Since the emergence of COVID-19, the term “palliative” has gained significant political significance, particularly in Nigeria. It has become synonymous with distributing resources to alleviate the suffering of the masses during challenging times. Political commentators view it as an essential element in addressing various socio-economic issues in Nigeria. Recently, the National Executive Council (NEC), comprising the vice president, Kashim Shettima, and the 36 state governors, held a crucial meeting in Abuja, placing palliative measures at the top of their agenda.
While the NEC has traditionally prioritized the distribution of funds from the federation account, last month saw a substantial N907 billion shared among the three tiers of government. What attracted headlines, however, was the discussion on palliative measures to mitigate the impact of fuel subsidy removal on the citizens. The council members decided to abandon the opaque social register previously used by the former president’s administration and proposed state registers for the forthcoming palliative distribution.
Nigerians are now debating whether the proposed palliative measures will effectively alleviate inflationary pressure on their daily lives. Social critics are drawing comparisons between the funds allocated for ordinary Nigerians and the budget set aside for the political elites in the legislature and judiciary. Femi Falana, SAN, asserts that the elites are the primary beneficiaries of these palliatives, also known as subsidies, and provides various examples to support his claim.
Despite not dismissing the importance of palliative measures, this column believes that the most effective approach to improve the economic, social, and political well-being of Nigerians lies in the prudent use of the windfall resulting from fuel subsidy removal. By utilizing the available resources wisely, the nation’s currency can be strengthened, inflation curbed, unemployment reduced, productivity increased, and political violence and social unrest avoided. Such improvements would eventually lead to a decrease in fuel prices and other inflation-related pressures.
Thus, the best palliative solution would involve the judicious management of the impending massive windfall resulting from President Bola Ahmed Tinubu’s bold initiative. Nigeria’s distributable revenue has witnessed a significant increase, reaching about N1.9 trillion in June, a staggering 150% rise from the previous month. Fortunately, the Federation Account Allocation Committee (FAAC) shared N907.054 billion, though some argue that according to section 162(3) of the 1999 constitution (as amended), all funds in the federation account should be shared without any savings.
Imagine the positive impact on the national economy if the N907.054 billion shared among the three tiers of government is efficiently infused into the local government councils, states, and federal government’s economies. The hope is that the present administrations would reduce wasteful expenditures associated with public offices. Many Nigerians are concerned about the National Assembly allocating a significant sum of N110 billion for themselves, a substantial portion of which might be spent on luxury cars, only benefiting foreign manufacturers and importers.
Furthermore, envision public officials adopting a more responsible and less ostentatious lifestyle, understanding that such excessive displays of wealth can be disheartening to the impressionable youths. Proper management of the nation’s resources would lead to more job opportunities for graduates and skilled Nigerians, which is essential considering the current estimated unemployment rate of 41% according to KPMG.
Increased employment opportunities would contribute to reducing insecurity in the country, a pressing concern for political actors. With the eradication of corrupt multiple-exchange windows from the Buhari administration, Nigeria’s macro-economy has become more attractive to foreign direct investment (FDI). However, the location of these FDIs largely depends on the actions taken by state governments to prioritize ease of doing business. States that genuinely prioritize business-friendly environments are more likely to attract higher percentages of foreign investment.
With its first steps, the Tinubu administration appears determined to put in place economic policies that would galvanize national and state economies. The creation of an Infrastructure Support Fund (ISF) attests to that. According to the president’s spokesman, Dele Alake, “The new infrastructure fund will enable the states to intervene and invest in the critical areas of transportation, including farm-to-market road improvements, agriculture, encompassing livestock and ranching solutions, health, with a focus on basic healthcare, education, especially basic education, power, and water resources, that will improve economic competitiveness, create jobs and deliver economic prosperity for Nigerians.”
In a recent column, I discussed the potential emergence of superstrates as the necessary factors fall into place. The 5th Alteration Act, which grants states the authority to handle electricity production and distribution, offers an opportunity to address a critical barrier hindering economic growth in Nigeria. It is hoped that states will embrace Independent Power Generation (ISF) and collaborate with private capital to create a competitive business environment that attracts foreign direct investments (FDIs) to their regions.
The president’s strong commitment to economic rejuvenation is evident, and this column encourages state governors and local council administrators to work together with the federal government to revive the national economy. If successful, many of the socio-political challenges that have been impeding the country’s progress could be overcome nationwide. On the contrary, those who fail to collaborate risk losing out on what might be known in the future as the “Tinubu plan.”
Given Tinubu’s experience as a former two-term governor of Lagos State and a federal legislator, he understands the potential for collaborative opportunities between states and the federal government in terms of funding support. During his tenure as Lagos governor, Tinubu initiated partnerships in power production, although he faced frustrations from the federal government. Otherwise, Lagos State could have achieved self-sufficiency in electricity production and distribution by now. He also established the Lagos State Security Trust Fund, a successful collaborative effort that enhanced security agencies’ capacity within the state.
With Tinubu in power, state governors have a unique chance to tap into the vast resources available through the federal government. Recently, Niger Delta stakeholders encouraged their state governors to engage with President Tinubu’s administration and leverage the upcoming infrastructure revolution for the region’s benefit. This is a wise call, as an industrial revolution and improved infrastructure are the antidotes to the longstanding crises that have hindered progress in the area. Significant infrastructure development stands as the most effective palliative for all Nigerians.