The federal government should consider investing the funds recovered from the late former Head of State, General Sani Abacha, in infrastructural development, as this will help in alleviating poverty among the masses.
The move by the federal government to distribute the $322 million repatriated from the accounts of former Head of State, late General Sani Abacha in Switzerland to those the government described as vulnerable Nigerians has remained a topic for debate.
The initiative by the government will not achieve the objective of poverty alleviation nor translate to development, some experts have argued, just as they advised the government to invest the fund in infrastructural development.
According to the experts, a recent revelation that Nigeria had overtaken India as the country with the largest number of extreme poor as of 2018, as revealed by a report by the Washington-based Brookings Institution, calls for greater investment in human capital development in the country.
It has been proven that infrastructure development is necessary for reducing poverty in developing countries by increasing economic growth, and thus should be prioritised by governments. Findings had shown that the physical stock of infrastructure would always have higher rates of economic growth and productivity returns. For instance, improvements in transport and communications infrastructure can result in higher levels of economic growth due to lower transportation costs. Lower transportation costs, on the other hand, increases labour productivity.
Indeed, while a lot of Nigerians hold the opinion that the move is for the ruling government to score some political points ahead of 2019 general elections, others have continued to question the modality for sharing the fund.
The National Coordinator of the Open Government Partnership (OGP), Nigeria and Special Assistant to the President on Justice Reforms, Juliet Ibekaku-Nwagwu, had explained that the funds would be paid directly into the accounts of the poorest Nigerians through their various accounts for two years and identification numbers to be made available on a website being developed by the National Social Investment office and the World Bank.
"The poorest members of the community will be registered online and before you make any payment, they must have an ID number so that every payment would be tracked. No amount will be paid out without a joint signature between Nigeria and the World Bank and without identification of individuals," she had said.
In May, President Muhammadu Buhari had said the recovered loot would be put into the conditional cash transfers (CCT) scheme targeted at the "poorest of Nigerians".
Also, a representative of the National Cash Transfer Office (NCTO), Tukur Rumar, had said the federal government would begin the disbursement of the loot to over 300,000 poor households in 19 states this month.
He had listed Niger, Kogi, Ekiti, Osun, Oyo, Kwara, Cross River, Bauchi, Gombe, Jigawa, Benue, Taraba, Adamawa, Kano, Katsina, Kaduna, Plateau, Nasarrawa, Anambra and internally displaced camps (IDPs) in Borno as the beneficiaries.
Not the Right Way to Go
The Chief Executive of the Financial Derivatives Company Limited, Mr. Bismarck Rewane said:"What do you mean by liberating the poor by giving them money to eat? What we are saying is invest in infrastructure, produce capital formation so that people can get jobs. You are giving anunemployed man money to buy a bag of rice for one week and then comes back to you again for money. That is not the solution."
On his part, the Director General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, wondered how the beneficiaries would be gotten, saying, "It would be difficult to determine those they call poor Nigerians."
According to Ekpo, the fund should be channeled to the government's school feeding program me or to enhance healthcare services, especially primary healthcare in the country.
"We can invest this money in infrastructure, either hard or soft infrastructure and monitor the outcome. For example, target a major road project or power project and ensure that it is completed," he added.
Moody's Senior Analytical Advisor for Africa and the institution's leading analyst for the region, Aurélien Mali, said alleviating poverty in Nigeria would be very difficult as long as the country's Gross Domestic Product (GDP) remains below its demographic trend.
"As long as Nigeria continues to grow below six per cent, the poverty level is not going to change, and the standard of living is not going to improve. So, you will continue to have income inequality that will continue to increase and overall it is going to be difficult to improve GDP per capita," he added.
To Prof. Uche Uwaleke of the Nassarawa State University, the scheme as a poverty alleviation tool, poses a number of challenges.
"The first is the challenge of selecting the beneficiaries and the objectivity in the criteria employed. Why the choice of 19 states when we have 36 states in Nigeria? There will definitely be transparency and accountability issues. The second issue is the challenge of sustaining the scheme from volatile and irregular income streams. The poor need food, access to water and health care. Depending on age, education is also important," he said.
Also, the Socio-Economic Rights and Accountability Project (SERAP) asked the federal government to reconsider its plan to share the Abacha loot.
The Director, SERAP, Timothy Adewale, described the plan as "mere tokenism", adding that "it would neither have significant impact on poverty alleviation nor satisfy the twin objectives of justice and development."
The organisation asked the president to rather create a central recovery account/trust funds, "with oversight mechanisms to ensure repatriated funds are transparently and accountably spent to invest in tangible projects."
"The authorities have a legal obligation under the UN Convention against Corruption to which Nigeria is a state party to make sure that the returned Abacha loot is properly and efficiently used, both from the viewpoint of using asset recovery as a tool of ensuring justice to victims of corruption and breaking the cycle of grand corruption.
"But the plan to share the loot among households is mere tokenism and would neither have significant impact on poverty alleviation nor satisfy the twin objectives of justice and development.
"Rather than spending the loot to fund the National Social Safety Net Programme (NAASP), President Buhari should, within the framework of the 1999 Constitution (as amended), create a central recovery account/trust funds, with oversight mechanisms to ensure repatriated funds are transparently and accountably spent to invest in tangible projects that would improve access of those living in poverty to essential public services such as water, education and health.
"Distributing N5, 000 to household would neither improve the socio-economic conditions of beneficiaries nor achieve the enduring value of a more transparent and robust system to manage recovered loot.
"The return of the Abacha loot is a chance for President Buhari to commit to the enforcement of the 2016 judgment by Justice Mohammed Idris, which ordered his government to publish the spending of recovered loot since 1999 by past and present governments till date, as well as details of projects on which the funds were spent; and to vigorously push the National Assembly to pass the Proceeds of Crime Bill," SERAP argued.
Furthermore, SERAP said it would be unfair to leave 17 states out of the loot because they do not have the appropriate platform to implement the National Social Safety Net Program (NAASP).
"In any case, distributing the returned loot to households in 19 states because the remaining 17 state governments have not yet put in place the appropriate platform through which to implement the NAASP is both unfair and discriminatory," the group said.
"The planned distribution is also vulnerable to abuse and corruption by state governors, who may push for the funds to be given to their supporters and thus used for parochial and political purposes."