Nigerians in reaction to President Tinubu’s moves to cushion the effects of the petrol subsidy removal, have called for credibility and accountability in the disbursement of the proposed palliatives.
“Funding 75 enterprises with N1 billion each at nine percent interest for 60 months is an interesting idea. How the 75 enterprises are selected will be key for the credibility of the initiative; how their progress is tracked and reported (including how they are paying back the loan), Joe Abah, country director of DAI, an international development firm.
Abah shared his thoughts on President Tinubu’s speech on the economy on Twitter.
Tinubu had in a broadcast on Monday unveiled some plans to cushion the effect of his reforms to be implemented between July 2023- May 2024.
Some of the palliative plans outlined in the speech include allocating N125 billion to support MSMEs, consisting of 1 million nano businesses, 100,000 MSMEs, and start-ups. Additionally, there will be nine percent interest loans available for SMEs, BBC, and startups, ranging from N500,000 to N1 million, with a repayment period of 36 months.
To address food price stabilisation, the government plans to release 200,000 metric tonnes of grains to households in all 36 states and the FCT. Also, 225,000 metric tonnes of fertiliser, seedlings, and other inputs will be provided to farmers. The government equally plans to disburse N200 billion to cultivate 500,000 hectares of farmland. There will also be infrastructural support for states, with the fund allocated for healthcare and educational upgrades.
Additionally, the government plans to invest N100 billion in mass transit by distributing 3,000 gas-powered buses for nationwide transportation. Lastly, the speech mentioned funding student loans with over N1 trillion saved from fuel subsidy payments, which will be used to support higher education institutions.
Abah said he was glad that the N50 billion grant is to nano businesses and that it is conditional. “I am also glad about the touted N8,000 to 12 million households, using the National Social Register, for six months doesn’t appear to be happening anymore. As always, how the nano businesses are selected will be key for credibility, as will a report on how they are meeting the conditions attached to the grant.”
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In his tweets, he supported the removal of the subsidy by the administration.
“I agree with the removal of fuel subsidy although I am not opposed to subsidy per se. It could have been possible to tackle the fraud in the system, and to ensure that only the poor benefit. This will rely on a credible and comprehensive database of the poor, with full knowledge of each Nigerian’s income. Because since that cannot happen overnight, it is better to first stop the country from bleeding $16 billion every year on subsidy that we cannot afford,” Abah said.
Moghalu Kingsley, former deputy governor of the Central Bank of Nigeria, endorsed the reforms and called for accountability in executing the palliative measures to address the impact on Nigerians’ cost of living.
“President Tinubu’s speech was very clear about a plan to tackle the inevitable impact of the subsidy removals on the cost of living of the suffering Nigerian masses, and showed empathy too. His government should now be held accountable for execution,” he said.
Kingsley said that execution should now be performance-managed and monitored.
“There can be no return to petrol and forex subsidy if Nigeria is to structurally transform its economy. Next: a value-addition export-oriented economy plan to bring in forex while bottlenecks are removed at home.
“That’s the only way we can ultimately benefit from the removal of the fixed/dual exchange rate that was simply a corruption-trading complex for cabals. Else, the masses take the pain of imported inflation while portfolio foreign investors take the profits,” he said.
Kalu Aja, a personal finance consultant, believed the palliative plans of the president will yield results if implemented.
“Everything the president said was well thought out and will have a positive impact if implemented,” Aja said.
Aja said that these initiatives should have come earlier as speed is good in government.
“So why did they wait? He still has no ministers, same revenues, same economy, so what was the delay for?
Abdul Mahmud, human rights lawyer while replying to Kingsley Moghalu, stated how the removal of the subsidy has affected the poor.
“Showed empathy” by mere platitudes, Prof? Please, step away from the “unreal” world of books and you’ll find the poorest of the poor of our country who have for over 90 days been buffeted by the thoughtless removal of oil subsidy without discernible palliative frameworks,” Mahmud said.
Olusegun Onigbinde, co-founder, BudgIT & chief executive, Kwerty raised concerns on the distribution and allocation of these palliatives across the country. He advocated for systemic solutions such as tackling food inflation and increasing the minimum wage.
“Focus on systemic solutions such as tackling food inflation, minimum wage increase and building a national register. These handouts to a select few have never worked because it’s built on a faulty foundation,” he said.
