Senator Jimoh Ibrahim (APC Ondo South) has called on the Federal Government to consider food vouchers as a solution to curb the mismanagement and corruption surrounding annual palliatives allocated to poor Nigerians.
The senator, who chairs the Senate Committee on Inter-Parliamentary Affairs, shared his multi-dimensional economic solutions during an interactive session with journalists covering the Senate on Wednesday.
Ibrahim argued that the introduction of food vouchers would not only help end the inefficiencies associated with palliative distribution but also address food insecurity across the country. He suggested that the vouchers, if issued by the Federal Government, could be distributed to Nigerians in all 36 states and 774 local government councils, ensuring that aid reaches those in need while reducing waste and potential misuse of funds, according to Independent.
He pointed out that the Federal Government currently allocates about N15 billion annually in palliatives to state governors, but this often leads to mismanagement or outright diversion of funds. In contrast, Ibrahim proposed that food vouchers would directly address the issue of food insecurity while helping to improve Nigeria’s cash-to-GDP ratio, which he described as currently very low at 1.5%.
The senator explained that the cash-to-GDP ratio represents the amount of currency in circulation compared to the country’s Gross Domestic Product.
According to Ibrahim, Nigeria’s ratio is notably lower than that of many developed nations, which typically have ratios between 5% and 10%. He acknowledged that the current administration, under President Bola Tinubu, has made efforts to improve this ratio, increasing it from 1% to 1.52%. However, he emphasized the need for further progress through strategic policies and reforms.
Ibrahim also highlighted the importance of taxing the wealthy more effectively, particularly individuals who indulge in luxury purchases such as private jets, expensive cars, and properties in exclusive locations like Dubai. He stressed that the rich in Nigeria are under-taxed and that addressing these gaps would help create a more balanced and equitable economic system.
“Food Vouchers if introduced and issued by the federal government to poor Nigerians across the 36 States of the Country and 774 Local Government Councils would serve the purpose which is meant for as against N15billion palliatives given to State governors by the Federal Government with attendant mismanagement or even outright diversion
“Secondly, Since our Cash to GDP ratio in Nigeria is very small, Food vouchers will replace Naira for food purchase by the poor or any Nigerian given.
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“Cash to GDP ratio means country’s currency in circulation to its Gross Domestic Product.
“It is calculated by dividing the amount of cash in circulation by the Country’s Gross Domestic Product , which is very low in Nigeria , compared to many other countries , particularly the developed ones, with 5 to 10% ratio.
“The Present administration headed by President Bola Tinubu, inherited an economy of cash to GDP ratio of 1% and has succeeded to increase it to 1.52% , and putting a series of well envisioned policies and reforms on ground for further increase.
“As laudable as the efforts of President Tinubu are in turning the Nation’s economy around there is a need for the government to buy into the strategic idea of issuance of food vouchers to poor citizens as palliatives and also tax rich more.
“In fact, the rich in Nigeria are under taxed particularly those buying and using luxury things like private jets, highly expensive cars and buying houses in Dubai and other exclusive places in the world.
“In a nutshell, the rich in Nigeria need to pay more taxes and those lacuna need to be tackled”, he stressed.