Economist urges Tinubu to consider non-cash subsidy palliatives

An economist, Prof. Uche Uwaleke, has advised President Bola Tinubu to consider non-cash palliatives instead of cash to ameliorate the effects of subsidy removal faced by Nigerians.

Uwaleke, a Professor of Finance and Capital market at the Nasarawa State University, Keffi, gave the advice in an interview with the News Agency of Nigeria (NAN) on Thursday in Lagos.

His reactions came in respect to the President’s letter to the House of Representatives, which was read by the Speaker, Hon. Tajudeen Abbas, during plenary on Tuesday.

The letter was for approval of additional financing for the national social safety net programme scaled up by the National Assembly.

The letter stated that 12 million families would get N8,000 over a period of six months to ameliorate the hardship faced by Nigerians as a result of the fuel subsidy removal.

It said the support would enable poor and vulnerable Nigerians to cope with the cost of meeting basic needs and will have a multiplier effect on about 60 million individuals.

Uwaleke said, “This is rather a sub-optimal option. The government should look in the direction of non-cash palliatives.

“The President is equally seeking approval of $800 million soft loan from the World Bank as part of funds to cushion the impact of the subsidy removal.

“If we add this N500 billion to the N600 billion (assuming I & E average rate of N750 applied to the World Bank’s facility), that should give N1.1 trillion.

“Consistent with the principle of maximum social benefit in public expenditure, one way, in my view, to ensure this money reaches the grassroots is to divide it by 774 Local Government Areas (LGAs) which translates to about N1.4 billion and transfer this sum to each local government.

“An optimal way to ameliorate suffering is via sustainable jobs. So, this money can be utilised as initial capital to establish massive skill acquisition centres in every LGA.

“The construction of these centres will generate huge job opportunities in the LGAs and help to reverse rural-urban migration.

“The management of the funds will be done by the communities themselves using traditional and religious institutions.”

On mass transit schemes, Uwaleke urged the government to partner the private sector to address the challenge.

He said, “with the current galloping inflation rate (official figures are understated), what can N8,000 do to a family of four in a month?

“And this is meant for only 12 million families (about 48 million persons, that is assuming they are adequately targeted and the National Social Register is clean and updated) in a country of over 200 million people.”