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Subsidy removal palliative: Why FG must steer with stakeholders’ consultation

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Without much controversy, the National Social Investment Programme of the immediate past administration did not record much success with regards to socio-economic impacts in real terms. Although measuring the impact of the whole gamut of the programme may be clogged with some parameters that may not give assessment of the policy a straight cut summation in exact and round terms, it is conclusive that the programme did not alleviate poverty as intended. The conditional cash transfer and the school feeding programme which gulped funds in billions failed to eradicate any poverty. Rather, the scourge of poverty between 2016 and the time the government exited in May 2023 worsened.

The new government which kicked off in less than two months from May 29, met conditions that could be said to be excruciating to many. However, an announcement of the government by the new President, Bola Tinubu in his inaugural speech, declaring discontinuation of subsidy payment on Premium Motor Spirit (PMS), popularly called petrol, meant a situation that would further toughen conditions for the masses. The immediate effect has seen hike in the pump prices of petrol. The attendant impact has informed hike in transportation fare and prices of commodities.

The outcry of Nigerians grew much louder when on Monday the Nigerian National Petroleum Company Limited (NNPCL) announced an upward adjustment for petrol pump price, pegging it at N617/per litre. Immediately, lamentations took over the air.  It means prices of goods and services would further soar high; Nigerians lamented hike in transport fare.

Amidst all, the announcement of the Federal Government to provide a palliative of N8,000 monthly to 12million households for six months has been greeted with austere condemnation. Critics have lamented and described same as ridiculous amidst the tough socioeconomic conditions which have seen inflation soaring as  high as 22.79 per cent in June. Critics have pointed out with comparative juxtaposition the jumbo pay of public officers, with particular reference to recent controversial allocations to lawmakers in the National Assembly and Judges of the Judiciary. For instance, the Nigerian Labour Congress (NLC) vexed by the new pump price on Monday lamented the meagre sum “called palliatives” while lamenting the N70billion, and N36billion allegedly allocated for lawmakers and judges. The NLC’s vexation rallied round the ridiculous amount of N8,000 for pallatives, allegations of the poor consultation by the present government with stakeholders, and recent request for loan to fund the palliative. The NLC in its lamentations which took knocks on the government in a statement by its President, Comrade Joe Ajaero, had said:  ”We have restrained ourselves from making further comments publicly on the vexatious issues around the recent but unfortunate unilateral hike in the price of Premium Motor Spirit (PMS) in the guise of the so-called subsidy withdrawal which has unleashed predictably as we had earlier warned unimaginable and unprecedented hardship, sorrow, anguish and suffering upon Nigerian workers and masses.

“Our resolve is anchored on our strong and abiding faith in the outcomes of the processes of social dialogue and its mechanisms, especially within a democratic setting which fortunately all the major stakeholders in the nation’s socioeconomic framework pleads to at this particular point in time though some have demonstrably shown that it does not go deeper than the rhetoric.

“However, the government of Nigeria seems to have been misled into believing that resorting to impunity and imperiousness in governance in a democracy is a beneficial option as it pursues its stated and unstated objectives.

“It is this belief that we are sure has continued shaping the actions of this government since its inauguration on the 29th day of May, 2023 to continue inflicting mindless and heartless pains on the populace one after the other without the decency of embracing the tenets of democracy which requires wide and deep stakeholder consultation on weighty matters of state.

“Nigerians would remember that the federal government had called for dialogue in the aftermath of its disastrous forlorn trajectory in the astronomical increase in Petroleum product price and our subsequent call for a nation-wide industrial action. We were also witnesses to the actions of the federal government in procuring an unholy injunction from the Courts which were served us in Gestapo style by trucks laden with fully armed soldiers and Policemen.

“In all of these provocations, we remained committed to the principles of the Rule of Law, good conscience and democracy so that we can continue to be the moral compass for leaders in the public space. This explained our decision to suspend action on the proposed strike.

“As it stands, rather than reciprocate the goodwill of Nigerian workers, the federal government has insisted on threading the path of dictatorship and seeking to impoverish the people further by taking steps that can only be described as robbing the people of Nigeria to pay and feed the Rich.

“It is on this basis that the NLC strongly condemns the decision of the Tinubu-led administration to seek the approval of the National Assembly to obtain another tranche of external loans worth N500billion from the World Bank for the purposes of carrying out a phantom palliative measure to cushion the effect of its poorly thought-out hike in the prices of Premium Motor Spirit.

“Remember that the $ 800million which was already proposed before the devaluation of the Naira by this government was worth about N400 billion then but is now worth about N650 billion after devaluation. It is from this, it proposes to bring out N500 billion for distribution.

“The proposal to pay N8,000 to each of the so-called 12 million poorest Nigerian households for a period of six months insults our collective intelligence and makes a mockery of our patience and abiding faith in social dialogue which the government may have alluded to albeit pretentiously.

“The further proposal to pay National Assembly members the sum of N70 billion and the Judiciary N36b is the most insensitive, reckless and brazen diversion of our collective patrimony into the pockets of public officers whose sworn responsibility it is to protect our nation’s treasury. We believe that this may amount to hush money and outright bribery of the other arms of government to acquiesce the aberration.

“It is unconscionable that a government that has foisted so much hardship on the people within nearly two months of coming into office will make a proposal that clearly rewards the rich in public office to the detriment of the poor. What this means all this while is that the government is seeking ways of robbing the very poor Nigerians so that the rich can become richer.

“There is no other way to explain the proposal to pay a misery sum of N8,000 Naira to each of the mysterious poorest 12 million Households for six months which amounts to N48,000 and pay just 469 National Legislators N70b or about N149m each while the Judiciary that has about 72 Appeal Court Judges, 33 National Industrial Court Judges, 75 Federal High Court Judges and 21 Supreme Court Judges and a total of about 201 Judges receives a total of N35b or N174m each. If these other two arms are projected to receive this, what members of the Executive Council will receive is better left to the imagination of Nigerians perhaps, the balance of N150b will go to them.

“These proposals are not just unacceptable to Nigerian workers but are also dictatorial and thus undemocratic. It is not a product of social dialogue which would have produced collectively negotiated outcomes by critical national stakeholders.

“We had thought that this government given the circumstances of its emergence ought to have been a stickler to all the preachments of the fine tenets of democracy which would have shored up its image and begun to build legitimacy for itself. Unfortunately, it seems to be in a hurry to abandon the remaining pretensions to democracy that the previous administration left behind.

“Furthermore, the actions of the federal government show that it does not have trust and confidence in the very Presidential Committee that it set up to take a comprehensive look at the consequences of the Petroleum Product price hike and make recommendations on the way forward to ameliorate its negative impacts upon the citizenry. What this means is that the government may actually not be interested in the work of the Committee and may have used it as a window to pretend to Nigerians that it is taking steps towards dealing with the consequences of its policies.

“We do not understand why the federal government would seek to undermine itself as its action suggests. Why not wait for the Committee to sit and come up with the needed recommendations which would then guide the government’s fiscal and monetary policies? Seeking to borrow and going to the NASS for an approval means that it has already taken decisions on what it wants to do and has a budget thus is in need to borrow to fund these activities. Like they will tell you; it is a fait accompli.

“We reiterate that we do not have confidence in how the data for the never changing 12m poorest households was generated neither do we have confidence in the mechanisms being pursued for the distribution of the cash transfers. The history of such transfers especially the school feeding programmes even while the children were at home due to the Covid-19 pandemic and the Trader Moni saga fills Nigerians with trepidation reminding us of the continued heist of our collective resources by those in Public office.

“We have continually demanded that this register be made public but, it seems to have become an instrument of the occult shrouded in mystery and wielded by the grandmasters whenever opportunities like this present themselves.

“It is important to inform Nigerians that despite having shown our readiness to commence work in the Committees, the federal government which convenes the meetings is yet to inaugurate the National Steering Committee thus stalling the Work of the Proposed Committees.

“If the government had wanted an expedited action which Nigerians want more, the best approach would have been to quickly inaugurate the Committees and allow them do their work but as we write, nothing has been done except the continuation of the borrowing spree and subsequent allocation to themselves.

“NLC would not want to continue to be part of the usual charade of Committees with outcomes that are never implemented. We would not want to waste the time of Nigerians especially workers on Committees that have already been programmed to fail and thus ignored.

“We do not want to provide a cover for the government to get away with the hardship it has imposed on the people. We do not want to legitimize impunity.

“As a result, if the government does not want to stop these fortuitous actions that it is pursuing in the name of palliatives, we will be forced to constructively review our engagement with the government on this vexatious issue and take matters into our own hands.”

Amidst the pressure of castigation that the palliative lacks human appeals, President Bola Tinubu Tuesday night, directed that the proposed N8,000 conditional cash transfer programme be reviewed immediately. The President had also said that the whole gamut of the palliative package of government to cushion the effect of subsidy removal that has led to the high cost of goods and services be unveiled to Nigerians.

In a statement issued, Tuesday night, by the Special Adviser to the President on Special Duties, Communication and Strategy, Mr. Dele Alake, the President had said: “You will agree with me that it has become part of the culture of President Bola Ahmed Tinubu administration to constantly dialogue with Nigerians who voted him into office. The President covenanted with Nigerians that their welfare and security will be topmost in the Renewed Hope Agenda of his government.

“In the last few days, the conventional and new media platforms have become awash with stories of the government intending to embark on conditional cash transfer to vulnerable households mostly affected by the painful but necessary decision to remove subsidy from petrol.

“The story has been widely reported that the Federal Government is proposing to give 12 million households from the poorest of the poor N8,000 monthly for a period of six months as government palliative to reduce the discomfort being experienced by Nigerians consequent upon subsidy removal.

“A lot of ill-informed imputations have been read into the programme by not a few naysayers. The Administration believes in the maxim that when there is prohibition, there must be provision. Since subsidy, the hydra-headed monster threatening to kill the economy, has been stopped, government has emplaced a broad spectrum of reliefs to bring help to Nigerians.

“While it should be noted that cash programme is not the only item in the whole gamut of relief package of President Bola Ahmed Tinubu, as a listening leader who has vowed to always put Nigerians at the heart of his policy and programme, the President has directed as follows:-

“That the N8,000 conditional cash transfer programmed envisaged to bring succour to most vulnerable households be reviewed immediately. This is in deference to the views expressed by Nigerians against it.

“That the whole gamut of palliative package of government be unveiled to Nigerians.

“Immediate release of fertilisers and grains to approximately 50 million farmers and households respectively in all the 36 states and the FCT. The President further assures Nigerians that the N500 billion approved by parliament to cushion the pain occasioned by the end of subsidy regime will be judiciously utilised. The beneficiaries of the reliefs shall be Nigerians irrespective of their ethnic, religious or political affiliation.

“President Bola Tinubu has promised to always prioritize the wellbeing of Nigerians and he is irrevocably committed to the vow. A number of decisions taken so far by this Administration have buttressed this stance.

“You will recall that the President took a similar decision after listening to complaints from the business community/stakeholders about burdensome taxes, particularly multiplicity of taxes they are made to experience. This warranted the signing of four (4) Executive Orders cancelling some classes of taxes, while suspending the implementation dates of others. In addition, the President has also set up a Tax Reform/Fiscal Policy Committee to bring up recommendations that will engender a wholesome fiscal environment for the country and remove anti-business barriers.

“I wish to assure Nigerians that President Tinubu will continue to be a listening leader whose ears will not be dull to the views expressed by the citizenry. The President believes government exists to cater for the interest of the people and he has demonstrated this so clearly.”

As lamented by the NLC, it is important the Federal Government allow for broader consultations in its policies, particularly with regards to subsidy removal which would now demand adjustment in prices from time to time. The need to give proper attention to to make such consultation broader in scope is very important to come up with a palliative coverage that bears relevance to human face with all sense of appeals to reasonable compatibility to the prevailing situation on ground.

Hence, the presidential committee set up to deliberate on the terms of palliative should be reconstituted with broader stakeholders coverage to allow for deliberations with specific clarity outlined for its terms of reference. The committee should be convened to operate without bias, essentially to yield an outcome of plausible recommendations to address the strains which the subsidy removal may pose or is capable of posing on the country. This is important to avoid, for the nation, crises that may further breakdown the fabrics of development, and in all sense save the government of the day from turmoil that may be too costly for it to calm.

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Editorial

Endless turnaround maintenance of Port Harcourt Refinery

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Since 2021 when the turnaround maintenance of the Port Harcourt Refinery started, there have been heaps of failed promises of the production commencement date.

First, it was former Minister of State for Petroleum, Timipre Sylva promising severally of commencement of productions of Port Harcourt Refinery, but these promises never came to limelight till he resigned for political calling.

Next was the Managing Director of Port Harcourt Refinery, Ahmed Dikko who at a time said the turnaround maintenance was 98 percent completed and would have commenced operations in December 2023. That promise again was unfulfilled.

The Group Managing Director of Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kyari equally said that Port Harcourt Refinery would start production in two weeks time, that elapsed in April, 2024. April has come and gone.

The Head, Corporate Communications of NNPC Ltd, Olufemi Soneye was also quoted to have said that the reason for non-commencement of operations of the Port Harcourt Refinery was regulatory and compliance tests. As it seems, all efforts to restart the operations of the Port Harcourt Refinery and by extension other refineries, have been futile.

Political watchers have adduced poor management, corruption, sabotage and lack of political will as some of the problems confronting smooth operations of our refineries. They particularly accused those benefitting from importation of petroleum products as being responsible for the non-functionality of the four refineries in Nigeria.

Political will, of course, plays a major role in shaping directions the policies go. Political will in this instance translates to good leadership, and in this case, the buck stops at the table of the Federal Government, particularly the President, who doubles as the Minister of Petroleum.

Petroleum being the mainstay of the country’s economy should be given all the attention it deserves. The reason being that virtually everything in the country is tied to the petroleum products situation.

Since the announcement of the removal of fuel subsidy on May 29th, 2023 by President Tinubu on assumption of office, life has not been the same in Nigeria. Cost of living has  risen astronomically, consequent upon the hike in price of petroleum products.

In the midst of plenty, courtesy of the abundant human and material resources, Nigeria is still often described as the poverty capital of the world. What an irony! Turnaround maintenance of the refineries subsists without end. Every hope is now placed on the Dangote Refinery, a private outfit. While the diesel price slash is commendable, how on earth will a single private entity take the whole country to Eldorado?

We cannot regulate what we do not produce, this is a natural principle that cannot be contravened. We only pray that Port Harcourt Refinery comes on stream someday.

We look forward to that time. Our position is that Government agencies saddled with the responsibility of providing fuel and other petroleum products to Nigeria must do their work and justify their pay.

This onerous task is mandatory and statutory to them and shall amount to disservice if they fail. Our prayer is not for them to fail, but that they fulfil their vows and make the country great for the overall interest of all.

Tecnimont, the Italian company undertaking the $1.5 billion rehabilitation project of the Port Harcourt Refinery has through its Local Managing Director, Gian Fabio Del Cioppo pledged to fulfil the terms of contract, so as far as we are concerned, there is nothing stopping the country from achieving the target of the turnaround maintenance project.

The only clog would of course be lack of political will, which we know could be cultivated. So let all hands be put on deck to achieve results.

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Editorial

Gas explosions: Nigeria and its avoidable tragedies 

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Nigerians die daily for reasons  so avoidable it would make  a 19th century peasant weep.  The deaths are often a product of systemic wickedness, nonchalance, and greed. Too often have gas explosions claimed the lives of Nigerians untimely. Whether it is the leaders refusing to enforce the checks and balances for personal gain, or citizens selling defective gas cylinders, it all balls down to a collective aversion for kindness.

The internet is rife with news of this tragedy occurring in a Sisyphean cycle. Jolted by the cries of the populace, the leaders promise reprieve, release press statements and in the weeks that follow, little to nothing happens. “One must imagine Sisyphus happy,” Camus wrote. Unfortunately, our Nigerian dead imagine nothing.

While people relaxed from their labour, were preparing for the Workers Day celebrations, nine people including a pregnant woman were injured in Tuesday’s gas cylinder explosion at Alaba Lane, Alayabiagba Community of Ajegunle-Apapa, Lagos.

“The fire explosion started around 1:30 pm and immediately, two tricycles were burnt, school children coming back from school were affected. A particular young man was seriously affected as his body was peeling off, but rushed to the Gbagada General Hospital,” according to reports.

The usual suspect is, of course, negligence, as the Director of Lagos State Fire and Rescue Service, Margaret Adeseye, puts it: “preliminary investigation revealed that several various gas cylinders traded within the neighbourhood have one triggered from a susceptible leakage leading to the snapping of a high tension cable and resultant Fire.”

The explosion razed down “four commercial tricycles, six lock-up shops, a bungalow part of properties, while salvaging adjoining structures including a major fuel service station.” Children were hurt, the future of the nation plunged, as usual into avoidable misfortune.

The way out is through. The press releases are wonderful PR statements but they do not bring back the dead, as was the case in Ogun State recently where a truck explosion cost the nation another life. The leaders must enforce the checks and balances put in place. The law is no decoration.

We mustn’t wait until a politician’s family member is involved in a tragic gas accident before “banning” (as is the default response of the Nigerian leadership). The leaders must realise that such misfortunes are contagious, and money is hardly a bulwark against 3rd degree burns in a nation where all its doctors are fleeing.

Renewed Hope requires renewed action. This is all that Nigerians ask of its leaders. All agencies responsible for monitoring trucks, cylinders need to work together to defeat this peculiar evil. Like COVID-19, gas explosions are no respecter of persons.

Of course, citizens too must do their part and resist the allure of profit over the death of others. A society without empathy is headed for a dystopia. It will not matter the price of petrol or electricity tariff, if all that matters is the pursuit of super profit at the expense of one’s neighbour. We owe it to the dead to live fully and graciously. To escape, as we should, avoidable tragedies.

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Editorial

Dangote’s diesel price slash proactive step towards economic growth

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Oil marketers have continued to dispense Automotive Gas Oil, popularly called diesel, at a price between N1,350/litre and N1,450/litre in various locations across the country despite repeated cuts in the price of the commodity by the Dangote Petroleum Refinery. Although they attributed the high pump price of AGO to transportation costs, taxes and old stock in most of the tanks in their filling stations, they commended Dangote for yielding to their calls for further reduction in the price of AGO from the plant.

The recent reduction in the price of diesel to N940 per litre by Dangote Refinery is a welcome development. It will, hopefully, help reduce the cost of transportation, which will presumably, lead to a reduction in the prices of goods and services. This is good news for consumers who have been grappling with high inflation and weak purchasing power.

The price change of N940 applies to customers buying five million litres and above from the refinery, while N970 is for customers buying one million litres and above. It would be recalled that the management of Dangote Petroleum Refinery announced a further reduction of the price of diesel from 1200 to 1,000 Naira per litre barely two weeks ago.

The strategic impact of affordable diesel prices on the economy cannot be overstated, especially in a country like Nigeria where transportation, a key component of any business activity, is controlled by the private sector. Diesel is the fuel that powers most commercial vehicles, including trucks, buses, and generators, which are essential for the movement of people, goods and services across the country.

If diesel prices are high, it directly affects the cost of transportation, which in turn affects the prices of goods and services. For example, if a trader has to pay more for transportation, they will pass on the cost to the end consumer, resulting in higher prices for basic commodities like food, clothing, and household items.

This marks the third major reduction in diesel price in less than three weeks when the product was sold at N1,700 to N1,200 and also a further reduction to N1,000 and now N940 for diesel and N980 for aviation fuel per litre.

The decision of Dangote Refinery to first crash the price from about N1,750/litre to N1,200/litre, N1,000/litre and now N940 is an eloquent demonstration of the capacity of local industries to impact the fortunes of the national economy positively. The trickle-down effect of this singular intervention promises to change the dynamics in the energy cost equation of the country, amid the inadequate and rising cost of electricity.

The reduction will have far-reaching effects in critical sectors like industrial operations, transportation, logistics, and agriculture, contributing to easing the high inflation rate in the country. It must be noted that most manufacturing companies in Nigeria generate their own electricity powered by diesel. If the price of that energy source is affordable, a lot of companies will be back in operation with the added advantage of enhanced employment opportunities and a friendlier cost of products.

Before now, manufacturers were confronted with abnormal costs of doing business instigated by the energy crisis. What followed was a steep rise in prices of factors of production as well as other inputs that impacted negatively in the economy. As a result, many foreign companies had to leave the country due to the high cost of doing business. This and the worsening power supply had and is still having very devastating effects on businesses at the moment.

Nigeria’s annual inflation rate has surged to 33.2 percent, the highest since March 1996, up from 31.7 percent in the previous month. This sharp increase in inflation is primarily driven by the steep depreciation of the local currency and the removal of fuel subsidies. Food inflation, which constitutes a significant portion of Nigeria’s inflation basket, has continued to climb, reaching 40 per cent in March, the highest level since August 2005. Additionally, the annual core inflation rate, excluding farm produce and energy, has soared to a multi-year high of 25.9 per cent in March. Consumer prices, however, eased slightly to three per cent, down from 3.1 percent as of February 1.

The benefits of affordable diesel prices extend beyond the consumer level. It also has a positive impact on the nation’s economy as a whole. For one, it will help reduce the cost of production for manufacturers and other businesses that rely on diesel-powered machinery. This will make them more competitive and ultimately lead to increased economic growth.

Furthermore, affordable diesel prices will also make it easier for small and medium-sized enterprises (SMEs) to thrive. SMEs are the backbone of any economy, and reducing their operational costs will help them grow and create jobs which, in turn, will boost the economy.

Ultimately, the artificial fuel queues resumption is uncalled for at this critical time of untold hardship on Nigerians. Since the planned removal of the fuel subsidy has failed, the best thing for the APC-led administration is to carry out an urgent review of the policy. Nigerians have witnessed untold hardship in the past few days due to the scarcity of petroleum products in the country.

Few filling stations selling fuel are doing so at cutthroat prices. If you are lucky enough to get commercial transportation, you should be ready to pay more than you already budgeted. This situation has shown that the said fuel subsidy removal by the Tinubu-led administration is a failure, a professional scam and there is a need for an urgent review of the policy.

We urge the Federal to deploy emergency means of resolving the unbearable fuel scarcity situation because Nigerians are passing through hell.

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