Oil windfall: Algeria pays jobless citizens as Nigeria spends on subsidy

Algeria has become one of the first countries in Africa to start a permanent unemployment-benefits programme for its young population, as surging energy prices give the OPEC member more firepower to tackle social unrest.

However, Nigeria which is ahead of Algeria in oil production capacity is yet to deliver any package from the rising oil price.

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As crude oil price rose above $100 dollar in recent time, Nigeria had placed a $57 per barrel benchmark for the 2022 budget which indicates higher earnings for the country. Experts had even advised the government to save the excess from the risen crude price or invest it in infrastructure. Rather, officials in the oil sector fear that the N4 trillion it has placed already to subsidise petrol within a $86 oil price range could increase with the higher crude price.

For Algeria, about 580,000 job-seekers between 19 and 40 years of age are eligible to collect monthly payments of 13,000 dinars ($91 or officially around N38,000 monthly) beginning Monday, the National Employment Agency of Algeria stated. 

While Libya is the largest oil producer in Africa, Nigeria is immediately the second largest producer while Algeria is the third largest oil producer in Africa. However, in terms of population, Nigeria is five times larger than Algeria, stated an OPEC report.

According to the National Bureau of Statistics (NBS), Nigeria has 33.3 per cent or 23.18 million of the over 200 million population employed as of 2021. The report clearly stated that these people either did nothing or worked for less than 20 hours a week, making them unemployed by definition.

Algeria has 43.8 million people as of 2020, and had 1.314 million unemployed persons as of 2019, according to Statisa.com.

According to a Bloomberg report on Tuesday, the move marks one of the clearest bids yet by authorities to address simmering economic discontent that’s fuelled three years of sporadic protests against Algeria’s ruling elite.

“I’ve been unemployed for five years and have no income,” said Fatiha, a 25-year-old masters graduate in biology who was lining up Monday at a post office in the centre of Algiers, the capital. “This payment is certainly very welcome, but I’d prefer to have a job with a good salary to help my family.”

The new benefits have attracted more than 1 million applications, which the employment agency says are still being assessed. To qualify, an applicant needs to prove they’ve never had a work contract with a company and are actively looking for employment.

“This bonus is our right” but not enough, said Walid, an unemployed bricklayer who picked up his allowance Monday. “I am married and have two children. I would have liked it to be accompanied by health coverage.”

For Nigeria, there are no immediate plans on ground as officials in Nigerian National Petroleum Company Ltd (NNPCL) said the Nigerian government has a huge petrol subsidy bill of about N3.7 trillion.

The Minister of Finance, Budget and National Planning, Zainab Ahmed had earlier announced that the fund earmarked annually for petrol subsidy could be removed in June 2022 and used for some social safety nets including the payment of N5,000 to some 40 million vulnerable as transport allowance. However, by February when pressure against removal of the subsidy kicked in, the government succumbed and announced a N3.7tr (nearly N4tr) budget that would cater to the petrol subsidy in the 2022 budget.

The closest the Nigerian government has done in the past eight years is the social safety net such as the N-Power that has employed 400,0000 Nigerian graduates in batches A, B and C with a N30,000 monthly stipend for two years in each batch. Currently, the government has selected some 200,000 beneficiaries it is training towards granting a loan to become self-reliant by way of entrepreneurship.