The Need for NEAT

Despite abundant human and natural resources, endowments, and potential for strong economic growth and regional leadership, Nigeria’s long-term prospects have been hampered by the failure to consolidate effective systems of democratic governance, misguided policy choices, and glaring inefficiencies in distributing social and economic benefits to citizens. Key challenges include: moribund public infrastructure; pervasive corruption; widespread poverty and unemployment; inadequate access to education, healthcare, and other basic human needs; a rising trend of violence; and the absence of public accountability for the massive oil rents that have defined the country’s economy and politics for over four decades.^[1]

Socioeconomic challenges. Currently in the throes of a profound socio-economic crisis, Nigeria’s government is faltering in its aspiration to lift more than 100 million Nigerians out of poverty in 10 years. The National Bureau of Statistics in its 2020 Q4 Labor Force Statistics reported that 22.3 million out of the 69.7 million (32%) of the active labor force were unemployed.^[2] As of November 2022, the Bureau also puts Nigeria’s poverty figure at over 133 million Nigerians, or 63% of the country’s population.

Several interstate roads across the country are in deplorable condition. Access to basic education, health care, and other infrastructure—such as electricity, safe drinking water, and improved sanitation—is still a challenge. To illustrate this, a new UNESCO report estimates that 20 million Nigerian children of school age are out of school.^[3] On top of this, Nigeria is currently witnessing a rising trend of violence, revealing deep cracks in society and casting doubts on aspirations to national cohesion and identity. While hundreds of ethnic groups struggle to find commonalty within colonially imposed borders, it is the Hausa and Fulani in the north, the Yoruba in the southwest, and the Igbo in the southeast that predominate. This is complicated by religious identities, across Muslim versus Christian lines. With Nigeria facing so many problems simultaneously, sustainable support for the CSOs working to advocate for improvements and fill service gaps is critical.

Pervasive corruption. Nigeria is one of the worlds’ more corrupt countries, ranking 150^th out of 180 countries in the 2022 Corruption Perceptions Index by Transparency International. The country’s poor socioeconomic profile is often blamed on corrupt mismanagement of resources at all tiers of government and through successive administrations. Corruption has also been identified as a major obstacle to Nigeria’s efforts to make progress toward the Sustainable Development Goals. This corruption is one reason why the target asset classes have not been successfully managed in the past, and a strong argument has been made that alternative approaches—such as that proposed by the NEAT Initiative—are needed.

HOW WOULD NEAT ADDRESS THESE ISSUES?

Nigeria’s third sector is crucial to addressing the twin challenges of socioeconomic development and corruption. However, Nigerian CSOs rely disproportionately on international donors. More than 500,000 organizations registered at national, state, and local levels have to compete in the space for scarce donor funds. Even so, Official Development Assistance (ODA) to Nigeria has declined from a peak of $11.43 billion in 2006 to just $3.38 billion in 2020.^[4] But despite so-called donor fatigue, CSOs continue to offer invaluable services and to fill gaps in state interventions.

The deterioration of the Government of Nigeria’s capacity over the years and the inability of the domestic business sector to effectively compensate for a “rolled-back” state has meant that CSOs have had to increasingly step in to fill gaps in public service delivery in addition to playing their demand-side roles. In fact, many CSOs have developed comparative advantages in delivering social services in areas such as basic education, public health, and water, sanitation, and hygiene (WASH). Others have achieved remarkable success in influencing reforms.

As producers of public goods, many CSOs are unable to charge fees for their services. This is complicated by their inability to accept funding from sources that could limit their independence and contradict their positions on the issues they represent. Such positioning limits funding sources, especially for advocacy organizations, but also for the many CSOs that need sustainable funding streams to support their work providing vitally needed socio- and economic-development services.

With these challenges in mind, there has been increasing dialogue in Nigeria on the need to localize the aid architecture. It is widely agreed that—beyond building local ownership and ensuring sustainability—localization enhances efficiency as it improves the speed, quality, and scale of international development and humanitarian response efforts. However, many Nigerian CSOs lack the operational, institutional, and programmatic capacity to support both home-grown and internationally-funded initiatives. The establishment of a dependable funding source to address these shortcomings could both provide a stronger base of institutions to carry our internationally-funded development work and provide sustainable support for on-going efforts when international funding is not forthcoming.

These twin goals are at the heart of the NEAT Initiative.