Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has said the federal government is yet to adopt a particular social welfare measure to cushion effects of the planned removal of fuel subsidy, just as the Nigeria Labour Congress (NLC) has begun mass mobilisation of civil society organisations for the January 27 and February 1 nationwide protests against proposed removal of petrol subsidy by the Federal Government..
The minister said while the central government is determined to implement provisions of the Petroleum Industry Act, prescribing absolute deregulation of the oil sector, it is also mindful of adopting a measure that would be practicable and easy to implement.
The minister had, at a forum in November said the government was going to provide N5000 to about 40 million poor and vulnerable Nigerians in a period of one year to cushion the expected economic impact of the potential subsidy removal, a move that was widely criticised as a misplaced priority by most Nigerians.
But the minister said what was put out to the public was simply a proposal by her ministry to the Federal Executive Council as transport subsidy in the sum of N5000 or any amount that would be agreed for between 20 to 40 million people.
“What we have that has been put out to the public is a proposal from the ministry. It will be discussed alongside other proposals, and whichever one is agreed as the one that is most practical and also the one that will be easier to implement, especially as we want to make sure only the right people get that subsidy will be the one that will be implemented.
She said since her office made the proposal to the executive arm, “there have been other proposals” on how to mitigate the fuel subsidy removal that would be considered by this committee.
Speaking during the presentation of the 2022 budget breakdown last week, the finance minister said the government is currently working on several options from different groups, including the one being chaired by Vice President Yemi Osinbajo.
“So, there are several options that we are currently working on and as people resume from the holidays, the committee’s work will start again. And part of the work will be to engage also with Labour so that we are able to comply with the provisions of the Petroleum Industry Act that specifies that all petroleum prices should be deregulated,” Ahmed stated at the event that took place in Abuja last week.
The International Monetary Fund (IMF) has asked the federal government to remove the subsidies and provide social welfare measures to cushion the effects of the proposed removal of subsidies on power and petrol. “There are significant downside risks to the near-term outlook arising from the uncertain course of the pandemic and the domestic security situation,” IMF said after its officials concluded a visit to Nigeria last year.
Ahmed said one other proposal that has been made “which is very key is for us to identify, through the transport workers’ union, commercial vehicle drivers, get them registered and pass the subsidy through them, using vouchers.” She did not give details on how the vouchers would be applied and how to determine real beneficiaries of the proposed social welfare.
Nigeria is still grappling with population data. The country’s population is estimated to be over 200 million. Speaking during the budget breakdown, Mrs. Ahmed said the authorities are finalizing efforts to conduct population census to determine its true numbers. The exercise is hoped to take place between the end of this year and 2023 when the country would be conducting its general elections.
“So, the numbers are yet to be discussed and agreed upon,” the finance minister said. The idea is to find a way to provide funds in the hands of the people that really need it to enable them to have some support because of this potential removal of fuel subsidy.
So far, Nigeria has been able to deregulate Kerosine and Diesel prices. The only one that is not deregulated is PMS. The current administration is planning to comply with the PIA, because it is an Act of the National Assembly.
Ahmed believes that the lack of actual deregulation in the sector is ripping Nigeria of needed revenues, saying the subsidy is currently being given to people that can afford it. Stating that there is no provision for subsidy in the 2022 budget from July, Ahmed said the government is ready to abolish the incentive from July 2022.
Meanwhile, the unions have scheduled meetings in Lagos and Abuja this week with leaders of civil society groups ahead of the rallies.
In a letter to the President/General Secretary of its affiliate unions, the NLC directed its Central Working Committee members to be part of the meeting to reject plans by the government to remove subsidy from petrol.
According to the letter signed by NLC President, Comrade Ayuba Wabba and General Secretary, Emmanuel Ugboaja, the Abuja meeting will hold on Tuesday while that of Lagos will hold on Friday.
The Trade Union Congress (TUC) said its organs would meet from January 20 to 22 to take a position on the planned subsidy removal.
Its President, Comrade Quadri Olaleye, confirmed the meeting to our reporter.