Questioning Handouts: A Critique of Borrowing for Consumption in Nigeria

I am not a professional economist or statistician and will not pretend to be one.

Brothers and Sisters, I am concerned with borrowing to give handouts instead of using such funds to target production and manufacturing activities.

I have never been comfortable with the government’s handouts, and my skepticism stems from the fact that despite spending N500 billion annually since 2016, 63% of Nigerians still live in multidimensional poverty (National Bureau of Statistics/Nigeria Multidimensional Poverty Index, 2022).

I doubt whether all the trillions and billions said to have been spent on the school feeding program and the monthly N5,000 handouts, as stated, reached the target audience.

Besides, we have seen or heard that repatriated looted funds had, in part, been re-looted in the past, and nobody has been prosecuted and convicted.

Worrisome also is the apparent fact that many more children dropped out of school during Buhari’s administration, even as “the number of primary school-aged children who were not in school had also increased by 50 percent, from 6.4 million to 9.7 million since 2010” (UNESCO).

We have been through many trajectories of handouts and have always yielded the same results. So, suppose we had a saving of N400 billion every month from petroleum subsidy removal; couldn’t we wait for two months to disburse the proposed palliatives instead of borrowing interest yielding N500 billion and $800 million, respectively, for consumption that would develop wings and fly to an unknown destination and compound our debt burden?

There is no doubt that if the N500 billion and $800 million borrowings are well deployed, they could boost energy for SMEs to thrive, target productive activities in farming, which would reduce food prices in the long run, put cheap mass transit system in the roads for the masses, provide affordable housing, improve healthcare and educational standards, and increase the earning power of the middle class over a long period.

I may seem naïve and unlearned. My people in Niger Delta usually ask, “Wetin I Sabi Sef?, which means what do I know? So, since I know nothing, those who know should wise me up. I am always willing to learn. Waiting.

Grace and peace!!!