The Senate, Trade Union Congress, TUC, and experts
yesterday disagreed with the Federal Government’s plan to
remove fuel subsidy next year and replace it with a N5,000
monthly transport grant to 40 million Nigerians.
While the Senate said there was no provision for such grant
in the 2022 budget, TUC expressed shock that government
could come up with this when negotiations on subsidy
removal between government and the Labour movement is
still ongoing, saying it is unacceptable.The Nigerian Labour
Congress on its part, described the development as an open
invitation for unrest and revolt.
Meanwhile, Vanguard analysis showed that the
implementation of 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 four years, the FG spent N2.93 trillion on fuel
subsidies as follows: 2016 – N563.3 billion; 2017 – N144.53
billion; 2018 – N730 billion and 2019 – N1.5 trillion.
However, Minister of Finance, Zainab Ahmed, said yesterday
that the Federal Government has not concluded work on the
proposed N5,000 transport grant, adding that the duration
for the implementation will not exceed one year.
Senate disagrees
Speaking with journalists yesterday after submission of its
committee budget proposal, Chairman, Senate Committee
on Finance, Senator Olamilekan Adeola (APC, Lagos West),
said that there was no provision for N5,000 monthly grant
for 40 million Nigerians for transportation allowance in the
2022 budget currently before the National Assembly.
According to him, before the Executive can embark on such
intervention, the proposal must come to 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.
‘It’s rumour to me’
Adeola, who noted that the proposal was still a rumour to
him as the Chairman, Committee on Finance, said: “I don’t
want to go into details, if there is something like that, a
document needs to come to 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 subsidy in the fiscal document, we can’t speak because
that is the document that is currently before us.
“The Minister of Finance, Budget and National Planning was
quoted as saying that 40 million Nigerians will be paid
N5,000 as transportation allowance, in lieu of the fuel
subsidy.
“I don’t want to go into details for now. I believe that if such
a proposal is to come to pass, a document to that effect
must be sent to the National Assembly for us to see how
feasible this is and how we identify the 40 million Nigerians
that are going to benefit from this process. “There are still a
lot of issues to be deliberated upon and looked into if
eventually this will come to pass and how do we raise the
money to pay these 40 million Nigerians?
“So, this is not provided for already in the 2022 budget. We
don’t have anywhere in the budget where 40 million
Nigerians will collect N5,000 monthly as transportation
allowance, totaling 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.”
Transport grant won’t exceed one year — Finance minister
But the Minister of Finance, Budget and National Planning,
Mrs. Zainab Ahmed, disclosed yesterday, in Abuja that
money to finance it would come from the Federation
Account.
The minister, who stated this while responding to inquiries
by Vanguard on the modalities of the relief package, said the
N5,000 monthly transport allowance will last between six
months and one year.
Consequently, the minister said that a committee had been
set up to look into it.
‘C’ttee led by VP looking into it’
According to her, a federal government team, led by the
Vice President, Prof. Yemi Osinbajo, has been negotiating
with the state governors on the programme.
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.
She said: “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.
“The e-Naria will help, but so also are the various payment
platforms that are currently available.
“What we will not do is pay people in cash. So the transfers
that people will receive will be through one kind of
electronic money or the other and it’s meant to be for a
period of six, nine or 12 months.
“So these are things that we are still in negotiating because
it’s still money that would have to come from the federation
account. So everybody that is a member of FAAC will have
to agree on the numbers. The maximum will be 12 months,
the minimum will be six months.
“So this exercise of the registration on the part of the
Federal Government, the Ministry of Humanitarian Affairs
already has responsibility; they’re already developing this
register, but the states are also going to be actively involved
in providing this electronic register through which the
transfers will be undertaken.
“How long will this intervention last? Okay, six months to 12
months. And we’re saying the committee is still working. So
we’ll know on Monday, how long, how much and then the
procedure on a state by state basis.”
Govt inviting anarchy, says NLC
Also reacting yesterday, the Nigeria Labour Congress, NLC,
rejected the transport grant, saying government was inviting
anarchy.
NLC in a statement by its President, Ayuba Wabba, warned
that the government was planning to set the nation on fire,
contending that government’s new position was being
anchored by the International Monetary Fund, IMF and the
World Bank.
The statement read: “A few hours ago, the Group Managing
Director and Chief Executive Officer of the Nigeria National
Petroleum Corporation (NNPC), Malam Mele Kyari
announced that the price of petrol could jump as high as
N320 and N340 from February 2022.
The NNPC GMD/CEO said that 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. 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.
“The assertion of the NNPC GMD was re-echoed on the 23rd
of November 2021 by the Minister of Finance, Budget and
National Planning, Mrs Zainab Ahmed, at the launch of the
World Bank Nigeria Development Update (NDU), titled ‘Time
for Business Unusual’ where she announced government’s
plans to disburse N5000 to 40 million poorest Nigerians
each as transport grant to cushion the effect of the planned
removal of the fuel subsidy.
‘’The disclosures by the NNPC GMD and the Minister of
Finance were in symphony with the positions of the World
Bank Country Director for Nigeria, Mr. Shubham Chaudhuri
and the International Monetary Fund urging the Federal
Government to do away with fuel subsidy.
“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 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 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. Thus, any attempt
to compare the price of petrol in Nigeria to other countries
would be set on a faulty premise as it would be akin to
comparing apples to mangoes.
“The contemplation by government to increase the price of
petrol by more than 200% 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 majority of our people resorting to tree
felling and charcoal for their energy needs.
“We wish to warn that the bait by government to pay 40
million Nigerians N5000 as palliative to cushion the effect of
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 government is not trying to
rob Nigerians to pay Nigerians. Why pay me N5000 and then
subject me to perpetual suffering?
“Clearly, government thoughts on the so-called removal of
fuel subsidy are cloudy and appear to be a ‘penny wise-
pound foolish’ gamble. It is clear that the palliative offered
by 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.
‘’Some of the viable options that can help insulate the
domestic consumers from the market pressure brought
about by the free fall of the Naira by making arrangement
with contiguous refineries not far from Nigeria to swap crude
oil with refined petroleum products; to accelerate work on
the rehabilitation of Nigeria’s four major refineries which are
all currently operating at near zero installed capacity; and
establish empirical data on the quantity of refined petroleum
products consumed daily by Nigerians.
‘’ 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.”
TUC, experts kick against N5,000 transport grant
Reacting, the Trade Union Congress of Nigeria, 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 on Tuesday
because it was a unilateral decision without the input of
labour.
He said: “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 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.”
Implementation’ll bring corruption — OGSPAN
Also opposing the transport grant, National President, Oil
and Gas Service Providers Association of Nigeria, OGSPAN,
Mazi Colman Obasi, said the implementation will bring about
corruption.
He said: “It makes sense to deregulate the downstream
sector for improved stability. It will also attract serious
investors into the sector.
“But paying N5,000 to 40 million Nigerians would not make
sense as it could bring about corruption. The government
should look at other ways of impacting Nigerians and the
nation’s economy.”
Govt needs something more realistic, says ex-MOMAN chair
Immediate past chairman, Major Oil Marketers Association
of Nigeria, MOMAN, who doubles as the Managing Director,
11PLC, Adetunji Oyebanji, called for a more realistic project
to be created, rather than the planned N5, 000 distributions
to the poor.
Speaking to Vanguard, Oyebanji stated that the planned fuel
subsidy removal was long overdue as such funds should be
used to support other sectors of the economy.
He said, “I have been an advocate of the removal of fuel
subsidy because it is not benefiting the ordinary man rather
the elite who drive cars. So, I was pleased with the planned
removal.
“However, the idea of disbursing N5,000 to Nigerians is not
sustainable and cannot be adequately monitored. What is
the difference between what was and what is suggested?
“I would think that such a fund would go to supporting
primary school students with books and feeding as well as
fees. That would encourage and grow the education sector
and its citizens in the long run. Also, the Federal
Government can inject such funds to the transport buses so
that Nigerians can pay low fare on the BRT buses. To me,
these are projects that are feasible and accountable.
‘N5,000 can’t make any difference’
Also speaking, human rights activist and program officer,
Rights Protection and Accountability Network, Dr. Siyanolu
Abegunde, said: “This government lacks economic thinkers,
how can they think N5,000 monthly hand-outs will make a
difference in today’s Nigeria when inflation is riding to the
sky and cost of living is very high?
“Besides, the process of executing the cash transfer will, as
usual, be controversial and riddled with corruption, nepotism
and all the negatives associated with this country.
“As for me, the government should have invested in heavy
constructions that can give some hope to the vulnerable in
the form of jobs as we see in rail construction.”
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.
He said: “All the previous and ongoing social interventions
schemes of this administration such as Conditional Cash
Transfer, TraderMoni and others, what have 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.”