Osinbajo: A People-Centered Budget Starts With the Poor, Not the Powerful

Former Vice President Yemi Osinbajo says a country’s budget must reflect who actually lives there. In Nigeria, the majority are poor. Therefore, he argues, budgeting cannot follow the same logic as in a country where most citizens earn middle or high incomes. He calls the fix a change of mindset, and he illustrates it with his own experience in government.

His story begins in early 2016. Osinbajo chaired the economic management team, and he presided over a pre-budget meeting on spending priorities. Officials weighed a 500 billion naira allocation for the National Social Investment Programme, worth about 1.9 billion US dollars then. The programme came straight from the APC manifesto. It promised homegrown school meals for millions of pupils, collateral-free loans for about three million traders and farmers, jobs for 500,000 unemployed graduates, and cash transfers for one million of the poorest Nigerians.

The proposal sparked heated debate. Many officials called 500 billion naira too much, and they labelled the programme unsustainable. Osinbajo noticed a pattern. “Why is it that whenever we propose substantial spending on the poor, the immediate questions are about affordability and sustainability?” he asked.

Recent history gave him the answer. In 2009, Nigeria’s banking crisis left more than 5.4 trillion naira in non-performing loans. Fewer than 350 debtors, some of the country’s wealthiest individuals, owed 80 percent of that sum. The government stepped in and set up AMCON to stabilize the system. The rescue cost 5.5 trillion naira in 2010, roughly 36.6 billion US dollars. Notably, the entire federal budget that year stood at 5.6 trillion naira.

Osinbajo accepts the economic case for that rescue. A bank collapse would have endangered depositors, businesses and the wider economy. However, he sees an even stronger case for investing in the majority. Moreover, he rejects the idea that helping the wealthy automatically lifts everyone else. “It happens so slowly that the majority are dead before it even happens,” he said.

Fortunately, his side won the argument. Between 2016 and 2019, the programme fed 9.6 million children daily in 24 states. Farmers, aggregators, cooks and servers all earned income from the meals. Meanwhile, the Bank of Industry lent to 2.4 million informal traders through the GEEP platform. The government also engaged 500,000 graduates as extension workers and primary school teachers, and it paid conditional cash transfers to over a million people. Yet spending never exceeded 300 billion naira at any point. By contrast, the bank rescue cost almost ten times that amount.

For Osinbajo, this contrast exposes a flawed way of thinking. Policymakers treat support for the top of the pyramid as an investment, but they treat support for the bottom as a burden. “That’s a dangerous mindset,” he warned.

A people-centered budget therefore starts with citizens’ circumstances. It asks where the poor will work, what stops them from earning enough, and which public investment would change their livelihoods most. For smallholder farmers, the answer may include security, irrigation, better seed, storage, roads to market, affordable credit and an end to arbitrary levies. For artisans and small manufacturers, it may mean reliable electricity, equipment and practical skills.

This approach also makes sound economic sense. When millions of people become more productive, they expand the economy’s capacity. Additionally, their higher spending creates demand for goods and services that others supply. Consequently, Osinbajo wants budgets to answer harder questions than whether GDP will grow. Whose productivity will rise? Whose income will increase? How many livelihoods will improve, and how soon?

He points to Chief Obafemi Awolowo as proof that this thinking works. In the 1950s, Awolowo devoted 41 percent of the Western Region’s budget to education, the highest share in the free world at the time. As a result, the region wiped out illiteracy within one generation.

Budgeting is only the first of Osinbajo’s three examples. He also draws on his government experience to discuss how the state administers justice and how it tackles corruption. Across all three, his message stays the same: government must begin with the circumstances of the majority.