The Civil Society Legislative Advocacy Centre (CISLAC), has called on the Federal Government to engage civil society actors and 774 local government councils, who represent the people, for wider stakeholder consultations crucial to public trust and acceptability in the proposed subsidy palliatives for Nigerians.
Speaking on the proposed subsidy palliative in Abuja, the executive director of CISLAC, Auwal Musa Rafsanjani, said the fiscal space created by the subsidy removal must be provided for wider public good and the resources saved could be reallocated to those groups most affected by the reform in adopting complementary measures as about 27% of the country’s average household budgets is dedicated to fuel-related expenses.
He said: “The reallocation of subsidy savings should be directed to fixing the energy and transport sectors as opposed to another round of jamboree in the name of succour. Loans are being desperately sought to fix and build roads and rail lines, so there are concerns that the new government is mis-prioritizing the utilization of sparse funds that may only end up lining few pockets.
“Breakdown of the amended N819.5 billion supplementary budget shows that N500 billion is set aside for palliatives to cushion the effect of recent fuel subsidy removal, N185 billion for the Ministry of Works and Housing to alleviate the impact of the flooding disaster suffered in the country in 2022 on road infrastructure across the six geopolitical zones, N19.2 billion for the Ministry of Agriculture to ameliorate the massive destruction to farmlands across the country during the flooding experienced last year; N35 billion to the National Judicial Council; N10 billion to the Federal Capital Territory Administration for critical projects; and N70 billion for the National Assembly to support the working conditions of new members. There is a seeming lack of clarity and sincerity of purpose behind this sharing formula and its illogical rationale as a further breakdown suggests that each of the 469 legislators gets about N24 million each, while the more vulnerable public beneficiaries get N8000 each monthly.
“At this crucial time of post-covid recovery when the increasing cost of governance underpinned by high personnel and overhead costs are weighing down on the federation purse; steps should be taken towards restructuring and rationalizing government parastatals, agencies and commissions to address these costs; 30% of the annual budgets barely goes into capital projects; the government has never achieved more than 40% budget performance; and domestic and local debts are piling. Given our current fiscal situation there must be stringent measures to address these depletions and deficits. Nigeria’s external debt is about 40% of its projected N77 trillion debt stock, most of which is to multilateral creditors like the World Bank at 47% and more worrisomely to Commercial lenders (private creditors) at 39%, with debt service to revenue ratio projected by the World Bank to increase from 100.2 per cent in 2022 to 123.4 per cent of federal revenue in 2023 and possibly hit 160 per cent in five years
“The funds should be administered through the 774 local governments at N1.04 billion per LGA, with each setting up a committee that will consist of community leaders, civil society groups, religious leaders and political leaders for effective monitoring. On the other hand, the LGAs could be required to utilize the funds (N1.04 billion) in a manner that is consistent with maximizing social benefits in public expenditure, for instance through effectively monitored establishment or rehabilitation of public health care centres, health insurance schemes, skill acquisition centres or similarly robust initiatives,” he stated.
Mr Rafsanjani, who heads Transparency International in Nigeria, pointed out the need for a transparent palliative disbursement processes given the history of palliative administrations during the COVID-19 pandemic.
He also cited the inefficiency and lack of transparency that trailed interventions like the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance Bank SME/Household loan and Anchor Borrower’s Programme, stressing the need for effective process.
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