President Bola Ahmed Tinubu warned the National Economic Council, or NEC, led by Vice President Kashim Shettima, on Wednesday that he would not put up with lame justifications for failure.
The council, which oversees the economy, is composed of the vice president, 36 federation governors, the governor of the Central Bank of Nigeria, CBN, and other coopted government officials.
In response to the National Income, Salaries, and Wages Commission’s recommendation that workers receive a consequential adjustment of N702.919 billion to lessen the impact of the removal of fuel subsidies, the council announced that it would be taking Tinubu’s warning into consideration.
President Tinubu addressed the council before it entered a closed-door meeting and instructed it to develop interventions to lessen the effects of the removal of petroleum subsidies.
Tinubu tasked the council with helping his administration change the nation’s economic fortunes.
The task of expanding the country’s economy, according to Tinubu, is enormous, and there should be “no excuse for failure.”
Tinubu reaffirmed the determination of his administration to keep its commitments to Nigerians.
NEC Considers N703bn Payment to Workers as Subsidy Removal Palliative
In its maiden meeting, the NEC also said the recommendation for another payment of N25 billion in monthly petroleum allowance to workers to mitigate the effect of the termination of the payment of subsidies would be considered.
Bala Mohammed, the governor of Bauchi State, made this announcement to reporters from the State House after the inaugural NEC meeting, which was presided over by Vice President Kashim Shettima and held in the Council Chamber of the Presidential Villa in Abuja.
He claimed that the government had taken a comprehensive approach to all the issues surrounding the removal of subsidies, challenges, and problems and had established a small council committee to review the situation and develop a mandate that would help workers and other vulnerable groups.
According to him, the committee is made up of the governors of Kebbi state, as Chairman, and Anambra representing the South East geopolitical zone. Benue North Central, Kaduna Northwest, Bauchi (Northeast), Cross River (South-South), and Oyo State (Southwest) are the representatives.
Other relevant agencies, according to Governor Mohammed, included the budget office, a representative of the Central Bank of Nigeria, CBN, a representative of the Office of the Attorney General of the Federation, a representative of Nigeria National Petroleum Company Limited, NNPCL, a representative of the Trade Union Congress, TUC, and a representative of the Nigeria Labour Congress, NLC.
It is expected to submit a recommendation to the NEC within two weeks for a comprehensive decision to be made immediately to alleviate any problems that may arise as a result of the subsidy removal.
He said, “The NEC had received recommendations on the various ways and means that the country can use whatever increases that we have in the revenue to mitigate the impact that this is going to make on the lives of our workers.
” And so they recommended that there should be a consequential adjustment, estimated at N702.92bn, as part of the allowances that should be given as petroleum allowance to all workers, as well as a N23 or N25bn monthly offer to cushion the effect on workers.”
‘I think what I said—maybe I did not say it very clearly—is that various scenarios were given by the presenter on the issue of national salaries, income, and wages, and this 702 billion-plus was suggested as an allowance for the cost of living adjustment allowance by organised Labour, and the other one is a petroleum allowance,’ Mohammed clarified.
“The governor of Ogun has told you that there are other allowances here and there, but with regard to labour, these are some of the few allowances that they have suggested, and that of petroleum, they said, will range from 23.5 billion to 45 billion per month, depending on what is in the kitty for distribution or for sharing.
“So the 702 billion is a suggested sum for Labour to cushion the effect on workers of a new allowance that will be tagged the cost of living adjustment allowance.
“We will sit down within two weeks to come up with a recommendation to NEC for a holistic decision that will be taken immediately to alleviate the problem that is being encountered by the removal of the subsidy,” the Bauchi Governor explained.
He said the input of the committee on palliatives earlier set up and headed by former Vice President Yemi Osinbajo would not be discarded but integrated into the ongoing process.
Also speaking, the Abia State governor, Alex Otti, said, “As part of the inaugural national economic council meeting today, a major focus was on the removal of petroleum subsidies and the implied removal of subsidies on foreign exchange, which has led to some convergence of some sort.
“The impact of these two actions is definitely increased prices. And as a way to solve the problem and reduce the shock, a presentation was made by the National Automotive Design and Development Council on the great things that are happening in the automotive industry.
“It was that about six states in the country, including Lagos, Ogun, Anambra, Enugu, Akwa Ibom, Kaduna, and Kano, have benefited from the domestic production of vehicles or the assembly of vehicles by Nigerian companies operating in Nigeria. And these companies include INNOSON, Maikano, Dangote Peugeot, Peugeot Automobile of Nigeria, Stallion Hyundai, Honda, Elizade/Toyota, Coscharis and Ford, Kojo Motors, and Jet Systems motors.
” At the moment, about 50,000 jobs have been created by this simple act of either assembling vehicles in Nigeria or producing them in Nigeria. A great feat is that some of these companies have gone into the manufacturing or assembly of electric vehicles and vehicles powered by CNG (compressed natural gas)
“The impact of this is that the pressure on the price of petroleum products, particularly PMS, will be reduced the more we use electric vehicles and CNG-powered vehicles.
“Some of the decisions that were taken include that legislative support will be needed to be given to these companies that are doing great things in Nigeria. It is important to underscore the point that the former President had made a commitment that by 2060 Nigeria would join countries that would eliminate fossil fuel-powered vehicles and move to electric vehicles in pursuit of the net zero emission that some of the countries in Europe, America, and Asia have signed on to.
“So if that must happen, then we need to ramp up the production of electric vehicles and CNG vehicles.
“It is estimated that if we give legislative support to these companies, about a million jobs from the 50,000 jobs that exist in that industry would be created. It was also suggested that the funding that is required by most of these vehicle manufacturers and assemblers be made available to them. So that we begin to reduce our dependence on PMS and other fossil fuel-powered vehicles.
“Finally, it was also suggested that the electric vehicle development plan will fast track the development of electric vehicles and should be supported wholeheartedly by the new government. The reality is that we cannot run away from the removal of petroleum subsidies. We should have done it a long time ago.
“But we must salute the courage of the current government to bite the bullet and remove it. Initially, it had reduced the consumption from about 66–67 million litres a day to just about 40 million. And as time goes on, consumption will continue to go down.
“We know there are implications, particularly for the poorest of the poor. And that is why this government is seriously looking at palliatives to at least deal with the shock that the poor of our society goes through “
The Ogun State governor, Dapo Abiodun, said, “What I’ll be speaking on is the contribution by some of the key oil and gas sector heads. We had input from NNPC and NMDPRA, the Nigerian midstream downstream petroleum regulatory authority.
“We had from the marketers, and of course, it was a robust dialogue and cross-fertilisation of ideas by all the executive governors across the length and breadth of Nigeria today.”
On his part, the Katsina state governor, Dikko Radda, said, “We just had our maiden meeting of the NEC Economic Council. And so many issues were discussed, and resolutions were made on some issues. Some issues were sent to various committees for further deliberations. Part of the issues that we discussed today is palliative measures to mitigate the effect of the petroleum subsidy through the NG-Cares programme.
” As you are aware, the NG-Cares Programme is a programme that started in 2021 and runs up to 2024. And then there is to provide some emergency palliatives and social needs on so many issues ranging from small farmers to MSMEs and other interventions.
“It’s $750 million from the World Bank. And it began a long time ago. And some of the recommendations that were made include the state Cares platforms having a strong capacity to handle the implementation of palliative care for new and existing poor and vulnerable individuals, households, farmers, and the local economies of operators in the country.
“Additional funding can be sourced from the federal government, the World Bank, development partners, as well as the Nigerian private sector. In specific, the World Bank can be approached for additional financing on the NG-Cares programme. Discussion can start as soon as possible.
“So these are the recommendations that were made. And the Economic Council will pursue these recommendations for the benefit of the Nigerian, vulnerable, and poor.”