FG Okays N180bn Palliative Fund, Each State Gets Paltry N5bn

*Releases 100,000 bags of rice to states 

*States insist World Bank’s $800m support should be through cash transfers 

*NEC sets up negotiation committee to interface with labour

Deji Elumoye in Abuja

The federal government has approved a paltry N5 billion for each of the 36 states of the federation for procurement of food items and fertilisers as part of efforts to alleviate the suffering associated with fuel subsidy removal in the country. This was the highpoint of the resolutions of the monthly National Economic Council (NEC) meeting held yesterday at State House, Abuja, which was presided by Vice President Kashim Shettima.

Governors Yahaya Bello of Kogi State, Babagana Zulum of Borno State, Charles Soludo of Anambra State, Seyi Makinde of Oyo State, and Uba Sani of Kaduna State briefed newsmen on the outcome of the meeting.

Speaking after the meeting, Zulum explained that the fund was part of measures to bring temporary solution to the high cost of living caused by the subsidy removal, as government continued to work on more enduring programmes. He said the states were to purchase with the money 100,000 bags of rice and 40,000 bags of maize, as well as fertilisers, among other items.

The governor added that considering the urgent need to mitigate the effect of the skyrocketing food prices across the country, the federal government had last week released five trucks of rice to each state of the federation.
Zulum said, “NEC met today and expressed serious concerns as regards increasing cost of food items, increasing cost of transportation, amongst others, as a result of subsidy removal.

“In order to cushion the effect of subsidy removal, the federal government has released five trucks of rice to each state last week.
“Furthermore, in order to cushion the effect of food shortages across the country, the federal government has approved the sum of N5 billion to be given to each state for the procurement of 100,000 bags of rice, 40,000 bags of maize, and fertilisers.

“This funding has to be shared with a formula as follows: 52 per cent of this money is given to states as grants, while 48 per cent of the N5billon is to be paid back on an instalment basis within a period of 20 months to the CBN by the states and the local government areas in Nigeria.
“The council commended the efforts of the federal government under the leadership of President Tinubu as well as the CBN. We have also commended the efforts of NEMA in cushioning the effects of the subsidy removal.
“Council has taken bold decisions in order to ensure speedy release of grains and other items in order to cushion the effects of subsidy removal on the less privileged in the society.”

However, Zulum said NEC insisted that the federal government should deploy the $800 million loan from the World Bank the way it was initially planned, through conditional cash transfers, using the registers to be provided by the states.
According to him, “Council has also taken note of the $800 million loan and insist that it be strictly used for intended purpose and based on accurate and acceptable register.

“The $800million announced by the president will go to Nigerians in accordance with an accurate social register.”
He noted that besides the plan to take care of the immediate effects of subsidy removal through food reliefs, the council took notice of federal government’s wider plan to deploy the N500 billion approved by the National Assembly towards strengthening agriculture, transportation, and industry.

He said, “Furthermore, Council has also noted the package that was announced by the president in order to cushion the effect of subsidy removal, amounting to about N500 billion. This fund has to be distributed to the following sectors: MSMEs, industrial sector, about N125 billion will go to cash transfers, agricultural sector, as well as gas expansion for buses.

“Because of the increasing cost of fossil fuel, the federal government intends to establish more gas stations in Nigeria, procure more gas powered buses, CNG buses, as well as electric buses in order to cushion the effect of the subsidy removal.”

Zulum also said NEC agreed that the frontier states bordering Niger Republic were to be assisted with more palliative materials than other states, considering the influx of refugees into their domains from the troubled neighbouring country.
“Furthermore, NEMA will also liaise with states in order to distribute foodstuffs to the people immediately, especially, those affected in the frontline states that are bordering Niger Republic because of influx of refugees,” he said.

The Borno State governor disclosed that the council set up a committee, consisting of Chairman of Nigeria Governors’ Forum (NGF), Governor of Kwara State, Abdulrahaman Abdulrazaq, Soludo, and others, to interface with organised labour on the post-subsidy situation in the country.
He stated, “The council has also tasked the states to dialogue with the labour unions’ leadership. A committee made up of Anambra State governor, NGF Chairman, and others, has been nominated to interface with labour.
“The most important thing that the council has taken note of is that all these palliatives that are being mentioned now are temporary solutions.
“Council has decided to invest in medium and longer term sustainable solutions that will ensure availability of food and non-food solutions in Nigeria, especially investing in commercial agriculture and also investing in irrigated agriculture.
“NEC is calling on Nigerians and labour to be calm, law-abiding, as the president is determined to address the issues at hand.”
On his part, Soludo said the review of social register was in progress. He said Nigeria was already having refugees from Niger Republic, which was affecting the distribution of palliatives.
Sani said only N2 billion had so far been given to states from the N5 billion approved.
Bello stated that a sub-committee was constituted last year to propose modalities to address the imminent food crisis due to flooding and funding for palliatives to victims.
He said, “The sub-committee was to be chaired by the governor of Kebbi State and the following as members: ministries of agriculture, humanitarian, finance, NEMA, and CBN.”
The governor added that the NEC secretariat was “to develop and forward a template with accompanying letter to all the affected states to collect data on preliminary assessment of the impact of the flood in the affected communities, harmonise the data and produce report of their findings to the committee”.
On the limitations, Bello said, “The exercise would have been more successful and effective if all the affected states had responded as and when due and according to provisions made in the template. Some of the limitations include the following: delay or non-submission of filled template by some states. Only 16 out of the total number of affected states forwarded their submissions to NEC secretariat to date as expected.
“About 15 others were yet to do so. The submission from defaulting states are awaited to update the database.
“Some of the states that submitted did not fully comply with requisitions of the template, thereby making some of their submissions difficult to process by the automated system.
“There is the need for compliance with laid down processes to allow for higher degree of uniformity, especially, considering the huge volume of data involved.
“Only few states reached out to the council secretariat’s technical team for possible guidance and assistance in the exercise. States are encouraged to take advantage of the secretariat’s personnel to address important concerns where necessary.
“Only few states indicated financial implication for the damages caused, thereby making it difficult to propose a required amount of intervention.
“Some submissions were not done according to the template, which makes difficult to ascertain the financial implications of such states.”
The governor said NEC recommended that the plight of victims of the flood disaster across the affected states should be alleviated without further delay, if the much needed intervention from the federal government materialised.
He gave further details, stating, “There is, therefore, the need to expedite release of fund to affected states, as recommended by designated committees constituted by the federal government to that effect. This would go a long way in addressing the needs of the victims as well as offset debt incurred by some states to assist their citizens.”
NEC resolved that the secretariat and officials of the office of the vice president should visit the affected states for on-the-spot assessment of the situation on ground to authenticate the data submitted by states and determine the needed intervention.
The council also resolved that the federal government’s immediate intervention should be expeditiously carried out by NEMA, Ecological Fund Office, and other relevant agencies. It urged states to ensure maximum cooperation.
NEC equally resolved that all hands should be on deck to ensure appropriate submission and data presentation. It said the quality of data collected should be enhanced to meet international standard, stressing that the challenge of flooding deserve concerted and collective effort.
The council stated, “There is need to strengthen NEMA as a structure and sustainable adaptation measure for the citizens. In mobilising resources to tame the tide of flooding, there is need to look beyond NEMA.
“NEC secretariat to come up with recommendations on the roadmap towards addressing the flood situation.”
Bello said Excess Crude Account from July 19 to August14, 2023 was $473,754.507; Stabilisation Account from July 18 to August 14 was N30,346,557,405.12; while Natural Resources Account from July 18 to August 14, 2023 was N115,175,616,159.65.
In his submission, Makinde said the Nigeria Economic Summit Group (NESG) made a presentation on how to explore a NEC agenda for macroeconomic stability and shared prosperity.
He said the presentation was to advise the council on how to achieve low inflation and stimulate economic growth.
The governor said weak forex supply and heightened demand for imports remained core drivers of exchange rate instability.
Makinde stated that the forex market volatility had persisted despite recent forex alignment, driven by pressure on forex demand that widened the gap between official and parallel market rates due to inadequate supply and speculative tendencies. He said external reserves had remained under pressure as it fell by 8.3 percent from 37.1 billion in January 2023 to 33.9 billion in July 2023.
The governor said the recommendation was that “the NEC must insist on pushing a national legislative reform agenda for national competitiveness. It is essential that Nigeria resolves the legislative binding constraints to our national competitiveness”.