Labour, others oppose World Bank’s $800m subsidy palliatives

Unending fuel price increases

The organised labour and other trade associations have kicked against the World Bank’s $800 million facility granted to the Federal Government to cushion some of the effects of petroleum subsidy removal in Nigeria.

The groups argue that mere palliatives cannot provide a sustainable succour except the local refineries are revived.

This is even as discussions are also ongoing between the present administration and the in-coming government on modalities for the removal of fuel subsidy by the middle of this year.

Among those in opposition are the Nigeria Labour Congress (NLC); Trade Union Congress (TUC); Nigeria Employers Consultative Association (NECA); and the Northern Youth Council of Nigeria (NYCN).  

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed on Wednesday that the “$800 million is for the scale up of the National Social Investment Programme at the World Bank and it’s secured it’s ready for this disbursement.”

She said the $800 million is the first tranche of palliatives to be disbursed through cash transfers to about 50 million Nigerians, who belong to the most vulnerable category of society.

She spoke with journalists after the weekly Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, at the State House, Abuja.

Explaining further, Ahmed said: “When we were working on the 2023 Medium Term Expenditure Framework and the Appropriation Act, we made that provision to enable us exit fuel subsidy by June 2023.

“We’re on course; we’re having different stakeholders’ engagements, and we’ve secured some funding from the World Bank that is the first tranche of palliatives that will enable us give cash transfers to the most vulnerable in our society that have now been registered in a national social register.

“Today that register has a list of 10 million households. Ten million households is equivalent to about 50 million Nigerians.

“We also have to raise more resources to enable us do more than just the cash transfers and also in our engagements with the various stakeholders, the various kinds of tasks that we have go beyond the requirement of just giving cash transfers. Labour, for example, might be looking for mass transit for its members.

“So there are several things that we’re still planning and working on, some we can start executing quickly, some are more medium-term implementation.”

Besides, she added that there is a legal issue. “On the secondary question on exit of fuel subsidy, this is a commitment in the Petroleum Industry Act. There’s a provision that says 18 months after the effectiveness of the PIA, all petroleum products must be deregulated, that 18 months takes us to June 2023.”

The cost of living is already at a pace inconsistent with household incomes and the disposable income of workers and Nigerians, in general, has been eroded significantly by myriads of challenges.

Local refineries must work

However, several groups have opposed the World Bank’s largesse, because of the huge mistrust between the government and the people, especially as modalities for the selection of the 10 million households would not be transparent, in view of similar intervention programmes by this administration.

Indeed, they believe the palliative is another conduit for the government officials to further enrich themselves at the expense of the masses.

While the NLC insists that it “will not accept the removal of petroleum subsidy without locally refining the product in the country,” just as NECA said fixing the local refineries must be the pre-condition for subsidy removal.

The Director-General, NECA, Wale-Smatt Oyerinde, warned that “an abrupt removal of the subsidy without any aid to cushion the hardship this would heap on the masses, especially the most vulnerable in the society, could lead to extreme forms of poverty.”

He continued: “The cost of living is already at a pace inconsistent with household incomes and the disposable income of workers and Nigerians, in general, has been eroded significantly by myriads of challenges. These issues also affect employers considerably and significantly.

“While we support the removal of fuel subsidies and also commend the support of the World Bank, we believe the government should not shy away from the fundamental issues. These issues include fixing the refineries as a pre-condition for the removal of subsidies.”

He added that “It makes no economic sense to inject cash in the form of palliatives into an economy that is already beset with unending inflationary pressures.”

On its part, the TUC is concerned that social dialogue has been undermined under the circumstances.

TUC’s Secretary General, Nuhu Toro, described the grant as, “another neocolonialism tactic by the World Bank to hold Nigeria hostage,” and therefore, unacceptable.

“There is no doubt that our country’s debt burden and high-interest rate will be worsened by this development,” he added.

The NYCN, on its part, fears that any palliative measures put in place to cushion the effect of the subsidy removal would be looted by corrupt government officials as they did with COVID-19 palliatives.

“We cannot afford to have another round of hardship inflicted on the Nigerian people, especially the youth, who are already grappling with a high unemployment rate and lack of opportunities,” President of the Council, Isah Abubakar, said.

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