The Senate and some management experts yesterday expressed concern over the rationale for choosing the beneficiaries of the federal government’s planned disbursement of N2.4trillion palliatives to cushion the immediate effects of the fuel subsidy removal next year,
This is just as the Senate said there is no provision for the N5,000 monthly subsidy allowance for 40 million Nigerians as transportation allowance proposed by the federal government in the 2022 budget.
Minister of finance, budget and national planning, Zainab Ahmed, had said that there will be N5,000 monthly transportation allowance for the 40 million poorest Nigeria to cushion the effects of fuel subsidy removal, an intervention programme that will last for one year.
Speaking with journalists after submission of its committee’s budget proposal, Senator Adeola Olamilekan Solomon, who is chairman, Senate Committee on Finance, said that no provision for such allowance is currently before the National Assembly, just as he queried the criteria that would be used to determine the beneficiaries of the transportation allowance.
He added that before the Executive can embark on such intervention, the proposal must come to the National Assembly, adding that, for now, the proposal is still a rumour to him as the chairman Committee on Finance.
He said, “I don’t want to go into details; if there is something like that, a document needs to come to the National Assembly; and how do they want to identify the identity of the beneficiaries. This is not provided for in 2022 budget proposal – which is N2.4 trillion.
“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 proposal is to come to pass, a document to that effect must be sent to National Assembly for us to see how feasible this is and how do 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 this 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,” he said.
“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 reordering of the budget. For now, I still want to take it as a rumour until it is formally presented before the National Assembly,” he added.
On his part, the chief executive officer of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the proposal on cash transfer to the vulnerable segments of the society was not a bad idea, as it is essentially a transitional policy to mitigate immediate shocks, but the fund must go to the right segment of society.
“We need to be sure of the integrity of the database that contains the 40 million people. This should be validated by key stakeholders including the labour unions and the civil society groups. It is important as well to validate the inclusiveness of the database,” he said.
Yusuf, however, stated that more enduring reforms would have to take place to ease transportation costs, build domestic petroleum refining capacity, and attract more investors into the downstream petroleum sector.
“On the appropriation for the cash transfer, this can be resolved through engagement with the National Assembly. This should not be difficult given the rapport between the National Assembly and the Executive.”
Speaking in similar vein, an entrepreneurship and business management expert, Dr Timi Olubiyi, said there is the need to have clarity about the criteria for choosing the beneficiaries.
He said, “The N5,000 to be given to cushion the effect of subsidy removal is a welcome development but there is need to understand the rationale: how do we determine the poor among the 200 million estimated population that we have, and in doing this we need a credible database.
“The country needs House of Senate approval, and if not given the initiative will be on hold because we need the House’s backing to forge ahead.”
Olubiyi, however, said that except the presidency will use an executive order to implement such, it will be on hold till the time it can be accommodated in the budget.
Meanwhile, the federal government has said the N5,000 per month it plans to give to poor Nigerians as a transportation grant after the removal of fuel subsidy will last for a duration of 12 months.
Ahmed said state governments were to augment the allowance, on the basis of their financial strength.
“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,” she stated.
“Government is providing the support and support is to augment what the families already have. We wish we can do more.
“But we’re also limited in terms of the maximum of what government can afford. But there nothing’s stopping the states to add more than the N5,000 that is going to come from the federation.
“So, some states might decide to do more where they can afford it. The federal government right now is just looking, under this committee, at N5,000 per month.”
Meanwhile, the impact of the present economic growth being recorded will not be felt until it surpasses population growth rate.
Finance minister Zainab Ahmed disclosed this to State House correspondents after the federal executive council meeting presided over by President Muhammadu Buhari at the Presidential Villa.
The minister, who said she briefed council on the third quarter GDP report for 2021, which was released on Thursday last week by the National Bureau of Statistics, affirmed that the result shows an improvement from the contraction witnessed in 2020.
Asked why it the growth does not impact on Nigerians, she said: “Let me say that, again, the Nigeria economy is growing. And right now, we witnessed four consecutive quarters of GDP growth. We also said that we aspire to continue to push this growth to the point where the growth supersedes the growth in our population, because that’s the time that people will actually feel the benefits.
“So, we’re pushing the bar at the third quarter of 2021. The average annual growth is now 3.3%. Our population growth is roughly about 3.2%. So, we still need to do a lot more for people to feel this. But the fact is that the service sector is not in positive territory, it also means that people will actually begin to feel the difference, because it is the service sector that has the first direct impact on people.”
She noted that there has been a consistent decline in inflation from April 2021 to date.
“We expect this decline to continue through the rest of the year and also throughout the year 2022. On the other hand, we have seen an adjustment that has been done in the inflation largely caused by the improvement in the food basket in the inflation mix. And this is largely due to the agricultural harvest which constitutes 50% of the basket and inflation,” he said.
During his briefing, minister of transportation, Rotimi Amaechi, said he presented a memo to the cabinet for approval for the award of contract for the provision of training logistics, operational equipment and maintenance support for equipment and personnel, under the Integrated National Surveillance and Waterways Protection Solution Infrastructure in Nigeria.
“This is also what we call the Deep Blue Project. That’s the project that the president launched some months ago, around May or June.
“The contract was awarded at N6,347,967,644.21, inclusive of 7.5% VAT for a period of two years. It’s also important to say that the cabinet was briefed that there’s huge improvement in the security on our waterways now and we hope that it will continue as we progress.”
FG lacks competent economic management team – CISLAC
On its part, the Civil Society Legislative Advocacy Centre (CISLAC) said last night that the President Muhammadu Buhari’s administration lacks competent and quality economic management team which is why it kept making a policy somersault.
Speaking on the alarm raised by the Senate yesterday that the plan by the federal government to share N5,000 to about 40 million Nigerian poor to cushion the effect of the proposed subsidy removal is not part of the 2022 appropriation bill, the executive director of CISLAC, Awwal Musa Rafsanjani, said Nigerians know it is another plan to manipulate the minds of voters ahead of the 2023 general elections.
“One of the major problems that we have, or the Buhari’s administration has, is inconsistency and lies. The Nigerian government made pronouncement and people don’t believe it because of lack of accountability.
“It is because of the lack of accountability and lack of commitment that is making things go wrong in this country.
“If you said you are going to give out N5,000 to 40 million Nigerians and there is no budgetary allocation for it, then there is no guarantee that it will happen. You don’t spend public funds without anything backing it up,” Rafsanjani said.
“In the first place, we do not think that sharing N5,000 to some Nigerians is the best option considering what Nigerians are going through.
“The government is lacking competent and quality economic management team. There is a difference between economic advisers and economic management team.
“The economic management team is what will make the government focus on policy drive and its implementation. That is why there is a lot of mistakes going on now and then.
“The Senate has exposed it; it is now left for the executive to explain to Nigerians. To raise the hope of Nigerians and dash it, I think it won’t go down well.
“The people that are managing the affairs of the country don’t even care about accountability.
“The N5,000 as people are saying, it’s just to also solicit for the votes of the Nigerian people in the 2023 elections; because, why is it happening now? Clearly, this is going to be a fraud, ” Rafsanjani added.