President Bola Tinubu’s appeal for an $800 million loan from the World Bank has been approved by the Senate.
The Senate President, Godswill Akpabio, read the President’s letter during the plenary session on Thursday.
In the letter, Tinubu clarified that the borrowed funds would be utilized to enhance the national social safety net program. The request was accompanied by a government decision to transfer N8,000 monthly to 12 million impoverished and low-income households for a duration of six months. Tinubu stated that the funds would be directly deposited into the designated beneficiaries’ accounts.
The President’s letter stated in part: “Please note that the federal executive council led by President Muhammadu Buhari approved an additional loan facility to the tune of $800 million to be secured from the World Bank for the National Social Safety Net programme, Copy of FEC’s extract attached.
“You may also wish to note that the purpose of the facility is to expand coverage of shock-responsive safety net support among the poor and vulnerable Nigerians. This will assist them in coping with basic needs.
“You may further wish to note that under the conditional cash transfer window of the programme, the Federal Government of Nigeria will transfer the sum of N8,000 per month to 12 million poor and low-income households for a period of six months, with a multiplier effect on about 60 million individuals.
“In order to guarantee the credibility of the process, digital transfers will be made directly to beneficiaries’ accounts and mobile wallets.
“It is expected that the programme will stimulate economic activities in the informal sector and improve nutrition, health, education, and human capital development of beneficiaries’ households.
“Given the above, I wish to invite the Senate to kindly grant Approval for the additional loan facility of $800 million to be secured from World Bank for the National Social Safety Net Programme.
“While hoping that this submission will receive expeditious consideration by the Senate, please accept the assurances of my highest regards.”
Senate approves request
After entering a closed session at 3:32 pm yesterday, the Senate reconvened at 4:41 pm to deliberate and expedite the Approval of the request. The President’s letter was presented during the Plenary by the Senate President, Senator Godswill Akpabio.
NLC and TUC Fumes
President Tinubu’s plans have been criticized by the Nigeria Labour Congress (NLC) and the Trade Union Congress of Nigeria (TUC) for contradicting the efforts of the Presidential Technical Committee on the removal of Subsidy. According to the NLC and TUC, the President’s actions not only lack democratic principles but also indicate that the Committee was merely established for superficial purposes, as stated: “Any relief payments should align with the agreement reached with labor during the technical committee meeting.”
Although President Tinubu, Joe Ajaero (President of NLC), and Emma Ugboaja (General Secretary of NLC) could not be reached for comment, an anonymous senior officer of the NLC expressed, “The main issue is whether the President has confidence in the Steering Committee or not. If he already has a budget, it implies that he has already planned his own activities. In that case, what is the purpose of the Committees? The President’s actions have undermined the credibility of his own Committee.”
“We believe that it is not only undemocratic but shows that the President is merely setting up the Committee as a window dressing for whatever purposes he has set out for himself.
When examining President Tinubu’s plan to provide N8,000 to households for six months, equivalent to N48,000, one must question whether this amount can truly alleviate the extensive suffering inflicted upon the poor. Will it have a significant impact on addressing the existing consequences faced by Nigerians? Can the suffering suddenly cease after a mere six months?”
TUC President Festus Osifo, who also serves as the President of PENGASSAN, stated concisely, “Any relief payment must align with the labor agreement established during the technical committee meeting.”
Dr. Tommy Okon, the President of ASCSN and TUC’s Deputy President, supported this stance by remarking, “In my opinion, it is an economic waste. Given the current hyperinflation and socio-economic challenges, what does N8,000 monthly mean to 12 million Nigerian households? How did the government or the President determine the beneficiaries considering the data deficit in Nigeria? I believe the government should cease this ad-hoc and unsustainable program.”
“What form of poverty alleviation policy implementation strategy is this? Is it not proper to allow the Presidential Committee on Removal of Oil Subsidy to conclude its assignment and arrive at a collective agreement with organized labor before embarking on any palliative care distributions? What the government is doing could amount to doing exactly what the previous administration did that yielded no positive impact on the economy and the citizens.
NASU expresses concerns
Similarly, Prince Peters Adeyemi, the General Secretary of NASU, expressed concerns about President Tinubu’s plans, stating that any efforts aimed at alleviating the hardship caused by the removal of subsidies and the harmonization of exchange rates should be supported. However, he emphasized the need for transparency and inclusivity in determining the beneficiaries of the program. He also cautioned against potential misuse of the funds for personal gain.
CPPE emphasizes the need for an inclusive and transparent framework
Dr. Muda Yusuf, the Director/CEO of the Centre for the Promotion of Private Enterprise, acknowledged the importance of providing palliatives to vulnerable segments of society to mitigate the effects of recent reforms and inflation. However, he stressed that the framework for distributing the palliatives should be transparent and inclusive. He also suggested that concessions in taxation and import duties should be considered to address rising food prices, energy costs, and transportation expenses.
The maritime group criticizes the amount as insulting.
The Maritime Arbitrators Association of Nigeria (MAAN) criticized the Federal Government’s decision to provide N8,000 per household monthly to 12 million poor households, describing it as an insult to Nigerians. Ms. Jean Anishere Chiazor, the Vice President of MAAN, argued that such an amount would not be sufficient to feed a child, let alone a whole family. They questioned the identification process for determining the eligible poor households and the adequacy of the amount provided.
Prof Uwaleke questions the impact on families.
Prof Uche Uwaleke, the President of the Association of Capital Market Academics of Nigeria (ACMAN), expressed concerns about the effectiveness of providing N8,000 to a family of four for a month. He questioned the impact this amount could have given the current high inflation rate and the limited number of families that would benefit. He suggested alternative non-cash palliatives and recommended dividing the allocated funds among local government areas for better distribution.
Adonri suspects political motives.
David Adonri, the Executive Vice Chairman of HIGHCAP Securities Limited, criticized the monthly N8,000 payment as insignificant considering the number of impoverished Nigerians. He suspected that the policy might be a way to appease party members at the grassroots level rather than a meaningful solution. Adonri argued that the government should focus on addressing its financial deficit and finding sustainable solutions instead.
Anchor Insurance highlights the lack of a beneficiary database.
Mr. Adebisi Ikuomola, the Deputy Managing Director of Anchor Insurance Plc, raised concerns about how the government plans to distribute the funds, given the lack of a comprehensive database for identifying the poor. He pointed out that many genuinely poor Nigerians do not have bank accounts, suggesting that investing in human and infrastructural development would be a more effective way to benefit the impoverished.
Rights activist calls for job creation.
Prince Saviour Iche, a human rights activist from the Ambassador for Peace and Enlightenment Foundation, argued that Nigerians are not reliant on money palliatives to survive but instead need job opportunities and an enabling environment to earn a living. He questioned the criteria for selecting 12 million households as poor in a country with over 200 million people. He criticized the proposed N8,000 payment as inadequate, considering the rising cost of living and the previous failures in distributing financial support to the poor.