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President Bola Ahmed Tinubu in Nigeria, has admitted that the economy is going through a tough patch and citizens were being hurt by it, citing the high cost of fuel, food prices and others.
To ease the hardship, he said his administration desired to reduce the burden the current economic situation has imposed on citizens, businesses, the working class and the most vulnerable.
The admittance came out during Tinubu’s address to Nigerians on state of the nation
Tinubu on Monday announced the release of N500bn palliative even as he promised a new wage for workers.
In a move to assuage the agony of Nigerians who are smarting from the pains of the fuel subsidy removal, the President also said 3,000 buses would be provided to address the high transportation fares occasioned by the hike in fuel pump prices.
Tinubu reeled out the promises in a nationwide broadcast on Monday evening titled, ‘After darkness comes the glorious dawn.’
The announcement is coming less than 24 hours to a planned strike and protests by the Nigerian Labour Congress over the removal of the fuel subsidy and the failure of the Federal Government to implement palliatives to cushion the attendant hardships.
But taking time to explain the reasons for the policy measures his administration had so far taken to combat the economic challenges facing the country, the President disclosed plans to roll out 3,000 CNG-fuelled mass transit buses in states and local council areas.
He said the Federal Government is working closely with states and local governments to implement interventions that will cushion the pains of the populace across socio-economic brackets.
Part of the programme, according to him, is to roll out the buses across the states and local governments for mass transit at a much more affordable rate.
He said his administration planned to invest N100bn between now and March 2024 to acquire 3,000 units of 20-seater CNG-fuelled buses.
The buses, he said, would be shared to major transportation companies in the states, using the intensity of travel per capital, adding that participating transport companies will be able to access credit under this facility at 9 per cent per annum with 60 months repayment period.
Tinubu stated, ‘’In the same vein, we are also working in collaboration with the labour unions to introduce a new national minimum wage for workers. I want to tell our workers this: your salary review is coming.
‘’Once we agree on the new minimum wage and general upward review, we will make budget provision for it for immediate implementation.’’
According to him, manufacturers, medium and small scale enterprises and farmers will get a whopping N500bn share of the palliatives that would be rolled out.
He said, ‘’ Our plan to support cultivation of 500,000 hectares of farmland and all-year-round farming practice remains on course. To be specific, N200bn out of the N500bn approved by the National Assembly will be disbursed as follows:
“Our administration will invest N50bn each to cultivate 150,000 hectares of rice and maize. N50bn each will also be earmarked to cultivate 100,000 hectares of wheat and cassava.
“This expansive agricultural programme will be implemented targeting small-holder farmers and leveraging large-scale private sector players in the agric business with a strong performance record.
“In this regard, the expertise of Development Finance Institutions, commercial banks and microfinance banks will be tapped into to develop a viable and an appropriate transaction structure for all stakeholders.’’
The President noted, ‘’Earlier this month, I signed four Executive Orders in keeping with my electoral promise to address unfriendly fiscal policies and multiple taxes that are stifling the business environment.
‘’These Executive Orders on suspension and deferred commencement of some taxes will provide the necessary buffers and headroom to businesses in the manufacturing sector to continue to thrive and expand.
‘’To strengthen the manufacturing sector, increase its capacity to expand and create good paying jobs, we are going to spend N75bn between July 2023 and March 2024.
Our objective is to fund 75 enterprises with great potential to kick-start a sustainable economic growth, accelerate structural transformation and improve productivity.
‘’ Each of the 75 manufacturing enterprises will be able to access N1bn credit at 9 per cent per annum with maximum of 60 months repayment for long term loans and 12 months for working capital.’’
Unveiling other palliatives, Tinubu added, ‘’Our administration recognises the importance of micro, small and medium-sized enterprises and the informal sector as drivers of growth. We are going to energise this very important sector with N125bn.
‘’Out of the sum, we will spend N50bn on Conditional Grant to one million nano businesses between now and March 2024. Our target is to give N50,000 each to 1,300 nano business owners in each of the 774 local governments across the country.
‘’Ultimately, this programme will further drive financial inclusion by onboarding beneficiaries into the formal banking system. In like manner, we will fund 100,000 MSMEs and start-ups with N75bn. Under this scheme, each enterprise promoter will be able to get between N500,000 to N1million at 9 per cent interest per annum and a repayment period of 36 months.’’
To further ensure that prices of food items remain affordable, the Federal Government revealed that it had a multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain.
In the short and immediate terms, the government said it would ensure staple foods are available and affordable.
‘’To this end, I have ordered the release of 200,000 metric tonnes of grains from strategic reserves to households across the 36 states and FCT to moderate prices. We are also providing 225,000 metric tonnes of fertilizer, seedlings and other inputs to farmers who are committed to our food security agenda,’’ the President disclosed.
For several years, Tinubu said he had consistently maintained the position that the fuel subsidy had to go, stressing that the once beneficial measure had outlived its usefulness as it costs the country trillions of naira yearly.
Such a vast sum of money, he added, would have been better spent on public transportation, healthcare, schools, housing and even national security.
‘’Instead, it was being funnelled into the deep pockets and lavish bank accounts of a select group of individuals. This group had amassed so much wealth and power that they became a serious threat to the fairness of our economy and the integrity of our democratic governance,’’ the President observed.
He declared that Nigeria could never become the society it was intended to be as long as such small, powerful yet unelected groups hold enormous influence over its political economy and the institutions that govern it.
The President argued that the whims of the few should never hold dominant sway over the hopes and aspirations of the many, noting that ‘’If we are to be a democracy, the people and not the power of money must be sovereign.’’
The ex-Lagos State governor maintained that his predecessor did not make provision for the fuel subsidy beyond June in the 2023 Appropriations, stating that ‘’removal of this once helpful device that had transformed into a millstone around the country’s neck had become inevitable.’’
He further underscored the positive impact of the removal of the subsidy, saying it had increased the government revenues.
He explained that over N1tn had been saved within two months, which the government would channel into education loan and other programmes.
‘’In a little over two months, we have saved over a trillion naira that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters. That money will now be used more directly and more beneficially for you and your families.
‘’For example, we shall fulfill our promise to make education more affordable to all and provide loans to higher education students who may need them. No Nigerian student will have to abandon his or her education because of lack of money,’’ he pledged.
He regretted the unavoidable lag between subsidy removal and the palliative implementation, adding that the government is swiftly closing the time gap.
The President said he was monitoring the effects of the exchange rate and inflation on gasoline prices, promising to intervene if and when necessary.
Speaking on the multiple exchange rate system which had been scrapped, Tinubu described it as ‘’a highway of currency speculation.’’
He said it was used to divert money that should have been used to create jobs, build factories and businesses for millions of people.
‘’Our national wealth was doled on favourable terms to a handful of people who have been made filthy rich simply by moving money from one hand to another. This too was extremely unfair,’’ he lamented, stressing that it also compounded the threat that the illicit and mass accumulation of money posed to the future of the nation’s democratic system and its economy.
Tinubu reiterated his promise to reform the economy for the long-term good by fighting the major imbalances that had plagued it.
Ending the subsidy and the preferential exchange rate system were key to this fight, he explained.
‘’As we moved to fight the flaws in the economy, the people who grow rich from them, predictably, will fight back through every means necessary,’’ the President submitted.
On the Infrastructure Support Fund, the President said it would enable the states to intervene and invest in critical areas and bring relief to many of the pain points as well as revamp their decaying healthcare and educational Infrastructure.
‘’The fund will also bring improvements to rural access roads to ease evacuation of farm produce to markets. With the fund, our states will become more competitive and on a stronger financial footing to deliver economic prosperity to Nigerians,’’ he assured.
Tinubu saluted private employers in the Organised Private Sector who have already implemented general salary review for their employees.
He urged Nigerians to look beyond the present temporary pains and aim at the larger picture.
