President Bola Tinubu sent a mission to Libya and Algeria to discuss the issue in the Niger Republic, where a military coup ousted democratically elected President Mohamed Bazoum.

Tinubu Was Caution By CISLAC Over Subsidy And Palliatives

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The Civil Society Legislative Action, CISLAC, Friday admonished President Bola Tinubu over handling of gasoline subsidy removal processes and palliatives, as Nigerians feel powerless since the elimination of fuel subsidies since May 29.
Auwal Rafsanjani, the Executive Director of CISLAC, noted in a statement that Nigerians must be made aware of how profits from the withdrawal of gasoline subsidies are used, as well as palliative payments.

The implementation of subsidies in Nigeria, according to CISLAC, did not alleviate any of the problems that led to their adoption.

“It is expected that the fiscal space created by the subsidy withdrawal must be provided for wider public goods, and the resources saved could be reallocated to those groups most affected by the reform by adopting complementary measures,” the statement reads in part.

“However, gaining the confidence of the populace, who want to believe that the government has a viable and long-term strategy, is a significant issue the current administration faces.

The reallocation of subsidy savings should be directed toward fixing the energy and transportation sectors rather than engaging in another jamboree in the name of relief, as 27% of the average household budgets in the country are devoted to fuel-related expenses (petrol-powered generators and vehicles and heavy reliance on the subpar public transport system).

There are worries that the new administration is misprioritizing the use of limited cash that may only wind up padding a few wallets, given the dire need for loans to restore and develop roads and train lines.

Because of their recent experience with palliative administrations during the COVID-19 epidemic, Nigerians have valid worries regarding the openness of palliative distribution systems.In more recent times, we have seen the inefficiencies and lack of transparency that accompanied programs like the Anchor Borrower’s Programme, the Microfinance Bank SME/Household Loan, and the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), to name a few.

“More concerningly, a breakdown of the amended N819.5 billion supplementary budget reveals that N500 billion is set aside for palliatives to mitigate the effects of recent fuel subsidy removal, N185 billion for the Ministry of Works and Housing to mitigate the effects of the flooding disaster suffered by the nation in 2022 on road infrastructure across the six geopolitical zones, and N19.2 billion for the Ministry of Agriculture to mitigate the significant destruction to farmlands.

This sharing formula’s irrational justification and apparent lack of clarity and sincerity are evident when it is revealed that each of the 469 MPs receives almost N24 million while the more disadvantaged public recipients only receive N8000 per month, according to a further breakdown.

“The lack of compassion displayed here is disturbing, especially in view of the nation’s rising and unmanageable debt load. Steps should be taken to restructure and rationalize government parastatals, agencies, and commissions to address these costs at this critical stage of the post-covid recovery. Only 30% of the annual budgets go toward capital projects,

Government budget performance has never exceeded 40%, and municipal and national debts are mounting.

“Strict steps must be taken to alleviate these depletions and deficits given our current budgetary circumstances. The World Bank projects that Nigeria’s external debt, which makes up about 40% of its projected N77 trillion debt stock, will rise from 100.2 percent in 2022 to 123.4 percent of federal revenue in 2023 and could reach 160 percent in five years unless comprehensive reforms are put in place. The majority of this debt is owed to multilateral creditors like the World Bank, which represents 47% of the total debt stock, and is more concerningly owed at 39% to commercial lenders (private creditors).

According to CISLAC, in order for government policies and programs to be effective and efficient, they must be administratively workable, technically sound, and broadly acceptable.

The government should begin thinking about accelerating the implementation of the outlined recommendations of the Energy and Natural Resources subcommittees of the President’s Policy advisory council, which produced its detailed report in May 2023, in order to achieve more satisfying medium- and long-term outcomes.

“All efforts should be coordinated to optimize income creation while adhering to the values of openness, equity, and justice.

As we wait for the report of the Presidential committee on fiscal policy and tax reforms, which is charged with the primary objective of enhancing revenue collection efficiency, ensuring transparency reporting, and promoting the effective utilization of tax and other revenues to boost citizens’ tax morale, foster a healthy tax culture, and drive voluntary compliance, it pointed out, the possibility that this will create a sound fiscal policy environment offers hope for the common man.

In the meanwhile, it said, “If we are to move forward with this decision, there needs to be a guarantee of openness and accountability in the administration of these new palliatives.

“The monies should be distributed through the 774 local governments, at a cost of N1.4 trillion per LGA, with each establishing a committee made up of representatives from the community, civil society organizations, religious leaders, and political figures for efficient oversight. On the other hand, the LGAs might be required to use the money (N1.4 trillion) in a way that maximizes social benefits from public spending, such as through the establishment or renovation of public health care facilities, health insurance programs, skill development centers, or other similarly effective initiatives.

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