The total spending by the Federal Government on palliatives and loans aimed at alleviating the impact of the removal of fuel subsidies could reach N3.27 trillion, investigation by The PUNCH.
These measures were introduced to counteract the economic challenges facing Nigerians and businesses following the removal of fuel subsidies, which triggered soaring consumer prices due to high inflation.
The allocated funds for these palliatives and loans include N100 billion for the acquisition of 3,000 units of 20-seater CNG-fueled buses, N200 billion to boost agriculture production, N75 billion for manufacturers, N125 billion for micro, small, and medium-sized enterprises, and the informal sector.
Additionally, N185 billion was designated as palliatives for states, with N1 trillion dedicated to student loans and other programs.
Moreover, N315 billion was allocated to pay federal workers’ N35,000 allowance for six months. There’s also a plan to disburse N1.13 trillion to 15 million households at N25,000 per month for three months, from October to December 2023.
An additional N70 billion was designated for palliative measures for lawmakers, and a N75 billion loan facility was set aside for 1.5 million market women.
The removal of the fuel subsidy, which was announced by President Bola Tinubu on May 29, 2023, led to a significant increase in fuel prices, resulting in a surge in the prices of essential commodities and inflation.
The World Bank had warned that without proper compensation or palliatives, 7.1 million Nigerians were at risk of falling into poverty, which could increase the number of poor Nigerians to 100.9 million.
In response, the Federal Government began announcing a series of support measures, including loans and palliatives for Nigerians.
The government introduced a N500 billion palliative plan, which included funds for the acquisition of CNG-fueled buses, support for agriculture, manufacturers, and small businesses.
This move was intended to alleviate the challenges faced by Nigerians due to the removal of the fuel subsidy.
Additionally, N5 billion was set aside as palliative measures for each state, including the provision of 180 trucks of rice.
The Federal Government also allocated N75 billion to 75 manufacturing enterprises as a N1 billion credit at a nine percent annual interest rate.
To further ease the impact of the subsidy removal, N125 billion was earmarked for micro, small, and medium-sized enterprises, and the informal sector. The government also committed to spending N1 trillion on student loans and other educational programs to make education more affordable.
In response to threats of labor strikes, the Federal Government agreed to allocate N315 billion to pay federal workers a N35,000 allowance.
The personnel cost of the Federal Government was reported to be over N5 trillion, with 1.5 million workers on its payroll. This meant that the N35,000 commitment to workers would cost N315 billion for six months.
The government also announced plans to pay N75,000 to 15 million households at N25,000 per month for three months, totaling N1.13 trillion.
Additionally, the Senate approved a request from President Tinubu to borrow an $800 million loan from the World Bank, which would be used to support vulnerable and poor households in the National Safety Net Programme.
The government previously proposed to transfer N8,000 monthly to the bank accounts of 12 million poor and low-income households for six months but later announced a review of the plan.
Other controversial measures included a N70 billion allocation to lawmakers to enhance their working conditions in the National Assembly.
