Alternative Plan: How FG Can Use Social Intervention Fund to Accelerate Nigeria

It occurred to me that this current administration has only four years to make good on its agenda of CHANGE.

With over 1 year of that time spent already, the results so far did not look like the job of transforming Nigeria would be a walk in the park as the election campaigns made us all to believe. 

For example, if we take a look at the area of job creation for youth, from what I can see, not much has really changed in the lives of the average Nigeria youth as current unemployment rates grew worse to 51%.
Thankfully, the federal government of Nigeria seems to be getting their hands dirty trying to fix this. That's why I took interest in the N500billion social fund; the government's consolidated social intervention fund capped at N500billion that covers six aspects including: Teach Nigeria Scheme; the Youth Employment Agency; Conditional Cash Transfer; Micro Credit Scheme; Home Grown School Feeding; and Free Education Scheme for Science Students. I am aware that the smartest brain are behind this project, with direct supervision from the office of the Vice President, but I don't think this money will be well spent nor achieve any major benefit to the economy, based on how it is structured.

Let me explain.
A breakdown of the N500billion shows where the majority of the money will be spent. It might be of interest to you that the YES initiative (N10billion), building of 12 ICT hubs (N15million per one) and STEM programme have meagre allocation from the N500billion fund, yet these are what I expect to have the larger portion to help in creating new industries that will diversify our economy.

It literally seems that the bulk of the fund is for aids: feeding school children, and monthly allocations to others. While it is morally difficult to argue against supporting the less privilege, but how far do you think that the government's approach of giving aids to its own people instead of empowering them accelerate the economy?

Raise your hands if you think that all the aids that Africa received from US and Europe helped us out of poverty. Many of such aids never really transform the African economy like when the average citizen is empowered with skills.

The message at that level is “not to give aids, but to partner…..”. Andrew Rugasira, CEO of Good African Coffee said it better on CNN and his book tour interview, as he noted that “the solution to Africa’s economic challenges will only be met by Africans innovating and creating valuable products, services and brands at source”.

The same analogy applies to this N500billion “handout” as it seems that the bulk of this money will be spent as aids, and there are so many things that could go wrong, just like the recently scrapped fuel subsidy. But the critical questions to ask is "what values are created after spending half a trillion naira? "

One of the most incredible mathematical equations I learnt is the compound interest. The equation emphasizes the impact that time has on the value of money. So, we are not only destroying the value of the N500billion, we are also not taking advantage of what its future value could be, if spent wisely.

Partnerships not Aids: a new way of thinking CHANGE
I am of the school of thought that government should double up critical investment on socially empowering initiatives that focus on building talents that solve national problems, as these problems, if they remain unsolved will make us dependent as a consumer nation.

One of such social programme is YouWin! I am not in a hurry to say YouWin was successful, but a World Bank report and an expert analysis later, it looks like the world's Largest Business Plan Competition – YouWin! -compared favorably against benchmarks as a viable job creation tool.

We should implement more of these initiatives and build a structure to make it a critical part of our GDP acceleration programme. Mr President believes that agriculture holds an immense potential for the growth of our economy.

Yes, I agree, but I am biased towards technology, because tech entrepreneurship is responsible for the growth of the most developed economies of the world. That is why the baby steps we have taken in this direction by all agencies of Government, especially under the auspices of NITDA including #StartupFriday, Aso Villa Demo Day and Technology Exchange programme (i.e GOTEX), should be sustained.

We have a lot we can learn from other nations, including supposedly “developing” economies like Chile that started a tech acceleration programme dubbed StartUp Chile which annually brings the best startup founders to launch their programme in the Latin American country, and India who are are building a government that relies on Technology.

We must encourage and support the youth to innovate, and solve local problems with global excellence. This will come at a cost to government. In addition to grants; it will imply granting concession, tax-rebates and “free trade zone” status to early stage startups; encouraging local investors to invest in our startups by giving them tax breaks for those investments like what is obtainable in Europe where high-net individuals that invest in local startups and keep their investments up to three years can benefit from rebate up to 50%. In Turkey, it is reported to be as high as 100%.

But if you ask me, we barely compete on major metrics we should focus on to accelerate Nigeria through technology innovations, instead, we have joined other African countries in attempts to ban everything from the “social media gag bill” to stifling home-grown technology like Remita that wants to help government's finance become more transparent.

Another casualty of our policy is a young Nigeria with a marketplace business model for digital imagery using drones, but the policy against drone will never make his business to take off. And there are several of us, who are hurt, made lame and efficient just because we are waiting for light (PHCN) to be switched on so that we don't have to bear the burden of fueling and maintaining generators which for most of us take away 45% of our business expenses. Add to all these challenges, our "doing business" index is so bad to the extent that local startups are choosing to be incorporated in US or elsewhere with one of them Andela, almost getting it's Nigeria identity "lost in transit" due to this.

This is where I believe we should spend the better part of Nigeria's intervention fund and make policies to make it happen, so that we (the youth) can create the future for Nigeria.

AUTHOR BIO: Wole Ogunlade is a growth strategist for early-stage startups; he writes about growth marketing topics on his personal blog,SpokenTwice.com and also contributes to leading tech blogs in Nigeria and diaspora. He is a mentor at the 2nd edition of the Tony Elumelu Foundation programme for entrepreneurs. You can connect with him on LinkedIn or Twitter @spokentwice.