Govs plan cash transfers to poor households, set to cushion subsidy removal effect

The National Economic Council comprising 36 state governors and Vice President Kashim Shettima has concluded a plan for state governments to implement cash transfer programmes using state-generated social registers.

It said states-generated social registers would better reflect the number of vulnerable Nigerians to be reached with such cash transfer or palliative scheme.

This came on the heels of the plan by the government to roll out its intervention measures to cushion the effects of the hardships facing Nigerians, following the removal of the controversial fuel subsidy.

At its last meeting, the NEC had set up a sub-committee, which was tasked with coming up with plans to reduce the harsh economic conditions trailing the removal of fuel subsidy and the unification of the exchange 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 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 decision to adopt state-generated cash registers means the governors are dumping the existing National Social Register, which as of 2023, has captured over 61 million vulnerable Nigerians eligible for various government social programmes.

He explained, “We also proposed that each state begin to plan towards implementing a cash transfer programme based on their social register of the states.”

The NEC also proposed the implementation of a six-month cash award policy for all public servants.

The six-month cash award policy, Abiodun said would allow sub-national entities to pay their public servants a prescribed amount of cash monthly.

The implementation of the CAP would be based on the individual capacity and priority of various states, he said.

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.

Soludo also debunked notions that the Federation Account Allocation Committee would share N1.96tn to the three tiers of government in July 2023, saying the amount accrues to N900bn.

He said, “Contrary to the widely reported news item that FAAC was going to destroy about N1.9tn or N2tn and so on trending, I think it is one of the ways to moderate the possible impact of the shock on the system to distribute I think barely just N900bn of that. And so it’s not the N2tn that people have been saying.”

On his part, the Bauchi State governor, Bala Mohammed, said that the Federal Government would distribute 252,000 metric tons of grains to states at a subsidised rate. This is as the Council backed the planned distribution of grains, fertiliser starting July 24.

“In terms of the quantity of grains that will be distributed, I’ve just conferred with the Acting CBN governor. They have more than 252,000 metric tons of grains and almost an equivalent number of bags of fertilisers that will be distributed within the timeframe (of six months),” he said.

Mohammed explained that the National Emergency Management Agency made its package available to Nigerians.

Also speaking, the acting CBN governor, Folashodun Shonubi, said the Federal Inland Revenue Service briefed the council and announced that it had exceeded its half-year target and plans to generate N25tn in 2024.

Shonubi said, “The Chairman of the Federal Inland Revenue was making a presentation on what they have done so far, the level of collections. It was nice to know they are ahead of their target for half-year. And we expect that before or by the time the year ends, they would exceed.

“They also gave us some idea of what next year should be like from them. And from this year, we hope to make some N10tn.

“It is planning that next year, we should be able to, working with all the agencies, provide N25tn as their contribution to the national coffers.”

The council also proposed an immediate implementation of energy transition plants, converting mass transit buses to Compressed Natural Gas with a long-term vision to establish electric automobile plants

It urged all tiers of government to be responsive to the people’s sufferings and address the rising cost of governance while balancing investment and consumption.