Bola Tinubu, Nigeria’s president, has promised Nigerians economic succour after he asked the National Assembly to approve a N500 billion palliative fund on Wednesday.

Nigerians have been hard-pressed as a result of the federal government’s discontinuation of fuel subsidies. Since the removal of fuel subsidies in May, the cost of petrol has almost tripled along with every other commodity subject to the effects of rising transportation cost.

“I understand that our people are suffering, yet there can be no childbirth without pain,” Tinubu told a group of former governors at Aso Villa on Wednesday.

“The joy of childbirth is the relief that comes after the pain. Nigeria is reborn already with fuel subsidy removal. It is a rebirth of the country for the largest number over a few smugglers.

“Please tell the people to be a little patient. The palliative is coming. I don’t want cash transfer to fall into wrong hands. I know it pinches, and it is difficult.”

FIJ took a closer look at Tinubu’s N500 billion palliative proposition and sought to find expert views on how the funds could be better harnessed.

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WHERE WILL TINUBU GET THE N500 BILLION FROM?

N500 billion is such a wholesome withdrawal for Nigeria at a time, regardless of its source. Nigerian states have their annual budgets in the neighbourhood of N500 billion.

Tinubu told the National Assembly that he wished to take this N500 billion from a N819,536,937,813 supplementary budget.

Muhammadu Buhari had introduced this supplementary budget in 2022 to fund capital projects due to the impact of the floods on farmlands.

“I write to request an amendment to the 2022 supplementary appropriation Act in accordance with the attached. The request has become necessary in other to, among other things, source funds necessary to provide palliatives to mitigate the effect of the recent removal of fuel subsidy on Nigerians,” Tinubu’s letter to the National Assembly read in part.

“Thus, the sum of N500 billion has been extracted from the 2022 supplementary budget of N819 billion for the provision of palliative. I hope the House will consider this request expeditiously.”

This means that the federal government would once again shift its priorities from those capital projects to facilitate palliative efforts such as cash transfers to vulnerable citizens.

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CASH TRANSFERS ARE A BAD IDEA

Tinubu is considering cash transfers to citizens, but many experts believe this is not a good idea.

Muda Yusuf, the head of the Centre for Promotion of Private Enterprise (CPPE), told FIJ that he had reservations about cash transfers as economic palliatives.

“The government has been floating a number of ideas such as cash transfer and I listened to the president yesterday who said that the citizens should be patient and that they are trying to take their time to make sure the benefits of the palliatives and cash transfers don’t go into the wrong hands. I have a feeling that cash transfers to the vulnerable members of society is one of the major things that the government is looking at. For now, that is what is very clear. Some of us have reservations about these cash transfers,” Yusuf told FIJ on Thursday.

“It is not easy to manage in this environment because the funds can get into the wrong hands, and this may also not be inclusive. How many people are we going to give money to? About how much money will get to those people? We have about 133 million Nigerians living in multidimensional poverty, and we don’t even know how credible our social register is. Data is a major issue when it comes to cash transfers. Whatever it is, it [the palliatives] has to be comprehensive and inclusive.”

Nigeria’s National Social Register has about 46 million vulnerable citizens in it, according to former minister of humanitarian affairs Sadiya Umar Farouq.

Buhari’s federal government claimed it used the country’s social register to give N5,000 to very poor and vulnerable citizens as part of its conditional cash transfer (CCT) programme. This has not stopped experts from registering their doubts with cash handouts.

Each will end up with N3,759 if we divide the N500 billion palliative fund by 133 million people stuck in multidimensional poverty. What is N3,759 worth in a country where petrol sells at N500 and a loaf of freshly baked bread is N800? How long will N3,759 sustain a Nigerian when one pound is worth about a thousand naira in foreign exchange?

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BETTER IDEAS

Cash transfers or anything close to the conditional cash transfer programme will not suffice; it won’t alleviate the sufferings of vulnerable Nigerians.

So, what are the better ideas that could actually justify the withdrawal of N500 billion as a palliative fund?

“Some of us really think that this palliative should be channelled towards better fiscal policies and investment in crucial infrastructure that will have a direct impact on citizens. We can also consider other subsidies in health, education, liquid petroleum gas (LPG) and transportation,” Yusuf explained.

“These things will directly impact Nigeria’s vulnerable population. The overall objective is to bring down the cost of living, that is what is most important at this time. We have some low-hanging fruits; first, the president has mentioned cash transfers. Second, we have talked about wage review. To improve the salaries of workers will cost some money. The federal government won’t give wage reviews to states, so it is possible that the wage review that will be contained in this supplementary appropriation will be limited to federal government institutions. So, we expect the state governments to do the same. We are hoping that the allocations to states get better because of the fuel subsidy removal and the convergence of the exchange rate.

“The government should also consider concessions on taxation. For instance, we can give concessions to the agricultural and manufacturing sector if we want to bring down the cost of food. We can reduce their cost of production by subsidising some agricultural inputs. We also need to bring down the tariff on mass transit buses so that commercial transporters can easily buy buses for commercial transportation. The tariff and import duties on these vehicles are at about 35% right now. Anybody earning N200,000 or less shouldn’t pay income tax. These are the kinds of moves that can give a more comprehensive flavour to this palliative instead of giving people money.”

The federal government will come up with more details on how they would intervene with this palliative fund after approval from the National Assembly.