Africa Leadership Group (ALG), a citizen-centric, and effective governance leadership organization has taken a swipe on President Bola Tinubu's swift decision on the petroleum subsidy removal, noting that its subsequent effects on the Nigeria citizenry is huge and worrisome.
Reacting in a press release to Vanguard, signed by Lara Gureje-Oderinde - ALG Director of Publicity and Media Relations, made known their position on the matter, stating that President Bola Tinubu administration's decision to disburse 500 billion naira to 12 million households over 6 months does not adequately address the fundamental issues and impact resulting from the subsidy removal.
It stated, "The decision to remove the petroleum subsidy regime, as declared by Mr. Bola Tinubu in his inaugural address, has had immediate consequences on the prices of goods, essential services, and food items, causing significant worries among millions of Nigerians, with a sharp increase in transport fares adding to the burden on citizens.
"The impact of increasing domestic fuel prices on the welfare of households arises through two channels. First, households face the direct impact of higher prices for fuels consumed for cooking, heating, lighting, and personal transport. Second, an indirect impact is felt through higher prices for other goods and services consumed by households as higher fuel costs are reflected in increased production costs and consumer prices."
However, Africa Leadership Group, an organisation founded by Pastor Ituah Ighodalo in a response to the outcry from Nigerians, conducted a survey of citizen's opinion, and disclosed that some analysts believe that the approach does not adequately address the fundamental issues and impact resulting from the subsidy removal.
Meanwhile, ALG in the process, proffered three top areas identified by the citizens where the 500 billion naira could be channeled for adequate use, other than mere incentives to 12 million homes that would not meet their needs.
"Firstly, about 48.7 percent of the fund should be invested in modular refineries to create jobs. Secondly, 48.1 percent of the money should be channeled to manufacturing or agriculture, with particular focus on small medium enterprises and smallholder farmers. And lastly, 41.7 percent should be used to subsidize commercial transportation or buy and distribute new buses to States to ameliorate the impact and logistics of human and goods.
"Other actionable pathways suggested by citizens include investing in health or
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education, subsidizing electricity tariffs, distributing funds to the poor through a
transparent process, investing in areas affected by terrorism, and focusing on food security initiatives."
The statement also mentioned that a phased implementation of the subsidy removal would have been more prudent, allowing citizens to plan and adjust their budgets accordingly, adding that the immediate effects and impact of the removal have been hard on many families, leading some to abandon their vehicles due to the high fuel prices.
According to ALG, the citizen survey also confirmed that the government should consider investing a portion of the 500 billion naira in climate-smart agriculture pilot food production initiatives in different geopolitical zones so as to enhance food security and reduce dependency on imports.
"Overall, the government must prioritize the well-being of its citizens, especially in terms of food security and transportation. A fair and equitable transition towards a sustainable and economically secure future can be achieved by carefully planning and implementing measures to mitigate the immediate effects of the subsidy removal while simultaneously investing in long-term solutions.
"Understanding who benefits from fuel price increases and the welfare impact of increasing fuel prices is key to designing and gaining public support for any relief program funding.
"Given the adverse impact on poor households, it is important that mitigating measures be implemented quickly to protect these households by expanding existing safety net programs, possibly with some improvements in targeting; and increasing high-priority spending that benefit the poor, such as in health, education, and infrastructure," ALG stated.
