With the Federal Government claiming to have disbursed N288billion COVID-19 relief fund to alleviate the socioeconomic impact of the pandemic on vulnerable Nigerians, TAIWO ALIMI fact-checks the claims against available data and facts.
SMEs shortchanged during disbursement as politicians hijack palliatives
More than 100 million Nigerians sink into poverty – NBS/World Bank
FOLASHAD Adejobi owns a Small and Medium-sized Enterprise (SME) running a catering service in Lagos state. Her business, however, suffered badly during the lockdown triggered by the COVID-19 pandemic. All the companies she serviced shut down, except one.
The only one that weathered the COVID-19 contraction subsequently downsized. This affected her business negatively. Her income got depleted by half and she began to feed on her little savings in the bank. In a short while, all her reserves were gone.
Cash-strapped, Adejobi needed help and in late 2020, her sister introduced her to the Federal Government of Nigeria (FGN)’s COVID-19 Supporting Small Business/MSME Survival Fund supervised by the Federal Ministry of Industry, Trade and Investment and she applied for the fund. She got a form, filled it and submitted.
After waiting for more than three months, she received a text message from a government agency in April 2021 that her application had been granted and she would be paid N30,000 monthly as SME support for three months. Her happiness knew no bounds. “I felt happy because the support is coming at the right time. Things are too expensive in the market and it is eating into my profit,” she said.
The 45- year- old’s optimism, however, dwindled when the money finally arrived. “My sister called me prior to disbursement that a condition is attached to payment: I would have to refund N15, 000.00 (half of the payment),” she said.
She could not comprehend it at first but her sister insisted on the ‘settlement’ for government officials. “In late April, N30, 000 was transferred to my First Bank Plc account and my sister called that she had been reliably informed of the payment that same day. She demanded the ‘settlement’ from the agreed sum paid into her account.”
Unfazed, Adejobi refused to pay up for three days. She, however, succumbed on the fourth day following incessant harassment by phone calls.
Thinking that was the end of the drama, within three days of the first installment, she woke up to see another alert of N30, 000 and almost immediately her sister called her again to request the usual payback.
At first, she lied about receiving the money but her sister persisted until she succumbed and sent the ‘settlement.’
“What is glaring to me is that the government officials are working hand in hand with my sister and banker. They knew the moment I got the money and they won’t allow me rest until I returned half of it.”
Another question agitated her mind. “I was supposed to get the money within three months, that is, N30,000 monthly but to my surprise, the full N90, 000 for the three installments was paid within 10 days.”
She reckoned that the system is either fraudulent or is being manipulated by fraudulent officials and their collaborators.
A culture of ‘settlement’
Adejobi’s story is hardly different from that of Taju Ibrahim, an artisan living in Ogun State, businessman Lanre Osifeso from Akure in Ondo State and housewife, Felicia Wogu, who resides in Magboro, Ogun State.
Ibrahim received the first installment of the COVID-19 Survival Fund of N30, 000 in March, this year, through the help of a friend who introduced him to the scheme. He said, “I received the money on March 8, 2021, and my friend called me to payback N15, 000.00 into his account two days later. I had spent the money before he asked for payment, so, I could not pay up.”
The bricklayer said he received no payment afterwards even though he was told that he would receive N90, 000 in three installments.
Osifeso has been paid twice and he paid N20, 000 from the money for ‘settlement.’
He said, “I’m expecting the final payment as I speak with you. My cousin introduced me to it and I’ve been paying back through him. There is no way to trace the money back to the ministry officials.”
In Wogu’s case, the payment was facilitated by her husband whose friend introduced to the scam. So far, she has received N30, 000 and paid back N15, 000. She said, “There are many people and government officials involved in this scam and that is why it is going on unabated.”
Wogu said she would continue to play along in order to receive the outstanding payments.
Further investigation by The Nation revealed that the COVID-19 Survival Fund disbursements are fraught by fraud often perpetrated by corrupt government officials and their collaborators.
On September 24, 2020, during a press conference in Abuja to update Nigerians on the progress of the National MSME Survival Fund and the Guaranteed Off-Take Stimulus Schemes programme of the FG, the Minister of State for Industry, Trade and Investment, Mariam Yalwaji Katagum, said the “Payroll Support Scheme targets 500,000 individual beneficiaries. The scheme will support MSME payroll obligations by paying between N50, 000 (max) and N30, 000 (min) to between three minimum and 10 maximum staff for three months.”
On April 22, 2021, Clem Agba, the Minister of State, Ministry of Budget and National Planning, while giving a comprehensive breakdown of the COVID-19 expenditure said: “From the N500 Billion stimulus in the revised 2020 budget, a provision of N126 Billion was made for building a resilient health system in Nigeria to prevent the loss of life.”
However, Vahyala Kwaga, a Senior Policy Analyst with the NGO, BudgIT, countered the claim. He said, “Unfortunately, there are several portals by which information is been disseminated, and to a very large extent, this creates an overlap of information and creates further difficulties in verification. So, you have the open treasury portal, corpus portal, and the bureau of public procurement as well. The important thing is triangulating these data to make sure that they all tally but because a lot of it is in non machine readable format, it makes analysis very difficult. Some of the information is missing and the links dead. So, you can’t in good faith say these figures are verifiable because there is no way for you to confirm them.”
He also punctured Agba’s declaration that, “Each state received N1billion except for Lagos and Kano states that received higher amounts.”
Kwaga argued that while it is a reasonable assessment, it would have been nice if there was a provision of only one viable portal in which COVID-19 spending, expenditure, donations can be tracked. “Also, several states have not published their information. Again, some states have provided links but they links are dead. Out of 36 states I would say seven have provided some form of pointers towards information and some of them are not even accessible to analyst and journalists,” he said.
In response to Agba’s claim that, “The president directed the disbursement of COVID-19 cash transfer to additional one million households as part of the social intervention programmes to protect the vulnerable,” Kwaga said: “The idea is to trace how much has been given out and who has received them. It is worrisome that the FG claimed to have spent a lot but they are unable to show us just who have received this relief materials. There is a break in the transparency line and it makes tracking extremely difficult.”
On FG’s claim that it had spent “N60 billion on road construction and rehabilitation under the Moving People and Goods programme across the country,” Kwaga noted: “It is not clear here if the N60 billion are fresh allocations or are they moving the funds from the existing budgetary allocation for road constructions? You could call this an extra budgetary allocation but it still need to follow the prescribed pattern of transparency, accountability and openness.
“I would say the FG really needs to do better in terms of implementation, measurement, and providing ample trusted third party verification for these things. Yes, they have said there is a lot of money available, Nigerians do not really know how much of these monies have been disbursed and genuinely whether or not there is a change in the economy as a result of this injection.”
On June 12 2021, President Muhammadu Buhari, during his nationwide address to mark Nigeria Democracy Day said: “During the pandemic, we disbursed N5, 000 to one million Nigerians using a Rapid Response Register and advanced N20, 000 to 750,000 beneficiaries of the Conditional Cash Transfer Progamme and provided 1.37 million Nigerians with palliatives from CACOVID.
“At the same time the Federal Government released 109,000 metric tonnes of food reserve stocks and 70,000 metric tonnes of grains to the poor and vulnerable in all 36 states of the federation.
President Buhari concluded thus: “In the last two years we lifted 10.5 million people out of poverty – farmers, small-scale traders, artisans, market women and the like.”
Reality vs FGN
Going by available data, the Federal Government’s claims conflict with the realities on ground. Verifiable figures obtained from the National Bureau of Statistics (NBS) punctured government’s sustainability claims.
Government’s claims that hundreds of thousands of new jobs have been created through its COVID-19 relief fund and from billions of Naira pumped into the economy to galvanise it, are hardly felt by the people.
FGN declaration that it has sustained 700,000 jobs in 140,000 MSMEs and 1,500 self-employed individuals through grants, and recruited 1,000 persons per local government of the 36 states and the FCT resulting in 774,000 persons being employed, fell short when it was compared to current unemployment figures as summarised by the NBS.
The unemployment figure released by NBS in fourth quarter of 2020 also contradicts FG’s claim on new employment.
“During the reference period, the computed national unemployment rate rose from 27.1% in Q2, 2020 to 33.3% in Q4, 2020, while the underemployment rate decreased from 28.6% to 22.8%. A combination of both the unemployment and underemployment rate for the reference period gave a figure of 56.1%. This means that 33.3% of the labour force in Nigeria or 23,187,389 persons either did nothing or worked for less than 20 hours a week, making them unemployed by our definition in Nigeria. This is an additional 1,422,772 persons from the number in that category in Q2, 2020. Using the international definition of unemployment, the rate was computed to be 17.5%.”
While the FG is claiming creation of new jobs, the reality is that more Nigerians have lost their jobs.
The situation is worse in rural areas where government claimed to have spent over N12billion on employment generation and facilities for rural dwellers; NBS estimates reveal that, “The unemployment rate among rural dwellers was 34.5%, up from 28.2% in Q2, 2020, while urban dwellers reported a rate of 31.3% up from 26.4%. In the case of underemployment among rural dwellers, it declined to 26.9% from 31.5%, while the rate among urban dwellers decreased to 16.2% from 23.2% in Q2, 2020.”
Among the young people (15-34 years) the story is devastating. “For the period under review, Q4, 2020, the unemployment rate among young people (15-34years) was 42.5% up from 34.9%, while the rate of underemployment for the same age group declined to 21.0% from 28.2% in Q2, 2020. These rates were the highest when compared to other age groupings.”
The summary is that many young Nigerians lost lucrative jobs and resorted to less paying jobs to make ends meet.
Sola Ogunwale, a chartered accountant, who was caught in the web of unemployment after his company went under in 2020, painted a pathetic image. He said, “What the NBS figures are saying is that more educated young Nigerians now ride ‘Okada’ (Commercial motorcycles), ‘Keke Marwa’ (commercial tricycle) and do other menial jobs.”
The story is the same across state boundaries as NBS estimates reveal a project a bleak picture across the nooks and crannies of the country.
“In the case of unemployment by state, Imo state recorded the highest rate of unemployment with 56.64%. This was followed by Adamawa state with 54.89% and Cross Rivers state with 53.65%. The states with the lowest rates were Osun, Benue and Zamfara states with 11.65%, 11.98% and 12.99% respectively.
In the case of underemployment, Benue state recorded the highest rate with 43.52%, followed by Zamfara and Jigawa States with 41.73% and 41.29% respectively. Lagos state recorded the lowest underemployment rate, with 4.5% in Q4, 2020.
“A total number of 12,160,178 did not do any work in the last seven days preceding the survey,” stated the NBS.
Palliatives hijacked by politicians
Investigation carried out in five states most hit by the pandemic namely Lagos, Kano, Rivers, Ogun and Niger states showed that a great number of vulnerable people including women, children, the elderly and physically challenged, did not get palliatives provided by the government. Rather, politicians, community leaders and their cohorts got it.
BudgIT independent findings reads in part: “During the homegrown school feeding tracking in Lagos, we visited different distribution centres in Ikeja, Surulere, Yaba, Ketu and Mushin. According to our findings, the exercise was a lot more transparent in Lagos. Security operatives were deployed to provide safety for the distribution agents and also help in handling the process. We also observed that the packages arrived at the centres on time, and most of the beneficiaries got their take-home rations without any significant scuffle.
“At the Maryland school complex in Lagos State, the tracking team confirmed that officials followed the due process to a considerable extent as beneficiaries used the QR coded vouchers to access their take-home rations. Citizens were allowed to pick up their rations once they presented the coupon. The take-home rations were valued at N4, 200 according to current market price and made up of 5 kg bag of rice, 5 kg bag of beans, 500 ml vegetable oil, 750 ml palm oil, 500 mg salt, 15 pcs of eggs, 140gm tomato paste.
Lukman Olanrewaju, a social worker in Agaye 1 CDA, Ojo Local government area, reported that “a measly five sachets of noodles and bowl of beans were shared to each landlord association in a community to cushion the stay-at-home effects.”
“In most monitored local government areas, including Agege, Mushin, Ikorodu, Sururlere and Epe, we discovered that palliatives were hijacked and diverted by politicians and shared among party members. Some residents who are not members of the party lamented the hijack and their exclusion from the whole distribution process. Ward chairman is in charge of the distribution of the food in the Agege area in Lagos State. One cup of rice, one cup of beans and one sachet of tomato paste were given to a street with more than 30 houses,” Olanrewaju added.
Oga Yemi in Iseyin Street, Onipanu-Lagos state said: “The politicians in our area hijacked the sharing of the palliatives, which was channeled through the party’s leadership across the wards in the local government area.”
Corroborating him, another Lagos resident, Funke, in Surulere, stated: “We received two cups of rice and three sachets of noodles and salt. My family consists of four members so the palliative was not enough to cater to our needs”
In Rivers State, a resident of the Rumualogu community revealed that the only relief packages several people in the community got during the lockdown came from generous individuals who wanted to assist the less privileged.
And Amina from Dogowa LGA, Kano State shared similar catalogue of complain: “Our community only received three bags of Rice, one bag of beans and groundnut oil for over three hundred residents. Each household was given four cups of rice, beans and one sachet of groundnut oil. Not every household benefited from the palliative items”
Impact on Nigerians
The result is that the target beneficiaries are not feeling the impact of the N288 Billion COVID-19 intervention fund even as more people slip below the poverty line.
According to World Bank’s bankrolled National Longitudinal Phone Survey (NLPS), being implemented by NBS monthly, more Nigerians will sink below the poverty index due to the economic impact of COVID-19
“The number of poor people would be set to rise from 82.9 million in 2019 to 90.0 million by 2022 due to natural population growth, yet with the economic effects of the COVID-19 crisis, the national poverty rate is instead forecast to jump to from 40.1% in 2019 to 45.2% in 2022, implying that 100.9 million Nigerians will be living poverty by 2022,” stated the report.
This contradicts President Buhari’s claim that: ‘In the last two years we lifted 10.5 million people out of poverty – farmers, small-scale traders, artisans, market women and the like.”
Households income remain precarious sinking lower than last year and leaving more families financially insecure.
The situation is complicated by the soaring inflation index. The NBS recorded The CPI (Consumer Price index), which measures inflation increasing by 18.17% YoY in March 2021, 0.82% higher than February 2021.
NBS’ ‘Selected food price watch data’ for April 2021 reflected that the average price of one dozen of medium sized eggs increased annually by 11.26% and monthly by 1.13% to N530 in April 2021, from N524.47 in March 2021.
The average price of 1kg of imported rice increased annually by 14.57% and decreased monthly by -0.67% to N540.58 in April 2021 from N544.21 in March 2021, while the average price of 1kg of tomato increased annually by 0.09% and monthly by 3.67% to N277.26 in April 2021, from N267.45 in March 2021.
Similarly, the average price of 1kg of yam tuber increased annually by 9.87% and monthly by 3.26% to N252.80 in April 2021, from N244.82 in March 2021.
Transport fare has also increased through the inflation. The NBS Transport fare Watch report for April 2021 covering road journeys and water way passenger transport, showed a rapid fare increase on every mode of transportation.
An average fare paid by commuters for bus journey within the city increased by 2.34% monthly and by 72.59% yearly to N386.10 in April 2021, from N377.27 in March 2021. States with the highest bus journey fare within the city were Zamfara (N620.35), Bauchi (N600.35) and Nasarawa (N500.23), while states with lowest bus journey fare rate within the city were Oyo (N200.07), Abia (N215.04) and Borno (N263.45).
For bus journey intercity, it increased by 1.48% monthly and by 37.50% annually to N2,446.86 in April 2021 from N2,411.29 in March 2021. States with the highest bus journey fare intercity were Abuja FCT (N4,594.21), Lagos (N3,500.20) and Sokoto (N3,340.30) while States with lowest bus journey fare within city were Bayelsa (N1,764.55), Bauchi (N1,782.12) and Enugu (N1,800.40). The average fare paid by commuters for journey by motorcycle per drop increased by 1.79% month-on-month and by 86.41% year-on-year to N276.30 in April 2021 from N271.44 in March 2021. States with the highest journey fare by motorcycle per drop were Yobe (N455.02), Lagos (N435.21) and Taraba (N430.55) while states with lowest journey fare by motorcycle per drop were Adamawa (N95.10), Katsina (N155.04) and Niger (N160.20).
‘Govt must do more’
The economic effect of COVID-19 pandemic is biting harder leading to loss of livelihood and abysmal increase in food, transportation, and housing and in general standard of living.
Ogunwale could not agree more: “Nigerians are overwhelmed with eking out a living in uncertain time. Condition of living is hard for them and so, the FG must do more than dropping figures to implementing. As an accountant, what I can deduce is that we have implementation problem and all that Covid-19 funds are largely going into pockets of some ministries’ officials, political leaders, and contractors and citizens working for them.”
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