Monday, December 21, 2015

The mathematics of PMB'S unemployment allowance

Out of the many campaign promises made by the President during the 2015 elections, one of them has become a thorn in his flesh. The promise to pay 25million unemployed graduates an allowance of N5,000 monthly has been on the radar ever since President Mohamadu Buhari won the elections.

Some people, including the PDP, have consistently said that this was an election promise that was never going to be kept. Others wondered where the money to pay this allowance will come from considering the fact that the economy of the country is at its lowest ebb since independence.

Despite all of these comments and noises, the former Publicity Secretary of the APC, now Minister of Information and communication, Alhaji Lai Mohammed has consistently maintained the determination of the Federal Government to pay this money.

While I am all for anything that will make life a little less difficult for the unemployed or the vulnerable, other questions are at the same time bothering my mind. The first is, how do we validate the actual number of people who should be paid? The Government says unemployed graduates; so this means that you must have gone through any institution of higher learning. Why do we exclude those who went to technical colleges or only have just finished secondary school education? Unemployment is unemployment, even if the guy did not attend any kind of school.

The next thing is how do we find out if they are working or not. How do we determine if someone is working, if he says he is not?  Then we also have to contend with working out from which generation of unemployed graduates we are going to start from. What about those who had worked previously, but are now out of a job? Are we going to consider them too?

These are valid questions, but I suppose those who made the promises would also have considered these questions, and I am sure that they are smart enough to have figured out a way to do it. However, the one thing that makes me a bit concerned beyond the logistics of paying the money is the mathematics or even the economics of it.

Let’s start this way. N5000 naira monthly for 25million persons will come to roughly around 125 billion naira monthly, which comes to 1.5 trillion naira yearly.

At 125 billion naira monthly, this sum is more than the annual budgets of many states in the federation. Only Rivers, Lagos, Bayelsa and perhaps a few others have annual budgets that is more than this figure.

At 1.5 trillion naira yearly, this sum is about 33% of our annual budget as a nation, excluding for 2016 where we are spending more than 8 trillion naira. Thus if you look at it, this sum is huge.
Now let’s talk about what 5,000 naira can do for an unemployed youth. At best, it will starve off serious hunger. At 200 naira per meal, the guy will only be able to eat once a day for about 25 days, meaning that this money will note even last him the month on feeding alone if he stretches his meal to once a day.

He cannot recharge his phone, buy soap, toothpaste, or other toiletries. He cannot do a lot of things with 5,000 and we are still talking about necessities here.

If we look at the total sum, 125 billion naira monthly poured into capital projects in roads, rail, power, or in agriculture will significantly change the face of our economy. By the time we spend 1.5 trillion additional monies in one year to provide the much needed upgrade to the infrastructure in the power sector alone, the majority of these unemployed people or even vulnerable will no longer be unemployed or vulnerable.

I think if the government goes along with this charade, it will only be playing to the gallery, and this will be a gross misuse of public funds. If this fund is however poured into projects or services (like improvement of our health infrastructure, or into national health insurance schemes), we will have solved huge problems for not only the unemployed and vulnerable, but for the entire nation.

Instead of burying their heads in the sand, the party and the administration needs to reverse this agenda, and use the money more wisely. There is no shame in admitting your errors and reversing the decision. A stitch in time saves nine.


* This article also appeared as a feature on www.ph-microscope.com

1 comment:

You don't have to make a comment, but if you do, please make it sensible. Life is too short for unreasonable comments. Thank you