How Would N5000 Regenerate the Economy?

By Eddy Odivwri

I listened to a comic video claiming that any time the federal government has any “senseless thing” to say, it is the Finance Minister, Mrs Zainab Ahmed that is usually pushed forward to proclaim it. The video went on to wonder the rationale and logic that defended the idea of removing the fuel subsidy and replacing it with N5000 for only 40 million poorest of the poor Nigerians. It further claimed that the poorest of the poor Nigerians are about 195 million. The video served its purpose: comic relief.

But did the issue actually offer any relief to Nigerians? I dare say No! If anything, it must have been a troubling idea that has the potential of raising the blood pressure of the masses.

The economic developments in this country remind me of a Bible story I read many years ago.

A King was ruling over the Israelites, and the people were groaning as things were tough and rough. And the king eventually died. His son, Rehoboam inherited the throne. The Israelites led by Jeroboam, had gone to plead with the king to lighten their burden now that he is the King. But after consultation, first from the elders, and then from the youths—his ilks, King Rehoboam, replied his subjects by vowing to chastise them with scorpion, and not the whips his father used on them. The result was that the Israelites went on the famous protest of “To Your Tents O Israel”.

It is thus surprising that in the face of all the wailings and complaints by Nigerians over the acute hardship they are facing, the best option/solution the government came out with is that petrol subsidy would be removed and that N5000 would be given as palliative to forty million poor Nigerians. There are many matters arising from this plan.

First, how did the government arrive at the figure of 40 million? What statistics or research backed this up? Is government implying that the remaining 160 million Nigerians are doing ok enough as not to need any palliative?

Question is , after one year, what happenes to the 40 million poor Nigerians? They would remain in their poverty or they would have been lifted from their poverty? How helpful would N60,000 a year be to even a beggar on the streets?

But even then, what is the guaranty that this mass of poor people will come from every part of the country? What we have seen in the past is that a particular section of the country will be the principal beneficiaries while a few other parts will merely provide supportive names to give it a semblance of federal spread. Truth is that there is poverty everywhere. The beneficiaries should not come from only one section of the country.

Aside the issue of the number, let’s do the arithmetic of the palliative. The plan is to dole out N5000 every month to 40 million people.That comes to N200billion monthly. And this will happen for between six months and one year. Assuming they sustain it for one year, that means N200 billion for twelve months. That comes to N2.4 trillion.

How much has been the amount spent on the provision of the so-called subsidy? N1.8 tr! So in attempt to solve the problem caused by N1.8 trillion, we are planning to spend N2.4tr.

Hey, does that sound sound? How can the government purpose to spend a much higher amount to solve a smaller problem? It is akin to undergoing a surgery to cure headache.

But beyond the poor economic sense of the scheme, let us look at the shallowness. If government is planning to spend N2.4 tr in one year so that it can remove the subsidy, why does the government not build another refinery altogether? How much does a medium-sized refinery cost?

There has been so much noise and even hoopla about modular refineries. What has happened to them? Would building another (brand new) refinery not be a lot better in every sense than sustaining the importation of petroleum products and giving out palliatives? By continuing the importation regime of petroleum products, we are not only providing jobs to outsiders (the countries we import from), we are indeed boosting their economy. If we could largely stop rice importation and literally knocked down the rice factories in Thailand and co, why can’t we do same on petroleum products? Or is it the effect of the notorious cabal?

How can N5000—N60,00 per annum, change the life story of any Nigerian? That amount (N5000) is about the cost of one bag of cement today. The Finance minister said beneficiaries will be paid digitally. Many of those poorest of the poor live in villages and hinterland communities. It may cost them about the same amount or even more to go to the towns and city centres where they can access banks. So what is the net benefit if the cost of transportation to and from collecting the N5000 will be equal to the money that will be collected ?

If the government is creative and even proactive enough, it can plough the N2.4 trillion into viable projects that will not only employ hundreds of people, especially the youths, who can in turn take care of their poor parents, but can also become an income-generating going concern for the country.

One wonders how the entire Federal Executive Council—filled with technocrats and professional doyens, will fail to give a deep thought to the scheme, and approve it with all its obvious and latent drawbacks.

It does appear that this government is so given to tokenism. It is bent on giving Nigerians fish instead of teaching them how to fish.

Once, they came with the idea of N-Power, then market moni, then the 774,000 (Keyamo) jobs—for three months. All these interventionist schemes, have not only ended, their impacts are as low as eventide, just as the beneficiaries are most likely back to point origin. The gestures from the federal government are attempts that merely scratch the surface of the economic challenge facing Nigerians. They are neither deep nor wholesome. That is why their impacts are minimal and negligible, and count for very little.

If all the funds so expended on these flash-in-the-pan schemes have been properly harnessed and invested in worthwhile ventures, the tension in the society would have been drastically reduced. The efforts of the government at meeting the social obligations of the Nigerian people through these vapourised schemes, appear like heavy down pour in the thick forest; it neither benfitted the crops nor the soil.

Needless to say that the ripple effect of the increase in the cost of pump price of petrol from N162 to the proposed N340 per litre will be ultra huge. Nigerians will practically be jumping from frying pan to fire.

Every aspect of the Nigerian economy will bear the brunt of that increase. In an economy where the inflationary rate has hit 16.3 per cent, the whatever good intent behind the N5000 gesture will be swallowed up by the spiky inflation in the economy. Transport cost, will be the first to shoot up. This will be followed by food items. Electricity bill will increase, school fees will increase, medical bills will increase. Indeed, all other things will follow. The end result will be a return to Thomas Hobbe’s world of nasty, brutish and short taste. The accompanying corollary will be that even crime will increase, as there is bound to be more hunger and hardship.And all the social arms like National Association of Nigerian Students (NANS) that ought to resist this plan have long been acquiesced by government. Who would have foretold the degeneration of the “struggle” of the 80’s and 90’s in Nigerian universities, that will witness NANS president riding in executive Mercedes Benz SUV with customized plate numbers with all the allures and accoutrements of a budding epicurean? Twenty years ago, it would have been a smelly sacrilege. But today, NANS leaders have been masterfully compromised and the struggle has been abandoned.

What is probably worse is that the scheme will be a gateless entry to the colony of corruption. All we shall hear when the scheme has taken off will be huge figures in billions of Naira as having been expended. Or didnt we hear that government spent over a trillion Naira on the provision of palliatives during the COVID-19 pandemic? They are still spending…

The TV camera, especially that of NTA will capture and feature a handful of (tutored) beneficiaries, say in Borno or Jigawa States, get interviewed where they will say glorious things about the great feat of the government… and that will be it. No agency of government is likely to probe or ask for records, not even the National Assembl;y that should exercise oversight functions. A chip of the bulk will sure zip every lip.

And that takes us to the issue of budget. Was this N2.4 trillion budgeted for in the 2022 fiscal budget? No, I think. So where will the federal Government source the money from? Will it get the approval of the National Assembly or will the executive arm of government afford to splurge that huge sum without the approval of the nation’s lawmakers? Will it fall back to borrowing again to dole out as political freebies?

Some have duly expressed worry about the timing of this scheme. In a pre-election year, many of government’s moves and gestures are treated with suspicion. Is this scheme all about 2023 presidential election?

I have heard of how government will fall back on some funds tucked away somewhere in the labyrinth of the CBN, to fund the scheme. That smacks of desperation, if you ask me.

Or was the idea of this N5000 palliative an after-thought? Why is it not not accommodated in the 2022 budget?

In all, we do not all have to be economists to understand that this N5000 gesture will cause us more aches than relief. It will not and cannot regenerate the economy. It will neither fix nor nix the economy.

Nigeria Air: Another Wild Goose Chase?

By Eddy Odivwri

He sounded clear and confident. He spoke with some air of authority and magisterial conviction. Nothing on his visage betrayed the fact that we are zomming into another trial-and-error engagement. It is his second effort, so we are likely to think all loopholes have been blocked and all minefields have been identified and cleared off. It is the sixth time the issue of the airline had been tabled at the Federal Executive Council (FEC). In 2018, efforts to launch the airline had gone pretty far, including organizing a roadshow in London, before it was cancelled and suspended. Now we are back to it again, as it scents reloaded. But the content of what the Minister of Aviation, Mr Hadi Sirika, said are full of fog.

First, Mr Sirika says operation will start in April next year, about five months away. Then that the airline will lease three aircraft to get started.

It plans to generate, wait for it, 70,000 jobs! Really? 70,000 jobs to work on three aircraft?

He drove home the point when he noted that the workforce will be higher than the entire federal civil service put together. Even far more established airlines which have been in operation for over two decades, do not have as much as 70,000. How will a borrow-borrow airline begin its work wwith 70,000 workers? We have not forgotten all the factors that combined to kill Nigeria Airways.

He also talked about the ownership structure. I am particualry glad that the private sector will own 46 per cent while the federal government will own just about five per cent, while “strategic Partners” will own 49 per cent.

I fear that no informed businessman will allow that heavy workforce at the take off of the airline.

If Akwa-Ibom State can run an airline successfully, and is already increasing its fleet, I do not see why Nigeria, the whole Nigeria, will start off by leasing airplanes. Would this not bore a hole into the asset base of the airline? If it has taken the ministry three fulkl years to re-strategise, the final outcome does not quite bespeak of a deep and clinical thinking.

And that is why many Nigerians are worried that this should not be another wild goose chase.