Increase in NYSC Allawi: Facebook User Makes a Telling Analysis

Michael Chigozie Obiukwu 

A Facebook user, Michael Chigozie Obiukwu, has given a shocking analysis of the allowances of serving members of the National Youth Service Corp (NYSC). The analysis which shows the dollar values of the allowances of corp members since 2011 till date is quite amusing as it is revealing.

Recall that the allowance of corp members was recently increased by the Federal Government led by Muhammadu Buhari from N19,800 to N33,000. This was a result of the recent upward review of Nigeria's minimum wage from N18,000 to N30,000 by the Buhari administration also.

Well, let us take a look at what the minimum wage and NYSC allowance has been since the past decade.

In 2010, the minimum wage was N7,500 while corper's allawi was N9,775 ($63 at average exchange rate of N153 to $1).
At this time, a bag of rice was about N8,000. So, annually, a corp member earned $756. If they saved half of this ($378), by the end of one year, they'd have barely enough to start a small business or pay rent.

In 2011, the Goodluck Jonathan administration successfully got the Nigerian Senate to pass into law an increment of the minimum wage from N7,500 to N18,000. Consequently, the administration also increased the NYSC allowance to N19,800 ($123 at average exchange rate of N160 to $1). In 12 months, a corp member earned $1,476.
At this time, a bag of rice sold for N9,000. Again, if they saved half of their annual earnings, they'd have $738. This was enough to start a small-scale business or pay rent.

Corp members pose for a photograph with a Nigerian solider. Source: The Guardian

By the year 2016, the value of the naira to the dollar had fallen steeply to an average of N438.50. So, while the corp member's allawi remained N19,800, the value in dollars had crashed to just $45. At this time, a bag of rice was sold for as much as N17,500 to N25,000 in some places. Annually, a Corp member's earnings amounted to $540 only. Depending on where the Corp member was serving within the nation at this time, I imagine that it was difficult to save at all.

Now in 2020, the Buhari administration has increased the allowance of corp members to N33,000 ($91 at average exchange rate of N360 to $1). A bag of rice currently sells for about N25,000. It costs between N1,600 and N2,500 to buy 1 small paint bucket of rice right now. And at the end of one year, a corp member will have earned $1,092. If they saved half of this, it will likely be possible to start a small-scale business, pay rent or write GRE/TOEFL/IELTS after completion of the service year.

The fact is that inflation remains in double digits currently, and commodity prices are quite high too. So, saving is not easy. But, with proper planning and prudent management of resources, a majority of corp members can make something minimally comfortable out of this new allowance.

Here is a list of 6 businesses you can start on a small-scale using $500 or less:
1.   Fashion design
2.   Business center (photocopy and typing)
3.   Small-scale exportation of commodity goods, such as kolanuts, vegetables, cassava (processed into African salad or Abacha), sugar cane, melon seeds (egusi), African oil bean seed (popularly called 'Ugba' in Igbo or Ukana in Efik), etc, targeting Nigerians in the diaspora.
4.   Decoration, event planning and cake-making.
5.   Small-scale farming or poultry.
6.   Food vending.

Similarly, you can invest in securities, especially mutual funds and treasury bills. If you save $45 every month strictly in a moneymarket mutual fund account, at the end of 12 months, you would have preserved $540 capital and made capital gains of at least 13% extra. It might look small to you now, but I promise that it won't when that time comes and you don't have this amount to your name.

Also, you can read the most comprehensive guide on how you can invest in treasury bills and do that too.

Managing your finances is critical to advancing your life's goals. Please make an effort to do so at this early stage.



Chukwubuikem Paul Anunaso is a civil/structural engineer. He is also the editor of The Paul Anunaso Blog, and can be reached at anunaso.cp@gmail.com.