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• Again, Senate reconsiders ‘uneven’ disbursement of N483bn intervention loan
• Ondo govt moves to cushion impact of subsidy removal, plead with residents
With five weeks left from the eight weeks the Federal Government and organised labour agreed for the conclusion of subsidy removal talks and palliatives, President Bola Tinubu yesterday, asked the House of Representatives to amend the 2022 supplementary appropriation Act to allow the Federal Government source N500 billion for palliative to cushion the effect of petrol subsidy removal.
This is amid a recent warning by the Debt Management Office (DMO) to the Federal Government against additional borrowing, saying 73.5 per cent of revenue generated this year will be used to service debt.
The President, in a letter addressed to the Speaker, Tajudeen Abbas, which was read during Wednesday’s plenary, said the money would be sourced from the 2022 Supplementary Appropriation Act of N819.5 billion.
Former President Muhammadu Buhari introduced the supplementary budget in 2022 for capital projects due to the impact of floods on farmlands and road infrastructure.
The lifespan of the budget has since been extended till December 31, 2023.
The President said: “The request has become necessary in order to source for funds to provide necessary palliatives to cushion the effect of the recent removal of fuel subsidy in Nigeria. I expect that the House will speedily consider the request.”
Abbas assured that the House would deliberate on the matter during Thursday’s plenary session and encouraged members to come prepared to contribute to the discussion.
On assuming office as president, Tinubu had announced the removal of fuel subsidy, a decision that saw the price of petrol jump three-fold across the country. Following the announcement, the Nigerian National Petroleum Company Limited (NNPCL) directed its outlets nationwide to sell fuel between N480 and N570 per litre, an almost 200 per cent increase from the initial price of below N200.
Immediately, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) called for a nationwide strike to protest the removal. However, the planned strike was suspended following a parley between them and the government, with some agreements reached.
While the administration has been commended for taking swift action on petroleum subsidy, there are still concerns about the impact of the removal, especially as it relates to the increase in the price of PMS and its multiplier effect on almost every sector of the country’s economy and households.
Meanwhile, the Senate has again resolved to launch a fresh probe into alleged uneven disbursement of N483 billion loan to Medium and Small-Scale Enterprises (MSMEs) in the six geo-political zones by the Development Bank of Nigeria (DBN) in 2021. This followed a motion by the Senate Chief Whip, Senator Mohammed Ali Ndume (APC, Borno) and co-sponsored by 64 other lawmakers during Wednesday’s plenary.
Recall that the ninth Senate had set up an ad-hoc panel to investigate the claim that the Southwest, especially Lagos State, had the largest number of the loan beneficiaries of about 47 per cent of the entire loan.
The DBN officials then told the panel that they adhered strictly to the criteria set up by their regulators and not geopolitical considerations in giving out loans.
Ndume, who was visibly dissatisfied with the outcome of the last investigation and the committee’s recommendations, said there was a need for the Senate to look at the issue critically again owing to the huge disparity in the loan disbursement.
However, there was mild drama as senators took time to dissect the motion. Seriake Dickson (PDP Bayelsa), while suggesting an additional prayer asked that the committee’s investigation should be extended to look at all intervention loans by the CBN, including COVID-19 palliative and Anchor Borrowers’ loan.
But the additional prayer was dropped on the pretext that it will make the assignment of the ad-hoc committee unending.
Contributing earlier, Orji Uzor Kalu (Abia North) said loans are obtained in application and following satisfaction of requisite requirements, including bank guarantees.
Olamilekan Adeola (Ogun West) said Ndume had the notion that his Northeast zone was short-changed but forgot that the development financial institutions had laid down procedures to disburse loans but appealed that the motion be given a second look if Ndume felt bad about the facts.
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Sani Musa (Niger East), who headed the former ad-hoc committee, said it should be noted that there is a difference between bank loans and palliatives. While agreeing that development institutions have criteria for granting loans, he said the institutions’ requirements might not be strictly followed. He disclosed that 65 per cent of loans disbursed by DBN have been repaid.
Musa also said interest of Northerners in applying for the loan may be restricted by religious belief that no interest should be paid on loans while financial institutions take 17 per cent on loan.
But Ndume interjected him saying he perfectly understood the workings of development institutions and their requirements, but claimed he got information presented from the website of the DBN and microfinance institutions involved.
A financial expert and retired banker, Sen. Isah Jibril, advised that the DBN, among other institutions, is not wholly a Nigerian institution, but has foreign bodies like the World Bank and International Monetary Fund (IMF) as investment partners and they have their criteria, which cannot be compromised by the Nigerian system.
He advised that Nigerians that failed to meet such requirements should approach other less cumbersome institutions such as the Bank of Industry and Bank of Agriculture.
In another development, the acting governor of Ondo State, Lucky Aiyedatiwa, yesterday, said the state government is initiating and launching plans to introduce palliative measures to cushion the impact of subsidy removal. Ayedatiwa, who stated this in a statement, said the government is already aware of the hardship and inconveniences faced by the people following the removal of fuel subsidy and its attendant effects.
He expressed concern at the hardship unleashed by the removal of fuel subsidy as it continued to deepen the pains of residents particularly workers in the state workforce.
The acting governor disclosed that the state is collaborating with the Federal Government through the National Economic Council (NEC), headed by the Vice President, Kashim Shettima.
He also added that the state government had also been talking to the leaders of the organised labour in the state at ensuring the state workers enjoyed the benefit.
