By Suleiman Umaru
Magnus Kpakol, a Professor and Chief Economic Adviser to former President Olusegun Obasanjo and now Chief Executive Officer, CEO, and Chief Strategist at the Chief Economic and Business Strategies, based in the North American country of the United States, US, and Nigeria has kicked against President Bola Ahmed palliatives to vulnerable Nigerians ‘’to mitigate the economic pains brought about by the removal of the fuel subsidy by his Administration.
Prf.dKpakol, who shuttles between Nigeria and the US, had there was nothing wrong with the removal of subsidy on fuel importation into the country. The former Chief Economic Adviser to erstwhile President Obasanjo who had expressed support for the fuel subsidy removal had said that the palliatives should be used to repair the country’s in refineries and petrochemical plants in Port Harcourt, Capital of Rivers state, Warri, Delta and Kaduna, which are working in bits and fits.
The four existing in the country have a total combined reefing capacity of 425,000b/d but are currently working in bits and fits. Past Administrations had spent billions of dollar to carry out Turn around Maintenance, TAM, on the plants, but that was how far the then Buhari’s Addministration could go.
Recall that Abdullahi Sule, a former governor of Adamawa, home state of Atiku Abubakar, a former Vice President, during Obasanjo’s eight years Administration and who was the Opposition party, PDP, Candidate, in the February 25, 2023, Presidential election, had said that Buhari’s Administration had spent over $19 billion that could not be independently verified on repairing the country’s c four existing refineries for the eight years in office without commensurate results.
This may have informed why the governors and Mohammed Shehu, Chairman, Revenue Mobilisation Allocation and Fiscal Commission , RMAFC, had thrown their weight for the removal of subsidy , citing lack of transparency in the scheme and the massive fraud in the process of payment to the marketers.
As a prelude to removal of the subsidy, the then Buhari’s Administration had secured a World Bank facility worth $800 million to attend to about 50 million Nigerians who belong to the most vulnerable category of the country.
Hajia Zainab Ahmed, former minister of Finance, Budget and National Planning had said that discussions were held between the immediate past Nigeria President and the incoming President Tinubu on modalities for the removal of fuel subsidy by middle of this fiscal year.
This may have informed why the former Lagos state governor had sought the approval of Godswill Akpbabio , a former governor of Akwa Ibom state led Senate for a borrowing request of $800 million sourced from the World Bank earlier sent to the upper Chamber by the then Buhari’s Administration in the 19th National Assembly that was not treated by the Lawmakers.
Tinubu had said that the loan be used ‘’to scale up the national Social Safety Net programme among the poor and vulnerable Nigerians to assist them in coping with basic daily needs’’. He had said under the conditional ttransfer window of the programme , the government will transfer N8,000.00 per month o 12 million poor or low income households for a period of six months with a multiplier effect on about 60 million individuals.
Hajia Ahmed, the immediate past minister of Finance, Budget and National Planning had disclosed that the government already has a list of 10 million households which is equivalent to about 50 million Nigerians that would receive the N8,000 per month for the six months.
Prof. Kpakol, would want the Nigerian government to study how Canada and the US, two developed economies are implementing similar policies to do so in Nigeria without hitting the rocks. The Chief Economic Adviser to former President Obasanjo’s Administration, who could not hide his feelings had said that the subsidy removal should have been implemented in phases, allowing Nigerians to adjust.
He was emphatic that the problem of most Nigerians to the subsidy removal was one of adjustment. He averred that Nigerians are not in a position to be able to switch to the new price arrangement of a litre of fuel at the filling stations due to the subsidy removal because of the dependency past governments had created for vulnerable Nigerians over the years.
The Economic strategist major worry that there will be a major uphill battle ahead over the subsidy removal may not be unconnected to the fact that people transporting foodstuffs from the rural areas in different parts of the country, particular, in the north western states of Zamfara, Kaduna, Sokoto, Katsina, and the north eastern states of Borno and Yobe including the north central states of Niger, Benue, Plateau and south eastern states of Anambra, Enugu, Eboyi and Imo, are burdened by terrorism, banditry , insecurity and high prices.
He noted that as general inflation is extremely high for Nigerians for now , it would further things in the country by making transportation costs even steeper. It is not surprising why he had suggested that the government ought to have addressed the transportation costs through slightly subsidised fuel for Commercial vehicles instead of taking thewho thing away completely.
The Chief Economist had expected the Tinubu’s Administration to use computers, electronics, machines and other devices at the filling stations where Commercial vehicles , taxis and those in Commercial transportation , should be able’’ to get fuel at a slightly , not completely subsidised method’’ rather than seeking the approval of the Tajudeen Abbas led House of Representatives of an $800 million World Bank loan request by the former Nigerian President to transfer to 12 million poor households in the country, as part of the government efforts to mitigate the economic pains brought on by the complete removal of the fuel subsidy on May 29, 2023.
While the incumbent Nigerian President , is more concerned ab paying palliatives of N8,000.00 each to to 12 million households in the next six months, Senator Hope Uzodinma, governor of Imo state may have taken the bold initiative to increase minimum wage of workers in the state to N40,00.00 per month, to cushion the adverse effect of the complete removal of fuel subsidy by the administration.
Prof. Kpakol, may not be alone in kicking against the government payment of palliatives to 12 million Nigerian households to mitigate the economic pains of subsidy removal. The Leadership of the Nigerian Labour Congress, NLC and Trade Union Congress, TUC, were said to have also faulted Tinubu’s Administration’s plan of giving the N8,0000.00 cash palliatives each to 12 million Nigerian households for the next six months.
The Organised Labour had said that the former Lagos state governor ‘s cash palliative plan for payment to 12 million households for the next six months was running contrary to the works of the Presidential Technical Committee on the removal of the subsidy.
The OPS, Leadership, had said that ‘’it was not only undemocratic for the government to do so but showed that the President is merely inaugurating the Committee for the payment of the N8,00.00 palliatives to the 12 million household in Nigeria as a window dressing for whatever purposes he has set out to achieve for himself’’.
Festus Osifo, President TUC and who incidentally is also the President of Petroleum and Natural Gas enior Staff Association of Nigeria, PENGASSAN, may have sent a message to the government that if the payment of the cash palliatives to the 12 million Nigerian households is not in line with the agreement reached with Labour and in line with the resolutions of the Technical Committee at its meeting, they will not hesitate to mobilise their members to protest the policy that may paralyse the economy.
The Imo state governor may have read the handwriting on the wall and would not the workers to embark on protest in the state because of the harsh effects of the complete subsidy removal by the inubu’s Administration that he had also promised after a stakeholders meeting at Owerri, the state Capital on Saturday, July 15, 2023, to make available N5 billion soft loan for farmers to enhance their productivity , notwithstanding the approved upward review of the monthly minimum wage of workers in the state from N30,000.00 to N40,000,00 .
Going by the steps taken by the Imo state government to increase workers minimum wage in the state beat the Federal government to it, Senator Uzodinma, appears to have sent a message to other state governors to follow suit to review the salaries and wages of workers to cushion the negative effect of the subsidy removal.
