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Receiving Government Aid Gets More Effective; The eNaira Effect

By Asuquo Kenneth

24, September 2021

CACOVID. Feed the Future. Ebola Fund Watch. These are a few words Nigerians have been hearing in the news in recent times. They refer to government relief initiatives meant to alleviate the effect of COVID-19, improve the agricultural value chain in Nigeria, and alleviate the effects of Ebola on victims, respectively. These funds are (and were) all directed to individuals and businesses who needed a way to stay afloat during the crisis times that prompted them, or to businesses who have been seeking ways to become meaningful contributors to the immediate economies around them but have no financial resources to make this happen.

There is a trove of social welfare schemes being deployed now and again all over Nigeria, from the Federal level, to the State level, to the Local Government level, and as history would have it, for every one of these welfare relief schemes, there have been eyes, ears, and mouths geared at the ready, looking on and observing, recording successes and failures, reporting them, and creating narratives. It is to be expected, really, that there should be such surgical introspection to these welfare programmes, as Nigeria, by very design, is riddled with a multiplicity of “what of mine?” traps – huge ethnic diversity, huge language diversity, stark religious diversity, obvious diversities in social strata. And to cap it all off is the fact that Nigeria is seen and quoted as the Giant of Africa. Nigeria is looked upon to lead in Africa. The resultant effect, for nine cases out of ten, is resistance.

The benignity of welfare programmes is resisted by fast-building narratives. The transparency of welfare programmes is resisted by quick-spreading narratives. The capability of these welfare programmes to achieve its objectives is resisted by quick-cementing narratives. It leaves the Nigerian government in an apparent lose-lose situation with controlling the narratives, and thus, the involved MDAs resort to acting with very little care for speaking, or speaking correct.

There has been word-of-mouth credence to some of the evidences of foul-play presented by these watchful eyes. Many-a-Nigerian households will give testimonies that bear witness to marginalization, inequitable distributions, moral soilage of qualification systems to receive funds, non-transparency of processes. These vocal evidences, while not nearly sufficient enough, are usually backed by publicly available statistics when pundits take on the matter and publish on their blogs and pages and channels. They would cite some of these instances: The case of the Economic Stimulus Bill of 2020, where the proposed law aimed to provide 50% tax rebates to businesses that are registered under the Companies and Allied Matters Act so they can use this saving to continue employing their current workers. However, while the bill focused on providing relief to formal sector businesses, 65% of Nigeria’s total GDP comes from the informal sector, which also employs more than 90% of the Nigerian workforce, and these workers needed support to survive. Many businesses in the informal sector are unregistered so it was difficult for them to get these benefits. There was a microfinance solution created for these businesses resultant from this, but even that too, faced its execution hurdles, and formed negative narratives too. The CBN’s N50 billion Targeted Credit Facility (TCF) stimulus package offered a credit of N3 million Naira to poor families impacted by COVID-19. However, the loan required collateral and was not interest-free. The people clamoured for a situation where the loans were made available free of collateral to poor households or just required signed guarantees by community leaders. They also clamoured for a situation where the loans were made available at a low interest rate with long moratorium and repayment period. There was also the obstacle of awareness: not many poor households and businesses in the informal sector knew about the available economic packages and policies implemented by the government on COVID-19, and so not many applied.

A month later, on April 1, 2020, the Nigerian government announced that it would make transfers of N20,000 ($52 as at then) to poor and vulnerable households registered in the National Social Register (NSR). As at August of 2020, the NSR had only 2.6 million households (about 11 million people) registered on its platform. However, 87 million Nigerians (8 times the households indexed by the NSR) live on less than $1.90 a day. Only 1/8 of poor households would have gotten that alleviation, and the ones who got would feel its effects, at the same living standard, for only 26 days, less than a month.

And these are the realities of COVID-19, which is most recent, and so far, recorded as the most organized federal government relief fund scheme executed in recent times. Pundits and bloggers and influencers ate these statistics up, and created hyperbolic narratives that only drive to discourage Nigerians from believing in and participating in government relief schemes in the future. The revamped Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development (FMHDS), today, is in charge of social schemes like GEEP (Government Enterprise and Empowerment Programmes), running sub programmes like TraderMoni, MarketMoni, and FarmerMoni; schemes like the N-Power programme designed for skill-acquisition for young Nigerians; schemes like CCT (Conditional Cash Transfer) which prioritizes social protection interventions as a key strategy towards reducing poverty and socio-economic vulnerabilities in the population; and schemes like NHGSFP (Nigeria Home Grown School Feeding Programme) aimed at providing cost-effective home grown school feeding for Nigerian students and pupils. Managing these programmes require the most dutiful attention to equitability, transparency, documentation, moral uprightness for pre-qualification and qualification processes, and social diversities of the country.

Most of these issues can be very easily solved if there was a way to ensure that once a scheme is created, the means to receive money from that scheme involved the government collecting your identification data remotely and simply sending you the funds, and the transaction is recorded, viewable by both government and receiver at all times, and cannot be changed at any time, whether you have a bank account or not. With such a system, the atmosphere, realities, and narratives around receiving government aid would change drastically.

On October 1, 2021, the Central Bank of Nigeria and the Federal Government will release a Central Bank Digital Currency called eNaira, designed to do exactly this. Built on the Distributed Ledger Technology system, eNaira has been reportedly poised to leverage on the security infrastructures of the system, and the peer-to-peer trust-inducing facilities provided by the system to ensure that money intended to be sent to you from the government once you qualify for a relief fund gets to you directly. This solves more than half of the problems government relief funds are facing today; this makes the participating MDAs for each relief fund care about the narrative again, and while doing the work, goes ahead to defend itself, with hard proof, of its transparent, equitable and dutiful distribution of funds. This buys back the people’s belief and trust lost by inability to back operations with data and facts. This changes the government relief aid game for the better, benefitting Nigerians and the Nigerian Governments.

This is the eNaira effect.

Asuquo Kenneth has been involved in social development projects in North-Eastern Nigeria for over 10 years now. He is a student of Agricultural and Bioresources Engineering from the University of Calabar, and begun his foray into the world of Social Development from volunteering for local farmers’ empowerment projects. Now, he manages up to 4 social development projects at a time, in fields far from agriculture. In his spare time, he is writing about his experiences on the field or playing football with his mates.

Please note that the content of this article was not generated by the Central Bank of Nigeria, and is not the intellectual property of the Central Bank of Nigeria. This article was written by a Third-Party Individual on their own terms, with their own creative voice and tone, unlinked from the Central Bank of Nigeria, concerning a product/service offered by the Central Bank of Nigeria. The copyrights for publishing the article were simply given exclusively to the Central Bank of Nigeria, and after careful verification of the facts presented by the article and its alignment with the principles of the Central Bank of Nigeria, has been published by the Central Bank of Nigeria on the eNaira Website.


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