Translating Fiscal Windfall into Welfare for the Poor and Vulnerable Population in Nigeria

BY MATTHEW MEGWAI

Nigeria’s fiscal structure is changing in ways that present both opportunity and responsibility. According to the World Bank, state governments collectively received ₦5.3 trillion from the Federation Account Allocation Committee (FAAC) last year, surpassing the ₦5 trillion share that went to the Federal Government.

This is more than a financial milestone; it is a call to action. With greater revenue flowing to the states, the real work of tackling poverty, inequality, and social vulnerability must take centre stage where it matters most, at the state level.

When Poverty Lives Next Door

The reality of poverty in Nigeria is local. It is in the rural communities where children drop out of school because parents cannot afford fees, and in urban slums where families skip meals to survive. The latest Nigeria Development Update (NDU) paints a grim picture: coverage of social safety nets dropped from 19% of the population in 2018/19 to just 6% in 2023, following the suspension of major social investment programmes like N-Power, the Home-Grown School Feeding Programme and GEEP at the time by Nigerian government.

While the Federal Government’s ₦550 billion allocation for social protection in the 2025 national budget is commendable, it still represents only 0.14% of Nigeria’s GDP, a fraction of the 1.5% global average. The World Bank has proposed a feasible intervention: monthly cash transfers of ₦22,500 to the ultra-poor at an annual cost of ₦2.5 trillion. Other African countries like South Africa, Ethiopia, and Rwanda have demonstrated that consistent social protection investments can stimulate local economies and drive inclusive growth.

Rising Costs, Shrinking Protection

The removal of fuel subsidies, exchange rate unification, and persistent inflation have combined to worsen the living conditions of millions. The National Bureau of Statistics (NBS) estimates that 133 million Nigerians are multidimensionally poor, a number that continues to grow daily.

Despite government promises, many beneficiaries of the National Social Safety Nets Programme (NASSP-SU), targeting 15 million households or roughly 75 million vulnerable Nigerians, are yet to receive payments. The official explanation has been delays in NIN validation. But behind these statistics lie real stories of families going hungry, children missing school, and preventable deaths due to lack of access to basic medication.

Every delay in delivery of social protection comes at a human cost.

States Must Take the Lead

With FAAC allocations at record highs, state governments now have both the resources and the moral duty to prioritize social protection. This is not merely about spending more, it is about spending smarter, reaching vulnerable population in rural communities, with transparency and coordination.

Yet, most states still lack functional social protection frameworks. In many cases, existing programmes are fragmented, uncoordinated, or without the backing of law. The absence of a unified approach undermines efficiency and accountability.

For Nigeria to achieve meaningful poverty reduction, social protection must be institutionalized at the state level, backed by legislation, funded through state budgets, and monitored with citizen participation.

What Must Be Done

• Accelerate Beneficiary Validation: Fast-track the NIN verification process to ensure timely delivery of cash transfers to verified households.
• Restore Key Programmes: Reactivate suspended programmes such as School Feeding, GEEP, and N-Power to ease the burden on vulnerable families.
• Promote Transparency and Accountability: Strengthen public oversight, open data reporting, and community-based monitoring of all interventions.
• Institutionalize Monitoring and Redress: Build credible feedback and grievance mechanisms, complemented by third-party evaluations.
• Increase State Budgetary Commitment: Dedicate a clear percentage of state revenues to social protection programmes that complement federal efforts.
• Legal and Structural Reforms: Pass and implement Social Protection Laws in states where they are missing and ensure effective coordination through state-level social protection agencies or steering committees.

Seizing the Moment

Nigeria stands at a crossroads. The surge in revenue to the states presents a rare opportunity to translate fiscal gains into human development. If well managed, this could be the beginning of a new era, one where growth is inclusive, and every citizen, regardless of status, is protected from the shocks of poverty.

But if states fail to act, this moment will slip away, leaving millions further behind the poverty line.

It is time for leaders at the subnational level to move from rhetoric to results. Translating fiscal windfall into welfare for the poor and vulnerable population, which is not just good economics, it is a moral imperative.

The Act Naija! Project being implemented by a consortium of Bread for the World, ANEEJ and NISD, and co-funded by the European Union, continues to advocate for inclusive governance and effective social protection systems across Nigeria. The project works with civil society, media, and government actors to strengthen accountability, promote transparency, and ensure that social protection truly reaches those who need it most.

Mr. Matthew Megwai is the State Programme Officer of the ActNaija Project in Enugu State, Nigeria.