The organised labour and some economists have faulted the plan by the Federal Government to transfer N8,000 into the accounts of 12 million vulnerable and poor Nigerians over the next six months to cushion the effects of the removal of subsidy on Premium Motor Spirit, popularly known as petrol.
The Senate had on Thursday approved the request of President Bola Tinubu to borrow $800m loan from the World Bank. It also amended the 2022 Supplementary Appropriation Act to accommodate the provision for N500bn for palliatives to mitigate the effect of petrol subsidy removal on poor Nigerians.
The President requested the two approvals in separate letters read by the Senate President, Godswill Akpabio, at the plenary.
According to Tinubu, the $800m loan will be used to cater for the welfare of the vulnerable and poor households in the country under the National Safety Net Programme, while the sum of N8,000 will be transferred monthly to the bank accounts of 12 million poor and low income households for six months.
There is unease in many states of the federation as the effects of the removal of subsidy keep biting Nigerians harder as rising costs of living and commuting have thrown a lot of households into poverty.
It will be recalled that the President announced the end to subsidy payment to fuel importers and marketers at his inauguration on May 29, 2023.
As a result of the announcement, the pump price of petrol was immediately increased by marketers to N500 per litre from N185 with the attendant rise in the cost of transportation, food and other goods and services.
Following threat by the organised labour to embark on a nationwide strike, the Federal Government rallied labour unions and a committee was set up to work out appropriate palliatives. The panel has yet to submit its report although the Trade Union Congress of Nigeria proposed N200,000 as the national minimum wage instead of the current N30,000 to cushion the effect of subsidy removal on workers.
The Chairman, Nigeria Labour Congress, Lagos chapter, Mrs Funmi Sessi, said the Federal Government’s plan was like a drop of water in the ocean.
Sessi spoke with the News Agency of Nigeria in Lagos on Friday, as stakeholders in the sector reacted to the government’s plan.
The President had in a request to the National Assembly indicated the intention of his administration to cater for the welfare of the vulnerable and poor households in the country under the National Safety Net Programme.
He said under the plan, the sum of N8,000 would be transferred digitally on a monthly basis to the accounts of 12 million poor and low income households for six months.
The money is expected to stimulate economic activities in the informal sector and improve the standard of living in the beneficiaries’ households.
Sessi said, “Looking at the money and the effect of the subsidy removal that has escalated the prices of everything in the market, I wonder what the N8,000 can do for a family in a month.
“I wonder what it can buy and the services it can render for 30 days; N8,000 cannot take care of a family for a week; it is not possible; it is going to be like a drop of water in the ocean.
“We do not know how the government is going to get clarity for those who will require it the most; how it will identify those who are most affected, and how the palliatives will get to those actually in need.
“Labour is asking for a pay rise; for those in abject poverty, we believe the government can do better for them.”
The labour leader, however, urged the President to instead provide facilities and infrastructure to make Nigerians independent to be able to provide for themselves and their families.
“It should profile those who want to do various agricultural activities, give them the resources and mobilise them, so that they can also become employers of labour,” she added.
The President, Association of Senior Staff of Banks, Insurance and Financial Institutions, Mr Oluwole Olusoji, said the move was a repeat of the same old process that did not add real value.
He stated, “What people need is not cash handout, but subsidised quality of service.
“Subsidised education up to a specified level; access to quality subsidised health services (free for children and established indigent families); subsidised government-managed transportation and efficient infrastructure (power, roads and communication) will add better value.”
The National Deputy President, Trade Union Congress of Nigeria, Mr Tommy Okon, also spoke on the issue.
He said it would be proper to allow the presidential committee on removal of oil subsidy to conclude its report and arrive at collective agreement with the organised labour before embarking on any palliative care distribution.
“Otherwise, it will amount to doing exactly what the previous administration did that yielded no positive impact on the environment and economy,” he noted.
Economists fault plan
On his part, a professor of Economics and Public Policy at the University of Uyo, Akwa Ibom State, Akpan Ekpo, harped on the fact that the conditional cash transfer would not solve the problems of poverty, but rather an investment in infrastructure through the provision of a good transport system, quality education, quality healthcare services and decent social housing would better impact the populace.
“If tomorrow, we solve our power problem, if we have 18 hours of uninterrupted power supply, it will go a long way to help those who are small business owners. It’s better than giving people N8,000 for six months or one year. I hope that’s not what they are thinking. The last administration gave people N5,000 to sell pepper, but it didn’t work. The best thing is to invest the money in hard and soft infrastructure, and to maintain the infrastructure over time,” he said.
Ekpo argued that there was no comprehensive data system in the country that would reveal the actual individuals that had such needs.
“We do not have the data that will show us those that need the funds. We have some data in terms of household poverty as compiled by the Ministry of Humanitarian Affairs, but that’s not enough because you need comprehensive data, well organised into different categories and structures as to who needs the palliative,” he added.
An economist, Johnson Chukwu, said there were several alternative options the Federal Government could adopt rather than distributing money.
He added that there was a need for the government to have a proper register of the citizens, noting that the N8,000 was too meagre to have any effect on the beneficiaries.
Chukwu stated, “The palliative is not meant to be a sustainable measure. It is supposed to be an ad hoc measure to cushion the impact of subsidy removal. It is not something that the government can sustain. I think it is not meant to be a continuous handout, but an intervention.
“There are several options, which the Federal Government has to choose the most appropriate to implement. The key question is do they have a proper register and what impact will N8,000 actually have on the people? ”
A professor of Monetary Economics, Olusegun Ajibola, explained that the decision taken by the government was to lessen the effect of the hardships faced by individuals.
According to him, such a palliative is not meant to be sustainable and should be considered as a temporary measure.
Some states announced immediate measures to deal with the situation, including reducing the number of days in which workers would come to their respective offices to three days from the usual five, while others unveiled plans to buy more mass transit buses for use by the workers.
The NLC has, however, advised the governors, who have yet to provide palliatives for workers, to emulate their colleagues who have done so.
The advice followed findings by Saturday PUNCH that many state governments were not showing interest in assuaging the hardship facing the citizens in the aftermath of the fuel subsidy removal.
The National Treasurer of the NLC, Hakeem Ambali, said, “State relief packages should have been rolled out immediately after President Tinubu’s announcement of the removal of fuel subsidy. Some states that really have the interest of their people at heart immediately rolled out palliatives. We, therefore, call on the other states to join the queue.”
Speaking further on negotiations with state governors as regards the minimum wage, the NLC official noted, “Once we finish negotiations at the national level, we shall direct state councils to embark on state-level negotiations.”
Over six weeks after the removal of the fuel subsidy, the Katsina State Government has yet to implement any programmes to cushion the economic impact on the citizens.
Sources, however, claimed that Governor Dikko Radda might announce the palliative measures when he returns to the state from a trip.
A source said, “You know his Excellency already directed that the Katsina State Transport Company should not increase transport fares on all the routes. More palliatives are on the way and I know he will make them public once he returns to Katsina.”
The Director-General in charge of the media, Maiwada Dammalam, could not be reached for comments.
The IPAC Chairman of the Inter-Party Advisory Council in the state, Ibrahim Ngawa, however, advised the state government to come up with palliatives that would reach the poor.
Ngawa, who was the Labour Party governorship candidate in the 2023 election, advised the government to use the community approach to get the palliatives down to the poor.
He stated, “The government should adopt the approach used in the health sector when handling polio cases in getting the palliatives down to the poor people in the state. The government can also get the palliatives across to the people through various wards and community leaders.
“The government should also get mass transit vehicles for students and improve their instructional facilities. More importantly, the government should ensure that only people who have the love of Katsina people at heart are appointed to serve in the committee that will handle the palliatives.”
Meanwhile, the Caretaker Chairman of the Peoples Democratic Party in the state, Dr Abdulrahman Usman, maintained that the Federal Government did not make adequate arrangements for palliatives for Nigerians before announcing the subsidy removal.
He said, “There is no seriousness on the part of the All Progressives Congress government on the issue of subsidy removal and that of palliatives for Nigerians. I am disappointed. No concrete arrangements for the after-effects and palliatives for Nigerians before the announcement of the subsidy removal.
“A bag of maize in Katsina State is now N40,000. Even if the government increases the minimum wage, will that solve the problem the removal has caused? I just wonder if the APC government is in power to alleviate the sufferings of Nigerians or simply because of the allure of office.”
The situation in Ogun is also not different as the state government has not unfolded succour for the people.
The government, however, said it would soon roll out palliatives for residents of the state.
The Permanent Secretary, Ministry of Information, Waid Adesina, stated this while responding to enquiries from one of our correspondents.
Adesina, who confirmed that the state government had plans for the people, noted, “The committee set up by the government on the palliatives, which includes the leadership of labour unions in the state, has just submitted its report to the government. So, very soon, the government will roll out its plans.”
The state Chairman, New Nigeria People’s Party, Sunday Oginni, advised that the planned palliatives should be unveiled on time.
Oginni said, “Recognising the fact that the removal of subsidy has brought untold hardship on the masses, the government at various levels needs to do the needful in terms of palliatives to cushion the negative effects of subsidy removal.
“It’s obvious that the skyrocketing transportation fares have led to hyperinflation. The federal and state governments are expected to invest in transportation systems.
“The Federal Government should make train services affordable and available with immediate effect, while the state governments must invest in metro and shuttle buses at affordable fares for commuters.
“Consequently, the federal and state governments should make sure that bad roads are quickly fixed and constantly maintained. In the same vein, the government should ensure the constant provision of electricity across the country. Availability of electricity will make life easier for the citizens and business owners.”
Oginni added, “The usage of gas as an alternative to PMS should be encouraged. Gas-powered cars and generators should be encouraged and supported by the government.
“All these suggested palliatives should be done within a record time to build the confidence of the masses that the removal of subsidy is truly in the interest of Nigerians.”
The Kwara State Government, on its part, said it was still working out palliatives for the state workers and other categories of residents.
The government had earlier announced the release of some luxury buses to convey students of tertiary institutions in the state capital.
The institutions include University of Ilorin; Kwara State University, Malete; Al-Hikmah University; Kwara State College of Education; Kwara State Polytechnic and College of Arabic and Islamic Legal Studies, Ilorin.
The Chief Press Secretary to the Governor, Rafiu Ajakaye, told Saturday PUNCH that the government was working to cushion the impact of the fuel subsidy removal.
The state Head of Service, Mrs Susan Oluwole, in a letter to the heads of ministries, departments and agencies dated June 26, 2023, said the state government had reversed its earlier directive on the fuel subsidy to allow the Federal Government and the organised labour work out modalities on more efficient interventions.
The letter signed by Mr Okedare Adeyinka for the HoS said that the intervention was expected to be unveiled very soon.
In Abia State, the government is hoping to benefit from the Federal Government’s palliative measures when approved by the National Assembly.
The Chief Press Secretary to the Governor, Kazie Uko, said the state government was aware that the Federal Government had written the National Assembly for approval of N500bn for palliatives for poor Nigerians.
He gave an assurance that the state government would key into the programme.
Currently, he explained that the government was working to clear the backlog of salaries and pensions left behind by the immediate past administration.
The Ondo State Government said it had set up a nine-man committee on palliatives to work out the strategies to cushion the effects of fuel subsidy removal on the residents.
The government said the constitution of the committee was part of the decision taken at the state executive council meeting held on Thursday in Akure, which was presided over by the acting Governor Mr Lucky Aiyedatiwa.
The Commissioner for Economic Planning and Budget, Mr Emmanuel Igbasan, disclosed this after the meeting.
According to him, the committee on palliatives was set up to cushion the consequential effects of the fuel subsidy removal on the citizens.
Igbasan promised that the government would continue to place importance on the people’s welfare in the 18 local government areas of the state, noting that it was aware of the hardship caused by the fuel subsidy removal.
“There will be a quick intervention in no distant time,” he stated.
Igbasan also disclosed that the committee was headed by the Chief of Staff to the Governor, Chief Olugbenga Ale.
He said, “We took a look into the issue of subsidy removal and its consequential effects on our people and the council decided to constitute a state committee on palliatives under the chairmanship of the chief of staff to the governor.
“Other members are the head of service and the commissioner of finance, among others.
We commiserate with our people over the hardship they are facing due to the removal of the oil subsidy.
“The chairman will soon convene a meeting of the committee, the fiscal surplus and what will accrue to the state from the Federal Government from the palliative of N500bn proposed by the President.”
The Ekiti State Government also said it would soon come up with welfare programmes for the people.
The Special Adviser to the Governor on Media, Olayinka Oyebode, urged residents to calm down as the government’s plan would come to the fore in a short while.
Oyebode said, “It is being worked out and will be communicated in a short while. The State Executive Council is working on it; we will come out with the plan shortly.
“The people of the state, including workers, should calm down; once it is rolled out, it will get to them as being worked out.”
The spokesman for the opposition Social Democratic Party in the state, Gani Salau, advised the APC government to take a cue from the Federal Government by promptly meeting the yearnings of the people of the state without any further delay.
“I advise the government to intervene in the area of transportation by providing buses to ameliorate the hardship being faced by residents on transport in view of high fares. The government should also empower residents particularly the people on the lower social rung and the needy,’’ he advised.
The Senior Special Assistant on Media and Publicity to the Akwa Ibom State Governor, Mr Anietie Usen, said that it was only his principal, Umo Eno, that could speak on the provision of palliatives.
He, however, said the governor would soon announce his plans.
“It’s only the governor that can speak on palliatives and I believe he will soon speak on it,” Usen said.
Reacting to the delay in rolling out palliatives, the state chapter of the APC said it had yet to notice any official direction on the issue.
The state Chairman of the APC, Mr Stephen Ntokekpo, stated, “As far as Akwa Ibom State is concerned, so far things are not transparent; there are a lot of hot stones on issues that ought to be. So far, we have not actually seen any direction in Akwa Ibom State.
“If you look around the nation, two-thirds of the states have been able to get their executive councils in place. Some have already sent the names of their would-be cabinet members to their respective state Houses of Assembly, but in our own case, the state is yet to kick-start anything called administration. So, the issue of palliatives is not being heard at the state level.”
To cushion the effects of fuel subsidy removal, Osun State Governor, Ademola Adeleke, said his administration was considering adjusting working hours for civil servants.
The governor’s plan was contained in a statement by his spokesman, Olawale Rasheed, who said Adeleke spoke at a PDP stakeholders meeting in Osogbo.
The statement read in part, “We (the Osun State Government) will soon introduce public transport buses. We are working on adjusted work hours and days. We want to make life easy and enjoyable for our people.”
But reacting to the plan, the APC spokesman in the state, Mr Kola Olabisi, queried the slow pace of things in Osun when other states were already implementing measures to lessen the burden on their people.
He said that could be an indication that the governor was confused about what to do to cushion the effects of the fuel subsidy removal on the citizens.
“When was the subsidy removed? Why is he still planning to act at this stage when other states are already rolling out plans? That can only mean the governor is confused about governance,” Olabisi said.
To mitigate the hardship in the state, the Rivers State Government launched a free transportation scheme for commuters.
Governor Siminalayi Fubara, who was represented by his deputy, Prof Ngozi Odu, unveiled 17 luxury passenger buses in Port Harcourt on Tuesday.
He said the buses would convey commuters on designated major routes in Port Harcourt, the state capital, and beyond in fulfilment of a promise made to members of the organised labour when they visited him in the Government House a fortnight ago.
The governor said the gesture was part of his administration’s interventions to cushion the effect of the high cost of transportation and the attendant challenges.
In Edo State, the Special Adviser to Governor Godwin Obaseki on Media Project, Crusoe Osagie, said the state government had embarked on several palliative initiatives, while noting that the state would consider more measures as soon as the Federal Government releases funds saved from the removal of subsidy.
Highlighting the steps the state had taken, Osagie said the working days had been reduced to three for civil and public servants, adding that the government had also made provision for them to work from home through its e-governance initiative.
He also stated that government buses had also been put at the disposal of the workers to ensure they commute to and fro work without spending much.
According to him, stated primary and junior secondary school students now go to school three times a week to reduce the burden of the high cost of fuel and transportation on the parents.
He added that the 18 local government areas of the state had been linked with the Internet, which would afford the workers the opportunity to work in designated areas without coming to their offices.
The Borno State Government has yet to announce palliatives to mitigate the effect of the current hardships being faced by workers and the generality of the citizens.
However, the state chapter of the NLC rose from a meeting Thursday with a list of such palliatives it intends to propose to the government for implementation.
The state Chairman of the NLC, Yusuf Inuwa, “We have drawn a list of such palliatives, which we will forward to the government through the Office of the State Head of Service.
“The proposed palliatives include reduction of working days to three; deployment of more metro buses to ply township routes, not only for workers, but for all commuters; the government should also provide foodstuffs for workers at subsidised rates every month end; and any other palliatives the government may be kind enough to provide.
“You will get the details when the government approves them for implementation.”
Governor Babagana Zulum has not formed his second-term cabinet.