Emeka Okoroanyanwu and Babajide Okeowo
Nigerians across the board have rejected the N5000 transport grant being proposed by the Federal government to 40 million poor people in the country in lieu of plans to fully remove fuel subsidy saying the grant is like a poisoned chalice.
They are worried that the government’s claim that subsidy removal would cut costs and save money for investments in other sectors of the economy may not be true after all going by experiences from previous social investment schemes initiated by the Muhammadu Buhari led Federal government.
Another argument the stakeholders have put forward is that the Federal government may not be sincere in its proposal to pay N5000 to 40 million poor Nigerians as there are no parameters yet to determine the beneficiaries of the scheme.
They pointed to the N10,000 TraderMoni, the Conditional Cash Transfer that the Vice President, Yemi Osinbajo went round selected markets to distribute to party fateful; the poorly executed N-Power programme where some university graduates were being paid N30,000 a month in what was to be a skill acquisition scheme, the haphazardly handled School Feeding Programme that benefited only a few children in some favoured states controlled mainly by the ruling All Progressive Congress, APC and the controversial Special Public Works programme meant to give jobs to 774,000 youths in the country.
In all these programmes, they said only a few poor benefited even as the government handled them haphazardly. At the end, poverty continued to ravage the country as more Nigerians sink into the poverty hole every passing day. The World Bank estimates that over 80 million Nigerians are in the poverty range with about 52 million unemployed youths roaming the streets.
In actual fact, checks by The Nigerian Xpress has shown that paying N5, 000 transport grant to supposedly 40 million poor Nigerians will actually cost more than the petroleum subsidy.
The proposed N5,000 monthly grant to 40 million Nigerians will cost the Federal Government N2.4 trillion annually, which is 81.71 per cent above the average annual subsidy payment from 2016 to 2019. During the past four years, the Federal Government spent N2.93 trillion on fuel subsidies as follows: In 2016, it paid out N563.3 billion; in 2017 – it paid N144.53 billion; 2018 – N730 billion and 2019 – N1.5 trillion.
Many Nigerians are in doubt over the Federal government’s claim of subsidizing fuel consumption in the country. This followed the gleeful declaration last year, by the government that it had finally removed fuel subsidy with some government Aides praising President Buhari for doing so.
These many scepticisms have swelled the rank of opposition to the removal of fuel subsidy and the N5000 proposed transport grant that may follow it.
Leading the opposition to the payment of the N5000 transport grant to 40 million poor Nigerians when the subsidy on Petroleum Motor Spirit (PMS) is removed in February 2022 is the Nigeria Labour Congress (NLC).
Ayuba Wabba, the President of the NLC, in a statement said the Federal government has refused to negotiate with the congress before concluding on removing the fuel subsidy and increasing fuel pump price, accusing the government of adopting monologue in arriving at its conclusion on subsidy removal, stressing that it will continually reject deregulation that is anchored on the importation of petroleum products.
“The response of the Nigeria Labour Congress is that what we are hearing is the conversation of the Federal government with neo-liberal international monetary institutions.” the statement reads.
“The conversation between the government and the people of Nigeria, especially workers under the auspices of the trade union movement on the matter of fuel subsidy, was adjourned sine die so many months ago.”
“Given the nationwide panic that has trailed the disclosure of the monologue within the corridors of government and foreign interests, the Nigeria Labour Congress wishes to posit that it continues to maintain its rejection of deregulation based on import driven model.
“It is difficult to convince Nigerian workers why our dear country is the only country among the OPEC member countries that cannot produce its own refined petroleum products and thus adopts the neo-liberal import production model of refined petroleum products.
“We wish to reiterate our persuasion that the only benefit of deregulation based on the import-driven model is that Nigerian consumers will infinitely continue to pay high prices for refined petroleum products.
“This situation will definitely be compounded by the astronomical devaluation of the naira, which currently goes for N560 to 1US$ in the parallel market.”
Wabba noted that any attempt to compare the price of petrol in Nigeria to other countries would be set on a faulty premise as such a comparison would be akin to comparing apples to mangoes.
“The contemplation by the government to increase the price of petrol by more than 200 per cent is a perfect recipe for an aggravated pile of hyper-inflation and astronomical increase in the price of goods and services,” he added.
According to him, the removal of subsidies will open a wide door to unintended social consequences such as degeneration of the current insecurity crises and possibly citizens’ revolt. This, he said, is not an outcome that any sane Nigerian wishes for.
He said: “The argument that the complete surrender of the price of petrol to market forces would normalise the curve of demand and supply as is being wrongly attributed to the current market realities with cooking gas, diesel, and kerosene is very obtuse.
“The truth is that these commodities which Nigeria can easily produce have been priced out of the reach of most Nigerian families with the majority of our people resorting to tree felling and charcoal for their energy needs.
“We wish to warn that the bait by the government to pay 40million Nigerians N5000 as a palliative to cushion the effect of the astronomical increase in the price of petrol is comical, to say the least. The total amount involved in this queer initiative is far more than the money government claims to spend currently on fuel subsidy.
“Apart from our concerns on the transparency of the disbursement given previous experiences with such schemes, we are wondering if the government is not trying to rob Nigerians to pay Nigerians? Why pay me N5000 and then subject me to perpetual suffering?”
Wabba said that the government’s decision to remove the petrol subsidy is “cloudy”.
“Clearly, government thoughts on the so-called removal of fuel subsidy is cloudy and appears to be a ‘penny wise-pound foolish’ gamble,” he said. “It is clear that the palliative offered by the government will not cure cancer that will befall the mass of our people who suffer the double jeopardy of hyperinflation while their salaries remain fixed.”
Wabba warned that the government was planning to set the nation on fire, contending that the government’s new position was being anchored by the International Monetary Fund, IMF and the World Bank.
He also complained that Group Managing Director and Chief Executive Officer of the Nigeria National Petroleum Corporation (NNPC), Malam Mele Kyari had just announced that the price of petrol could jump as high as N320 and N340 from February 2022.
The price increase would be consequent on the plans by the Federal Government to remove subsidy on Premium Motor Spirit also commonly referred to as petrol or fuel.
Wabba said the grand optimism of the NNPC GMD was predicated on the claims that the removal of the fuel subsidy is now backed by an act of parliament, probably the Petroleum Industry Act which was recently signed into law.
He said government thoughts on the so-called removal of fuel subsidy are cloudy and appear to be a ‘penny wise-pound foolish’ gamble, noting that it is clear that the palliative offered by the government will not cure the cancer that will befall the mass of our people who suffer the double jeopardy of hyper-inflation while their salaries remain fixed.
“As we had done several times, we call on the federal government to consider various options that can help Nigeria navigate out of the quagmire constructed by the failure of successive governments to embrace developmental governance and accountable leadership.
“The contemplation by the government to increase the price of petrol by more than 200 per cent is a perfect recipe for an aggravated pile of hyper-inflation and astronomical increase in the price of goods and services. This will open a wide door to unintended social consequences such as degeneration of the current insecurity crises and possibly citizens’ revolt. This is not an outcome that any sane Nigeria wishes for.
“The argument that the complete surrender of the price of petrol to market forces would normalize the curve of demand and supply as is being wrongly attributed to the current market realities with cooking gas, diesel and kerosene is very obtuse.
“The truth is that these commodities which Nigeria can easily produce have been priced out of the reach of most Nigerian families with the majority of our people resorting to tree felling and charcoal for their energy needs.
He said it is unfortunate that this record remains a myth and a huge crater for all manner of official sleaze and leakages in the downstream petroleum sub-sector of Nigeria’s oil and gas industry” the NLC stated.
Similarly, the TUC said the government’s new position on fuel subsidy was totally unacceptable, warning that the government is looking for trouble.
Secretary-General of TUC, Musa Lawal, said Labour was shocked with the government pronouncement last week Tuesday because it was a unilateral decision without the input of Labour.
“We are surprised and shocked with the government pronouncement. We do not know how the government came about it. The government is calling for trouble if they think they can go ahead with subsidy removal without Labour.
The Presidential Committee is made up of government representatives and Labour has not concluded its assignment. Our last meeting was in April. This new position is totally unacceptable to us.
Let us look at the issue of N5,000 for about 40 million Nigerians. How did the government arrive at the figure? How did they determine the targeted beneficiaries? Most Nigerians are aware that similar money was given out, the identities of the beneficiaries have remained a subject of controversy and debate among Nigerians.”
From the Senate Chambers of the National assembly came a strong opposition to the removal of subsidy and payment of N5000 transport grant to 40 million Nigerians.
Chairman, Senate Committee on Finance, Senator Olamilekan Adeola (APC, Lagos West) is very clear in his statement that there was no provision for a N5,000 monthly grant for 40 million Nigerians for transportation allowance in the 2022 budget currently before the National Assembly.
He said before the executive could embark on such intervention, the proposal must come to the National Assembly because it is going to cost N2.4 trillion.
“What are the criteria that would be used to determine beneficiaries of the transportation allowance?” he queried, noting that the proposal was still a rumour to him as the Chairman, Committee on Finance:
“I don’t want to go into details, if there is something like that, a document needs to come to the National Assembly and how do they want to identify the identity of the beneficiaries. This is not provided for in the 2022 budget proposal, which is N2.4 trillion.
“For us, we still believe it is news because this budget we are considering contains subsidy and if we are passing a budget with a subsidy in the fiscal document, we can’t speak because that is the document that is currently before us.
“So, this is not provided for in the 2022 budget. We don’t have anywhere in the budget where 40 million Nigerians will collect N5,000 monthly as transportation allowance, totalling N2.4 trillion. I know that there must be a budgetary provision for this for us (National Assembly) to consider. That is why I said it is still news out there until it formally comes to the National Assembly for either a virement to the budget or re-ordering of the budget.
“For now, I still want to take it as a rumour and as news until it is formally presented before the National Assembly,” he stated.
He is not alone. Victoria Ibezim-Ohaeri, Executive Director, Spaces for Change, a Non-Governmental Organisation, who supports complete deregulation of the downstream sector is vehement in her objection of the payment of the transport grants while claiming that cash payment to citizens would not work, due to many problems.
Hear her; “First, the N5, 000 cash payment is too small considering the level of inflation in the country.
Second, it would be difficult to select or determine beneficiaries. Third, we are also not very sure of the frequency of disbursement. More than these, it would be open to corruption.”
As an alternative, she urged the FG to increase the minimum wage, which would empower citizens to meet basic needs.
“Government can also invest significant funds into the power sector to supply commercial and stable electricity nationwide. The increased supply of power would reduce the demand for petrol products, which the citizens need to generate their independent power,” she stated.
Similarly, the Director of Entrepreneurship at Redeemers University, Ede, Dr. Olufemi Omoyele, questioned the success level of previous social intervention schemes of the government and wondered why Nigerians should be optimistic about the new proposal.
Hear him “All the previous and ongoing social intervention schemes of this administration such as Conditional Cash Transfer, TraderMoni and others, what has been their impact on the poor and vulnerable?
These schemes are poorly thought out, poorly executed and highly politicized. Tell me, how did they come about the 40 million to benefit from the scheme? What are the parameters?
These people are extremely poor, so in what way will N5,000 alleviate their sufferings in the midst of spiralling inflation and high prices? This government should come down from its high horse and face reality,” he said.
To Dr Nnanna Anyanwu of the Department of Economics, Nnamdi Azikiwe University, Awka, paying N5000 to 40 million Nigerians is a dangerous thing to do as inflation will cripple the economy and make things worse for Nigerians.
He asked: “How much are we really paying as a subsidy?” said the proposed payment would move millions of Nigerians into the poverty region.
According to him, the removal of subsidies should be a gradual process. Doing the arithmetic of the payment, Dr Anyanwu said paying N5000 to 40 million Nigerians every month will amount to N2000 billion every month while it comes to N2.4 trillion in a year. Put against the annual fuel subsidy of N1.8 trillion for 2021, he said the government wants to spend N2.4 trillion instead of N1.8 trillion. This, he said, runs against all rules of economic management.
The next obstacle he observed, was how the payment was going to be affected and monitored, noting also the other social crises that would come with the sudden total removal of fuel subsidy in relation to workers fixed income.
He said “the Buhari government should bear in mind that subsidies are part of government tool all over the world to cushion adverse effects of certain policies, except that a government chooses what to pay subsidy on.
How we intend to select, pay N5000 grant-FG
Speaking on how beneficiaries will be determined, how the scheme will be funded and how qualified Nigerians will be paid, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed that money to finance it would come from the Federation Account.
READ ALSO: Fuel subsidy removal, N5,000 monthly grant draw ire of Senate, NLC, TUC
The minister also disclosed the modalities of the relief package and said the N5,000 monthly transport allowance will last between six months and one year and that a committee led by Vice President Yemi Osinbajo had been set up to look into it.
Mrs. Ahmed said the exact number of poor Nigerians to benefit from the package would be determined by the committee, adding that there would be no cash payment, as beneficiaries would be paid through money transfers.
“The intervention we want to provide is for between 20 and 40 million people and there is still a lot of work going on.
“We have a committee that is chaired by His Excellency the Vice President, state governors and a few of us ministers as members.
“So we have to have a landing as to the exact number between 20 and 40 million. We already agreed it will be N5000 and we have also agreed that the remittances have to be done digitally.
e-Naria will help, but so also are the various payment platforms that are currently available.
As it stands, it is left to be seen if the proposal by the Federal Government is not dead on arrival going by the weight of objections against it.
