Palliative And Sustainable Economy

The President Bola Ahmed Tinubu-led Federal Government last Thursday, 16th August 2023, announced a N5 billion palliative for each of the 36 states of the Federation and and the Federal Capital Territory (FCT) (FCT), Abuja to cushion the harsh socio-economic realities of the removal of subsidy on petroleum products, on the groaning masses. The governor of Borno State, Babagana Zulum, made the announcement in Abuja when he spoke to State House correspondents after a National Economic Council meeting presided by the Vice President of Nigeria, Alhaji Kashim Shettima. The Federal Government’ had initially announced its plan to give a paltry N8,000 to 12 million vulnerable households every month under a six-month purported welfare scheme.
However, such plan did not go down well with the masses as the removal of subsidy on Petroleum products has dealt untold hardship on the people. The cost of living has quadrupled. Transport fares, house rents, prices of material necessities, cost of education and doing business such as small and medium scale enterprises and other businesses that depend on petroleum products, have further increased. The consumer of the goods and services bears the brunt of it all. For instance, the cost of photocopying a page document that was N5 is now N50, about 500 percent increase. However, the upwardly reviewed N5 billion palliative to each of the 36 states of the Federation and the FCT Abuja appears to elicit a flicker of hope and earns the approval of some Nigerians when compared with the N8,000 for each of the target 12 million households across the country which some people described as “assault on the sensibility of Nigerians” and “anti-poor poor” policy.
In fact, the organised labour, under the aegis of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC), had insisted that the palliative proposed by the Federal Government’ was far from being enough and insignificant to cushion the sufferings in Nigeria, following the removal of subsidy on petroleum products. However, as commendable as the N5 billion palliative to states and the FCT would appear, will the reviewed Palliative translate to a sustainable economic impact on the masses? How long will such harsh economy cushioning measures last in a country where proactive economic measures to fundamentally address the spiking poverty level in Nigeria, is elusive?
Speaking on the palliative, a small business operator in Port Harcourt, Mr. John Chukwudi, did not believe that the palliative measure will address the multi-dimensional problems faced by the citizens without putting in place basic infrastructure like refineries and electricity as well as upward review of salaries of workers.
According to Chukwudi, the sad experiences of the Ebola and COVID-19 intervention schemes further cast doubt on the possibility of palliative on subsidy removal getting down the vulnerable people. “I don’t believe that this money released by the Federal Government’ to ease the sufferings of the people will really get to them. Were you not in this country during the Ebola, COVID-19 and flood periods, did money or relief materials really get to vulnerable people? Some of the materials were stocked in warehouses in some states while the people wallow in poverty and pains”. Mr. Chukwudi, who was pessimistic about the implementation of  palliative scheme in the States, said “ For me, seeing is believing”. For Mrs. Sopakirite Lily-West, an agro-allied economist, palliatives without basic infrastructure is a defective measure of addressing a socio-economic problem like the one Nigeria is into presently. She said palliative is only a temporary, stop-gap measure while lasting measures are being put in place.According to her, spending N185 billion Naira on palliative, if not well invested will translate to a colossal and monumental waste.
“Imagine that the Federal Government’ had put such N185 billion on an infrastructure to boost the economy, what that will yeild to, in five years.The present administration would have put in place infrastructure like improved electricity, functional  refineries and friendly business environment before removal of petroleum subsidy. “For me what the Federal Government under President Bola Ahmed Tinubu has done is putting the cart before the horse. There must be a collision and counter-productivity”.
A Port Harcourt based lawyer is of the opinion that giving N5 billion to each of the 36 States and the FCT is a covert way of increasing the capacity of some State governors to spend frivolously, waste, siphon public. funds.According to Mr. Sobere, “ You know that some State governors don’t have a sustainable economic development blueprint for the state they are governing.
So when such special money which is actually meant to make the people heave a sigh of relief comes, it is like an imprest for the governors. We are here in Nigeria, we saw what happened when relief materials given to flood victims by donor organisations including multinational companies did not get to most of them. You should also not forget the COVID -19 intervention schemes, and Ebola intervention, how many vulnerable people benefitted? Rather, it was a smokescreen for some of those in Government to share it among themselves to the exclusion of the needy”. In his view, a Christian cleric in Rivers State, Rev. Dr. Daddy Ibulubo, that the Federal Government’ dropped the proposal to give only N8,000 for each of the 12 million target households in the country and released N5 billion to each state and Abuja, shows it is listening to the people.
According to Dr. Ibulubo who is the Rivers District Superintendent of Assemblies of God, Nigeria, “frankly speaking the initial amount of N8,000 palliative was grossly inadequate considering the high cost of living in the country. The Federal Government’ is spending N185 billion as against about N480 million on the initial plan. I hope that State Governors who are trustees and stewards of the people’s resources will give value to every kobo received to alleviate the plight of the suffering people of the country. The people are really suffering. And the suffering is man-made. So they should be proactive to address it “ For its part the central Labour organisations, the NLC and TUC have urged the Federal Government’ to make upward review of workers’ salaries and wages as an integral factor of the palliative scheme.
The umbrella unions had proposed a N200,000 National Minimum Wage for the Nigerian worker. Joe Ajaero of the Nigeria  Labour Congress in a speech recently gave President Tinubu a knock for not working the talk on public servants’ salaries.
“Labour is disturbed that while President Tinubu in his speech lavishly praised the private sector for quickly dispensing wage awards to their employees, the Federal Government’ has failed to do the same for public workers in its employment. This is a case of failing  woefully to live up  the standard it has set  for others to meet”, Comrade Ajaero said.As measures to cushion the effect of removal of subsidy on petroleum products on public servants, some State Governors and Government institutions have  also announced the reduction of official work days from five to three. The governors include those of Edo, Borno, Bayelsa, etc. The management of University of Ibadan has also reduced its working days.
However, the Rivers State Governor, Sir Siminalayi Fubara has purchased and put on various routes in Port Harcourt metropolis and its environs a fleet of vehicles to ease movement at no cost to the commuters with a view to cushion the effect of the subsidy removal on the residents of the State. This is aside other relief packages the Rivers State Governor has promised to roll out soonest, while the promotion to various salary grade levels of  more than 4,000 workers in the State public service, had been implemented by Governor Fubara with assurances of improving on the welfare of workers. Meanwhile, the Rivers State Government  has also commenced rehabilitation of the State Secretariat in keeping with its Civil Service friendly policy. The President, Bola Ahmed Tinubu had in his maiden address to the people said the removal of subsidy on petroleum products is a necessity to prevent the country from “going under” and deliver the economy of the nation from the stranglehold of a few unpatriotic elements in the country.
While many agree with the present and successive administrations that the removal of subsidy is necessary to free and channel funds accruing from the subsidy removal into critical areas of infrastructure, the implementation of policy is hasty and ill-timed.Economists and Labour leaders have advocated for the rehabilitation of nation’s four refineries to make them work at installed capacities, regular power supply, provision of welfare packages for workers and others The unavailability of pre-subsidy removal incentives have triggered among several other challenges, high cost of living and outrageous hike in the pump price of petroleum products. A litre of premium motor spirit known as petrol, is now sold for about N700. While the masses associate high pump price of petroleum products to the moribund state of Nigerian refineries, the Senior Special Assistant to the President on Public Affairs, Aguri Ngelale told Nigerians “to disregard the myth that more refineries in Nigeria would translate to cheaper fuel price”
He said having more refineries  would save Nigeria the cost that would have gone into importing fuel products. According to Ngelale, “that is a myth, it does not happen anywhere in the world, even if we had the most refineries producing the most PMS in the world, you would find that the most prolific PMS producers with their refineries do not charge differently from the countries without refineries”, Ngegale said  in an interview on TVC. The kernel of it all is that making all refineries in Nigeria work at installed capacities will not scale down the pump price of petroleum products. That would suggest that Nigerians are living at the mercy of market forces. So Nigerians should cultivate the frame of mind of adjusting to new increases as may be dictated by the market forces.
If refineries are fixed to work at installed capacities and the anticipated relief is not realistic, if “PMS producers with their refineries do not charge differently from countries without refineries”, then huge amount of money put in building and maintaining the refineries is a colossal waste. And Nigerians should be ready to live with the  multi-dimensional challenges, pain and hardship posed by removal of subsidy on petroleum products. No wonder Mr. President did not include fixing refineries as part of his administration’s plan to solve the economy problem. His inclusion of the refineries following a knock by the NLC president was an after-thought designed to soothe frayed nerves. Let the palliative stimulate  a sustainable economic growth for States and the country. A sustainable economic growth is the bedrock for national development, and massive job creation.

By: Igbiki Benibo