Targeting Efficiency of the Household Upliftment Programme in Southwestern Nigeria

Abstract

This study examines the targeting efficiency of Nigeria’s Household Upliftment Programme (HUP) in Osun and Oyo States, focusing on the extent and cost implications of inclusion and exclusion errors. Using household-level data ranked by multidimensional deprivation scores, the study applies a decile-based classification to assess targeting outcomes across regions and local government areas (LGAs). About 45.27% of beneficiary households were ineligible, indicating substantial inclusion errors that generated a monthly leakage of ₦550,030.50. In contrast, 64.05% of eligible households were excluded from the programme, resulting in a monthly under-coverage cost of ₦1,184,925.00. Exclusion errors were particularly pronounced in the least poor LGAs, where nearly four-fifths of poor and vulnerable households were omitted. The analysis highlights that the humanitarian and welfare costs of exclusion outweigh the fiscal benefits of inclusion, reaffirming earlier evidence from the global social protection literature. Although the HUP demonstrates success in reaching some poor households, improving the accuracy of proxy-means targeting and enhancing data validation mechanisms remain essential for reducing mistargeting and optimizing the social returns of cash transfer programmes in Nigeria. This study contributes to the social protection literature by empirically quantifying the magnitude and fiscal cost of inclusion and exclusion errors in Nigeria’s Household Upliftment Programme using a multidimensional deprivation framework and subnational comparative analysis across poverty-ranked LGAs in Osun and Oyo States.