By Omoniyi Salaudeen
The current socio-economic condition in Nigeria presents an interesting paradox.
The more money the Federal Government throws around in the name of palliatives to mitigate the hardship of the policies of the current administration of President Bola Ahmed Tinubu, the more the ordinary people cry about hunger.
With the 20 trucks of rice recently dispatched to states as an emergency food supply to quell hunger and the N570 billion given to governors to ease hardship, there is still a seething cauldron of anger over the worsening food crisis in the country.
For all that has happened since the dawn of a new regime of subsidy removal with the floatation of the naira, Nigeria has become a case study for economic waste that is associated with palliatives in the name of reaching out to the vulnerable in society either by direct cash transfer or free supply of foodstuffs.
In economics, this comes under transfer payment. By simple definition, transfer payments are payments made by the government to individuals or businesses without the exchange of goods and services.
At times of economic distress and for humanitarian reasons, transfer payments are made to individuals through social programmes like welfare, student grants, and even social security.
The purpose of transfer payment is to provide immediate assistance to those who require it.
This practice is not peculiar to Nigeria. Many countries provide direct cash assistance to people during economic emergencies to support those in need and stimulate the economy.
However, in the case of Nigeria, there is a strong argument against the pattern of palliative sharing and cash transfer by the Federal Government. Critics of transfer payment and palliatives say they can discourage work and productivity. If people receive transfer payments or free goods, they may be less likely to look for a job or improve their skills. This can lead to a decrease in overall productivity and economic growth.
In addition, it creates a dependency on government assistance which can be difficult to break. In the long term, it can constitute a burden on the economy.
Other than these, the initiative has also been greeted with many criticisms as the distribution of items is inherently fraught with a lack of transparency, insincerity and absence of an accurate social register, etcetera.
For instance, a renowned legal luminary, Chief Afe Babalola, faulted the idea behind the policy measure, describing it as an attempt to turn Nigerians into beggars and lead them to poverty.
“It is wrong for the government to share garri, beans and rice as palliatives. They are turning the people into beggars. The government that is giving the people rice and beans is leading us to poverty. The government is discouraging people from working, whereas the government must provide the people enabling environment for people to work and feed themselves,” he said.
Prof Segun Ajobola, a quintessential economist, giving further insight into the socio-economic implications of the initiative in an interview with Sunday Sun, said: ‘It breeds laziness and promotes a sense of entitlement.”
According to him, no valid argument can be canvassed for palliatives. Instead, he said the government should divert resources from palliatives to creating incentives for small-scale businesses to thrive and refocus the policy on empowerment initiatives.
In so far as the Federal Government tried to address the cry of hunger, Prof Ajibola noted that there had been a serious challenge in the distribution of palliatives to the vulnerable segment of society.
He said: “Ordinarily, the concept of palliatives should take care of periods of emergencies, pandemics, serious environmental challenges like war, or natural disasters that incapacitate people from going with their normal businesses. In such circumstances, there may be a need to support the people for survival because they can no longer cater for themselves due to those challenges. That is when palliative becomes an important aspect of human living. Other than that, there is no other valid argument that can be canvassed for palliatives.
“When you allow the concept of palliatives to radiate through the society, you are creating a lot of societal problems. One, the individuals that are able-bodied and are capable of supporting their livelihood will imbibe some sense of entitlements. And at that point, it breeds laziness and criminal tendencies because you are compensating people for doing nothing. And that is very dangerous for the economy as a whole.
“In Economics, value should be exchanged for value. There is no free lunch anywhere. If you get anything free, somebody is paying somewhere. Palliatives only expose people to an entitlement mentality, creating the challenge of encouraging able-bodied people to work.
“Again, there is the challenge of equity or equality of fair distribution. However transparent the process of distribution of palliatives is, it cannot get to everybody. Because of all these problems, it is always better to embrace empowerment. Drive empowerment; don’t give people fish, teach people how to fish so that you can feed them for life. Empowerment raises the productive capacity of an economy. It engages able-bodied men and women in productivity activities in the economy. It also helps the concept of a self-reliance economy as we have in other jurisdictions like China and India where an average person is an entrepreneur.
“The government should convert the concept of palliatives into resources that can help productivity in the agricultural sector. There are lots that can be done to help the farmers and small scale enterprises. There are so many things that can be done both at the local and national levels in terms of accessibility to infrastructure that can make the environment more conducive to enable individuals to become self-reliant.
“Palliative is transfered income. It is the distribution of income rather than the production of it. It doesn’t generate fresh output, it is for conspicuous consumption. Like I said earlier, nothing is free. If you get anything free, somebody has paid for it. It is only empowerment programme that helps productivity; palliative is for consumption.”
Chief Chekwas Okorie while expressing disagreement with the criticism that palliatives could lead to laziness or worsening poverty, expressed concern that the Federal Government had not given adequate attention to production.
He said in a telephone chat with Sunday Sun: “People are already in abject poverty, there is no palliative; no matter how small, that will drive them further into poverty. It can only ameliorate their indigence. And, of course, the government itself has admitted that it is a short-term measure.
“There are criticisms here and there about the method of sharing. To a large extent, there is transparency on the part of the Federal Government in getting these palliatives down to the states and local governments. If there is any criticism, it is how the states get them to the real vulnerable people.
“Those who have received it will not like to hear anybody making statements to derogate what has given them a lifeline. At the level of poor people, giving one cup of rice makes a difference not to talk about giving somebody a 10kg bag of rice. That is a big difference.
“Anybody who is lazy and is ascribing his laziness to palliative is patently lazy. He can find anything to justify being lazy. There is no society where you will not find lazy people and they will always find excuses for being lazy. I don’t want to think that assisting people to come out of vulnerable conditions will make them lazier than they have been.
“Where I have issues with the government is that I have not seen strong policy initiatives to drive staple food production. Staple food production has not been given the impetus expected of a government that is presiding over a country in starvation. Usually, during harvest season, certain food prices especially those items that are perishable like tomatoes, yams, fruits, and onions, crash. But we have not seen much difference in the market. This goes to show that commitment to production was not really there.”
Okorie, therefore, tasked the Federal Government to frontally tackle the challenge of insecurity that had made it impossible for farmers to go to their farms.
“Insecurity is one of those things hampering farmers from doing their work. The government should, therefore, take security at the rural level very seriously. There are too many policemen, who ordinarily should be in the rural areas, but are mounting roadblocks on the highways extorting money and frustrating people in the cities. The government has to pay attention to it,” he added.
Meanwhile, in a bid to aid the recovery of Small and Medium Enterprises (SMEs) from the effects of the fuel subsidy removal, the Federal Government has announced the plan to disburse N150 billion to micro, small, and medium-sized enterprises (MSMEs) and manufacturers. According to Dr Doris Uzoka-Anite, minister of Industry, Trade, and Investment, there is also an arrangement in the pipeline to give N50,000 grants for Nano’ Businesses nationwide.
Commenting on the initiative, Ajibola described the initiative as a welcome development.
“Anything that can help to raise the level of productivity in an economy is a welcome gesture. It is done everywhere in the world. These are some of the things we are canvassing instead of donating to me a bag of rice or beans that I will consume waiting for another one to come even when I am not incapacitated in any way. There are so many multiplier effects in giving incentives to the productive sector of the economy,” he posited.
In all of these, the important thing is to balance the potential negative effects of palliatives on work ethics, productivity and the cost to the government.