Nigeria’s social protection budget allocation has had a negligible impact on reducing poverty, according to a recent World Bank report. The country’s allocation of 0.14% of its Gross Domestic Product (GDP) to social protection is significantly lower than the global average of 1.5% and the Sub-Saharan African average of 1.1%. This limited investment has resulted in a mere 0.4 percentage point reduction in the national poverty headcount.
The report, titled “The State of Social Safety Nets in Nigeria,” highlights the inefficacies of the country’s social safety net programs. Despite various initiatives, including conditional cash transfers and school feeding programs, the poverty rate remains largely unchanged. The World Bank attributes this to poor design and benefit dilution, where the same amount of money is spread thinly across larger households, reducing its effectiveness.
Furthermore, the report expresses concern over Nigeria’s heavy reliance on foreign donors to finance its social safety nets. Between 2015 and 2021, official development assistance accounted for approximately 60% of federal spending on safety-net programs, with the World Bank providing over 90% of that support. This dependence on external funding puts Nigeria at risk of funding gaps whenever donor support declines.
The World Bank notes that the poorest households in Nigeria are larger, leading to a thinner distribution of benefits among family members. This further contributes to the negligible impact on reducing inequality among the poor. However, the report acknowledges that well-targeted programs, such as the National Social Safety Nets Programme, have shown encouraging results, reducing poverty by 4.3 percentage points and the poverty gap by 4.2 percentage points among its beneficiaries.
The Nigerian government has announced plans to expand its digital cash-grant scheme, targeting 15 million households and covering some 70 million people. However, the World Bank describes the country’s social safety-net spending as inefficient, with a smaller portion of benefits going to the poor despite their dominance among beneficiaries. The report emphasizes the need for Nigeria to find sustainable funding for its social safety-net programs and to improve the targeting and design of these initiatives to effectively reduce poverty and inequality.
The World Bank’s report underscores the significance of addressing poverty and inequality in Nigeria, where over 104 million people live below the poverty line. The international community and the Nigerian government must work together to develop more effective social safety nets and address the underlying causes of poverty to ensure a more equitable and prosperous future for all Nigerians.