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19September2017

The benefits of a robust National Identity System are enormous


The new unified Identity Management System, which would be the outcome of the exercise, would provide a common database for both private and public institutions in the country thereby reducing the cost of data management in many public and private institutions in the country. With the data on the intended unified database accessible to all professionals and/or sectors across the whole economy, economies of scale should bring down cost. Hence, it is expected that the potential price to be paid by end-users of these data would be significantly competitive.

In addition, improvement in crime management on the part of law enforcement agencies, facilitation of wider financial inclusion on the part of the financial services sector, and elimination of multiple identities are immediate advantages to the people. The reduction or elimination of the prevalent scourge of ghost workers in both public and private sectors would be significantly aided by a robust identity database. The current national push for e-payment and e-governance should also receive a major push with a robust national identity management system. A robust national identity database with accurate social and demographic data would aid efficient planning and policy formulation at both the public and private sector levels.

 

Calamity of the past must be avoided

Nigerians remain sceptical about the genuineness of another round of national enrolment for a national identity project. It may be perceived as yet another white elephant project for siphoning billions of Naira from the national purse. The negative conclusion of the SAGEM transaction would be hard to erase in the memory of Nigerian elites. Though the level of infrastructure and partnerships are encouraging and indicate that the current process is genuine, the NIMC must ensure delivery on its mandate to change this mind-set amongst Nigerians. Unfortunately, it is currently running behind schedule as the first phase of enrolment, meant to commence at the end of the second half of the current year, is yet to kick off.

A robust, harmonised National Identity Management System would potentially provide a springboard for many economic and structural reforms that are being implemented in the country. In addition to checking crime and supporting the growth of financial inclusion, it would promote job creation and open up opportunities previously impeded by identity management challenges. Doing it right is the only way these benefits can be realised. The NIMC may set out by cleaning and harmonising the existing databases, thereby saving the nation significant funds in the process.

 

Successfully implemented across the Globe

In many developed countries, personal security numbers are essential features of the public personalities of citizens. They are used in the collection of taxes and other levies, redistribution of revenue, distribution of social services, public assistance to the needy, tackling of socio economic issues like unemployment amongst others. The existence of these numbers has supported speedy financial transactions and the depth of financial systems in these countries. While Britain uses a National Insurance number, the US makes use of the Social Security Number.

Among emerging countries, Brazil stands out as it has two different national identity systems. These are the Registro Geral (RG), a number associated with the official states’ residence ID card and Cadastro de Pessoas Fisicas (CPF), federal and supposedly unique (barring fraud) number. The RG numbers are assigned by the states and a few other government organizations, such as the armed forces. RG numbers are unique and identified by the state of issuance. The CPF on the other hand is federal and was created originally only for purposes of taxation. One or both numbers are required for many common tasks, such as opening bank accounts or getting a driver's license.

In September 2010, India's government embarked on a tremendously ambitious project to issue a biometric-based unique digital identity (UID) to each of its 1.2 billion residents. The goal is to connect hundreds of millions of "excluded" Indians with formal economic institutions. It is aimed at enhancing access of all country's people to banking, mobile services, healthcare and education while streamlining the country's massive welfare programs. At the end of 2012, an estimated 300m Indians may have been captured thereby bringing genuinely underprivileged and excluded households into the country's mainstream economic system for the first time.

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Fixing the Nigeria’s healthcare challenges will require more public spending

According to a study conducted by the IFC with assistance from McKinsey & Company in 2009, only a few countries in Sub-Saharan Africa are able to expend the WHO-determined average of US$35-US$50 (N5,250 - N7,500) per year per person on healthcare despite the surge in foreign assistance from several multilateral agencies and donors during that decade. The study estimated that over the next decade (2010 - 2020), US$25 billion – US$30 billion (N3.7 trillion - N4.5 trillion) in new investment will be needed in healthcare assets, including hospitals, clinics, and distribution warehouses, to meet the growing healthcare demands of Sub-Saharan Africa. The World Health Organisation (WHO) estimates that about 50% of Sub-Saharan Africa’s total health expenditure is financed by out-of-pocket payments from its largely poor people. It is therefore understandable that Sub-Saharan Africa with about 11% of the world’s population accounts for about 24% of the global disease burden in human and financial costs despite commanding less than 1% of global health expenditure. Globally, almost 50% of the deaths of children under five take place in Africa. In Nigeria, the Ministry of Finance reported that the resources available for delivering the essential health care package are about N3,848.00 (US$25.65) per capita. Low public spending on healthcare provides a huge opportunity to leverage the private sector in ways that will improve access and increase financing and the quality of healthcare goods and services throughout Africa.

The Nigerian healthcare sector shares the same attributes with its African peers

Infrastructure decay, brain drain, incessant workers’ strikes and low investments in the sector characterise healthcare services in Nigeria. Collectively, all tiers of the healthcare system have suffered. In 2011, national spending on teaching hospitals and federal medical centres is estimated at N204 billion; approximately 79% of the government’s health expenditure. However, only N20.25 billion (10% of total hospital expense) is allotted to capital expenditure in spite of insufficient medical equipment.

The structure of Nigeria’s public healthcare system is multi-layered

Public health care delivery system in Nigeria consists of a network of primary, secondary, and tertiary facilities. In 2005, the Federal Ministry of Health estimated a total of 23,640 health facilities in Nigeria of which 85.5% are primary, 14% secondary and 0.2% tertiary health care facilities. 38% of these facilities are owned by the private sector. This has not changed significantly since then. Primary care was largely provided through health clinics and dispensaries spread throughout the country. Secondary care is provided through general hospitals and maternity centres while tertiary care is handled through the university teaching hospitals.

Inadequate infrastructure and poor staff morale lead to poor service delivery in public hospitals

The target areas for mass procurement of medical equipment are the teaching hospitals. The absence of proper facilities and inadequate remuneration of public sector healthcare workers have resulted in the coexistence of privately-owned hospitals which cater to those who can afford them side by side with the public healthcare centres. In public funded hospitals, physical facilities are often decaying, and equipment is either obsolete or non-operational as a result of power challenges. The irony however, is that the few highly skilled medical professionals are often found in public employment but are almost always providing consultancy services in privately funded firms or in their own personal clinics.

Nigerian Health indicators are very poor

According to the Federal Ministry of Health, the health indicators for Nigeria are among the worst in the world. Nigeria shoulders 10% of the global disease burden and is making slow progress towards achieving the 2015 targets for the MDGs on healthcare. The health indicators in Nigeria have largely remained below country targets and internationally-set benchmarks due to weaknesses inherent in the system. Hence the government is convinced that a purposeful reform of the National healthcare delivery system is necessary. The government, thus, initiated a process that led to the development of the National Strategic Health Development Plan 2010-2015 (NSHDP) which was developed in a highly participatory manner in 2010.

 …But the National Strategic Health Development Plan (NSHDP) 2010-2015 has not taken off yet

The NSHDP 2010-2015, developed to strengthen the national health system and to vastly improve the health status of Nigerians, estimates that a total amount of N3.99 trillion (US$26.6 billion) would be required to reposition the Nigerian Health system over the 6 year period. Funding sources are limited largely to government spending at all levels, development partners via Official Development Assistance (ODA) and Non-Governmental Organisations (NGOs) and Philanthropists. 

Over the 6 year implementation period of the NSHDP, the estimated annual spending requirement is N666.16 billion. Unfortunately, in the first year of implementation in 2011, the total health sector budget is only N257.87 billion. This represents 5.75% of the total budget and less than half of the required annual spending. In addition, the National Health Bill upon which the spending is based is yet to become law. The rising competition for government resources continues to make it difficult for any sector to get the kind of guaranteed allocation that is proposed in the bill as well as potential increase in government expenditure to the sector in the future. The plan was delivered in August 2010 which was already eight months into its first implementation year. Therefore the plan already had a bad start and is unlikely to deliver results as intended.

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Nigeria’s education and health sectors can benefit from the Bolsa Família Model

Nigeria is a classic case of the paradox of growth without development. The record of sustained higher than peers GDP growth rates over the last ten years alongside a high incidence of poverty and unemployment, and dire health indicators and education statistics, is incongruous. Public allocated resources, in terms of budgetary and extra budgetary allocations to these critical sectors have been adjudged reasonable in most quarters even though they may be below international benchmarks.

Despite the high poverty in the land, the few government programmes that benefit the poor such as fertiliser and fuel subsidies are being threatened by fraud and corrupt practices and the debate as to whether there should be a welfare system for the public has come to the fore.

Poor health statistics compared to the average in Africa and other emerging economies

At 138 out of 1,000 births, the under-five mortality rate in Nigeria is higher than the African average of 127, similarly, 27% of children under five are underweight compared to the 20% African average. At 840 deaths per 100,000 births, the maternal mortality rate for Nigeria is substantially higher than the African average of 620 and Brazil’s 58. The proportion of births attended to by skilled personnel is 39% compared to an average of 57% for Africa. Due to the inadequacy of public health infrastructure and low affordability among the populace, many seek cheaper alternative methods.

Recent survey suggests that the Universal Basic Education programme is not achieving its objective

While the overall primary school enrolment and completion rates are impressive at 83% and 74% respectively, the statistics have been supported by data that is skewed to regions that are educationally advantaged. The most recent statistics suggest that over 4 million school age children are out of school in Nigeria and/or are engaged in one form of child labour or the other to support themselves and/or their families. This is despite the compulsory Universal Basic Education (UBE) programme which mandates compulsory first 9 years of schooling for all school age Nigerians. UBE receives statutory transfer status in the government’s annual budgetary allocation. 

Nigerian Poverty Incidence- hunger amidst plenty

Nigeria’s incidence of poverty is put at 57.61% on the average across four poverty measures. According to the National Bureau of Statistics (NBS) data, 40.63% of Nigerians are food poor, consuming an inadequate amount of calories per day; 60.48% are absolutely poor; 69% are relatively poor, spending less than two third of the total household expenditure; and 61% live on less than a dollar a day. This is compounded by an unemployment rate of 23.9% (2011) which also explains the high level of inequality in the country as indicated by the Gini coefficient of 0.447 in 2011. Gini coefficient is a measure of inequality in a country on a scale of 0 - 1 with 1 representing perfect inequality in terms of access to economic resources.

Addressing the poverty issue in Nigeria may require adopting the Brazilian Bolsa Familia model or a variant of it

There have been several attempts at providing social safety programmes in Nigeria in the form of pro-poor, women and/or employment programmes. Some notable ones that draw direct funding from the public budget include the National Directorate of Employment (NDE), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), National Poverty Eradication Programme (NAPEP), and in recent times YouWin and other women and child health related components of the Subsidy Reinvestment programme (SURE-P). A major concern however is the extent to which these programmes have produced the desired effects of employment generation, poverty eradication, and improved health for women and children in relation to the resources allocated to them each year.

Addressing this conundrum, in a country without a clear social security system that supports the poor and unemployed, requires an intelligent approach, especially in an environment where corruption is rife. In this regard, there have been suggestions that the ingenious approach developed and adopted by Brazil or a variant to suit the domestic situation could be adopted in Nigeria. The programme named Bolsa Família Programme (BFP) or family grant has been adjudged one of the most efficient social security systems globally by the World Bank. It is currently being recommended to other countries and has been adopted by the United States in New York's Opportunity NYC programme.

The Bolsa Familia Programme grants limited monthly income based on meeting specific conditions

The Bolsa Família Programme (BFP) was created in October 2003, through the merger of four pre-existing cash transfer programmes, in an effort to improve the efficiency and coherence of the social safety net and to scale up assistance to provide universal coverage of Brazil’s poor. The programme provides transfers ranging from 15 to 95 Brazilian Reals (R$) (US$7-45) per month to poor families. BFP is a conditional cash transfer programme that seeks to help reduce current poverty and inequality by providing a minimum level of income for extremely poor families, and break the inter-generational transmission of poverty. Eligibility for the transfers is based on beneficiaries’ compliance with three specific human capital requirements.

First, for a family to qualify for cash payments every month, children must stay in school until age 17, and attendance must be at least 85% up to age 14 and 75% thereafter. Secondly, children must get the full set of vaccinations in their first five years. And finally, mothers must attend pre and post natal care. The BFP programme targets poor and extremely poor families throughout the country. The adopted income ceilings for eligibility were set at a fixed monthly per capita family income of R$100 (US$48) for moderately poor families and R$50 (US$25) for extremely poor families.

The amount of transfer is basic; preventing recipients from making a substantial living on it

In setting the monthly amount, a number of factors were considered and the adopted value was set to ensure that the resulting benefits are simple to administer, favour the extremely poor, favour families with children – but with limits to avoid promoting fertility, and prevent eligible beneficiaries of the old programmes from losing out on the new programme. The BFP provides two types of benefits: basic and variable, according to family composition and income. All families in extreme poverty get the basic benefit regardless of demographic composition. Both extremely poor and moderately poor families receive a variable benefit based on the number of children in the family with a maximum of coverage for three and whether the mother is pregnant or breast-feeding.

Although the assistance unit is defined as the family as a whole, payments are made preferentially to the woman in each family as the legally-responsible beneficiary, as established by the BFP law. Hence, 93% of legally responsible beneficiaries are women. This preference reflects international experience that suggests that women are more likely to invest additional income in improving the education, health and welfare of their family, particularly their children, than men. 

Implementation of the BFP leads to improvement in Brazil’s economy and welfare status

The level of support is low, as it is designed to supplement income from jobs; however studies have shown that the injection of this cash into particularly poor communities is helping stimulate the local economy. According to the Fundaçao Getulio Vargas (FGV), a university in Brazil, the number of Brazilians with incomes below R$800 (US$440) a month has fallen more than 8% every year since 2003. The Gini index, a measure of income inequality, fell from 0.58 to 0.54, a significant fall by this measure.

Studies have also shown that the bulk of the money is spent on necessities such as food, school supplies, clothing and shoes. This is in contrast to the anti-cash transfer arguments that if you gave money to the poor, they wouldsimply spend it on alcohol. While only an 8% poverty reduction can be attributed to BFP benefits, the impact on the poverty gap and the severity of poverty has been stronger, and these have fallen 18% and 22% respectively. FGV and the World Bank argued that the BFP has also been efficient considering it has similar impact on poverty with the public pension scheme but at far lower cost.  On the broad indicators of education and health which form the core of the conditionalities in the BFP, Brazil parades one of the most impressive figures globally, especially on health.

Nigeria can benefit immensely by adopting the Bolsa Familia model

Nigeria may need to urgently review the myriads of poverty and employment programmes that benefit only a few, which currently run, and consider revising them into only one or a few effective ones that benefit many. Since Nigeria’s rank on the health and education performance scale is at the lower rung of the table and there is currently no social safety net to direct transfers to the poor, adopting a model similar to BFP could be hugely beneficial.

However, it must be noted that a transparent national identity database must precede any form of implementation of this programme as a functional requirement so as to minimise the likelihood of benefits ending up in the wrong hands. 

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