Minister of Finance, Budget and National Planning, Zainab Ahmed has said that the N5,000 monthly grant proposed to be given to poor Nigerians next year to cushion the impact of petrol subsidy removal will suffer the same fate as the Subsidy Reinvestment Programme introduced in 2012, CSL Stockbrokers Ltd has said.
The Minister of Finance, Budget and National Planning, said this week that the Federal Government would give a transport grant of N5,000 each to between 30 million and 40 million poor Nigerians for a duration of 12 months.
Analysts at CSLS noted on Friday that former President Goodluck Jonathan attempted to remove subsidies in January 2012, which led to demonstrations and strikes across the country.
They said in a note that Jonathan was subsequently forced to reapply some subsidy (although not the full amount) to assuage Nigerians’ anger.
The analysts noted that in response to the cries of Nigerians for accountability, Jonathan set up SURE-P on Feb. 13, 2012 to reinvest whatever the Federal Government would get from subsidy removal into programmes and activities that would be beneficial to the masses.
They said, “However, after a few years of the programme, no meaningful progress was made towards alleviating youth unemployment in Nigeria.
“Former Chairman of the SURE-P, Christopher Kolade, after his resignation, noted that he resigned his position in 2013 because the SURE-P operations were becoming tainted with corruption and politics, thereby losing its credibility.”
The analysts described subsidy removal as a critical free-market reform, saying, “We believe it is beneficial to the economy and to government finances, though it will almost certainly put pressure on consumers and small businesses.”
They said, “We, however, believe there remains some political risk in implementing the change. The subsidy on petroleum is widely seen as a form of social security in a country where health and social security provision is non-existent.
“Thus, we believe the July 2022 commencement date for the plan might not come to fruition. 2022 is a pre-election year and the government may be forced to retain the subsidy to avoid any clash with the populace.”
The CSLS said the plan to provide a monthly grant of N5,000 would not in any way provide the needed cushion compared with the expected increase in petrol price.
“Also, it appears almost impossible to effectively execute the plan given Nigeria’s poor population data and we believe it will go the way of the SURE-Project,” it added.
