The federal government has introduced a N5 billion relief package for every state within the federation, as well as the federal capital territory (FCT), aiming to alleviate the repercussions of the petrol subsidy removal.
Governor Babagana Zulum of Borno State disclosed this information in Abuja on Thursday. He addressed State House correspondents after a national economic council (NEC) session chaired by Vice President Kashim Shettima.
The council consists of governors from all 36 states, the governor of the Central Bank of Nigeria (CBN), and various other government officials.
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In a statement after the meeting, Zulum said the N5 billion is to enable the state governments to procure 100,000 bags of rice, 40,000 bags of maize, and fertilizers to cushion the effect of food shortage across the country.
“This funding has to be shared with a formula as follows: 52 percent of this money is given to states as grants, while 48 percent of the N5billon is to be paid back on an instalment basis within a period of 20 months to the CBN by the states and the local government areas in Nigeria,” he said.
“The council has taken bold decisions in order to ensure the speedy release of grains and other items to cushion the effects of subsidy removal on the less privileged in society.
“The council has also taken note of the $800 million loan and insists that it be strictly used for the intended purpose and based on an accurate and acceptable register. The $800 million announced by the president will go to Nigerians in accordance with an accurate social register.
“Furthermore, the council has also noted the package that was announced by the president in order to cushion the effect of subsidy removal, amounting to about N500 billion.
“This fund has to be distributed to the following sectors MSMEs:
industrial sector, about N125 billion, will go to cash transfers, agricultural sector as well as gas expansion for buses.
“And because of the increasing cost of fossil fuel, the federal government intends to establish more gas stations in Nigeria and procure more gas-powered buses, CNG buses, as well as electric buses.”
The move is coming weeks after the federal government suspended its earlier plan to disburse N8,000 naira each for 62 million Nigerian households.
The removal of fuel subsidy spiked the cost of living by about 300%, leaving Nigerians choking on unaffordable prices of goods and services.
President Bola Tinubu said the 2023 budget has no provision for fuel subsidy. On Wednesday, the federal government said it has no plan to reintroduce the subsidy. This means that the focus is to provide Nigerians with palliatives to mitigate the effects of the subsidy reform.
However, Nigerians are concerned that the palliatives, left in the care of governors, will not reach those they’re meant for. This concern stems from what happened during the covid pandemic, where governors hoarded palliatives given to states to distribute to citizens.
Another concern raised by Nigerians is that the palliatives are too meager to cushion the rising effect of the subsidy removal.
Rehoboam Economics will never cease to amaze me.
Our daily consumption of rice is 367k bags of rice(Premium Times). 5 trucks per state is a total of 111k bags(FCT inclusive)
Distributing 111k bags is basically giving out 30.36% of the daily consumption. In other words, you’re… https://t.co/1V68IuSF7t
— Mikael C Bernard (@MikaelCBernard) August 17, 2023