People & Money

Covidnomics: How to Deliver Food and Money to the Poorest Nigerians

Just before the lockdown of Lagos, videos of Government officials readying food packages to distribute to poor households were making the round on social media. It looked thoughtful and reassuring. But just hours after the lockdown came into effect, video clips and reports emerged showing restless Lagosians in poor neighbourhoods complaining about being locked down and having no food to eat.  Lagos still has 13 more days of lockdown to go and it’s not inconceivable that the lockdown will be extended. So it’s very important to think of ways to get food to the poorest Nigerians.

About 50% of Nigerian workers are small-time farmers and another 30% are engaged in the informal sector of the economy. Both categories constitute the poorest Nigerians; they both have small and insecure incomes but informal workers are the ones likely to go hungry.

Here are a few ideas to help the poorest Nigerians:

Distribute Money, not Food

Food production and distribution is a vast and very complex system, the Government doesn’t have the resources to replicate or take it over in one week. The goal should have been to make food transportation and retail safe as Nigeria fights to curtail COVID-19 while finding means to give money to poor people to buy food. Studies of refugee camps have proven that giving money, rather than food, to refugees is more efficient and less prone to corruption and makes a significant contribution to local economies. We have examined how food production and transportation could be made safe in Covidnomics: Five Ideas to Enhance Nigeria’s Food Security. Lagos has also floated the idea of Neigbourhood Markets which needs rigorous design and robust communication. The question is: how do you get money to the poorest to buy food?

Pay N5,000 per Week into the Bank Accounts

The United States of America is paying $1,000 into the account of the poorest Americans, identified by their tax returns, as a COVID-19 relief.  Nigeria can use bank accounts to achieve the same aim (even well-off Nigerians don’t have reliable tax records). A computer programme would identify Nigerians who are likely to be very broke and have no money to buy food by analyzing data on patterns of deposits and withdrawal and balances over the last two years.

Involve Microfinance Banks

Petty traders and others with daily or insecure incomes are big customers of microfinance banks. Transactions of customers should be analyzed to find out the poor and vulnerable who are likely to have dependents and/or are breadwinners. Because microfinance banks don’t have debit cards, the identified vulnerable customers should be asked  (via sms) to send bank accounts into which their COVID-19 Stay-at-Home stipend could be sent (the computer programme will exclude those who have been linked to a bank account).

 Identify Telephone Users who Spend Less than N200 on Calls

Almost every Nigerian has a mobile telephone. People who spend less than N200 on calls daily are likely to be amongst the most vulnerable. The data harvested from the telcos should be linked to that from the banking system. Those who have not been captured as vulnerable in the banking system because they have no bank accounts should be asked to nominate people to whom their stipends could be transferred. This wouldn’t pose too much of a problem as one would imagine because it is habitual for Nigerian workmen and the artisanal class (auto mechanics, plumbers, bus drivers etc.) to receive transfers through friends or family members if they don’t yet have a GT Bank account (for some reason this is their favourite bank).

Soup Kitchens/Distribution of Cooked Food Packs

The most vulnerable Nigerians (who sleep on the street) have no bank accounts and don’t know anyone who have. We know where they are e.g. Ita Faaji on Lagos Island. Fastfood outlets could be used to cater for them (they could be rebranded to avoid perceive damage). Cooked food packages could also be dropped for the most vulnerable. Caring for them can help avoid escalation of crime.

Communicate Strategically

Plan interventions against clear objectives – who is this intended to help? Is this the best way to help? What are the barriers to reaching intended beneficiaries? How can they be surmounted?. Communication should also be planned with such rigour. There’s no point in showing videos of packed food or announcing neighborhood kitchens without robust plans for reaching a good percentage of intended beneficiaries. Or in transferring money to people if there are no plans to ensure the supply of food. Plans to maintain the safe supply of food and help vulnerable buy food should be mapped out and then supported with communications targeting different players in the supply chain, including security personnel. Assuring food can be supplied safely, as well as communicating that fact, will dampen food inflation which has risen to between 40% to 140% for staples such as garri according to an SBM Intelligence survey.

How Much will it Cost?

According to the Nigeria Inter-Bank Settlement System (NIBSS), Nigeria has, as at May 2019, a total of 78.936 million bank accounts.  If we assume that 70 million of these accounts belong to Nigerians in employment (others being dependents, emigrants, second or third accounts etc.), 21 million bank accounts will belong to the 30% of the Nigerians in informal employment. If we also assume that 5% i.e. 1,050,000 of the Nigerians in informal employment e.g. market women with big shops will not be picked as poor and vulnerable by the computer programme designed to identify the lowest income bank customers, this leaves us with 19,950,000 vulnerable people who qualify for the N5,000 COVID-19 stipend transfer. We also assume that 50% of these vulnerable Nigerians are not in the three cities experiencing the lockdown, so we are left with 9,975,000 qualified people. The total figure for two weeks is thus N99,750,000,000.

 How to Get the Money

The Minister for Humanitarian Affairs and Disaster Management, Ms. Sadiya Umar Farouq distributing cash to Abuja residents.  This is labourious and prone to abuse and is potentially unsafe. We are not sure of the criteria that has been used to identify beneficiaries.

In a world of $26 oil, Nigerian Governments (Federal and State) should spend with great care. Luckily, corporates are stepping up to help. We have calculated around N31 billion in donations – a good chunk of the money should come from here. And the Federal Government should itself attach strings to the donation-the donors would be too “shy” to ask-by asking the private sector to not only donate but volunteer staff who would be closely involved in the design and implementation of the interventions. The efficiency gains would be massive.

Donation Short Codes

Better-off Nigerians should be asked to contribute to the COVID-19 Stay-at-Home Stipend Fund and help feed less fortunate Nigerians. If 10 million donate an average of N5,000, this is N50 billion. Banks should create shortcodes to make the donation as easy as saying COVID-19. Demonstrating transparency would be key.

To summarize, interventions to curtail the spread of COVID-19 and to assist the most vulnerable Nigerians should aim to ensure the safe production, distribution and sale of food. Government should find ways to give the most vulnerable Nigerians money to buy food rather than seek to take over the distribution of food. The limited government capacity should be spared for coordinating interventions with the private sector and other stakeholders including development agencies. No one can be certain when the COVID-19 pandemic will be over.

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