended annual expenditure of N3.7 trillion to eliminate poverty, as stated in its ‘Nigeria Country Economic Memorandum: Charting a New Course’ report. The report suggests that, ideally, approximately 13.45% of the 2024 budget should be allocated to address the escalating poverty rates in the country.
The National Bureau of Statistics (NBS) disclosed in its National Multidimensional Poverty Index report that 133 million Nigerians are currently multi-dimensionally poor, with 63% attributed to a lack of access to health, education, living standards, employment, and security.
The World Bank’s ‘Macro Poverty Outlook: Country-by-country Analysis and Projections for the Developing World’ report indicated that inflation and low economic growth could lead to an additional 2.8 million people falling into poverty by the end of 2023. Approximately 37.5% of Nigerians are projected to live below the international poverty rate of $2.17 per day, while 70.4% may fall below the lower middle-income poverty rate of $3.65 per day in 2023.
Despite these concerning figures, the budget allocation reflects a dominant focus on security, receiving the largest share of 12% (approximately N3.25 trillion), addressing the prevailing security challenges in the country. In contrast, infrastructure development receives only 5% (about N1.32 trillion) despite the substantial infrastructure deficit.
President Bola Tinubu, during the presentation of the 2024 Appropriation Bill, themed ‘Budget of Renewed Hope,’ highlighted the government’s commitment to completing critical infrastructure projects to address structural economic challenges. He emphasized the budget’s goal of achieving job-rich economic growth, macroeconomic stability, a better investment environment, enhanced human capital development, poverty reduction, and increased access to social security.
President Tinubu underscored the top priority given to defense and internal security, with an overhaul planned to enhance law enforcement capabilities and safeguard lives, property, and investments across the country. He further emphasized the critical role of human capital development, particularly focusing on children as the foundation of the nation.
In line with his inauguration commitment, President Tinubu’s administration prioritizes economic development with a focus on job creation, food security, and ending extreme poverty. Notably, the Federal Executive Council has approved a $5 billion annual trust fund dedicated to humanitarian and poverty alleviation initiatives, with 30% funded by the Federal Government and 70% from donor agencies.
Furthermore, the recent launch of a social safety net program by President Tinubu, distributing N25,000 to 15 million homes for three months, aligns with the administration’s commitment to poverty eradication. The World Bank’s approval of the National Social Safety Net Program-Scale Up, amounting to $800 million, is a significant initiative expected to continue until June 30, 2024, with the Federal Ministry of Humanitarian Affairs and Poverty Alleviation tasked with its implementation.
Acknowledging the impact of recent policies on Nigeria’s poor and vulnerable, the Federal Government plans to fund a monthly cash transfer system with the loan, targeting those affected by the elimination of fuel subsidies. The World Bank emphasizes the importance of cash transfers in mitigating the adverse effects of inflation and low economic growth on the poor, with an estimated 7.1 million Nigerians at risk of falling into poverty without appropriate compensation or palliatives following the fuel subsidy removal.
