WHY THE PRESIDENT MUST NOT DO CASH PALLIATIVE OF N576 BILLION, By Dr. Adeoye

 

A. There is no doubt about the fact that President Tinubu mean well for Nigeria and Nigerians.

B. He is one Politician on Nigeria's soil that has found help from the throne of Grace and that is why he won both primary and the Presidential election.

C. There is also no doubt that he has been preparing for this position from the day he resigned from MOBIL.

D. The actions he took immediately he assumed office actually proved that he was prepared for the job. 

E. Removal of Fuel Subsidy, CBN Governor and the unification of Foreign Exchange policies are clear indications of a prepared man.

However, in recent times, I have been disturbed by the plan of the government to give N8,000 cash palliative to 12m poor Nigerians for six months.

Below are the reasons why Cash palliative should be AVOIDED. 

1.N8,000 to 12m Nigerians will result in N96 Billion a month and N576 Billion in six months.

2. Cash palliative does not befit a country that has not reach OPTIMAL  PRODUCTION LEVEL. It is good in a country that has attained optimal production level but are restricted from going out to work. Example of such is the United States of America where cash were distributed during Covid Restrictions because people could not go out to perform their economic activities.

3. There are two options available for Mr President, and they are contained in number 4 and five below.

4. Purchase 200 Buses per Senatorial District at N30m per bus.

Treat Abuja like any other 36 states. 

600 buses times 37 will.be 22,200 buses.

The cost will be N666 Billion.

a. This will drop the cost of transportation if handed over to relevant stakeholders to manage.

b.involve the 3 Paramount Rulers in each of the Senatorial District of each state 

c. Involve the Transport Experts and Various workers Union and professional bodies.

d. Put the buses in strategic locations around the country.

e. Get the Governors involved.

f. Ensure regular maintenance and run it as a pure business but regulate the rate based on locations. Make monthly ticket available. USE card over time like in OYSTER Card in UK.

g. Ensure there are savings from the income generated from the buses so as to be able to replace them after 5 years.

h. Let no politician use the bus for free.

I. All Nigerians will benefit from this as most people will no longer have to worry about high cost of petrol.

J. It will affect the cost of goods that would have risen ordinarily as a result  on high transportation cost.

K. Workers will not need to drive their cars to work Daily.

This is what you find with the Transport system in London.

L. The cost of doing this is less than the N576 Billion that would have been spent if we give out N8,000 per month to 12m Nigerians for six months who will return to their sufferings after 6 months.

5. The second option I am suggesting is that we should give out N1,000,000 to 600, 000 Nigerians who will engage in petty businesses and will be able to employ 4 other Nigerians. 

a. Let them pay back over 10 years @ 2 or maximum 5% rate and if possible at no interest since N576b proposed by Federal Government is a free gift anyway.

b. Give them Tax Holiday during the 10 years period.

C. Direct employment from this will be 5 times 600,000 which will be 3m Jobs instantly among the poor.

d. Indirect job will also be another 5 human beings having to do one thing or the other with the 5 people. Hence, another 3 m indirect jobs will be created.

Total Cost of this will be N600 Billion. All we need to do is to add N24 Billion to the N576b planned to be distributed as cash.

e. These 6 million people will not depend on handouts thereafter as the N1m will be like teaching them how to fish and not the giving of fish. State Government will benefit through PAYE  since their business will have tax holiday for 10 years, but PAYE will come to states.

6. Other factors that will affect the giving of Cash of N8,000 per month for 6 months are: 

i. How do we determine the poor Nigerians.?

ii. How do we ensure the spread across the country.?

iii. What will N8,000 do monthly?

iv. It means 12m Nigerians will receive N48,000 each in 6 months.

In my considered opinion, that will not solve the poverty problem and  hardship arising from Fuel Subsidy removal.

v. To give N8,000 per month is to give N266.67 per day. This will not produce the desired result as it means giving less than N90 per meal if it is assumed that the so called poor will eat three times daily.If we assume that less than N90 is okay per meal, then what happens at the end of 6 months.? Half of the of 12m people would have been saved from poverty and pains if we give N1m each to 600,000 Nigerians.

By the time we roll out the next phase of it, we would have covered the 12m people, and they would have been saved in perpetuity from penury and  hunger

vi. The worst aspect of Cash palliative is that people return to their level at the end of the programme, and that will cause more havoc after 6 months and can lead to unrest.

CONCLUSION

Some may argue that it is difficult to manage the buses, but I will say that, Nigeria is not that bad to say that we do not have good people again.

Some will say that the Governors will corner the buses, but I don't believe this is true about all the Governors. 

I also believe that if we engage the private sector people in this, it will yield the desire result. 

It will also help the health of working class people who do not have any reason to drive around again.

Lastly I repeat, Mr President. Please do not give out Cash palliative of N576b.

The amount is too much for such and the two alternatives enumerated above will have better impact than N266.67 per day to 12 million Nigerians.

The Author, Dr.Gbenga Adeoye is a Lawyer, Chartered Accountant, Tax Expert and Arbitrator of UK and Nigeria. He is an advocate of Good Governance and Tax Justice.

He believes that Transformation of a country or entity depends largely on the quality of people in leadership.

He can be reached on dga@gbengaadeoye.com