The minister of Finance, Budget and National planning Mrs Zainab Ahmed, on 24th Nov. 2021 proposed a 5000.00 transport grants to the poor and vulnerable population of Nigeria by the federal government as its plans on the removal of the fuel subsidy Speaking at the world bank Nigeria Development Update (NDU)
on Tuesday the minister said , the plans is to institute a monthly transport subsidy in the form of cash transfers of 5000.00 to between 30-40 million deserving Nigeria who makes up the 40% bottom poorest population of the country however the controversial side to these is that the senate pointed out that the appropriation bill does not make provision for the 5000.00(naira)monthly grants to 40million Nigerians, which got me really curious as to how and what are the plans to achieving this fairytale plan of disbursing 5000.00 to over 40million Nigerians accurately and effectively without some sort of politics and corruption playing a part in the sharing formula
Recall that the Former President Goodluck Jonathan attempted to remove subsidies in January 2012, which led to demonstrations and strikes across the country, Jonathan was subsequently forced to reapply some subsidy (although not the full amount) to assuage Nigerians' anger. In response to the cries of Nigerians for accountability,
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on 13 February 2012, Goodluck Ebele Jonathan, set up a Subsidy Reinvestment Programme (SURE-P) to reinvest whatever the federal government will get from subsidy removal into programmes and activities that will be beneficial to the masses. However, after a few years of the programme, no meaningful progress was made towards alleviating youth unemployment in Nigeria. Former chairman of the SURE-P, Christopher Kolade, after his resignation noted that he resigned his position in 2013 because the SURE-P operations were becoming tainted with corruption and politics, thereby losing its credibility.source
The removal of the subsidy is a critical free-market reform, in our view, and we believe it is beneficial to the economy and to government finances, though it will almost certainly put pressure on consumers and small businesses. We, however, believe there remains some political risk in implementing the change. The subsidy on petroleum is widely seen as a form of social security in a country where health and social security provision is non-existent. Thus, we believe the July 2022 commencement date for the plan might not come to fruition. 2022 is a pre-election year and the government may be forced to retain the subsidy to avoid any clash with the populace. Again, in our view, the plan to provide monthly grant of N5,000 will not in any way provide the needed cushion compared with the expected increase in petrol price. Also, it appears almost impossible to effectively execute the plan given Nigeria's poor population data and we believe it will go the way of the SURE-Project.source
Here’s a recap "a subsidy is sum of money granted by the state or public sector body to help an industry or a business sector keep the price of its commodity or service low and affordable to the masses,"
In these case the Nigerian government have been spending billions of dollars every year subsidizing the price of petroleum product to keep the price at a lowest minimum possible
As of September 2021 the government was reported to have spent 864billion on subsidy payment of petroleum product .source
So therefore the minister as announced targeted mid 2022, around june-july for the complete removal of the subsidy
But still there’s no concrete plans or certainty about these as it is pending on how much would be recovered upon the removal of the subsidy
My take on these is critically looking at the living condition in Nigeria and the state of the economy these will only double the trouble of the average Nigeria making a living, basically considering that our economy anchors mainly on alternative source of energy for electricity which is obviously the fuel and diesel generators for running business in Nigeria due to inconsistent power supply, so what that mean is that the price of petroleum product will likely double which in other words will trigger the up-scalling of prices of Goods and services in the country such that it will be very difficult for the lower class citizen to meet up
Looking at it critically the 5000.00 transport grants wont go any were as to helping the matter cause the cost of transportation too will definitely be affected apart from that it will be very difficult to meet up daily earns meat talk less of spending it on transportation
THE REMOVAL OF FUEL SUBSIDY ONLY TO REPLACE THAT WITH THE TRANSPORTATION STIPENDS IS ONLY BREAKING THE TIP OF THE ICEBURG IN ELEVATING POVERTY IN NIGERIA as it will only make living unbearable for the common man on the street,
Thank you for having me and I really appreciate you for coming around, please do well to drop your thoughts on these.