The Federal Government has announced its decision to disburse N5000 per month as transportation grant to 30-40 million Nigerians that are “deserving” of it, to cushion the effect of the energy subsidies’ removal that is currently looming over the country.
The Minister of Finance, Budget and National Planning, Zainab Ahmed made this announcement in Abuja on Tuesday at the launch of the Nigeria Development Update.
The New Diplomat earlier reported that the World Bank had advised the Nigerian government to end its energy subsidy regime within three to six months.
The controversy surrounding subsidy removal on energy has been one of most debated topics in the country for over a decade now, sparking regular face-off between successive Nigerian governments and labour unions.
World Bank, a Bretton wood institution in a report on Tuesday had said: “Urgent priorities for the next three to six months include reducing inflation, improving exchange-rate management … eliminating the PMS subsidy … and improving infrastructure.”
According to the Finance Minister, the decision to pay N5000 monthly stipend to some Nigerians is part of the government measures to mitigate the impact of the removal of energy subsidies including on fuel and electricity targeted for mid-2022.
She explained that the grant would cover the most vulnerable 40% of the population in the country.
In her words, “The subsidies regime in the [oil] sector remains unsustainable and economically disingenuous.
“Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion the potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40% of the population.
“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5,000 to between 30 – 40 million deserving Nigerians.”
Ahmed further said that with the fully implementation of the newly assented Petroleum Industry Act 2021, the reactivation of public refineries, and the expected opening of three new private refineries in 2022, the economic of the country will be greatly impacted, bringing millions of citizens out of poverty.
“We are very optimistic that the recent developments in the oil sector, such as the Petroleum Industry Act 2021, hopefully, the full reactivation of the four public refineries in the country, and the completion and coming on stream of the three private refineries under construction in 2022, would significantly boost contribution from the sector to our economic growth efforts.
“I agree with the report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy while utilizing cash transfers to safeguard the welfare of poor and middle-class households,” the minister added.