In this piece, WALE AKINSELURE writes on the politics of the distribution of palliatives to cushion the effects of the petrol subsidy removal and what Nigerians consider as adequate soothing balm.
It is another season of distribution of palliatives. This time, it is not COVID-19 but necessitated by the removal of petrol subsidy. The call for some palliative became rife because the removal of subsidy strained the disposable income of Nigerians and sunk more people into poverty. The urban poor is arguably the most affected by the subsidy removal because they have to grapple with rising cost of food, rising cost of transportation and other essentials. For the rural poor whose impact is minimal, the call was for provision of palliatives in the form of free access to healthcare, education and such services. Laced with the calls were however the fact that in Nigeria, distribution of palliatives in the country is susceptible to corruption and politicization.
Nigerians, who largely accepted that the removal of petrol subsidy was inevitable, citing its economy-wide benefits, demanded immediate compensation mechanisms for the people. Nigerians seemed to see reason with the argument that the petrol subsidy primarily benefited richer households, while its low petrol prices created incentives for smuggling petrol to neighbouring countries. Nigeria found itself at a critical juncture where oil and gas revenues were falling despite higher oil prices partly due to lower crude oil production but mainly due to the very costly Petroleum Motor Spirit (PMS) subsidy. With rapidly deteriorating fiscal situation, increasingly unsustainable debt dynamics, surge in exchange rates, galloping inflation reaching a 17-year high, rising food insecurity, more millions of Nigerians hugging poverty, slumping purchasing power of households, Nigerians expressed belief that the petrol subsidy removal will allow Nigerians breath and bring about the desired reforms in the nation’s economic life.
Various conversations dominated the polity on what they considered the adequate palliative. Cases were made for cash transfers, mass transit vouchers. Joining the discourse, then, acting Head Economic and Business Policy Department, Nigerian Institute of Social and Economic Research (NISER), Ibadan, Mr Louis Chete advanced compensation mechanisms thus: e-wallet programme for small-older farmers, mass transit schemes, digital-enabled cash transfer scheme, free health care for the vulnerable, transport vouchers. Chete, however, pointed that a mix of strategies will deliver higher welfare benefits to Nigerians. But, beneath the various palliative propositions was the fear of whether the intended beneficiaries will be reached. Associate Professor of Political Science, Dr Tunde Oseni said he feared that the lack of accountability and transparency that rocked the fuel subsidy scheme may also deck an effective implementation of compensation measures. Oseni argued that the gains of subsidy removal had better be immediate else monsters will be created if people do not see the gains of the removal in a short while. Similarly, a consultant on International Development Practice, Dr Omowumi Akin-Onigbinde said Nigerians who trust the removal of the petrol subsidy by the President Bola Tinubu administration will be so disappointed if the palliatives derail.
Putting the cart before the horse?
While the Tinubu administration racked its head on what palliative to announce, it received knocks from a number on putting the cart before the horse. The arguments was that Tinubu should have provided palliatives before announcing in his inaugural address on May 29, 2023 that, “Subsidy is gone.” Among those who knocked the Tinubu administration for how it went about implementing the subsidy removal was the Serving Overseer of the Citadel Global Community Church (formerly Latter Rain Assembly), Pastor Tunde Bakare. Bakare described Tinubu’s announcement of the removal as impulsive, urging him to go after the few ‘powerful’ people benefiting from the subsidy regime rather than ‘punish’ the majority of Nigerians. Bakare chided the president for plunging the nation into chaos by a very poor change management process.
For days, Nigerians waited on what palliative the Tinubu administration would announce. Globally, such adverse situation demands solutions that are technically robust, practically implementable and politically feasible built upon transparency, accountability and trust. An inkling into the path the federal government intended to take came when the House of Representatives on July 13, 2023 approved President Bola Tinubu’s request to use N500 billion to provide palliative packages for Nigerians. Similarly, the president sought the legislature’s approval of a World Bank loan of $800million from the federal government to fund the National Social Safety Network Programme. The Federal Executive Council (FEC) led by former President Muhammadu Buhari had approved the $800 million loan facility. From the N500 billion, the federal government will transfer the sum of N8,000 per month to 12 million poor and low income household for a period of six months. The presidency had said apart from the N8,000 monthly transfer, there would be the immediate release of fertilizers and grains to 50million farmers and households in the 36 states and the Federal Capital Territory (FCT).
But, Tinubu’s N8,000 proposal was greeted with whips and, knocks from Nigerians from East, West, North and South. The queries included what rationale and modalities will be used in identifying Nigerians that are poor and in need, what N8,000 could take care of considering the hike in prices of basic necessities of life with some describing the amount as ridiculous and a drop in the ocean. Some Nigerians even described the plan as a scam, with presidential candidate of the Peoples Democratic Party (PDP) describing the plan as a brazen attempt to divert public funds. Boxed into a corner, the federal government in a statement by the then Special Adviser on Special Duties, Communications and Strategy, Mr Dele Alake, said, “The President has directed that the N8,000 conditional cash transfer programme envisaged to bring succor to most vulnerable households be reviewed immediately.” Alake said the new directive was in “deference to the views expressed by Nigerians against it.”
Notwithstanding the opposition of many Nigerians, the Country Director, World Bank Nigeria Office, Shubham Chaudhuri argued that, “what seemed like a modest cash transfer of N8,000 per month for six months can make a real difference for families that are surviving on N80,000 per or less (between 60 and 70 percent of Nigerians.”
Chaudhuri argued that such N8,000 transfer would not just take care of consumption but also help in preventing children from dropping out of school, skipping meals as well as helping households cope in ways that preserve their investments in future.
Backtracking on N8,000 cash transfer, the Tinubu government returned to the table to carve out another kind palliative. While the wait for another announcement lasted, the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) staged a nationwide protest to lament the hardship faced by Nigerians as a result of the subsidy removal.
The workers lamented that Nigerians had been pushed to the wall, were hungry, tired and wanted a practical feel of palliatives.
Renewed N5 billion, rice, maize palliative
The renewed announcement of palliatives came when the National Economic Council (NEC) on August 17 said the Federal Government had approved N5 billion grant to be given to each state of the federation and the Federal Capital Territory (FCT) for the procurement of grains as well as five trucks of rice to cushion the effect of the subsidy removal. Governor Babagana Zulum of Borno State who briefed journalists on the outcome of the meeting added that states were expected to procure 100,000 bags of rice and beans, 40,000 bags of maize and fertilizer among other items. Zulum explained that 52 percent of the funds were given to the state governments as grants with 48 percent as loans. Special Adviser to the President on Media and Publicity, Mr Ajuri Ngelale said the government entrusted the responsibility to state governments believing that they had their own social register and structures to reach intended beneficiaries.
While some state governments have begun distribution of the palliatives to their citizens, in phases, there are still some state governments who say they are still putting modalities in place to begin distribution, leaving their citizens waiting. Some groups are already threatening protests against failures of their governments to provide palliatives despite receiving funds from the federal government.
However, among governors that immediately got down to the business of distributing the palliatives are Borno governor, Babagana Zulum who while inaugurating the distribution of Federal government’s palliatives to 100,000 vulnerable households, on August 22, said his administration was providing additional 300,000 households to make a total of 400,000 households.
The Kano governor, Abba Kabir Yusuf said it was spending N1.6 billion out N2 billion FG grant on food palliatives. He added that government had plans to provide cows, sheeps, goats to empower women, especially those from rural areas.
On his part, Niger State governor, Mohammed Bago said he planned to spend N2 billion across the 274 wards whereby each ward in Chanchaga, Bida, Suleja and Kotangora LGAs would receive N20 million while the remaining wards in 21 LGA are to get N10 million each.
Kaduna governor, Uba Sani acknowledged the state’s receipt of N2 billion, assuring that the state’s palliative package includes distribution of food items to 210,000 households, transportation and assistance to small holder farmers, micro, small and medium scale enterprises. Sani pointed out that families headed by people with disabilities, widows and the elderly will be considered first, other poor and vulnerable households, orphanages and IDPs will be given special attention.
Ebonyi governor, Mr Francis Nwifuru acknowledged receipt of N2 billion 3,000 bags of rice, stating that N2million each be given to 1,500 citizens of the state engaged in hawking and other menial jobs in the state. The governor asked commissioners for skills development, commerce and industry to visit major cities and identify citizens engaged in street hawking and other menial jobs. Cross river governor, Mr Bassey Otu said the plan was to distribute palliatives to 10,000 households in the state, adding that the palliative of the state government was loading. Kwara governor, Abdulrahman Abdulrasaq, only recently inaugurated a committee on distribution of N5billion FG palliatives.
The Oyo government said rice given by FG will be shared along with the food relief package to 200,000 households from Wednesday. Affirming that the state had received N2 billion, Governor Seyi Makinde said the state will distribute to households 10kg of rice, 5kg of beans, garri, elubo and a bottle of groundnut oil. The Benue governor, Hyacinth Alia, said the state will people with special needs will get attention, while there will be an increase in provision of equipment and food for rehabilitation centres in the state. Delta governor, Sheriff Oborevwori said added to distribution of the FG palliatives were an increase in workers’ salaries and reduction of working days to ameliorate hardship.
Introducing another dimension, Kogi governor, Yahaya Bello and Governor Godwin Obaseki of Edo State said that construction of roads and provision of other critical infrastructure is better than giving out palliatives to Nigerians. Bello’s position is resonated by president of the Nigeria Labour Congress (NLC), Mr Joe Ajaero who argued that the N5 billion was inadequate and will have little impact on the Nigerian population. He said the palliatives needed are good roads, refineries, salary increase. He described the FG palliative as mere tokenism, saying the NLC was doing its homework to propose to the federal government what will provide some permanent relief. He lamented that more Nigerians had being plunged into poverty with the last two fuel price increases. Rather than give few bags of rice to Nigerians, Ajaero argued, “It is cheering to hear that they are coming up with CNG committees and we want to be thorough and we have centres where people can refill their CNG vehicles, factories where the cylinders could be produced. It should be done fast.”
Similarly, renowned legal practitioner, Mr Femi Falana described the FG moves as temporary measures and quite diversionary. He said: “The people in government have not addressed the root of the crisis, which is the dollarization of the economy. Whatever palliatives are announced would be eaten up by the dollarization of the economy which we are not in control. “As long as these guys in the government are not prepared to strengthen the naira, to make the naira the only legal tender in Nigeria, we are not going to go far. The government hoarded Indomie palliatives in 2022 and if governments can hoard palliatives, the N5 billion will end up being looted by some of them.”
With questions of accountability and transparency in sharing the palliatives bothering the mind of Nigerians, Dr Philip Edema of Augustine University Lagos, listed other issues to include whether the palliatives will address issues of cost of food, energy and transportation. He added that government can palliate Nigerians by reducing corruption, wasteful spending seen among politicians, ensuring that the four refineries are working, subsiding energy because of its effects on small scale businesses. He added that palliatives needed would be supporting manufacturers to reduce capital flight, over-reliance on dollars, regulating customs duty and prices of goods and services.
Vice Chancellor, Dominican University, Ibadan, Professor Hyginus Ekwuazi simply described the palliatives as an afterthought, inadequate and unsustainable. Also, Dr Raphael Ojebuyi of the University of Ibadan, said the palliatives were a mere slave-dose that cannot address massive poverty in the land. He urged government to come up with policies that will address unemployment, poor educational system, food insecurity, general insecurity, epileptic electricity generation, corruption, overbloated cabinet and National Assembly and japa syndrome. A political scientist, Professor Gbade Ojo regarded the palliatives as inadequate. He questioned whether the nation has accurate data to identify the poorest of the poor. Rather, Ojo said government should focus on arriving at a new national minimum wage.
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