Subsidy Removal: NEC Proposes Palliatives For Workers, Vulnerable

Nigeria’s National Economic Council (NEC) has proposed palliatives for workers and vulnerable groups in the country, to cushion the telling effects of fuel subsidy removal.

This was in line with President Bola Tinubu’s directive a fortnight ago that the NEC should come up with palliatives to cushion the effect of fuel subsidy removal carried out upon his assumption of office on May 29, 2023.

Disclosing the outcome of the NEC meeting which was presided over by Vice President Kashim Shettima at the State House, Abuja on Thursday, Bauchi State governor, Senator Bala Mohammed, said Council 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 the intervention plans.

He also announced the setting up of a committee by NEC to work out, within two weeks, the modalities for organizing and distributing the palliatives. 

Mohammed, who was joined by four other governors; Dapo Abiodun (Ogun), Dikko Radda (Katsina), Alex Otti (Abia) and Yahaya Bello (Kogi), also stated that the interventions include a recommended sum, ranging from N23.5bn to N45bn per month, as petroleum allowance for civil servants.

He further explained that the Council also discussed the possibility of obtaining funds from the World Bank and London partners to implement the programme of Compressed Natural Gas (CNG) for vehicles in the country as part of measures to bring down the price of fuel.

His words: “Various scenarios were given by the presenter on the issue of national salaries, income and wages and this 702 billion plus was suggested as an allowance for the cost of living adjustment allowance by the organized Labour and the other one is a petroleum allowance. 

“The governor of Ogun has told you that there are other allowances here and there, but with regard to Labour, these are some of the few allowances that they have suggested and that of petroleum, they said will range from 23.5 billion to 45 billion per month, depending on what is in the kitty for distribution or for sharing. 

“So, the N702 billion is a suggested sum for Labour to cushion the effect on workers on a new allowance that will be tagged cost of living adjustment allowance”.

Mohammed added that the Council looked at all the issues including “the challenges and problems holistically and set up a small committee of council to review and come up with a term of reference to organized areas specifically where this palliatives can come and how it will be dispensed to alleviate the problem of workers and other vulnerable groups.

“Members of the committee is composed of Governor Kebbi as Chairman; Anambra representing the South East geo-political zone; Governor Benue, North Central; Governor of Kaduna, Northwest; my humble self, Bauchi, representing the northeast; Governor Cross River, South South and Oyo state, Southwest.

“Other relevant agencies were also included. They comprised of a budget office, representative of the CBN, representative of the Office of the Attorney General of the Federation, representative of NNPC, representative of TUC and NLC and of course, Rukayat El-Rufai, so that we can sit within two weeks to come up with recommendation to NEC for a wholistic decision that will be taken immediately to alleviate the problem that may be encountered by the removal of the subsidy.”

The Bauchi state governor said 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.

Also speaking, Governor Dapo Abiodun of Ogun state disclosed that the oil sector represented by the officials of DAPPMAN made suggestions on how to reduce the price of petrol to the Council.

According to him, the body urged the government to reduce the taxes being collected by the NPA, NIMASA and other government agencies on petroleum products.

He added that the Group Chief Executive Officer if the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari reported that the company noticed that with the subsidy removal, cost of fuel in the neighbouring countries has jumped up.

He added that those neighbouring countries have been relying on subsidized fuel from Nigeria.

Abiodun revealed that the NNPCL boss therefore suggested that Nigeria beging to export fuel to her neighbours with less capacity to import the product.

Said he: “The GCEO of NNPC says  the position of  NNPC now used to be in the active trade of actually trading petroleum products to the neighboring countries, since they do not have the wherewithal to import petroleum products. 

“We decided that we would have a subcommittee of NEC on oil and gas that will look at the issues that have been brought to the fore  by the marketers, by the regulator, by NNPC to ensure that we harmonize report back to NEC and if NEC adopts it we will present it to Mr. President”.

The governor equally revealed that the price of fuel would drop by N40 when the local refineries begin to work at full capacity.

On his part, Governor Dikko Radda of Katsina State, affirmed that government has approached the World Bank for more funds for the NG-Cares programme to mitigate the effect of subsidy removal. 

According to him, “as you are aware, the NG-Cares Programme is a programme that started 2021 running up to 2024. And then is to provide some emergency on palliatives, social needs on so many issues ranging from small farmers holders, MSMEs and other interventions. It’s a $750 million from the World Bank. And it has commenced long time ago. 

“And some of the recommendations that were made include the state Cares platforms having strong capacity to handle the implementation of palliative to the new and existing poor and vulnerable individuals, household and farmers, local economy of operators in the country.

“Additional funding can be sourced from the federal government, World Bank, Development partners as well as Nigerian private sector. 

“In specific, the World Bank can be approached for additional financing on NG-Cares programme. Discussion can start as soon as possible. 

“So these are the recommendations that were made. And the Economic Council will pursue these recommendations for the benefit of the Nigerian, vulnerable and the poor”, he said.

Also speaking, Governor Alex Otti of Abia State said NEC looked at the issue of providing legislative support to local automotive manufacturers following a presentation made to it by the National Automotive Design and Development Council.

While noting that the impact of subsidy removal has increased prices, he said the presentation dwelt on ways to solve the problem and reduce shock.

Otti stated that some of the local vehicle manufacturers have already gone into the production of CNG and electric automobiles, which can reduce the pressure on petrol, noting the need to support them through legislation. 

“At the moment, about 50,000 jobs have been created by this simple action of either assembling vehicles in Nigeria or producing them Nigeria. 

“A great feat is that some of these companies have gone into the manufacturing or assembly of electric vehicles and vehicles powered by CNG – compressed natural gas. The impact of this is that the pressure on the price of petroleum products particularly PMS will be reduced the more we use electric vehicles and CNG powered vehicles.

“Some of the decisions that we were taken include that legislative support will need to be given to these companies that are doing great things in Nigeria.

“It is important to underscore the point that former President had made a commitment that by 2060 that Nigeria would join countries that will eliminate fossil fuel powered vehicles and move to electric vehicles in pursuit of the net zero emission that some of the countries in Europe, America and Asia have signed on to. 

“So, if that must happen, then we need to ramp up the production of electric vehicles and CNG vehicles.

“It is estimated that if we give legislative support to these companies that about a million jobs from the 50,000 jobs that exist in that industry would be created. 

“It was also suggested that the funding that is required by most of these vehicle manufacturers and assemblers shall be made available to them so that we begin reduce the dependence on PMS and other fossil fuel powered vehicles”, he said.

Also speaking, Governor Yahaya Bello of Kogi State disclosed that NEC also spoke of the need to alleviate the suffering caused by the 2022 flood disaster in the country through the timely release of funds as recommended by various committees. 

According to him, NEC regretted the delay by many of the states affected by the disaster to forward their submissions to the Secretariat. 

Noting the position of NEC, he said “the plight of victims of the unfortunate flood disaster across affected states of the federation could be alleviated if the much needed intervention from the federal government materialized without further delay. 

“There is therefore the need to expedite release of funds to affected  states as recommended by designated committees constituted by the federal government to that effect.

“This will go a long way in addressing the needs of the victims as well as offset debts incurred by some states to assist the victim”, he said.

Bello said given the threat of flood this year, NEC resolved that all states should make a comprehensive submission by next week.

Deji Elumoye in Abuja 

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