Fuel subsidy removal: Why palliative framework must be encompassing

Policy drafting, formulation, and implemention have been critical issues in the analysis of governance in Nigeria. One recent policy matter which has been on the front burner of discourse has been the recent discontinuation of payment of subsidy on petroleum products in the Country. President Bola Tinubu made as one of first strikes in his policy directions, the removal of subsidy. The decision announced in his first official declaration, during his inaugural speech, on May 29 generated not only shock, but panic, fear, discontentment and multifaceted reactions.

The weight of the decision informed the need for reactional policy decisions, following the resistance that greeted the development. The discontinuation of subsidy on Premium Motor Spirit (PMS), popularly called petrol, meant more cost for transportation, production expenses for small businesses, among other strains, the impacts of which would be felt negatively among the masses of the common Nigerians.

Although the gains expected from the policy decision have heen justified to be of benefits to Nigerians in the long run, yet the impact in the short run would pose consequences, many of which may be too burdensome with hardship on the common Nigerians who are not prepared for such heavy blow, particularly at a time they are grappling with the torns of harsh economic conditions heightened and suffered in the past few years, particularly under the recent past administration.

Among the reactions lodged in dissatisfaction was the fight by the organised Labour to embark on a nationwide strike, though discussions and court injunction thwarted the plans.

In response to the reactions, the Federal Government, as declared by President  Tinubu, turned to make provisions for palliatives for Nigerians to cushion the impact of the decision. The  President following the outcry which trailed the announcement of the removal of subsidy on PMS had directed on Wednesday 07 June, the National Economic Council (NEC) led by the Vice President, Kashim Shettima to begin the process of providing palliatives. Tinubu had given the directive while he met with some major oil marketers led by Ogun State Governor, Dapo Abiodun at the State House in Abuja.

Subsequently, as part of its first deliberations upon inauguration, the NEC, last Thursday, June 15,  in Abuja, had said it considered recommendations from the National Salaries Income and Wages Commission to pay N702 billion as cost of living allowance to civil servants as part of intervention plans to mitigate the effects of the removal of subsidy on petroleum.

Following the deliberations, the Governor of Bauchi State, Bala Mohammed, had disclosed to State House Correspondents shortly after the inaugural  NEC meeting at the Aso Rock Presidential Villa that NEC received recommendations on the various ways and means to mitigate the impact that the new realities would have on the lives of workers. He had further disclosed that the intervention includes a recommended sum ranging from N23.5 billion to N25 billion per month as a petroleum allowance for civil servants?

“The NEC had received recommendations on the various ways and means that the country can use whatever increases that we have in the revenue to mitigate the impact that this is going to make on the lives of our workers. And so they recommended that there should be a consequential adjustment, estimated at N702.92 billion as part of the allowances that should be given as petroleum allowance to all workers and as well as a N23 or N25 billion monthly offer to cushion the effect on workers,” he had said.

The Governor who also disclosed that the Council received other suggestions to review salaries and wages, had said, “In addition to the palliative, the government looked at all the issues, challenges and problems holistically and set up a small committee of the council to review and come up with a term of reference to organise areas specifically where this palliative can come from and how it will be dispensed to alleviate the problem of workers and other vulnerable groups,?”

“Members of the Committee include the Governor of Kebbi State as Chairman; Anambra representing the South-East geopolitical zone; Governor of Benue, North-Central; Governor of Kaduna, North-West; Governor of Cross River, South-South; Oyo, South-West; and the Bauchi State Governor representing the North-East.

“Other relevant agencies in the Committee are the Budget Office, representatives of the Central Bank of Nigeria, Office of the Attorney-General of the Federation, Nigerian National Petroleum Company Limited, Trade Union Congress of Nigeria and the Nigeria Labour Congress and Rukayat El-Rufai. We will sit within two weeks to come up with a recommendation to NEC for a holistic decision that will be taken immediately to alleviate the problem that is being encountered by the removal of the subsidy,” he had hinted.

He, however, added that the input of the Committee on palliatives earlier set up and headed by former Vice President Yemi Osinbajo would not be discarded but integrated into the ongoing process. The development came barely two weeks after President Tinubu directed State Governors to concretise various palliative measures to ease the attendant hardship from the petrol subsidy removal.

It is essential that from various levels of Government, beginning from the Federal to the State and where necessary, the Local Government, the framework for the scheme be put into meaningful perspective. Efforts toward the palliatives should be concretise concertedly as reasonable as possible.

It is no doubt that the policy came as a blow on Nigerians at a time the masses are groping with the hardship of the wobble economy debilitated with shaking fabrics. It is, therefore, essential that the provisions of the policy be made with elaborate coverage built around best reasonable terms of social intervention working schemes.

In the regard of the foregoing, it is pertienet for the NEC to deliberate deeply such framework for which the palliative will bear positive impacts to the socio-economic fabrics of the Country, not disregarding the political fabric either.

Importantly, incorporating the terms of implementation of the policy should be well detailed in profound terms in the framework to guide the disbursement for effective delivery.

More importantly, since small businesses which form the greater quota of the contribution to GDP in the country have been deeply affected by the development, the palliative policy framework  should extensively capture grants for these businesses to survive. In all the draft, formulation and implementation of the intervention should be grounded in substance, bearing relevance to the need of developmental appeals devoid of political and administrative glitches capable of defeating purposeful relevance.