By Debo Popoola
The Federal Government of Nigeria has stated that it will start the payment of N5,000 monthly allowance to about 25million unemployed youths in the country.
According to a source close to the government, the Federal Government has already started the process of compiling the data of the youths that will benefit from the allowance. It will cost the Federal Government over N125 billion monthly and N1.5 trillion annually. This is in line with the APC’s manifestoes as part of the party’s social and welfare package for less privileged Nigerians.
Recently, the Senate rejected a motion aimed at compelling the president to fulfill the campaign promise of N5,000 allowance for unemployed youths. Despite the failed motion, the Presidency will still embark on this payment next year.
Pundits and analysts are worried and skeptical about the feasibility of this. Presently, Nigeria generates about 80 per cent of its foreign exchange earnings from oil. The recent fall in global oil prices has resulted in dwindling revenue for the country. Many projects embarked upon by the last administration were stopped because the government could not fund them. Many state governments became broke and were only aided by the bail-out funds through the Central Bank.
Businesses are struggling due to shortage of money in circulation, many have even folded up. This hash economic realities is clearly evident in the persistent drop in shares at the Nigeria Stock Exchange
President Buhari has said severally that his administration will be very frugal with spending and he will do whatever is possible to minimize the cost of governance. This is what any reasonable leader would do in such an economic crisis.
Now, even with the present hash economic realities, the government is still planning to embark on a welfare package for 25 million unemployed youths. The question now is: how sustainable is this plan?
Nigeria’s budget for 2015 is 4.5 trillion naira. Using this as specimen for next year’s budget, if 1.5 trillion of it is spent on welfare package for unemployed youths, that means 25 per cent of the whole budget is already taken. Meanwhile, more than 70 per cent of Nigeria’s budget is spent on recurrent expenditure.
Seventy per cent of 4.5 trillion is 3.1trillion. If we deduct this from the whole budget, we are left with 1.4 trillion for developmental projects. It is from this 1.4 trillion naira that the 1.5 trillion will be used for the payment of allowances for the unemployed youths, already there is a budget deficit. That means nothing is left for other developmental projects. APC has also promised to embark on massive infrastructural development across the country.
Even if the president will reduce the recurrent expenditure in the 2016 budget, it will be hard for government to reduce it by 50 percent. Even with this, what is left for other projects after the 1.5 trillion naira for unemployed youths has been deducted.
With this analysis, the sustainability of this welfare package may be doubtful unless the government has found a way of funding this package outside the budget.
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