Experts have said given the high inflation rate, the N25,000 provisional pay rise announced for workers among other measures by President Bola Ahmed Tinubu will not solve the economic hardship faced by Nigerians.
The president in the 63rd Independence Day Address yesterday had also announced plans to extend the cash transfer to an additional 15 million vulnerable households to cushion the hardship effects of the fuel subsidy removal.
He also said that the government had set up an Infrastructure Support Fund for states to invest in critical areas to ensure better grassroots development.
But criticising the move, an economist, Dr Austin Nweze, said the solution to the economic crisis was not to throw money where it would not make an impact but to fund production in order to reduce the spending on importation.
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He said paying workers additional N25,000 monthly for six months would amount to nothing because “In six months, inflation will still be high, transportation cost will still be high, exchange rate is high and manufacturers importing raw materials have to buy those things at the highest cost.”
He also faulted the plan to expand the social safety net programme through the conditional cash transfer, saying there is no reliable data to make it work.
Nweze said, “The thing is that you find a way of producing more of the things that you consume. If labour is threatening and all that, why are they threatening? Because the inflation rate is high; so much money chasing few goods but when you produce more goods, inflation will automatically come down.
“So how do we bring down the cost of purchasing goods and services provided within? The only thing is to produce more and how do you produce more? You need to go back to the fundamentals.
“When Sanusi Lamido Sanusi was CBN governor, he gave N600bn to textile industry, some of them rejected it and they said, ‘Look, if we collect this money now, the major cost component for their manufacture is power, which is about 50 – 55 %, if you don’t fix power, the money you are giving us is useless.’ So, they refused to collect it because the main fundamental thing is not taken care of.
“I think there is confusion everywhere. If the government is serious about this, they should go back to the drawing board. What are the critical sectors they would push that money to so that they would be more productive?’
Similarly, a public policy expert, Dr Abimbola Oyarinu, said the introduction of N25,000 for low-grade workers by the federal government was a clear indication that the government had lost control of the economy and was trying to clutch at straws.
He argued that while the policies introduced by the government were not bad, its implementation had exposed the economy and the citizens to so many hardships, which can’t be corrected by N25,000.
“What is the percentage of N25,000 to the hardship in the country now? How did they come about the N25,000? What metrics did they use at arriving at it as a reasonable amount to help the people get over the situation?
“The truth is that the economy cannot survive the increase in pump price, it has slowed down the economy; it has increased the number of poor people. Governments all over the world should be concerned about the welfare of the people. The policies were the right step but the implementation was not well-thought out. The government could have introduced them in phases to allow the economy to be able to survive. N25,000 is not going to kick start the economy,” he said.
However, a public affairs analyst, Nelson Ekujimi, said the N25,000 was part of the efforts of the government to help the citizens navigate the economic situation, adding that the presidency was not in the position to fix salaries and wages.
“We all know that one of the things NLC is clamouring for is palliative to workers. FG through the presidency does not have power to increase wages, so this is a palliative. A committee comprising the FG, state government, private sector, workers and other stakeholders are working on a new minimum wage.
“We must not lose sight that the N25,000 is provisional. So, it is commendable and will cushion the effects of what the workers just like other Nigerians are going through,” he said.
PDP slams president
Meanwhile, the Peoples Democratic Party (PDP) said the 63rd Independence Day Address by President Bola Ahmed Tinubu was empty and bereft of ideas, especially in the face of the harrowing and life-discounting experiences being encountered by Nigerians.
Debo Ologunagba, National Publicity Secretary of the party, said the whole speech showed that the president was not prepared for leadership in the first place.
He also said Tinubu’s admission that his administration was responsible for the “current excruciating hardship in the country” validated PDP’s position that his government lacked the competence, capacity, required skills and humaneness to run the affairs of the nation.
The PDP said that Nigerians did not need to pass through agonising hardship as being excused by Tinubu if the nation is run by a government that has the required vision and skills to harness and manage our economic potentials, national comparative advantage and expanded value chain that abound in our vast but dormant productive sector.
He said, “Indeed, any serious government with requisite capacity and vision will set a Marshall Plan on every critical sector, which has the capacity to galvanise and stimulate the economy through job creation.
“Our party holds that the manifest non-preparedness and hasty implementation of ill-planned policies by the current APC administration triggered a catastrophic economic failure with unprecedented crippling effect on the productive sector and agonising hardship on Nigerians.
“The ill-planned policies led to the closure and mass exodus of many multinational companies from our country, disabled millions of Small and Medium Enterprises and resulted in massive loss of jobs across the country.”
PDP said it was troubling that President Tinubu’s speech also had no clear-cut measures to revamp the critical sectors of manufacturing, agriculture, food production, transportation, healthcare, education and other pivotal sectors of life in the country.
“The president’s speech articulated no solutions to the fall of the naira from N187 to the US Dollar under the PDP to over N1,000 under his watch; no answers to the alarming over 40% unemployment rate and the fact that Nigerians are now daily fleeing the country in droves.
“Furthermore, it is heartrending that the president’s speech had no words on the mindless killings, maiming, abductions and mass burial of citizens in various parts of the country under his watch. He had no reassuring words on the abduction of students in Zamfara State as well as other victims of such dastardly acts across the country.”
On the welfare package for Nigerians, PDP said, “There is nothing to cheer over such spiteful tokenism where, amidst unbearable costs, President Tinubu announced a miserable N25,000 per month for six months for average low-grade workers, while still being aspirational on his promise of Compressed Natural Gas (CNG) buses.
“It is also certain, from antecedents, that the promised cash transfer programs to an additional 15 million vulnerable households, would be another conduit pipe to divert public funds to corrupt APC leaders.”
Speech ignores fundamentals – Obi
Meanwhile, the Head of Obi-Datti Media Office, Mr Diran Onifade, has said that the president’s speech fell short of expectations as it failed to address some fundamental challenges facing the country.
He said that this might not be unconnected with the legitimate battle the president was battling with.
“I think he (President Tinubu) is more concerned about the legitimacy of his election victory still being contested and may not be able to meet expectations, until he clears that and that is if he is cleared of it,” Onifade said.
Broadcast represents hope for greatness – APC
The National Publicity Secretary of the All Progressives Congress (APC), Barrister Felix Morka neither answered his phone call nor responded to a text message sent to him.
But the APC Director of Publicity, Bala Ibrahim, told Daily Trust that Tinubu’s broadcast represents hope for greatness.
He said Tinubu would deliver on his campaign promises and make life better for Nigerians because he has the required experience from both the private and public sectors and understands the current national realities.
“If you take into consideration the broadcast and promises made by Mr President, if you take into account his antecedents, one can say that we are heading to Eldorado; Nigeria is heading for greatness.
“From the broadcast, there is hope, I am very optimistic,” he said.
By Abbas Jimoh, Baba Martins, Saawua Terzungwe (Abuja), Abdullateef Aliyu and Abiodun Alade (Lagos)