By Hussaini Abdu | Nigeria is currently undergoing one of its most consequential economic reforms in decades. The removal of fuel subsidies in 2023, the unification of the exchange rate, and ongoing fiscal consolidation measures are intended to correct long-standing structural distortions and restore macroeconomic stability.

Early indicators suggest some progress at the macro level: government revenues have improved, and the fiscal burden of subsidies, estimated at between N3 trillion and N4 trillion annually, has been significantly reduced.

Yet, these gains have come at considerable social cost. Inflation reached over 30% year-on-year by early 2024, with food inflation exceeding 35% in some periods.[1] The National Bureau of Statistics (NBS) estimates that over 133 million Nigerians, approximately 63% of the population, are multidimensionally poor.[2]

The World Bank warned in its June 2023 Nigeria Development Update that recent reforms could push additional millions of Nigerians into poverty without adequate mitigation measures. Subsequent estimates confirm this trajectory: by October 2025, approximately 139 million Nigerians were living in poverty, underscoring both the scale of vulnerability and the consequences of insufficient social protection.[3]

These outcomes were not unexpected. Economic reforms of this nature inevitably produce distributional shocks. The critical issue, therefore, is not whether reform should occur, but whether it is built on or accompanied by a credible social protection system capable of mitigating its predictable downsides. In Nigeria, this system remains weak, fragmented, and insufficient.

Why Social Protection Matters for Economic Reform 

Social protection is not merely a welfare intervention; it is a core component of economic governance, particularly in reform contexts. First, it serves as a shock absorber, preventing households from resorting to negative coping strategies such as reducing food consumption, withdrawing children from school, or selling productive assets. Second, it enhances the political sustainability of reform. Nigeria’s history, including the widespread protests following previous subsidy removals, demonstrates that reforms lacking credible social mitigation are vulnerable to public resistance. Third, social protection contributes to economic efficiency and inclusive growth. By stabilising consumption and boosting human capital, it supports long-term productivity and reduces inequality.

In this sense, social protection is not an alternative to reform. It is a necessary complement. It enables economic reforms by cushioning vulnerable populations, sustaining household consumption, and preserving social stability. Without credible social protection, reforms risk deepening poverty, eroding public trust, and ultimately becoming politically, socially and even economically unsustainable. 

Between Relief and Resilience: Dilemmas of Social Protection in Nigeria 

Nigeria’s approach to social protection is marked by enduring dilemmas that continue to constrain both its effectiveness and credibility. Central to these tensions is the challenge of balancing scale with precision, central coordination with subnational delivery, and short-term relief with long-term resilience. These dilemmas are particularly evident in the evolution of the country’s social protection architecture, especially the expansion of cash transfer programmes in response to recent economic reforms. While these programmes represent an important shift towards more structured forms of support, they also expose persistent weaknesses in targeting, coverage, institutional coordination, and public trust. As Nigeria seeks to strengthen its response to rising vulnerability, a clear understanding of these structural challenges is essential to rethinking how social protection, particularly cash transfers, can evolve from fragmented interventions into a coherent, development-oriented system. In this context, the following key dilemmas warrant close examination: 

  1. The Dilemma of Palliatives Approach

Nigeria’s response to the social consequences of economic reform continues to be framed in terms of “palliatives”, a fundamentally reactive and postmortem approach to social protection. In most cases, interventions are introduced after reforms have already been initiated, key actions taken, and their negative effects are being felt, rather than being built into the design of the reforms. They are therefore often short-term relief measures designed to cushion immediate hardship. 

The current reform cycle reflects this pattern. The removal of fuel subsidies and the liberalisation of the exchange rate were undertaken without a robust social protection architecture in place. As inflation surged and living conditions deteriorated, mitigation measures, particularly cash transfers, were introduced only belatedly. By this point, many households had already absorbed significant shocks and often resorted to harmful coping strategies.

In principle, cash transfers are among the most effective social protection instruments globally. Evidence from multiple countries shows that well-targeted transfers can reduce poverty, improve food security, and support human capital development. However, the Nigerian experience reveals significant limitations, such as: 

  • Inadequate coverage: While the National Social Safety Nets Programme (NASSP) is designed to reach millions of households, its coverage remains limited relative to the scale of need in a country of over 200 million people and widespread vulnerability. Government data indicate that although approximately 19.7 million households (about 70 million individuals) are captured in the National Social Register, only about 8–8.5 million households have actually received cash transfers in recent implementation cycles.[4]
  • Persistent Targeting Challenges: Nigeria’s National Social Register (NSR), though an important step forward, remains incomplete and uneven in quality across states. While the register is estimated to cover about 19–20 million households (roughly 70 million individuals, about half of those living in poverty), this still leaves a significant proportion of the poor and vulnerable outside the system.[5]Also, variations in data quality and validation processes across states undermine data reliability. The result is a dual problem of exclusion errors, in which deserving households are left out, and inclusion errors, in which benefits are captured by less vulnerable groups.
  • The real value of transfers has been eroded by inflation. In an environment where food prices have surged dramatically, the purchasing power of cash transfers has declined, limiting their ability to effectively cushion households. 
  • Challenges of transparency and trust undermine legitimacy. Public concerns about politicisation, uneven distribution, and weak accountability mechanisms continue to affect confidence in the programme.

These limitations reflect a deeper structural problem, the persistence of a palliative logic that prioritises short-term relief over systemic resilience. As such, the challenge is not merely one of programme design, but also of timing and underlying philosophy. Social protection in Nigeria is treated as an afterthought, deployed to manage the fallout of reform rather than to anticipate and mitigate its impacts. This palliative logic undermines both the effectiveness of social protection and the sustainability of reform. A more credible approach requires that social protection be factored into reform from the outset, with systems and institutions in place before, not after, economic shocks are transmitted to households.

  1. Dilemma of Institutional Misalignment

A deeper structural issue is also the institutional location of social protection within the Federal Ministry of Humanitarian Affairs and Poverty Alleviation. This placement reflects and reinforces a conceptual framing of social protection, especially the cash element, as a humanitarian concern rather than a development imperative.

Humanitarian systems are designed for crisis response. They are typically short-term and reactive. While they play a critical role in emergencies, they are not well-suited to delivering large-scale, permanent, and predictable social protection systems. By situating social protection within a humanitarian framework, Nigeria risks perpetuating a cycle of episodic interventions instead of building a durable social protection system. This institutional arrangement also weakens policy coherence, as social protection becomes disconnected from broader economic planning, labour market policy, and development strategy.

Globally, countries with effective social protection systems, such as Brazil, Indonesia, and South Africa, have embedded these systems within central economic or social development institutions, ensuring strong alignment with national development priorities.[6] In these contexts, social protection is treated not as a peripheral welfare function, but as a core instrument of economic policy, supported by clear legal frameworks, sustainable financing, and robust administrative systems. This institutional positioning enhances policy coherence, strengthens accountability, and enables programmes to operate at scale with greater efficiency and impact. Nigeria’s current arrangement falls short of this standard.

  1. Dilemma of Fragmentation and Underinvestment

Despite repeated policy commitments, Nigeria’s social protection system remains severely underdeveloped. Public spending on social protection is estimated at about 0.14% of GDP[7], far below both global and regional benchmarks. World Bank data indicate that the global average for social assistance spending is around 1.5-3% of GDP, with Sub-Saharan Africa averaging about 1.1%, while better-performing emerging economies invest even more.[8] This gap becomes even more striking when measured against adequacy benchmarks. The International Labour Organisation estimates that Nigeria would need to invest an additional 3-4% of GDP annually to achieve a basic universal social protection floor.

More fundamentally, social protection in Nigeria has yet to be institutionalised as a rights-based and system-driven framework. Unlike countries where social protection is anchored in law and guaranteed as a minimum entitlement, Nigeria’s approach remains largely programme-driven, discretionary, and vulnerable to political cycles. As a result, access to social protection is often uneven, episodic, and contingent on shifting policy priorities, rather than embedded within a stable and accountable social contract between the state and its citizens. It is even worse at the state level, where programmes remain fragmented across multiple agencies and tiers of government, with weak coordination and overlapping mandates. This fragmentation is compounded by corruption and limited administrative capacity. 

  1. Dilemma of Federal Structure

One of the most persistent and under-examined constraints to effective social protection delivery in Nigeria is the structure of the federal system itself. The challenge is not just administrative; it is deeply political and reflects tensions between central authority and subnational autonomy.

On the one hand, social protection programmes in Nigeria have historically been highly centralised, designed and coordinated at the federal level. This centralisation often weakens delivery. Federal institutions are distant from communities, lack a granular understanding of local vulnerabilities, and are often constrained in their ability to ensure last-mile implementation. As a result, programmes risk becoming bureaucratic exercises, detached from the lived realities of the people they are intended to serve.

On the other hand, attempts to decentralise implementation to state governments have produced mixed, and often troubling, results. While decentralisation aligns with Nigeria’s constitutional structure and, in principle, enhances responsiveness, it is easily undermined by weak institutional capacity, political interference, and uneven commitment across states. In some cases, social protection programmes are poorly implemented; in others, they are captured by local political interests or not implemented at all. This creates significant geographic disparities, where access to social protection becomes contingent on the priorities and capacities of individual state governments. These dual challenges, of centralised inefficiency and decentralised inconsistency, have contributed to the fragmentation of Nigeria’s social protection landscape.

International experience suggests that the solution does not lie in choosing between centralisation and decentralisation, but in carefully balancing both. Effective social protection systems are typically anchored in a strong national framework that sets policy standards, defines eligibility criteria, establishes financing mechanisms, and ensures data integrity. At the same time, implementation is devolved to subnational levels, where local knowledge and proximity can enhance targeting and service delivery.

Towards a Beter Approach to Social Protection 

Addressing the structural weaknesses in Nigeria’s social protection system requires a shift from fragmented, reactive interventions to a coherent, well-financed, and institutionally grounded framework. The following priority actions are critical to achieving this transition: 

  • Set the Social Protection Floor: Central to this shift is the establishment of a national social protection floor that guarantees minimum levels of income security and access to essential services for all citizens. This means ensuring that no one falls below a basic threshold of well-being, through measures such as income support for vulnerable households, access to healthcare, child and family benefits, and protection for the elderly and those unable to work. This approach aligns with the International Labour Organisation’s Social Protection Floors Recommendation (No. 202), which calls on countries to establish nationally-defined systems that provide universal, rights-based guarantees of basic social security across the life cycle.[9]Such a system should combine broad-based coverage with targeted depth, ensuring that large segments of the population are protected while providing additional support to those facing extreme vulnerability. 
  • Link Protection to Livelihoods and Economic Participation: A modern social protection system must go beyond protection to support resilience and economic inclusion. This involves integrating cash transfers with programmes that promote livelihoods, such as skills development and vocational training, support for micro, small, and medium enterprises and agricultural inputs and extension services. Evidence from “graduation programmes” in countries like Ethiopia and Bangladesh shows that combining transfers with productive support can significantly improve long-term outcomes.[10]In Nigeria, such an approach would help transition households from vulnerability to self-reliance and reduce long-term dependence on transfers.
  • Earmark and Increase Funding for Social Protection: Financing remains a central callenge but also presents an opportunity. The fiscal space created by subsidy removal provides a potential resource base for scaling up social protection.However, this requires deliberate policy choices, including earmarking a defined share of subsidy savings for social protection, strengthening domestic revenue mobilisation, and improving efficiency in public expenditure. The World Bank estimates that reallocating even a modest share of subsidy savings could significantly expand social protection coverage in Nigeria.[11]Ultimately, social protection must be treated as a core public investment, essential for both social stability and economic growth.
  • Strengthen Data and Delivery Systems: Addressing these gaps requires stronger data and delivery systems, including regularly updated social registries, integrated digital identification, and transparent payment platforms. Strengthening the National Social Register through continuous updates, independent verification, and closer linkage with digital ID systems is particularly critical.

Improving data integrity and ensuring interoperability across federal and state platforms will enhance targeting accuracy, reduce leakages, and minimise both exclusion and inclusion errors. Ultimately, a more reliable and transparent data ecosystem will not only improve programme effectiveness but also rebuild public trust and confidence in social protection delivery.

  • Reposition Social Protection within a Development Framework: Social protection should be repositioned from a seemingly humanitarian function to a core component of national development policy. This requires institutional realignment, either by anchoring social protection within a central economic or planning institution or by establishing strong cross-government coordination mechanisms. Such repositioning will ensure policy coherence, long-term planning, and alignment with broader development objectives.

  • Establish Decentralised and Inclusive Accountability Mechanism: Nigeria requires a multi-level governance model for social protection that combines strong federal leadership with effective state-level delivery. The Federal Government should provide policy direction, co-financing, and standard-setting, while states implement programmes within a nationally-defined framework that ensures consistency and equity. Without such a balance, social protection risks becoming either overly centralised and disconnected from local realities or excessively decentralised and uneven in access and quality. Resolving this federalism dilemma is therefore critical to building a system that is both scalable and credible.

For decentralised delivery to be effective, it must be underpinned by robust accountability mechanisms. This includes clear performance benchmarks for states, transparent reporting systems, and independent oversight. Importantly, accountability processes and structures should extend beyond government institutions to include civil society organisations, community structures, and the private sector to monitor implementation, validate beneficiary lists, and ensure that programmes reach intended populations.

These specific recommendations point to a necessary shift in Nigeria’s approach to social protection, especially the cash system, from fragmented, reactive interventions to a coherent, well-governed, and adequately financed system. The challenge is not simply to expand programmes, but to build a framework that is predictable, transparent, and aligned with broader economic policy. By embedding social protection within the design of reforms, strengthening institutions and data systems, and ensuring accountability across all levels of government, Nigeria can move from managing crises to building resilience. Ultimately, a credible social protection system is not only a moral imperative but also a strategic investment in social stability, economic inclusion, and the long-term success of reform.

Conclusion 

Nigeria stands at a critical juncture. Economic reforms are necessary, but their success and sustainability depend on how their social consequences are managed. The current reliance on palliatives, weak institutional arrangements, and limited coverage risks deepening poverty and undermining the legitimacy of reform. However, a well-designed and adequately-funded social protection system can transform reform from a source of hardship into a pathway for inclusive development.

The choice is therefore between reform that excludes and destabilises, and reform that is inclusive and protective. A shift from palliatives and humanitarian system to a development strategy is both urgent and indispensable. Only then can Nigeria ensure that economic transformation delivers macroeconomic stability, dignity, resilience, and shared prosperity.

--Dr Hussaini Abdu, an international development and humanitarian specialist, is the Country Director of CARE International in Nigeria.

 

[1] National Bureau of Statistics (NBS), Consumer Price Index Report, 2024.

[2] National Bureau of Statistics (NBS), Nigeria Multidimensional Poverty Index Report, 2022.

[3] World Bank, Turning the Corner: Nigeria Development Update, 2023. World Bank, Nigeria Development From Policy to People: Bringing the Reform Gains Home: Nigerian Development Update, 2025. 

[4] Business Day, “FG Disburses N330bn in Cash Transfers to Poor Households”. September 18, 2025. 

[5] See “NSR Coverage Across Nigeria” on https://nassp.gov.ng/nsr/nsr-coverage-across-nigeria.

[6] International Labour Organisation (ILO), World Social Protection Report 2020–2022.

[7] World Bank, The Social Safety Net in Nigeria. 2025. 

[8] World Bank, Ibid, 2025. 

[9] International Labour Organisation, “Social protection floors in the post-2015 agenda: Targets and Indicators, Policy Brief, 2015. 

[10] Banerjee, Abhijit et al., “A Multifaceted Programme Causes Lasting Progress for the Very Poor,” Science, 2015.

[11] World Bank, Seizing the Opportunity, Nigeria Development Update, 2023