Universal Basic Income: A Strong Case for Nigeria
According to the National Bureau of Statistics, in Q3, 2016 18.3 million of the youth (15–34 years) labour force population of 40.16 million were unemployed or underemployed.
Yes, 18.3 million!
Unemployment / Underemployment in Nigeria is a national emergency.
Could the Unemployment / Underemployment figures be an opportunity to grow the economy and industrialize at an accelerated and unprecedented pace?
Perhaps, if Universal Basic Income is explored.
The concept of a Universal Basic Income and its merits are addressed here:
The Federal Government should pay NGN50,000.00/month (NGN600,000.00/year) to each Unemployed / Underemployed Youth.
This conservative amount is guided by unofficial estimates that the average monthly salary in Nigeria is between NGN75,000.00 — NGN100,000.00.
The Federal Government will continue to inject this Universal Basic Income over the next 12 years.
The 12 years duration also coincides with projections that global demand for crude oil is going to drop 70% in 12 years.
From the table above, paying an average 6.075 million Unemployed / Underemployed Youths every year will cost the Federal Government NGN43.740 trillion (NGN3.645 trillion/year) over 12 years.
HOW TO PAY FOR IT?
1. Provide each Unemployed / Underemployed Youth with a National ID Card that can store value for the purposes of being used as a Payment Card.
2. Every month, each Unemployed / Underemployed Youth shall be required to go to their Deposit Money Bank (DMB) to load each card with Credit Points worth NGN50,000.00. Hardware shall be provided to the DMBs.
3. Every month, each Unemployed / Underemployed Youth shall be required to spend ALL of the Credit Points on goods and commodities sold by designated Participating Retail Business Entities (PRBEs).
4. All authorized goods and commodities shall be “Manufactured in Nigeria” and special Point of Sale (PoS) hardware that enforces that only goods and commodities “Manufactured in Nigeria” are purchased shall be provided to each PRBE.
5. All goods and commodities “Manufactured in Nigeria” shall be supplied by Participating Job Creation Manufacturers (PJCM).
6. With the GUARANTEED NGN43.7 trillion Revenue Growth expected over 12 years across the sectors the PJCMs operate in, the PJCMs shall be tasked to supply PRBEs with goods and commodities “Manufactured in Nigeria” and to create a MINIMUM of 18.3 million new jobs over 12 years.
7. Each PJCM shall be tasked to employ, train and pay a minimum wage of NGN75,000.00/month (NGB900,000.00/year) to each Unemployed / Underemployed Youth who once employed under the arrangement no longer qualifies for the next round of Universal Basic Income payout.
8. Over 13 years, the 18.3 million created jobs would have grown the National Payroll in the Nigerian economy by NGN164.97 trillion.
9. Over 14 years, NGN48.303 trillion in revenue collections would have been generated for the Federal Government i.e. Company Income Tax (CIT @30%): NGN13.122 trillion, Personal Income Tax (PIT @20%): NGN32.994 trillion, Value Added Tax (VAT @5%): NGN2.187 trillion.
10. In 13 years, the Principal of the NGN43.740 trillion invested by the Federal Government over 12 years would have been paid back. However, the revenue collections shall continue for the Federal Government.
This is not a bad deal.
The figures projected here will reduce Youth Unemployment / Underemployment, can accelerate industrialization by boosting aggregate consumer demand for goods and services through revenue and payroll growth, leading to an economic growth boost and the taming of the inflation gorilla.
Nigeria today may be a very strong case for Universal Basic Income.