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NLC Protests Tinubu’s N500bn Subsidy Palliative, Demands 300% Pay Rise

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Bola Tinubu

Bola Tinubu

The Nigeria Labour Congress and the Trade Union Congress have thumbed down the N500bn palliative proposed by President Bola Tinubu, stating that it is grossly inadequate to assuage the hardships confronting workers sequel to the fuel subsidy removal.

They are demanding a 300 per cent salary increase to enable workers to cope with the challenges imposed by the deteriorating economic situation that came with the removal of the controversial fuel subsidy.

On Wednesday, the President wrote to the House of Representatives seeking approval for N500bn to cushion the effects of petrol subsidy removal.

Tinubu’s request was contained in a letter sent to the National Assembly and read during plenary by the Speaker of the House of Representatives, Tajudeen Abbas.

The President had announced the petrol subsidy removal during his inaugural address on May 29, 2023, in response to claims that the subsidy regime favoured the rich more than the average Nigerians, among other reasons.

In his letter, the President proposed an amendment to the 2022 Supplementary Appropriation Act.

It read, “I write to the House of Reps to approve the amendment of the 2022 Supplementary Appropriation Act in accordance with the attached.

“The request has become necessarily important to, among other things, the source for funds necessary to provide palliatives to mitigate the effect of the removal of fuel subsidy on Nigerians.

“Thus, the sum of N500bn only has been extracted from the 2022 Supplementary Act of N819,536,937,815 for the provision of palliative to cushion the effect of petrol subsidy removal.”

The president said he hoped the lawmakers would consider his request “expeditiously.”

The House is expected to hold a plenary today on the president’s request.

Last December, the National Assembly passed a supplementary budget of N819bn for the 2022 fiscal year and also extended the implementation of the 2022 budget till March 31, 2023.

In May, the National Assembly passed the amendment to the 2022 supplementary budget to extend the implementation of the capital components to December 2023.

But unimpressed by the amount contained in the President’s letter, the NLC noted that the money would not be enough to cater for 125 million Nigerians who are believed to be living in poverty.

The National Treasurer of the NLC, Hakeem Ambali, who spoke in an interview with our correspondent in Abuja, questioned the extent to which the palliative would cover.

When asked if the amount would be sufficient, he said, “Definitely not. We have over 125m Nigerians that are technically poor. To what extent can this cushion the effects of this economic hardship?”

Speaking on ways by which the President can mitigate the effect of subsidy removal, the NLC official asked for “Minimum wage review of 300 per cent to all workers; granting licences to individuals for modular refineries to refine petrol locally; granting economic stimulus loan to SMEs at 15 per cent rate.’’

He added, ‘’The government should provide social benefits for aged and unemployed youths; agric loans to farmers and youths through the Agric Bank and community banks at single digit rate; provide alternative energy supply such as massive investment in solar power and Compressed Natural Gas to motorists.

“Fix the refineries; reverse the privatization of electricity back to the state due to poor performance; Execute metro rail line projects in all state capitals and reduction of school fees for students of tertiary institutions.”

NACCIMA, LCCI react

Speaking with The PUNCH, the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Olusola Obadimu, welcomed the idea of palliatives for the poor, but he questioned how the N500bn for the palliative measures would be spent.

According to him, the chamber will refrain from making further comments on the matter until clarification is given on how the fund would be utilised.

He said, “The idea, in principle, is good. Of course, people expect some relief. It is in the statement that we issued. We said it clearly that palliatives would be a good idea. We argued for it. But talking about a specific figure is something we can’t do when we don’t know the scope. The concept is fine, but we need more information about the scope.”

On his part, the Deputy-President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, while commending the move, said the fund would be insufficient to cushion the impact of the subsidy removal and the devaluation of the naira.

He further stated that the media and other interest groups must sustain the advocacy to ensure that the palliative measures are extended to the public and private sectors.

Idahosa said, “Whatever the president implements will not be sufficient to wipe out the impact of the two policies — subsidy removal and floating of the currency. So, it is going to be a partial effort to reduce, not eliminate the effect of those policies.

“There is a basis to complain if the details come out and only the public (sector) gets to benefit from it, then everybody in the private sector has a reason to complain. We have to wait and see how the first set of palliatives will be designed, then we can complain legitimately if the private sector is not involved.”

The President of the Nigerian Economic Summit Group, Mr Laoye Jaiyeola, said his group supported the palliative measure but stressed that it should be extended to those who really needed it.

He stated, “The clarity is that all of us are saying we must have palliative for the people affected. So if you are asking for palliative and the president cannot spend one naira without approval; so, where can he get it if he doesn’t borrow it?

‘’Everyone said there must be palliative for the subsidy removal and the palliative means that government must address the shock of the people. You know you cannot spend without approval and you also know that we are in deficit before; so, which other way can he get money if not borrow? So, he is following what the procedure says is legal.

“We support palliatives but it should go to the ultimate consumer and not those who sit in one place and are spending money. Identify the people that were affected the most and give them the palliative.”

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Job Losses, Factory Closures Loom As Unsold Goods Pile Up — MAN

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AGAINST the backdrop of sustained pressure in the foreign exchange market and high cost of production, the Manufacturers Association of Nigeria, MAN has indicated that inventory of unsold goods is escalating to levels now threatening the existence of companies operating in the production sector of the economy with attendant job losses.

Findings show that as of the weekend the foreign exchange market had recorded over 254 per cent plunge in the value of the naira since flotation of the currency by the Central Bank of Nigeria (CBN) in June 2023.

Recall that the naira traded for N471 per dollar in the official I&E market on June 13, 2023 before the floatation of the currency, but exchanged for N1,665.50 to a dollar as at February 23, 2024 on the Nigerian Foreign Exchange Market (NAFEM), indicating a depreciation of more than 253.6 per cent over the eight-month period. The forex crisis is also stoking inflation, and coupled with high energy costs, purchasing power has continued plummet, stifling demand for goods.

Speaking on the impact of this development on the manufacturing sector, Director General, MAN, Segun Ajayi-Kadir, said: “There are reports that across the board, many warehouses and plants of many manufacturing firms are stockpiled with unsold goods manufactured last year. “The development is as a result of the devastating effects of the exchange rate crisis, inflation, fake and sub-standard goods, smuggling and other macro-economics challenges.”

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CBN Lifts Ban On BDCs, Introduces New Operational Mechanism

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In a major development aimed at financial stability and strengthening the naira, the Central Bank of Nigeria (CBN) plans to resume its weekly intervention in the country’s foreign exchange (FX) market through the Bureau de Change (BDC) operators.

In 2021, the central bank, in a bid to achieve its mandate of safeguarding the value of the local currency, ensuring financial system stability, and shoring up external reserves, announced the immediate discontinuance of foreign currency sales to Bureau de Change (BDC) operators in the country.

However, the resumed intervention, which would reportedly commence today for funding as well as Tuesday for collection, will see the apex bank inject FX into the subsector in a bid to rescue the naira from further depreciation against major currencies, particularly the US Dollar. The collection will be at designated CBN branches in Lagos, Abuja, Kano, and Awka, while details of the naira accounts to be credited for funding bidding will also be made available today.

CBN is also expected to publish the list of eligible BDCs to benefit from its funding using certain compliance criteria.National Executive Council of Association of Bureau De Change Operators of Nigeria (ABCON) hinted on the latest developments through a memo to its members over the weekend.

The association also warned members that it will no longer be business as usual under the new supervisory regime of the central bank, as any infringement or infraction would result in outright revocation of license and prosecution.

ABCON said through the association’s various engagements with the central bank, in conjunction with ABCON’s strategic partners, CBN had agreed to its request, under the bank’s supervision, to inject liquidity into the market through a weekly intervention beginning today.

CBN assured ABCON that the new circular on the Revised Regulatory and Supervisory Guidelines to BDCs, which was introduced over the weekend, was only a draft exposure that required the association’s inputs before the release of the final guidelines by the apex bank.

To that effect, the letters of the guidelines were not cast in stone, the association’s leadership told its members, who had been worried over the sweeping reforms in the document, which, among other things, prescribed N2 billion and N500 million minimum capital for national and state BDCs, respectively.

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