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FG Should Prove Social Security To Guarantee Investment

Godwin Uyi Ojo
Posted: Oct 10, 2016 at 9:23 pm   /   by   /   comments (0)

Charles Okonji

As the Federal Government plans to lower taxes for Small, Micro and Medium Enterprises (SMMEs) to stimulate the economy, particularly at this moment of recession, some stakeholders have posited that this could only be actualized through proper implementation of national basic income scheme.

Even though a robust programme for the SMMEs could generate employment, they pointed out that in a dire situation of poverty and misery of the average Nigerians, especially the unemployed, the Federal Government should vigorously execute national social security scheme.

An official of National Bureau of Statistics, Dr. Niyi Omotola, who established the authentic statistics on categories of the employed and unemployed during at a workshop of the national Social Security Scheme, which was organised by Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) in Abuja, disclosed that the Nigerian population was experiencing explosive growth while witnessing a decline in the number of the employed and therefore a rise in the number of dependant population, which stood at 63 per cent in 2015.

Following this development, according to him, the proportion of Nigerians living below the poverty line grew from 34.1 per cent in 1992 to 70 per cent in 2010, noting that this had jeopardised their ability to fulfil their potentials and attain happiness, simply because of their financial handicap, either by reason of dependence or by reason of unemployment and poverty.


Abysmal inequality

A lecturer at the Lagos State University, Dr. Tunde Akanni, pointed out that if the national budget trend was anything to go by, a situation whereby less than one per cent of the population would enjoy about 70 per cent of the national wealth through recurrent expenditure, while the 99 per cent of the 170 million population would made to settle for 30 per cent in capital expenditure from the national wealth would no longer be acceptable.

Akanni said: “It is this sort of insensitivity that sustains poverty and leads to violent conflicts undermining our development. There is too much money flying around, and the citizens must wake up from docility and place real demands on their government.

“But how did we get here?  BBC labeled Nigeria as world’s pollution headquarters.  All oil companies are guilty. Avengers have worsened the situation. We have had incessant fuel price hiking.

“The first major upward review of fuel price was announced in October, 1973 by the military administration of General Yakubu Gowon. It was tagged “Uniform Pricing Exercise” with a 40.8 per cent increase in the price of premium motor spirit (PMS) from 6 kobo to 8.45 kobo.

“Babangida adjusted fuel prices five times between March 31, 1986 and December 19, 1989 from 20 kobo per litre to 70 kobo per litre a reflection of over 250 per cent increase. This also coincided with the adoption of the structural Adjustment Programme (SAP) that effectively led to the devaluation of Naira.

“Babangida’s excuse for the new pump price of petrol was that due to devaluation of the national currency, the domestic price of fuel had become unreasonably cheap and was therefore burdensome to the government,” he stressed.


Rationale for NaBIS

The Executive Director of ERA/FoEN, Dr. Godwin Uyi Ojo, disclosed that the Nigerian population had been experiencing persistent growth, while a greater percentage of the population was dependant.

Percentages of employed Nigerians to total population, according to him, were approximately 33 in 2010, 34 in 2011, 32 in 2012, 34 in 2013 and 37 in 2014, explaining that the implication was that 67 per cent, 66 per cent, 68 per cent, 66 per cent and 63 per cent of the population were dependants in 2010, 2011 2012, 2013, 2014 and 2015 respectively.

He added that the proportion of Nigerians living below poverty line grew from 34.1 per cent in 1992 to 70 per cent in 2010, lamenting that with a significant proportion of the Nigerian people financially handicapped, either by reason of dependence or by reason of poverty, the ability of their marginal propensity to consume and produce to make any meaningful contribution to the National income multiplier had been significantly constrained.

ERA/FoEN boss, while emphasizing that “national security should be seen beyond protecting a few with armed personnel but should be all embracing,” said that the events since the second half of 2015 had confirmed ERA/FoEN’s warning that the bubble of oil dependency would ultimately burst, pointing out that between then and now, the international price of oil had dipped from $145 per barrel and oscillating between $40 and $48 per barrel.

Ojo said that for nations like Nigeria, which did not save for the rainy day, the collapse of oil prices meant that the national budget could not be financed without mortgaging the future.

He said: “Nigeria is one of the countries in the world where the gap of inequality is highest.  Over 68 million Nigerians are unemployed, millions live on less than two dollars per day and millions more go to bed hungry.”

ERA/FoEN boss explained that with more than 63 per cent of the population living as dependent, it meant serious national security risks, disunity, low morale and lack of patriotism, adding that with no form of succor on the horizon, the youths and the dependent population would resort to crime, drug addiction, prostitution and other criminal vices that threaten our socio-economic fabric, peace and stability.

Ojo said: “There is also the class that feels there is no hope of survival and resort to suicide which is significantly on the rise. We commend the Federal Government Social Investment Programme to pay conditional stipends of N5,000 to some categories of vulnerable groups from selected states covering some 500,000 persons. The SIP is a pilot project. It is not comprehensive and should not be for only graduates or those businesses inclined if it will deliver on its set goals.

“We proposed a far more comprehensive national social security scheme since 2013. Such scheme will ensure an unconditional National Basic Income Scheme of N10,000 paid to all Nigerians who are unemployed.

“A national social security for all Nigerians should include monthly stipends for the unemployed, free medical health services for vulnerable groups, food as a human rights to address hunger through Food Stamps delivery system for the hungry, and Disability Allowance for the physically and mentally challenged citizens.

“Given the official figures from the Bureau of Statistics that Nigeria earned N48.4 trillion between 2000-2011, and N8.8 trillion in 2011 from oil wealth Nigeria can afford minimum Basic Income Stipend of about N10,000 exclusively to the poor and unemployed if we are to halt this decline towards a political class economy,” he stressed.

ERA/FoEN boss pointed out that moral and ethical issue, among others, should be enough rationale for NaBIS, as it would help to address the gulf of inequalities and social disparity in the country, which is one of the highest in the world.

He pointed out that environmental justice struggles might not be enough, noting that security and welfare of the people, as enshrined Chapter II, article 14, subsection 2b of the constitution of the federal republic on Nigeria, was the primary purpose of government.

He said: “This provision is not guaranteed and it is non-justiciable under the constitution. But the narrative should move from this to how can make this practical and functional. It brings opportunities for unlocking creative potentials in the production process.

“Sustenance social security can transform the lives of the poor. An economy that is experiencing recession requires injections in the form of government spending to stimulate economic activities. This underscores the importance of National Basic Income Scheme in Nigeria at this point in time.

“Sociocultural-extended family system in the African setting needs to be preserved by reducing the burden of the safety nets of dependency and communal living which entails mutual benefits,” he stressed.


Unlocking Nigerians’ creative potential

The National Coordinator of Women Environmental Programme (WEP), Mrs. Nguavese Tracy Ogbonna, disclosed that NaBIS would unlock creative potentials of Nigerians for national development, as the social security had always been the foundation of economic security for people – disabled persons, families of retired and deceased workers.

According to her, social security arrangements had always been collective remedies against adversity and deficiencies, ranging from pensions to disability compensations, death benefits as well as free or quasi healthcare and education security and welfare of the people.

Ogbonna said: “This is declared as the primary purpose of Government in Chapter II, article 14, of the 1999 Constitution of the Federal Republic of Nigeria. Given the nationwide import of this duty, driving social security initiatives has been one of the constitutional responsibilities of the Federal Government.

“Nigeria has over the years tried various social security schemes/systems. However, these have not been implemented satisfactorily. This gap has led to instances of alleged embezzlement and misappropriation of pension funds, long queues of pensioners to access pension funds and ultimately, stranded pensioners, amongst others in the area of pension fund management in Nigeria,” she stressed.

WEP’s National Coordinator admitted that the Federal Government had, in the past, made some efforts to address these challenges. Among such efforts was the Workmen Compensation Scheme of between 1987 and 2011, which was set up by the Workmen Compensation Act (WCA) to ensure that workmen where compensated for injuries – the employees were largely not compensated.

Another one was the Nigeria Social Insurance Trust Fund (NSITF) of 1961, 1993 to 2003. This scheme was targeted at protecting private sector employees, whose employers were then mostly the multinationals, from financial difficulties in the event of either old age, cessation of employment, invalidity or death. Unfortunately, the employees that contributed under the scheme did not receive the supposed benefits as the funds were largely inaccessible

Pension scheme of 1954 to 2004 was governed by the Pension Act and other relevant legislation, guidelines and policies issued by the government. The recent legislation enacted by the Federal Government to reinforce the social security framework in Nigeria was the Pension Reform Act (PRA) 2004.

The PRA, according to her, was enacted to improve on NSITF and public sector pension regimes. Under the PRA, the custody of pension funds was transferred from NSITF to private sector companies – Pension Fund Custodians (PFCs). The PRA also would provide some checks and balances by vesting administration of the pension funds with other bodies – Pension Fund Administration (PFAs).

Ogbonna said that Sustainable Development Goals (SDGs) could facilitate social security in Nigeria. The SDGs adopted in September, 2015 to provide a long timeline till 2030 for social security to be actualised. This would ensure that no one was left behind.

She disclosed that Nigeria, as a member state, joined world leaders to adopt the SDGs as a development priority, pointing out that the SDGs proposed to implement nationally appropriate social protection system for all including the social protection floors as agreed in 2012 by all countries and endorsed by the UN and G20 countries.

While citing Isabel Ortiz, head of the ILO’s Social Protection Department, Ogbonna, said: “Imagine a Nigeria where all older persons receive a pension; a Nigeria where all persons with severe disabilities receive benefits for a life in dignity. Imagine a Nigeria where all women receive maternity and child support so kids can eat, study and play; a Nigeria where there is support for those who are poor or without jobs. A Nigeria where no one is left behind. This is the Nigeria we want in 2030. A Nigeria with no poverty and fewer inequalities, a Nigeria with social protection for all.”


Tackling implementation challenges

A member of House of Representatives, Hon Uche Onyeagucha, noted that there could be some challenges in the implementation of the some security scheme, as some people might exploit it to their own advantage.

Onyeagucha pointed out that Bank Verification Number (BVN), which was introduced during former President Goodluck Jonathan’s administration, could be employed to curb corruption in the system.

ERA/FoEN boss, therefore, recommended strategies for wealth redistribution, which included the establishment of an institutional framework and setting up of a body called National Social Security Commission to operationalise the scheme.

According to him, the Federal Government should provide a legislative backing from the National Assembly to support Executive Order or gazette; National Identity cards and Biometric Verification to ensure that only qualified citizens’ benefit from the scheme; and a comprehensive database of all employed and unemployed people to enable easy verification of their employment status.

He added that the Federal Government should introduce a progressive tax of one per cent on monthly income of N500,000, stressing that organisation’s research indicated that there were about 1.2 million people in the private and public sectors earning more than N500,000 and this translates to N6 billion monthly.

Ojo said: “There should be sensitisation of policy makers and the need for a significant reduction in the earnings of political office holders in terms of Security Vote for the executives, national assembly members and other political office holders at the national, state and local government authority levels.

“There should be a stipulation of Penalties for Potential Abuses and Multiple Registration to serve as a deterrent to people who may want to indulge in frivolous acts. Such penalties should include blacklisting, forfeiting of any benefits associated with the database and possible jail terms of at least three years with hard labour.

“One way to guarantee this is through the provision of a national social security that has the prospects to release locked potentials, address issues of social disparity, exclusion and abject poverty. It will help secure true national security, and unity peace and progress among citizens.

“In particular a National Basic Income Scheme (NaBIS) for the poor and vulnerable groups will redress the widening gap of inequalities and social disparity through a national wealth redistribution system,” he stressed.


Envisaged benefits of NaBIS

The stakeholders agreed that NaBIS would stimulate the release of locked potentials through availability of small grants that could support petty business that could then grow to be employers of labour.

According to them, it would also bridge the gap of inequality given that it was a form of reparation from unequal use of natural resources and from systemic internal colonialism, adding that the establishment of a national social security would be an investment in citizens’ welfare and the country’s development.

They stated that it would reduce poverty, foster peace, stability and social cohesion.