Removal of Tinubu subsidies and palliative dilemma

The federal government's afterthought of offering palliatives to stifle biting inflation and other realities of fuel subsidy removal is becoming even more controversial than the era of lavish gasoline spending, reports Kehinde Olatunji.

President Bola Tinubu's reversal of the 8,000 naira monthly palliative plan for 12 million vulnerable households came as no surprise to many.

The decision sparked a backlash following the realization that the government had earmarked 500 billion naira to cushion the effects of the subsidy cuts, while 70 billion naira was intended to support "working conditions for members of the National Assembly".

In a letter the president wrote to the House of Representatives approving former President Muhammadu Buhari's administration's $800 million loan request for the social safety net program, Tinubu unveiled the plan for the loan.

According to the president, transferring money to poor households would have a multiplier effect on around 60 million people. For more credibility, the president said the money would be transferred to households digitally.

Tinubu's letter reads: "Please note that the Federal Executive Council (FEC) led by President Muhammadu Buhari has approved an additional loan facility in the amount of $800 million.

“This must be obtained from the World Bank for the National Social Safety Net Program. You may also wish to note that the purpose of the facility is to expand the coverage of support for shock-responsive safety nets among poor and vulnerable Nigerians. This will help them meet basic needs.

“You may further wish to note that under the conditional cash transfer window of the program, the Federal Government of Nigeria will transfer the sum of N8,000 per month to 12 million poor and low-income households. This is for a period of six months with a multiplier effect on approximately 60 million individuals.”

However, many Nigerians criticized the proposed monthly stipend as insignificant and described the N70 billion budget allocation for legislators as insensitive to the economic hardships many Nigerians are going through.

While some Nigerians have argued that money is better invested in infrastructure as there is no reliable data system to carry out a transparent and impactful process, others fear that if the initiative is implemented, supporters and party members of the All Progressives Congress (APC) would be the main beneficiaries.

Given the outrage that followed the scheme, with many citizens criticizing the plan as unsustainable, the President, in a statement on Tuesday evening, signed by Special Adviser on Special Tasks, Communications and Strategy, Dele Alake, said Tinubu had ordered the full range of the government's stopgap package to be unveiled to Nigerians.

“That the 8,000 naira conditional cash transfer program envisaged to support the most vulnerable households be immediately reconsidered. This is out of respect for the views expressed by Nigerians against it.”

While praising the president for having a listening ear, some Nigerians have urged him to tell the public how he plans to change the attitude of government officials to reflect the times, starting with the presidency.

They argued that a wind of cost-cutting must sweep through every nook and cranny of government, and all governments at all levels must defend the pressure.

A columnist, Ugo Egbujo, said the public wanted to see the sacrifices the government and leaders made to defend the austerity measures.

“So far the government has shown no visible signs of austerity, 70 billion naira in NASS, 30 billion naira in the judiciary, the usual long list of appointments everywhere, there is no indication that the government is ready to take its own medicine.

"Removing subsidies is the easy part. The government needs to see and remove the log with its own eyes. Right now it's so hypocritical. If the government doesn't embrace overt frugality, it risks losing all moral authority to continue down this painful but necessary path."

Speaking to The Guardian, the Executive Director of the Civil Society Legislative Advocacy Centre, Auwal Rafsanjani, said the need of Nigerians is not tokenism and a meager monthly stipend, but relief through infrastructure in transport, electricity, food production and healthcare.