Yemi Obafemi
Stakeholders in the private sector and economic analysts have said the Federal Government must plan far-reaching palliative measures that would reach not just civil servants, but all Nigerians, in its attempt to ease the effect of fuel subsidy removal.
They emphasized that it is important because public sector workers constitute an infinitesimal percentage of the country’s estimated 200 million population.
Recall that after President Bola Amhed Tinubu inauguration speech declaring an end to fuel subsidy, he emphasized on the need for a review of the minimum wage, among other palliatives to be introduced, to ease the harsh effects of the removal on the citizenry.
He consequently mandated the National Economic Council (NEC) to come up with inputs on palliatives and minimum wage review.
Rising from a meeting at the State House in Abuja, however, the NEC proposed palliatives for workers and vulnerable groups in the country.
The Vice President Kashim Shettima, Bauchi State Governor, Senator Bala Mohammed, who disclosed the outcome of the NEC, said the Council considered recommendations from the National Salaries Income and Wages Commission to pay N702 billion as cost of living allowance to civil servants as part of the intervention plans .
He announced the setting up of a committee by NEC to work out, within two weeks, the modalities for organising and distributing the palliative.
The Governor of Bauchi State, who was joined by four other governors Dapo Abiodun (Ogun), Dikko Radda (Katsina), Alex Otti (Abia), and Yahaya Bello (Kogi), stated that the interventions include a recommended sum, ranging from N23.5bn to N45bn per month, as petroleum allowance for civil servants.
Speaking further, he explained that the Council also discussed the possibility of obtaining funds from the World Bank and London partners to implement the programme of Compressed Natural Gas (CNG) for vehicles in the country as part of measures to bring down the price of fuel.
“Various scenarios were given by the presenter on the issue of national salaries, income, and wages and this N702 billion plus, was suggested as an allowance for the cost of living adjustment allowance by organised labour and the other one is a petroleum allowance.
“The governor of Ogun has told you that there are other allowances here and there, but with regard to Labour, these are some of the few allowances that they have suggested; that of petroleum will range from N23.5 billion to N45 billion per month, depending on what is in the kitty for distribution or sharing. So, the N702 billion is a suggested sum for labour to cushion the effect on workers on a new allowance that will be tagged cost of living adjustment allowance,” Mohammed said.
But Nigerians, especially leaders of thought from the organised private sector, are demanding that the planned palliatives should be encompassed in such a way that it would reduce inflationary pressures and improve economic conditions of the generality of Nigerians and businesses.
While affirming that government needed a policy action to tackle the cost of living, they noted that the focus of the interventions should be the one that would affect the standard of living of citizens, adding: “While short-term solutions like the provision of buses and increased allowances and salaries are appealing, the committee should also focus on medium and long-term solutions that would progressively enhance the standard of living of all Nigerians.”
They argued that measures should not be designed for only to organised labour, which makes up only five per cent or one million personnel of the public sector out of the nation’s 200 million population, alone as the focus.
Already, the Trade Union Congress (TUC) said that with the fuel subsidy removal, the current N30,000 minimum wage has been eroded by inflationary measures, stating that it expected the Federal Government to provide feedback on its demand for N200, 000 minimum wage by tomorrow, Monday, June 19.
The Secretary General of the TUC, Nuhu Toro, speaking to The Guardian that the new minimum wage of N200,000 was part of the demands it gave to the government in respect of the removal of the subsidy.
THE Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, also noted that though there is an urgent need for policy action to address the cost of living generally, wage increases don’t cover everyone, as those on payrolls were 10 per cent of the total working population.
He advised the government to focus more on macroeconomic issues, emphasizing that the Tinubu-led government needed to engage stakeholders in the food processing sector in order to reduce cost of food.
“If government engages effectively, ideas will emerge on what it can do to bring down the cost of staple foods. It is necessary also to bring down the cost of food through import duty waivers, and tax waivers on critical inputs, both in food production, processing, and agriculture. That should not take much time on tariff for tax policies,” he added.
Speaking further on transportation, Yusuf said all tiers of government must reel out mass transit buses to convey people at subsidised rates. “Import duty on passenger buses must be reduced or waived to see more supplies of the buses so that we don’t also put those in the vehicle assembly industry at a disadvantage. Their key raw material is SKD; government should waive the import duty, charges, and VAT that are used in the assembly of buses so that vehicle assembling plants, involved in the assembling of buses, can assemble buses at much cheaper rates. If we increase the supply side of transportation, transportation costs will come down, that is the logic.
“On fuel, we need to break the monopoly of NNPC on fuel importation, in the short run, to ensure more players are involved in the importation of petroleum products so that there can be competition.
“On power supply, if we have enough power, the demand for petroleum or diesel will reduce. There is a need for decentralisation of the grid. This will involve some tariff policies and tax measures. We need to do a lot on renewable energy. All taxes, import duties, and VAT on equipment used for renewables should be removed so that not everyone will be hooking up to public electricity because they are so expensive.
“Within a week, the government can change a lot of things; within a week, the government can change taxes, but not wages. Private-sector employers should encourage remote working to avoid pressure on their employees. They should also be prevailed upon to buy staff buses, not only government,” he added.
