July 14, (THEWILL) – Wittingly or otherwise, in the obvious absence of any overarching economic roadmap of the President Bola Ahmed Tinubu administration, it seems the vacuum is being ‘filled’ with palliatives being doled out by the Government. Since the far-reaching and deepening hardship caused by the key policies of the administration, the Federal Government, especially, has been deploying an assortment of palliative packages in trying to assuage the poverty and pains unleashed on the citizenry.
Without a doubt, the unintended outcomes of fuel subsidy removal and foreign exchange rates unification, two key economic policies of the Tinubu administration, have, in the past one year, unleashed poverty, pains, crash in standard of living, collapsed purchasing power, soaring inflation, etcetera. Apparently overwhelmed by the depth and scope of this ugly reality, the Government has been practically running from pillar to post—trying to douse the hunger, anger and festering despair in the land.
In panic or desperation, the Federal Government has on a number of occasions, announced some bouquet of palliatives targeted at various strata of the citizenry. Specifically, on 31 July 2023, (barely one month after the inception of the administration) President Tinubu announced the Government’s first set of palliatives. This included N100 billion for the acquisition of 3000 units of 20-seater CNG-fueled buses; N200 billion to boost agricultural production; N75 billion for manufacturers; and N125 billion for micro, small, and medium-sized enterprises (MSMEs) as well as the informal sector.
According to Mr. President, these measures were being put in place to ease the suffering caused by the removal of the fuel subsidy. Unfortunately, one year after, not much has resulted from the huge sums that were bandied in the Presidential speeches. President Tinubu has not, however, failed to flaunt more sets of palliative packages in every of his addresses in the past 12 months. In his latest of such gambit (in the last week of June 2024), Tinubu announced what he called a ‘National Construction and Household Support Program’. Under this initiative, the President approved an ‘uplift grant’ of N50,000 to 100,000 families in each state of the Federation for three months.
Under the same program, a whopping N155 billion is to be utilized for the purchase and sale of assorted foodstuff “to be distributed across the nation.” There is also the provision for a one-off allocation to states and the Federal Capital Territory (FCT) of N10 billion “for the procurement of buses and CNG uplift program.” Unveiling the latest palliative package during the National Economic Council (NEC) meeting at Abuja, President Tinubu urged state governors to meet the needs of citizens, stating that he “is willing to provide the needed support to ensure that Nigerians are relieved of hardship.”
Sequel to the above, it was also reported that President Tinubu has approved the duty-free importation of major food items like rice, beans and wheat, to cushion the impact of the high food prices Nigerians have been grappling with since he assumed office. This “duty-free” window is to last for a period of six months, and is part of the Presidential Accelerated Stabilization and Advancement Plan, according to the Minister of Agriculture and Food Security, Abubakar Kyari.
Kyari said: “To ameliorate food inflation in the country caused by affordability and exacerbated by availability, the government has taken a raft of measures to be implemented over the next 180 days.” Under this arrangement, the imported food commodities, according to him, would be subjected to “a Recommended Retail Price.” He said that in addition to the importation by the private sector, “the Federal Government will import 250,000 MT of wheat and 250,000 MT of maize.”
Recall that in December 2023, there was also announced a Presidential Conditional Grant Scheme as part of the Presidential Palliatives Program aimed at supporting businesses to navigate the economic crunch caused by Government policies. Under the grant scheme, N75 billion was to be dedicated to MSMEs and another N75 billion to the (formal) manufacturing sector to assist businesses in facing the harsh economic realities.
Truly, all these are mere snippets of the potpourri of palliative packages being dished out by the Government at the center in the past one year. In tandem, all sub-national governments have been towing the same line, coming up with motley palliative initiatives—ranging from the mundane to the ridiculous. The import of all these is that the palliatives seem to have diverted the attention of governments at all levels from crafting and deploying elaborate economic roadmaps for meaningful and sustainable development.
The adoption of ‘short-termism’—90 to 180 days duration—on which the palliatives are anchored is an ‘economic myopia’ in development planning. But for the mindset of the Government in deploying the palliatives as mere ‘tokens’, effective planning for the economic progress of any country is for medium-to-long term duration. Unfortunately, the fast and wide spreading poverty and hunger in Nigeria, caused by recent economic policies, has reduced life to a day-by-day struggle.
Again, unfortunately, the more of these palliatives that are being announced by the Government, the more and faster the level of deterioration of the economic condition of Nigeria and Nigerians. This is underlined by a recent report by the United Nations (UN) in which it warned that “82 million Nigerians may go hungry by 2030 as a result of the food crisis in the country.” The UN, in its annual food security survey, said this will be about 64 per cent of Nigeria’s population, urging the Federal Government to take urgent steps against climate change, pest infestation, and other threats to agricultural productivity.
Also, a recent study by the National Bureau of Statistics (NBS) revealed that Nigeria’s food inflation rate had hit a record high of 40.66 per cent in May 2024, surpassing the previous month’s increase of 40-53 per cent. “This surge represents the largest year-on-year increase in food prices since records began in 1996,” the NBS stated.
Unfortunately, again, these dire situations are worsening at a time the country is faced with huge fiscal challenges—including burgeoning public debt and low revenue (into public coffers). Where then will the funding for all these billions (or even trillions) of Naira for implementing the palliatives packages come from? Already, the country’s debt profile (at N121 Trillion) is almost no longer sustainable, with debt servicing taking up practically all Government revenues.
It should also be noted that the dishing out of many forms and hues of palliatives has become part of the unwholesome policy somersaults of the Tinubu administration. For instance, the 180-days import “duty-free” window for importation of some agricultural products is bound to negatively affect many existing local producers of those items. This singular ad-hoc measure could end up leading to the collapse of many businesses in the agric value chain in the country. By the time buccaneers and money launderers cash in on the “duty-free” importation window, Nigeria would have experienced a lot of dumping of ‘foodstuffs.’
By the time the ineluctable damage to be caused by these ‘panic’ measures called palliatives manifest, and the ‘token’ salary awards and other handouts vaporize, it will become obvious that the economy has been made worse-off. As it is today, the Government and its MDAs seem to be working in silos; which is why the Central Bank of Nigeria (CBN) will be raising interest rates and businesses will be looking for concessionary facilities from agencies other than banks. In the end, businesses are asphyxiated and close shops while the Government yet claims to be ‘business-friendly’ with its policies. These are really contradictions; there is an urgent need for policy harmony. It is a clarion call for a holistic blueprint!
Okeke is a practising Economist, Business Strategist, Sustainability expert and ex-Chief Economist of Zenith Bank Plc.
