CALPED Submits Position Paper on How Best Citizens Can Benefit From Subsidiary Removal

CALPED Submits Position Paper on How Best Citizens Can Benefit From Subsidiary Removal

By: Femi Mustapha

The Coalition of Association for Leadership, Peace, Empowerment & Development (CALPED) has submitted a position paper on how best citizens can benefit from Government fuel subsidy saving and other Federal Government policies.

The Head of Leadership, Governance, and Advocacy of CALPED, Yusuf Ishaku Goje, submitted a two-day Town Hall Meeting organized by the Partnership for Amplified Voices (Pam) supported by the World Bank, held in Kano.

CALPED stated that the announcement of the removal of subsidy on the premium motor spirit (PMS) by President Bola Ahmed Tinubu took many by surprise, and threw an already impoverished population and struggling businesses into more hardship.

The Group added that the categorical policy statement generated immediate reactions with an increase in the price of liters of fuel leading to inflation of the cost of transportation as well as goods and services.

The decision, according to CALPED, is coming at a time when inflation, particularly food, electricity tariff, and multidimensional poverty are at an all-time high. The impact of this decision, which took many by surprise, has thrown an already impoverished population and struggling businesses into more hardship.

They asserted that nonetheless, there is widespread unanimous consensus that fuel subsidy has over the years been a cankerworm that has continued to fester into the financial resources of the country. Particularly, there have been various levels of allegations of corruption and fraud in the subsidy regime running into hundreds of billions by a few powerful vested interests.

Thus the Coalition says has limited the capacity of the government to meaningfully invest in critical areas such as human capital and infrastructural development. Thereby throwing millions of Nigerians into unemployment, hunger, and abject poverty.

Kaduna, one of the North-West states, like others, has also been hit hard by the effect of the fuel subsidy removal due to the already high level of poverty. According to the Multidimensional Poverty Index Survey, 2022, by the National Bureau of Statistics (NBS), the State, though ranked in the middle of the ladder, has, in terms of numbers, 8.04 million multidimensionally poor, only second in Kano State with 10.51 million, in Nigeria.

“Now that subsidy has been removed with the resulting hardship being experienced and savings being made by the government, the Coalition of Associations for Leadership, Peace, Empowerment & Development (CALPED) hereby contributes to the public debate on how best citizens can benefit from government policies.”

The Coalition stressed that the resultant removal of fuel subsidy has thrown many in Kaduna State into untold hardship with a hundred percent hike in the cost of transportation, energy, and general inflation without a concomitant increase in wages or household income;

“Household income and consumption, due to devaluing of the Naira, reducing at an alarming rate; out-of-pocket expenditure for social services such as healthcare increasingly becoming unbearable for the residents;

“Businesses, especially micro and small enterprises, gradually grinding to a halt due to the high cost of doing business; thereby exacerbating the rate of unemployment and underemployment, at 44% and 22% respectively; and

“Farmers, especially smallholder women and youth farmers, finding it difficult to procure farming inputs leading to fear that it could worsen the existing food insecurity challenge.”

CALPED opined that the National Economic Council (NEC) towards ameliorating the hardship recently resolved that State governments enumerate/update beneficiary register for cash-transfer, cash-award policy for public servants for six months, payment of outstanding arrears (pension and gratuity), funding support for SMEs, food security, among others.

“From various interactions with residents of the State, there are suggestions that the government should alleviate the hardship occasioned by the new policies of fuel subsidy removal, and electricity tariff hike by: expansion of the Ad-hoc Committee on Palliatives to include wider stakeholders, especially civil society accountability mechanisms;

“Engaging widespread and robust citizens’ consultation to seek the inputs and partnership in formulating and implementing the proposed palliative measures;

“Development of a comprehensive implementation plan in alignment with the National and State Social Protection policy using a multi-sectoral and stakeholder approach;

“Cleaning and updating the Social Register to ensure credible targeting of poor and vulnerable households;

“Strengthen the financial inclusion communities of practice to accelerate capturing of the unbanked poor and vulnerable households; Subsidizing the cost of farming input, storage and processing for especially smallholder farmers;

“Investing massively in mass transit in collaboration with National Union of Road Transport Workers and other transport unions or groups, to protect and create jobs in the sector, to check the high cost of transportation; and extend subsidy on electricity tariff until households stabilize from the effects of fuel subsidy removal.

Given the above and for citizens to optimally benefit from subsidy savings the following are recommended: the citizens while being very vigilant should give the government the benefit of the doubt as the roll-out of the palliative measures and reallocate savings from the subsidy removal;

“leverage the Open Government Partnership (OGP) principles and commitments to demand participation, transparency, and accountability in the entire budget process to ensure proper utilization of subsidy savings and implementation of palliative measures;

“Strengthen State and Local Government-level accountability mechanisms to deepen social accountability in public service delivery, especially in ensuring proper utilization of subsidy savings, implementation of palliative measures and other ongoing social investment programs;

“Leverage innovation and technology to increase participation, transparency, and accountability; generate evidence to name and shame officials, inducted into the hall-of-shame, State and non-State actors involved in diversion and corruption in the utilization of subsidy savings and implementation of palliative measures; and

“Engage both Federal and State legislators demand proper representation, oversight, and audit of public accounts to ensure optimal utilization of subsidy savings.”

The Coalition noted that proper utilization of subsidy savings and implementation of palliative measures will depend on the political will of the leadership at the three tiers of government as well as informed and engaged citizens. A strong social accountability mechanism driven by an unbiased, uncompromising, and incorruptible civil society group will be key in ensuring the citizens optimally benefit from the fuel subsidy removal savings.