Yesterday the Senate said the N5,000 monthly allowance for 40 million Nigerians to mitigate the expected high cost of transportation, after the planned removal of fuel subsidy, was not appropriated in the 2022 budget.
Recall he Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said on Monday that the Federal Government has proposed to give N5,000 as transportation allowance to 40 million Nigerians to cushion the effect of its planned fuel subsidy removal.
However, the Chairman, Senate Committee on Finance, Senator Solomon Adeola, who spoke on the issue at a press briefing yesterday in Abuja, said that there is no provision for such in the proposed 2022 budget.
Speaking with reporters after the submission of budget of MDAs being oversighted by the Committee, Adeola insisted that before the Executive can embark on such intervention, the proposal must come before the National Assembly.
He said the proposal would cost the Federal Government N2.4trillion and sought to know the criteria that would be used to determine the beneficiaries of the allowance.
He said: “I don’t want to go into details. If there is something like that a document needs to come to the National Assembly and how do they want to identify the beneficiaries?, he queried.
“This is not provided for in the 2022 budget proposal totaling N2.4 trillion. For us, we still believe it is news because this budget we are considering contains subsidy and if we are passing a budget with subsidy in the fiscal document, we can’t speak because that is the document that is currently before us.
“So, this is not provided for in the 2022 budget. We don’t have anywhere in the budget where 40 million Nigerians will collect N5,000 monthly as transportation allowance totaling N2.4 trillion.
Also, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has admitted that the Federal Government is still working out the details of the number of beneficiaries.
She said there was urgent need for the Federal Government to wean the nation off petroleum subsidies, adding that it could no longer sustain the N3 trillion per year subsidy, which has almost forced the Nigerian National Petroleum Company (NNPC) to virtually reduce its remittances to the Federation Account to zero.
On the N5000-a-month transportation grant to poorest Nigerians, Mrs. Ahmed said negotiations are still ongoing. She said the duration of implementation will be between six and twelve months.
The minister disclosed that the implementation will employ digital disbursement or transfers on available platforms.
“The Petroleum Industry Act has a provision that all petroleum products must be deregulated and in the 2020 budget, we made a provision to assume that at the maximum by the end of June, we must exit subsidy. So this last FAAC the subsidy cost to the Federation was N243 billion.
“So, if we look at a cost of about 250 billion per month, and it has been increasing consistently. So, we’re expecting something around N120 billion per month from NNPC and now we’re getting to a point where NNPC is remitting near zero. And if we don’t stop we will get to a point where will tell you pay me this for managing the fuel provision in the country. So if you take 250 billion times 12 months, that is about N3 trillion.
“If we don’t remove it, that is what it is costing us. This is money that we can use to apply to health and to education. The intervention we want to provide is for between 20 to 40 million people and there is still a lot of work going on. We have a committee that is chaired by His Excellency the Vice President, state governors and a few of us ministers as members.
“So, we have to have a landing as to the exact number between 20 to 40 million. We already agreed it will be N5000 and we have also agreed that the remittances have to be done digitally. So the e-naria will help, but also so are the various payment platforms that are currently available. What we will not do is paying people in cash. So the transfers that people will receive through one kind of electronic money or the other and it’s meant to be for a period of six, nine or 12 months.
“These are things that are still in negotiation because it’s still money that would have to come from the Federation Account. So everybody that is a member of FAAC will have to agree on the numbers. The maximum will be 12 months, the minimum will be will be six months.
“We thought it was important to do this to give people a chance to adjust before the other support measures that the government is working on materialise and that is the provision of alternative to PMS, which is CNG that is having mass transit vehicles converted to CNG.
“Also, the bringing on stream of petroleum refineries, including the Dangote Refinery so that it reduces even the need to import the PMS in the first place. So that’s the logic behind targeting the middle of next year.
