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HomeExecutive BriefTinubu's N8,000 Subsidy Palliative: Indirect Stealing or Relief for Masses?

Tinubu’s N8,000 Subsidy Palliative: Indirect Stealing or Relief for Masses?

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By Oludare Mayowa

Nigerian President Bola Tinubu received approval from both chambers of the National Assembly on Thursday for the provision of N500 billion in palliatives aimed at alleviating the suffering of Nigerians due to the removal of the costly and chaotic fuel subsidy.

The initiative is intended to address the impact of soaring inflation in the country and provide relief to identified indigent families nationwide. However, opinions are divided regarding the effectiveness of the scheme and its potential impact.

Drawing from past experiences, particularly during the COVID-19 era when various levels of government introduced palliatives to ease the pressure on Nigerians during lockdowns.

Investigations by Global Financial Digest have revealed that a significant portion of government provisions ended up in the hands of political office holders and powerful politicians. These individuals claimed to have collected items intended for the poor and diverted them for personal use.

In one instance in Ogun State, for example, three packs of items meant for three families were distributed among over 300 households in a particular location monitored by one of our correspondents.

Similar occurrences were reported in other parts of the country, where beneficiaries of the palliatives were denied access as items were hijacked by local government counselors and civil servants responsible for their distribution.

Despite billions of naira being allocated for these schemes, no government official has been held accountable for mismanagement, nor has anyone been held responsible for the scam.

Consequently, many Nigerians believe that the current initiative by President Tinubu’s administration to address the effects of the fuel subsidy removal and the rising cost of living will likely follow the same trajectory as previous efforts.

They argue that the measure’s impact will be minimal due to prevailing economic conditions, emphasizing that the government needs to address the root causes of poverty rather than merely superficially attempting to address the symptoms.

Critics argue that Nigeria lacks a reliable database to accurately identify the targeted beneficiaries of government programs. The mismanagement and unreliability of the National Identity Number (NIN) system further undermine the implementation of such programs.

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In contrast, in more developed nations, governments possess reliable databases of their citizens and can inject funds into the system to alleviate the impact of policies and emergencies on the populace.

However, even in those countries, instances of greedy public officials misappropriating palliatives intended to combat poverty have been reported.

During the COVID-19 era, for example, the United States government provided palliatives to cushion the pandemic’s impact on its citizens.

However, much of the funding ended up in the hands of the wealthy, who collected short-term loans and refused to repay them, while others in government who were not entitled to the funds still benefited.

Previous administrations, particularly during the immediate tenure of Muhammadu Buhari, faced similar challenges with transferring funds to indigent individuals despite billions of naira allocated for such programs.

Experts anticipate that the Tinubu administration will develop more enduring policies to alleviate poverty rather than engaging in well-worn programs that have had little impact on the economy in the past.

The repercussions of fuel subsidy removal include skyrocketing food prices, increased transport fares, and a general rise in the cost of living. To address these challenges, the government should consider the following measures:

Establish a well-functional public transport system in collaboration with the private sector to reduce transportation costs for Nigerians and discourage excessive profitability by fleet operators.

Adopt holistic policies to address challenges in the food production and distribution value chains, including resolving farmer-herder clashes, combating banditry and terrorism that negatively impact food production.

Establish silos nationwide to ensure food preservation and minimize wastage, as a significant amount of food produced in the country is lost due to inadequate storage and preservation facilities.

Build rural infrastructure, including more roads, to facilitate the transportation of produce from farms to markets.

Support farmer cooperatives to increase productivity, acquire farming implements, and distribute fertilizers to boost yields.

Encourage cooperatives to establish cold storage facilities for perishable items, with private sector involvement and incentives.

Implement cost-saving measures, reduce wastage, and plug financial management leakages to allocate more funds for infrastructure investments.

By implementing these strategies, the government can work towards alleviating the impact of the removal of fuel subsidy and improving the overall living conditions for Nigerians.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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