The Daily Trust Board of Economists has urged the federal government to inject the estimated N2.4 trillion it plans to spend after removing petrol subsidy next year on critical sectors like education and healthcare that will have a direct impact on the lives of Nigerians.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, recently announced that when subsidy on petrol is removed, perhaps in the first quarter of 2022, the government will consider giving N5,000 transport allowance monthly to 40 million vulnerable Nigerians for a year or less, to cushion the effects.
Analysis of this proposed expenditure indicates that at N5,000 for 40m Nigerians, the government will spend N200 billion every month and N2.4tr in one year as transport palliative.
A communiqué issued after a virtual and physical meeting of the Daily Trust Board of Economists on Saturday led by Prof. Binta Tijjani Jibril, the new chairman of the board, said: “The board praised the executive arm of government and the National Assembly for the patriotic efforts that saw to the passage of the Petroleum Industry Act (PIA).
“The board particularly commended the synergy between the two arms, in the build-up to the passage of the Act.”
While the board recognized that with the passage of the PIA there is no alternative to removal of subsidy, in view of the current realities in the economy it, however, faulted the proposal for handing out N5,000 to about 40m citizens, which it said could worsen inflation.
It said: “The Government should spend the proposed sum in enhancing the quality of services in critical sectors like education, healthcare, etc, using innovative delivery mechanisms which will have a more visible and measurable impact in the lives of Nigerians.”
The board also noted the growth in the Gross Domestic Product (GDP) for the fourth consecutive time after the 2020 recession but also urged government to take more concrete actions to address rising food inflation while tackling the spate of insecurity to ensure that food production and supply is sustained.