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The federal government (FG) will provide Nigerians with palliatives in the form of transport allowance after removing fuel subsidy from July 2022.
TheNewsGuru.com (TNG) reports Zainab Ahmed, Minister of Finance made this known on Thursday, saying that this is to cushion the effects of fuel subsidy removal.
Ahmed also stated that as part of efforts to cushion the effects of fuel subsidy removal in 2022, the FG was planning to do things differently in order to succeed in finally removing fuel subsidy.
Speaking during an interview on Channels TV’s Politics Today, which was monitored by TNG, the Minister said fuel subsidy is costing the country resources that should be used for education and health.
She explained how the payment of fuel subsidy is not beneficial to the common man, and described it as a “major drain and waste” on the country’s economy, adding that it is crucial that the country exit from the fuel subsidy regime.
The Finance Minister said the Petroleum Industry Act (PIA) provides that petroleum products should be deregulated, adding that deregulation will take effect from July 2022.
“While the act was passed. The president said there would be a one-year timeframe within which implementation will be made, moving from the status quo to the provisions of PIA.
“In making our plans at least in the 2022 budget, we assumed that this deregulation will take effect from July 2022.
“We assume that by June we will be able to exit the fuel subsidy, and we have made provision only up till June in the budget for fuel subsidy.
“And it is important that we exit this subsidy. It is costing us a significant amount of resources that we could have applied for education, health and critical infrastructure. It is a major waste and a major drain on the economy,” Ahmed said.
Asked if the FG is prepared for a scenario in which labour unions will reject fuel subsidy removal, the Minister said the FG is planning the deployment of compressed natural gas (CNG) vehicles as an alternative to petrol-aided vehicles.
Ahmed said the federal government is considering the payment of transport allowance to Nigerians for six or 12 months to cushion the effect of fuel subsidy removal.
She said the transport allowance will be transferred directly to the bank accounts of the right people through the help of a bank verification number and national identity number.
“What we are doing now is — we’ve been negotiating with labour. We are planning and deploying CNG — which is an alternative to mass transit to PMS.
“But we are also looking at providing some palliatives for a large number of the population in terms of maybe a transport subsidy for a short period like six months or if it is long, maybe nine months or maximum 12 months.
“Transport subsidy that would be given directly to individuals. What is constraining us is the issue of registration. The national identity registration process is ongoing and we want to make sure that this subsidy goes into the hands of the right people.
“That we can make transfers to people using their BVNs, account number and national identity number, and we know that it has gone to the right people.
“That is part of the things we are negotiating and working on. We are also engaging with the World Bank in designing a programme that will help us to provide succour for at least a minimum of 6 months, maximum of 12 months to enable us to make that transition,” the Minister said.
Asked when the fuel subsidy regime would end, she said, “If you look at what I said earlier, as from July 2022, there is no provision for fuel subsidy.
Asked if Nigerians should forget fuel subsidy in July 2022, she said, “Yes. We are trying to see if we can make it earlier. If we are able to get the funding to provide this alternative transport allowance, then we will be able to make it earlier.”
Minister explains reasons for rising cost of rice; defends Buhari’s constant local, foreign borrowings
The Minister of Finance, Budget, and National Planning, Zainab Ahmed, on Thursday also said smuggling is responsible for the rising cost of rice in the country.
The minister who spoke on Thursday on a monitored Channels Television programme said smuggling is affecting the market and hurting the citizens.
“Unfortunately there is a lot of distortion and the distortion is arising from smuggling of goods into the country,” the Minister said.
“We have unpatriotic Nigerians that will bring rice that is poor quality, some of it not even fit for human consumption and come and dump it in the market.”
She also reiterated the Federal Government’s efforts in fighting smuggling, noting that there is a combined team of the Nigerian Customs Service (NCS), Police, the Department of Security Services (DSS) among others to rid the nation of economic saboteurs.
The Minister also reacted to the fresh borrowing request by the Federal Government which was recently approved by the National Assembly.
According to her, the Federal Government has created a Medium-Term Debt Management Strategy, noting that the borrowings are not being done by fiat.
The borrowing that was approved by the lawmakers, the Minister noted, has been in the National Assembly since early this year.
“It is encapsulated in a plan, we are guided by the Fiscal Responsibility Act that sets the limit of how much you can borrow at any particular time.
“We have also structured the borrowing to make sure that we have the balance between domestic borrowing as well as external financial borrowings,” she added.
President Muhammadu Buhari had in May, asked the Senate to approve the loan request.
The 2018-2020 External Borrowing (Rolling) Plan contained a request for approval in the sum of $36.8 billion, €910 million, and a grant component of $10 million.
Lawmakers of the upper chamber have since then been making approvals in bits.
They approved $8.3 billion and €490 million in July. They also approved $6.1 billion in the same month.