• Business - Economy
  • Updated: November 25, 2020

Why Next N-Power Batch Is Not Priority For Government Again

Why Next N-Power Batch Is Not Priority For Government Again

It is no secret that N-Power and Survival Fund are two different social investment programmes, even though both are meant to protect jobs and reduce unemployment. The government uses N-Power and the Survival Fund for different reasons, but recently, the government has been silent on the next batch of N-Power beneficiaries.

The N-Power programme began four years ago with President Muhammadu Buhari using the N-Power scheme as a way to reduce unemployment in Nigeria. The N-Power Batch A were registered and employed into various fields such as teaching, agro, and other sectors, with the N-Power beneficiaries earning the minimum wage, which is now NGN30,000.

The N-Power programme has produced two sets; Batch A and Batch B, however, since the government received applications for Batch C, applicants have been left in the dark, wondering if the government no longer considered N-Power essential to its economic plan or vision.

READ ALSO: Next N-Power Batch To Benefit From Finance Bill 2020

Events That Shows Government Is Gradually Ending N-Power

In as much as N-Power has been able to support lower class households across the country, it is important to know that every good thing has an end - that is what is happening to N-Power. When the programme started, each N-Power batch was meant to last for two years, but the timeframe was extended to four years.

Many thought this was because of the 2019 election, as N-Power Batch A remained in the programme for four years before exiting this year June. The four-year period wasn't extended to the Batch B set, which began the N-Power programme in 2018. The Batch B set used the original timeframe on the programme, exiting in July, a month after Batch A ended their four-year run.

The exit of Batch A and Batch B was likened to a push-out or termination of contract, as the government didn't provide N-Power beneficiaries exit packages as promised - they were pushed into the unemployment market; Nigeria's unemployment rate rose to 21.7 million in August 2020.

Now, in the second tenure of Buhari, the government has further reduced the N-Power period to between six months and one year, depending on which sector a beneficiary is placed in. Beneficiaries placed in Agro will use six months on the N-Power programme, while beneficiaries in other sectors have one year.

READ ALSO: Bank Loans Female N-Power Beneficiaries Can Apply For

Noticed the timeframe reduced gradually over the years? From four to two years to one year, then six months. The government is gradually winding down the N-Power programme, reshuffling its priorities.

Buhari Not Ready To Fight Two Battles

The government is not ready to fight two battles at a time. The government's COVID-19 strategy is to retain jobs, while pausing its effort to create new ones, hence, the silence on N-Power Batch C intakes. Currently, the government's sight is set on ensuring small businesses remain operational.

That's why the Survival Fund applicants have gained more attention from Buhari's government than N-Power has in recent months. You might wonder why the Survival Fund is so important, that's because SMEs are the engine room of Nigeria's economy.

SMEs in Nigeria contributed 48% of the country’s gross domestic product (GDP), while 96 percent businesses in Nigeria are SME and account for 84 percent of employment in Nigeria, according to a August report by SME360. In order to prevent the economy from collapsing, the government initiated the MSME Survival Fund.

So, from October to December, Survival Fund beneficiaries will take the front row of government's disbursement of social investment programme salaries. AllNews gathered that the government is targeting 500,000 beneficiaries.

Note that the Survival Fund is meant for small businesses to continue operation and prevent them from sacking their staff, so payment of up to NGN50,000 will be given to each employee during a three-month period.

READ ALSO: Unity Bank's Investors' Confidence Unstable Amid Q3 Earnings

The portal for registration began in September, but verification is still ongoing. Lagos State will account for about 25,000 beneficiaries, Kano will have 17,000 beneficiaries, Abia will get 16,000, while other states will get 13,000 beneficiaries each.

Factors That Could Affect N-Power's Longevity

The reduction is coming at a time when the government is cutting cost due to an economic downturn caused by the COVID-19 pandemic and the recession the country is currently experiencing, which will last for about three months.

Nigeria's debt is rising. AllNews had reported that as at March this year, Nigeria's total debt stood at NGN28.628 trillion but grew by N2.381 trillion to reach N31.009 trillion at the end of June 2020. The government is still planning to borrow N4.28 billion, and by December 2021, Nigeria's debt is expected to hit N38.6 trillion.

Sadly, the majority of this loan will go into salary payment of government workers and servicing debt owed by Nigeria, leaving little for capital investment. Also, the revenue generation of Nigeria crashed due to the COVID-19 and lockdown, hence the recession.

So with the government having a revenue problem and a rising debt issue, it wil be cutting cost and doing away with what it considers "less important". So it's no surprise that N-Power duration has been reduced from four years to six months.

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