Editorial

Subsidy removal and $800 million World Bank loan for palliatives

LAST week, in yet another indication that the Muhammadu Buhari administration is deaf to the ceaseless alarms by Nigerians on debt peonage, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed that, ahead of the planned removal of subsidy on Premium Motor Spirit (PMS) in June this year, the country had secured a World Bank facility worth $800 million and meant “for the scale up of the National Social Investment Programme.” Briefing State House correspondents after the Federal Executive Council (FEC) meeting in Abuja, Ahmed said the sum was the first tranche of palliatives to be disbursed through cash transfers to about 50 million vulnerable Nigerians. Claiming that the most vulnerable members of the Nigerian society had been captured in a national social register which had a list of 10 million households, which “is equivalent to about 50 million Nigerians,” the minister stated that the government was ready to go beyond cash transfer to cushion the effects of subsidy removal on Nigerians. Her words: “There are various kinds of tasks that we have that go beyond the requirement of just giving cash transfers. Labour, for example, might be looking for mass transit for its members. So, there are several things that we are still planning and working on. Some, we can start executing quickly; some are for medium-term implementation.”

Truth be told, there is no reason the outgoing government should be so passionate about withdrawing subsidy from PMS. Buhari has been in government for almost eight years. He had promised to revamp the economy, diversify it and revive the moribund refineries, but he could neither fix the refineries nor tackle the issue of subsidy on PMS, an issue which his party had, during the campaigns for the 2015 general election, described as a scam. With the grossly inefficient, opaque and ridiculous manner in which the Buhari government has handled its poverty alleviation schemes that gulped huge public funds and are still generating public concern, it is quite understandable why some Nigerians have publicly expressed hope that the $800 million would not be treated as mere parting gifts to outgoing public officials.

It is disturbing that in spite of the huge debt it was already going to bequeath to the incoming administration, the Buhari government decided to take yet another loan, failing to reflect on the disturbing fact that about 96 percent of the country’s current earnings are being expended on debt servicing. In previous editorials, we called on the government, which has less than two more months in office, to leave the crucial issue of what to do with oil subsidy to the next government as it did not act on the issue for almost the full duration of its eight-year tenure. We therefore do not see any point in rushing a decision on the issue in the remaining days of the government as it would not be able to attend to the full implications of the decision. There is nothing to celebrate in the government announcing an $800 million loan from the World Bank to be distributed as palliatives to the poorest Nigerians to offset the expected pains of the removal of fuel subsidy.

We are alarmed that any government could be announcing such a step when it does not even have any good record in policy implementation, particularly the poverty alleviation programmes that were riddled with unexplained and unexplainable transfers of cash to unidentifiable Nigerians. This is an administration in which a minister once placed a huge amount of cash on a table and claimed that the money was being distributed to some nameless entities of no known address dubbed “the poorest of Nigerians.” At a point, the government even claimed to have distributed food items to school pupils who were home during the COVID-19 pandemic. How then can it justify this rush to incur debt for the country less than two months to the end of its tenure and when it has no track record of accountable disbursement of funds? And what viable method does it have to disburse these funds accountably before May 29? Now that Nigerians are expressing misgivings about this loan, we are inclined to advise the government to stay action on it and allow the next government to handle the proceedings.

In the event that the government refuses to pause action and decides to go ahead and disburse the loan, we call on Nigerians to make it their duty to impress it on the next government to investigate the issue immediately it comes into office in order to expose all those involved with the shenanigans surrounding it.

READ ALSO FROM NIGERIAN TRIBUNE