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Petrol Subsidy Removal: World Bank Urges Nigeria to Avoid Disbursing Expected $800m to Ghost Beneficiaries

The World Bank has advised the federal government to ensure that when it finally receives the $800 million loan expected to be expended on cushioning the impact of the fuel subsidy removal on Nigerians would be received, it should ensure that the fund get to intended beneficiaries and shielded from ghost names.

The Country Director of the World Bank, Shubham Chaudhuri, gave the advice  on Thursday , when he appeared on ‘Prime Time’, on Arise News Channel.

He also clarified that the $800 million loan was yet to be available for disbursement as it was awaiting the approval of the National Assembly.

He further added that with the poverty bracket of Nigerians expected to rise further, the urgency of targeted cash transfers for the vulnerable was vital, just as he suggested an increase in the number of beneficiaries.

Speaking on the subsidy removal and the immediate effect on Nigerians, he said: “Like many dramatic and bold steps, there would be some short-term pain and it is natural that leaders and the country are hesitant to inflict that pain and not quite sure how to deal with it.

“So, it does take some decisiveness to say that yes it would be painful, but we need to do this and we would try to do our best to make sure that the pain is mitigated for as many people as we can.

“Removal of petrol subsidy needed to happen, what we are saying is, help cushion some of the pains for a large part of the population as 60 to 70 per cent are those who would be considered either poor, near poor or economically insecure and vulnerable, meaning they’re sort of getting by day to day.

“This is the group that’s going to be hit hardest and government can do something to help cushion the pain, not alleviate it completely, but cushion the pain by providing targeted cash transfers to a large group of the population.”

Speaking on the likely means to identifying the poor and vulnerable, he said: “There has been an ongoing process right from the beginning. Identifying poor and vulnerable households near-poor households, all across Nigeria.

“Initially, and in fact, what’s called the National Social Registry, there are about 15 million households already in there. That was based on going to each community and asking the communities themselves to say who are the poorest and most vulnerable.

“And the idea is that the platform is available, not just for this, program that we’re supporting, but should the government choose to expand beyond 10 million households to identify others who may need them. And then the key thing is to ensure that the transfers are delivered to real people. “

 Speaking further, he said: “The key thing is that it shouldn’t be ghost names and that the cash transfer should actually get into the bank accounts or mobile wallets of those individuals in a way that’s monitorable and traceable.”

He further reiterated the importance of large scale cash transfer which according to him was in line with global standards.

He said: “Our board approved back in December of 2021, the $800 million that is available to provide cash transfers to roughly 10 million households. So at that time, I think the exchange rate was about N420/$1 so the calculation was $800 billion translates into roughly N360 billion of which N300 billion would be used for cash transfers of N5000 per household, for 10 million households over a period of six months.

“So that’s N50 billion per month for each of six months, which gives you N300 billion and then the N60 billion additional was to basically cover the implementation costs of making sure that you have the right systems to identify the households register them and make sure that they get the transfers digitally, and if they didn’t have bank accounts or mobile wallets, that they will be helped or assisted setting up bank accounts setting up a mobile wallet. So we were working with the national social safety net coordination office, the National Cash Transfer Office, and CBN to try and run this.

Nume Ekeghe in Lagos, Adedayo Akinwale and Kingsley Nwezeh

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