Impact of FG’s Cash Transfer Scheme on Household Savings and Employment

In a bid to alleviate poverty and enhance social welfare, the federal government of Nigeria implemented a Conditional Cash Transfer (CCT) programme, aimed at supporting poor and vulnerable households. The programme has been lauded for its positive impact on increasing household savings, as revealed by the latest report from the World Bank. However, the report also highlights that the programme had limited effects on employment, especially for women. Let’s delve deeper into the findings of the World Bank report titled ‘Beta Don Come: Effects of Cash Transfers on Women and Households in Nigeria’. The report revealed some interesting insights into the effectiveness of this initiative.

Limited Impact on Employment
Despite the noble intentions behind the cash transfer programme, the World Bank report highlighted that its impact on employment, particularly for women, has been limited. The report cited the 2016 cash transfer programme under the National Social Safety Nets Project (NASSP), where households received a lump sum payment of N 5,000 every two months. While the programme provided some benefits to caregivers, primarily women, it fell short in significantly boosting employment opportunities.

Positive Effects on Household Savings
One of the key findings of the report was the positive impact on household savings. It noted that households in communities that joined the programme earlier experienced notable increases in savings, food security, and access to assets like farmland and livestock. Moreover, caregivers reported higher levels of happiness, decision-making autonomy, and freedom of movement, indicating some positive outcomes from the intervention.

Need for Complementary Livelihood Support
Despite the gains in savings mobilization and household welfare, the report emphasized the necessity of complementary livelihood support to ensure sustainable improvements in households’ self-sufficiency. While the cash transfer programme contributed to enhancing certain aspects of well-being, such as saving habits and decision-making autonomy, it did not lead to significant enhancements in overall household consumption or caregivers’ employment and financial inclusion.

President Tinubu’s Loan Request and Conditional Cash Transfer Proposal

In July 2023, President Bola Tinubu proposed an $800 million loan request to scale up the national social safety net programme and mitigate the impact of removing petrol subsidies. The plan was to transfer N8,000 monthly to 12 million poor and low-income households for six months. However, following a review, Tinubu ordered adjustments to the proposed conditional cash transfer, reflecting the government’s commitment to optimizing the effectiveness of social welfare initiatives.

Future Directions for the Programme
The World Bank’s report underscores the importance of reevaluating the CCT programme to maximize its impact on poverty alleviation and economic empowerment. While acknowledging the positive effects on savings and welfare indicators, it advocates for a more holistic approach that integrates complementary livelihood support to drive sustainable improvements in households’ self-sufficiency.

In conclusion, he federal government’s cash transfer scheme has had a positive impact on enhancing household savings, but falls short in generating substantial impacts on employment and overall household consumption. The World Bank report underscores the need for a comprehensive approach to address the challenges of poverty and unemployment. By incorporating complementary livelihood support interventions and fostering a culture of saving, policymakers can empower beneficiaries to achieve sustainable improvements in their economic well-being.