Scepticism trails FG’s proposed payment of N5000 to the poorest Nigerians over fuel subsidy removal

Yinka Oladele

Nigerians have continued to react with mixed feelings, and scepticism over Federal Government’s planned removal of subsidy payment on fuel; and in its stead a disbursement of N5000-a-month transportation stipend to the poorest Nigerians.

Minister of Finance, Budget and National Planning, Zainab Ahmed, had on Tuesday in Abuja disclosed that about 30 to 40 million Nigerians who make up the poorest population will be covered by the scheme as the government will no longer subsidize fuel from February 2022.

Reacting to this development, a human rights activist and program officer, Rights Protection and Accountability Network, Dr. Siyanolu Abegunde said the pronouncement is an indication that the government is bereaved of ideas.

Speaking with EnergyDay via telephone, he said, “This government lacks economic thinkers, how can they think N5000 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, government should have invested in heavy constructions that can give some hope to these vulnerable in form of jobs as we see in rail construction.

Also speaking, 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 of the new proposal.

“All the previous and ongoing social interventions schemes of this administration like 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 millions to benefit from the scheme? What are the parameters?

“These people are extremely poor, so in what way will N5000 alleviate their sufferings in the midst of spiralling inflation and high prices? This government should come down from its high horse and face reality.

In his own take, Professor Adeagbo Moritiwon, a political economist noted that while the intervention can not be totally dismissed with the wave of hand, government must ensure transparency in the whole process and avoid political consideration in the choices of beneficiaries.

He however noted that many of the target demography have expressed fear that the scheme may not be wholly transparent.

Speaking to EnergyDay, David Anjorin, a 26- year-old job seeker, expressed concerns over the current economic situation of the country.

He believes the scheme is not well thought out. His words “See, I know more than 250 people whose conditions are worse than my own, yet like myself, their names may not be there since no government’s agency contacted us. So, how did they arrive at that figures? They should tell Nigerians the parameters?

Many Nigerians who spoke with EnergyDay remained cynical saying like most schemes, politicians will hijack it as a political patronage for their followers, leaving out the vulnerable and poor for which it is meant for in the first place.

The Minister had on Tuesday, while speaking at the launch of the World Bank Nigeria Development Update (NDU), said the final number of beneficiaries will depend on the resources available after the removal of the fuel subsidy.

“The subsidies regime in the [oil] sector remains unsustainable and economically disingenuous.

“Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40% of the population.

“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5,000 to between 30 – 40 million deserving Nigerians.

The World Bank in its Development Update had said 40 % of the poorest in Nigeria consume less than 3% of the total PMS in the country, noting that the rich were benefiting more from the subsidies.

“We are very optimistic that the recent developments in the oil sector, such as the Petroleum Industry Act (PIA) 2021, hopefully, the full reactivation of the 4 public refineries in the country, and the completion and coming on stream of the 3 private refineries under construction in 2022, would significantly boost contribution from the sector to our economic growth efforts,” Ahmed added.

“I agree with the Report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy, while utilizing cash transfers to safeguard the welfare of poor and middle-class households.

Ahmed said this move is set for June 2022, but the Federal Government hopes to do this before June — in line with the Petroleum Industry Act (PIA).