The federal government has revealed a N5 billion palliative package for each state in Nigeria, including the Federal Capital Territory (FCT), as a measure to mitigate the impact of the removal of petrol subsidy.
Babagana Zulum, the Governor of Borno State, announced this development in Abuja after a National Economic Council (NEC) meeting presided over by Vice President Kashim Shettima.
The National Economic Council comprises the governors of all 36 states, the Governor of the Central Bank of Nigeria (CBN), and other relevant government officials.
President Bola Tinubu had announced the end of the petrol subsidy regime in his inaugural speech on May 29. This move is intended to address the economic challenges and financial strain caused by fuel subsidy.
“On fuel subsidy, unfortunately, the budget before I assumed office is that no provision is there for fuel subsidy. So, fuel subsidy is gone,” the president had said.
Giving the outcome of the meeting, Zulum said the N5 billion is to enable state governments procure 100,000 bags of rice, 40,000 bags of maize and fertilizers to cushion the effect of food shortage across the country.
Sharing Formular
“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.”
He said the council commended the efforts of the federal government and the CBN in addressing the current situation in the country.