Subsidy Removal: Govs Plan Cash Transfers To Poor Households, Dump Buhari’s List

The National Economic Council, which includes 36 state governors and Vice President Kashim Shettima, has agreed on a strategy for state governments to conduct cash transfer programs using state-generated social registries.

It stated that state-generated social registers would better reflect the number of needy Nigerians who would benefit from such cash transfers or palliative schemes.

This followed the government’s plan to implement intervention steps to mitigate the effects of Nigerians’ hardships as a result of the controversial gasoline subsidy reduction.

The NEC established a sub-committee at its most recent meeting to devise solutions to ease the difficult economic conditions caused by the withdrawal of fuel subsidies and the harmonization of currency rates.

“It is states that are better positioned to do that enumeration to ensure the integrity of the social register,” the Governor of Ogun State, Dapo Abiodun, told State House, correspondents, after the NEC meeting chaired by a vice president at the Aso Rock Villa, Abuja on Thursday.

Abiodun spoke alongside the governors of Anambra State, Prof. Charles Soludo; Bauchi State, Bala Mohammed; and Acting CBN Governor, Folashodun Shonubi.

He said states-generated register “is aimed at enhancing the integrity and reliability of the National Social Register and ensuring that resources go to the intended beneficiaries.”

However, the governors’ decision to use state-generated cash registers means they are abandoning the existing National Social Register, which has captured nearly 61 million disadvantaged Nigerians eligible for different government social programs as of 2023.

“We also proposed that each state begin to plan toward implementing a cash transfer program based on their social register of the states,” he continued.

The NEC also suggested a six-month monetary award policy for all government employees.

According to Abiodun, the six-month cash award scheme would allow sub-national bodies to pay their public personnel a certain sum of money each month.

He stated that the implementation of the CAP would be dependent on the particular capacity and priorities of various nations.

He said, “It was prescribed that it should be implemented for six months in the first instance. And you’ll be wondering why six months.

“The idea is that as much as we’re also particular about ameliorating the pains of our people immediately, a lot of sustainable measures are being put in place and it’s our hope that within now and the next six months, those sustainable measures would have begun to be visible. And then we can begin to taper down on these cash awards.

“These would be funds that will be placed in the hands of civil servants that will be tax exempt,” he explained.

Disclosing the feedback of the subcommittee from its last meeting to journalists, Abiodun said NEC explained the importance of the proposed Cash Award Policy for civil servants, payment of outstanding liabilities to civil servants, and providing Micro, Small and Medium Enterprises with single-digit interest rates to support business growth, amongst others.

Meanwhile, justifying the need for states-generated social registers, the Anambra Governor said the existing version compiled by the Buhari administration lacks the integrity to form the basis of the government’s intervention.

“There’s a big question mark about the integrity of the so-called National Social Register. We have questions about how those names in the register were brought about and I’m sure one question I hear asked is whether it is for the most vulnerable group.

“Now, in thinking through that, we felt that sitting in Abuja and calling on somebody in Anambra to compile a list and send it to you and then the person, depends on who he brings, and the registers are generated and people go to those villages and ask where those people are and they don’t show up,” Soludo said.

The former CBN governor, who called for stress testing as a means to generating a credible register said, “If you are delivering any such national or federal programme from Abuja, it needs to be delivered via the governments that are there using their format and mechanisms to generate the comprehensive register.

“That meets certain criteria, that you can stress test and you can call out the people in the village and everyone will confirm that these are the vulnerable people if you are targeting vulnerable people, as it were.”

“So the integrity test is what is missing with that register. Many have just described what is being counted as National Register as bogus; some describe it as a phantom, some in all manner of terms,” Soludo added.

On the amount to be doled out under the cash transfer programme, the Anambra State governor said there would be no uniform figure as it would depend on the capacity of respective states.

He said state governments with outstanding salaries and allowances to pay must prioritise clearing the backlog instead of implementing cash transfers.

Soludo explained, “There is quite some fiscal surplus that will come to the states, local governments, and federal government.

“And we’ve suggested that it will be nice that you can implement cash transfers, subject to your financial capacity. Some might be able to do one; some might be able to do 10; some might be able to do 20, as the case may be. It depends on their capacity.

“There may be states that are not even able to do that now. For example, suppose you have a state where salary arrears of workers have been owed for three years or four years. In that case, the priority now is to start paying down some of the salary arrears or where pensioners have been owed their pension and gratuity for several years.”

He added that the NEC proposed negotiating a new minimum wage as part of medium and long-term strategies.