Nigeria’s new President Bola Tinubu has announced his government’s plan to pay $10 a month to poor households to ease the growing hardship caused by the scrapping of subsidies on gasoline.
In a letter to the Nigerian Senate, which was read during Thursday’s sitting, Tinubu said 12 million households will benefit from the handout for a period of six months. The government plans to fund it through an $800 million World Bank loan for which Tinubu is seeking legislators’ approval.
“It is expected that the program will stimulate economic activities in the informal sector and improve nutrition, health, education, and human capital development of beneficiaries’ households,” he said of the social welfare initiative.
Meanwhile, Tinubu declared a state of emergency on food security and directed the release of grains to households.
Dele Alake, his spokesman, said that “as with most emergencies, there are immediate, medium- and long-term interventions and solutions. In the immediate term, we intend to deploy some savings from the fuel subsidy removal into the agricultural sector focusing on revamping the sector.”
The president scrapped the gasoline subsidy on his first day in office at the end of May, ending a decades-long program that made gasoline affordable for many but which authorities said was expensive and economically unsustainable. The subsidies cost the government an estimated $10 billion in 2022.
He said his government would use the money usually budgeted for subsidies in other vital projects. However, the end of the subsidy program more than doubled the price of gasoline, resulting in severe hardship for citizens already battling high inflation of 22.4% and where at least 63% of the more than 210 million population face “multidimensional poverty,” according to the national statistics agency.
Tinubu said the planned $10 monthly handout would have “a multiplier effect” on about 60 million individuals, though some Nigerians criticized it as inadequate and unsustainable.
In Kano state, the economic hub of northern Nigeria, traders said the country’s cost of living crisis had crashed their returns as sales dwindled and the commodity prices went up.