The directive by President Bola Ahmed Tinubu that the National Economic Council (NEC), led by Vice President Kashim Shettima, should begin the process of working on interventions to ameliorate the impact of petrol subsidy removal on Nigerians is quite apt and amply demonstrates the humane disposition and sensitivity of Mr President to the plight of the citizens.
Addressing State House correspondent after a meeting with the president alongside major oil marketers at the Presidential Villa, Abuja last week, Governor Dapo Abiodun of Ogun state said the marketers were in the Villa to express solidarity with the president for his bold decision to end subsidy payment. He noted that Tinubu’s action showed his determination and courage to remove the hemorrhage that had bedeviled the country for decades.
The governor noted that while there would be some discomfort on the part of the people, the move would eventually pay off, as there can be no gains without pain. He said the country was spending about N4 trillion yearly on subsidy, which henceforth would be taken to the Federation Account Allocation Committee (FAAC) for sharing among the three tiers of government.
Also speaking, Chairman of Depot and Petroleum Marketers Association of Nigeria (DAPPMAN), Mrs. Winifred Akpani, said the courtesy visit was to express the major oil marketers’ utmost support to the federal government. She said the group was aware of the difficulties the subsidy removal has created in the country, expressing optimism that it was going to reposition the country. She noted that Nigeria in the first three months of 2023 has spent over N2 trillion, adding that if it continued with the payment, by the end of the year, it may spend about N7 trillion.
Akpani said through subsidy, Nigeria has been feeding her neighbouring countries, adding that it can no longer subsidise fuel for African countries, while its economy continues to bleed. The marketers announced their intention to donate 100 mass transit buses worth N10 billion as a way to cushion the effect of subsidy removal, hoping that other well-meaning corporate bodies would do the same.
Meanwhile, the hope of the organised labour movement to persuade the federal government to divert the $800 million loan facility obtained from the World Bank’s International Development Association (IDA) meant to be distributed to about 50 million poor Nigerians, has hit a brick wall.
This is part of the fallouts of the negotiation between organised labour and the federal government in Abuja over petrol subsidy removal. The World Bank, in total compliance with the terms of the agreement with the Nigerian government, is insisting that the loan cannot be deployed to fund another intervention aimed at cushioning the effects of the removal of subsidy on petrol.
The terms of the loan are the reason the $800 million cannot be deployed to other areas of intervention. For example, the Federal Ministry of Finance, Budget and National Planning is expected to spend $23.3 million on consultancy fees, hiring of staff, and payment for logistics such as training and workshops out of the $800 million loan facility to mitigate the effects of removal of petrol subsidy on 50 million poor Nigerians.
The agreement of the Ministry of the International Development Association (IDA) tagged ‘Financing Agreement (National Social Safety Net Program – Scale Up) between the Federal Republic of Nigeria and International Development Association (IDA) entitled ‘Credit Number7019-NG – Public Disclosure Authorised’, prescribes that the ministry is expected to establish a National Social Safety Nets Coordinating Office (NASSCO), which means doing away with the officials of the federal ministry of humanitarian affairs who have been trained to carry out similar tasks.
In the agreement, which was signed on August 16, 2022 by the former Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, and Nigeria’s Country Director of the World Bank, Shubham Chaudhuri, section 1.2 sub-section (a) partly reads: “The Recipient shall maintain, throughout the implementation of the Project, a National Social Safety Nets Coordinating Office (NASSCO) in FMHADMSD with functions and resources satisfactory to the Association, and with staff in adequate numbers and with terms of reference, qualifications, integrity and experience satisfactory to the Association.”
The Nigeria Labour Congress (NLC) and its Trade Union Congress (TUC) counterpart had, during the parley with the federal government on Monday, attempted to persuade government team to divert the loan into funding the Compressed Natural Gas (CNG) fuel option for car owners as well as commercial operators.
NLC President, Joe Ajaero, in opposing the money for distribution to the poorest of the poor, faulted the register of the beneficiaries. “We are totally opposed to the distribution of N5,000 for 10 million households or 50 million Nigerians to alleviate the effects of the removal of subsidy on petrol. That is an insult to Nigerians. How do you identify the beneficiaries?”
We are in sync with organised labour that the planned distribution of N5,000 to 10 million households or 50 million Nigerians is neither justifiable nor equitable, considering the fact that 133 million Nigerians are said to be multi-dimensionally poor. We advise that the federal government should instead formulate a welfare package aimed at mitigating the hardship caused by fuel subsidy removal for all Nigerians, irrespective of class or status.
