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Fuel subsidy: CSOs call for resuscitation of existing refineries, effective mass transit system

  6 Juin      30        Economy (14215),


Kaduna, June 6, 2023 (NAN) The National Social Protection Forum (NSPF), a coalition of Civil Society Organisations (CSOs), and Partners in Nigeria, have called for the resuscitation of existing refineries and provision of effective mass transit system to cushion the effect of fuel subsidy removal on Nigerians.

The forum’s National Coordinator, Dr Taiwo Benson, in a statement to newsmen on Tuesday in Kaduna, said the mass transit system should serve as alternative transport for commuting people and farm produce in rural and urban areas.

He said to resuscitate the existing refineries, the Government must convene a national dialogue with various stakeholders to brainstorm and create conditions for robust private sector investment in building new ones to increase competition and reduce cost.

Acknowledging the economic rationale advanced for the fuel subsidy removal, he said the Government should care much about the impact it would have on the masses, especially the extremely poor and vulnerable who constitute over 133 million of the over 200 million population.

Benson, however, said that they were dissatisfied with the manner and approach that was taken in removing the subsidy.

“While we do not dispute the need to take this measure as there are potential benefits to be realised, such as increasing the nation’s revenue, which has been shrinking over the years, we are concerned that the immediate effects of this measure will disproportionately affect the poor.

“Understanding that an increase in fuel costs produces a ripple effect in the economy due to the sudden increase in the cost of production, which is then passed on to consumers, this inadvertently leads to an increase in the cost of living, thus pushing the poor further into a position of destitution,” he said.

Benson, however, commended the Government for advancing social protection such as approval of the revised National Social Protection Policy and the recent signing of the Social Investment Programme Agency Law.

He, therefore, expects that the gains from the removal of the fuel subsidy would be used by the government to increase the level of social protection financing and expand effective coverage of existing social protection programmes for all citizens.

“We make this proposal based on existing evidence that shows that subsidies do not always benefit the very poor and vulnerable but end up benefiting the well-off.

“There is a global consensus that the removal of any subsidy should be accompanied by a corresponding investment in social protection and job creation.

“The government should not have embarked on the hasty removal of the fuel subsidy without undertaking widespread consultation with relevant stakeholders and not putting in place the necessary safety nets or palliative measures to cushion the effects,” he said.

The National Coordinator called for the implementation of measures in the short term to expand the National Cash Transfer (NCT) programme to cushion the impact of the subsidy removal on the poor.

He also called for the operationalisation of the National Health Authority Law (NHAL) to reduce out-of-pocket health expenditure that had been identified as a key driver of poverty and vulnerability, particularly for those already near the poverty line and below.

He advised the Government to move quickly to ensure that adequate and effective power supply is provided to enhance the productivity of small- and medium-scale businesses which happens to be the largest employer of labour in the country.

The National Coordinator acknowledged the moves to review national minimum wage by the Federal Government, describing it as a good initiative to maintain the purchasing power and ensure that a sizable proportion of disposable income is accessible to Nigerians.

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