Olugbade Omotajo
July 20, 2023.
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A couple of years ago, I started a local intervention group in my family compound in Beyerunka, Ibadan. Membership was equally made open to interested people from other adjoining compounds.The goal was youth reinvention and empowerment of vulnerable men and women. As it were, I was solely responsible for its funding.
One day, I requested the coordinator to get me a list of people who needed financial assistance to scale up their businesses. To qualify, you must tell me what you do, how much you need and why you need it.
In the end, I got a long list of men and women, old and young who wanted a share of my hard-earned money. Not surprisingly, the men in the group were flamboyant in their request but less than convincing in purpose. The youths were worse simply looking for cash handouts with no spectacular business idea.
In the thicket of it all, a woman shone through. Her request was modest and sincere. She needed just 5,000 naira only for her pap-making business. When I questioned her further on her plan for the money, she came with a plain and honest response: “I want to buy more maize grain so I can make more pap”. What followed was a verbal cash flow analysis from the unlettered woman. More pap, more sales and ultimately, more income because pap is truly lucrative in Beyerunka, the place of my place.
I didn’t hesitate. I gave her the money right away. Eleven years after, when she attended my installation in November 2022 as Mogaji, the traditional Head of my family, she was a different person. She hadn’t made millions or anything close to that but she had attained reasonable economic independence to look chubby and colourful beyond my wildest imagination.
Why this story?
I share to underscore the power of small money and how nations are built from the aggregate of their micro-enterprises.
To drive the point closer home, let’s explore the value-chain of the mini-pap production outfit and see the various actors along the benefit chain. To start with, we have the grain seller. The woman will buy more from the person and her sales will increase. Next is the person selling leaves that will be used to wrap the pap. That’s the major way we eat pap in my area. The seller of leaves will experience similar sales increase. Let’s not forget she will need to transport the goods home. In Nigeria, the heavier the load, the higher the charges. So, the transporter will rake in more money too. We’re not done yet. The pap will surely be grinded and I’m sure the more the merrier it will be for the mill operator. Finally or so I believe, the woman will cook the pap and in her own case, with biofuel called firewood. Therefore, the vendor of firewood will also experience a jump in her sales.
Without doubt, at each of these processing stages, one thing is happening: people are doing more and earning more. In other words, everybody’s income is growing not minding by how much. This way, the meagre 5000 naira channelled to fruitful economic use has passed through many hands and produced many positive results in a gracious cycle of profit-making. This is the multiplier effect of small fund and the route many developing countries are taking to create jobs and reduce poverty. This, also, is the fundamental basis for my support for the decision of President Tinubu to assist vulnerable households in the country with the sum recently announced which, expectedly, has become a subject of ceaseless attacks by some people and controlled optimism by others.
Now, consider what happens when 8000 naira, on monthly basis, gets into the hand of an active economic agent like the woman in my story. If we have 12 million of them we can only imagine how many individuals, families, communities will be lifted out of poverty and what the overall effect of such micro-capitalization will be on the national quest for poverty reduction.
Long before now, experts in development economics have told us time and again that the problem of the poor is not money but what to do when money comes. Put differently, the poor are poor because they lack ideas on how to be economically meaningful. Interestingly, the poor in Nigeria belong to a different class. They’re poor not because they lack ideas but simply because they lack the critical stimulus of small fund. Apparently, any short-term measure by government to expand their access to this catalyst will surely mean well for them. This is more especially so given that in addition to small fund deprivation, they also bear the disproportionate burden of any economic policy that comes with increase in the prices of goods and services. Thus, building a protective economic hedge around this group of people should not be dismissed with a wave of hands.
But then, situated in the context of our past unsavoury experiences, it has become both normal and sensible to doubt the sincerity of the present fund-distribution program more importantly, when an obscene version of it was concurrently approved for members of the national assembly in the face of broad-based national hardship. As a result, the criticisms that have trailed the policy are quite welcome and very well in order. What, on the other hand, have been quite out of order are the many alternatives recommended by those who feel the money should not be spent the government way. I would have kept my mouth shut if these were to be anyway superior to the plan of Mr President. Unfortunately they are not. Some suggested spending the money to purchase buses and distribute them to states to ease the cost of transportation as if such had never been done before in this country. In response to partial subsidy removal in the past, government had rolled out mass transit schemes by buying buses and giving them to transport and labor unions to sustainably operate for the good of the masses. Where are the buses today? The failure of that scheme should teach any government the common sense of avoiding similar path in the future. Next, others have advocated using the 500 billion to repair our refineries. In actual fact, an online petition is already running in this regard against PBAT. If anything is truly laughable, I think this really is. I find it totally incredible that any enlightened Nigerian will still advocate rolling more money into that omnivorous gorgon called refineries. May I ask? Are the refineries not working because they were poorly funded? Of course, we all know better. A third group has called on Tinubu to spend the money on long-term investments with greater and lasting impact without tacking due note of the palliative nature of the current offer and the target beneficiaries. Well said no doubt but just as a roasted dog is very sweet, what shall the poor feed on before the dog is roasted?
It is normal to doubt government but it is abnormal to believe government can never do well in everything it puts forward as an agenda issue. This is the position of some incurable cynics and the very reason the national economic rebirth we earnestly desire may be long in coming. We can engage in critical policy analysis and come up with alternative perspectives for the good of this country but a “Dead-On-Arrival” disposition to government policies will take us nowhere.
Globally, micro-capital investment has become the secret of growing countries especially in South East Asia and other economic regions. I know it because I have seen it at work. As an IFAD researcher, I spent two months in Rwanda working and interacting with holders of small funds and saw how their activities were redefining the fortunes of a country once blighted by war.
To me in a way, writing off this stimulus step, whether stated or implied, is to display a misunderstanding of the conjugal linkage between creative small fund and national development. Indeed, the United Nations Capital Development Fund recognises micro-capital as a growth catalyst particularly in the hands of women and has called for its widespread adoption in addressing the problem of poverty.
However, since previous benefit schemes have been led by army of thieves into private pockets, many sensibly believe that the 12 million Nigerians targeted under the current program will be proxies of politicians put forward to corner the fund for them. To a very large extent, this is untrue. For one thing, the list of beneficiaries will not be generated in Abuja but at the community level where you and I reside. Though, I don’t have implementation details, what is clear is that no fresh registration of beneficiaries will be conducted. The program will leverage existing Conditional Cash Transfer scheme by drawing on its social register. Even at that, each person in the register will be authenticated by independent verifiers vide the ‘KYC’ approach. Where dead members need to be replaced, Abuja will not do it and neither will the politicians. Community members will do it themselves because the verifiers or enumerators will work through community structures like CDC or Landlord Association as the case may be. This is an area to challenge the process, monitor the transparency and ensure that program design and delivery obey the rules of engagement and run a linear course. But what have been the experiences over the years? Very simple: critics stay back at home, watch the process run its full course and then turn around to make wild speculations and attack a program they had opportunity to influence.
While I do not rule out the possibility of criminal interception at any of these points, it is evident that the process of access has been developed to deliver the benefits only to those who deserve to be so treated. Payment is by lodgement into bank accounts and not cash envelopes. Therefore, far above Tinubu, it’s the responsibility of every tier of government at both the state and LGA levels to ensure strict compliance with the ROE. Remember, no human financial scheme or program is ever foolproof. That some criminal Nigerians especially, a whole SA to a governor at a time in this country, could go to the US and defraud the COVID 19 palliative program in that sophisticated country implies that such occurrence is equally not beyond us. If American government or politicians did not design their own to fail notwithstanding the hijack, it wouldn’t be asking for too much to give the present administration in the country the benefit of our doubt. Tinubu has proposed, it’s left to us to either make it work or make a mess of it. And in that case, we all have a role to play. Go to your LGA and demand to know who’s targeted and how the process will run. Be a voice in your community; stop leaving things to politicians and stop waiting until you get government appointment. The time to walk the talk is now!
