Tuesday, August 1, 2023

President Tinubu Unveils Broad Plan to Ease Cost of Living Pain

Nigerian President Bola Tinubu announced sweeping measures to soften the impact of his move to end gasoline subsidies that has sent prices surging.

The 500 billion-naira ($652 million) package is aimed at improving food supply, ease transportation costs and boost manufacturing. It will also provide conditional grants to at least a million small businesses.

“Our economy is going through a tough patch and you are being hurt by it,” he said Monday in a national address. “I understand the hardship you face. I wish there were other ways. But there is not,” the president told Nigerians in prepared remarks.

Read more: How Nigeria’s Leader Is Shaking Up a Shaky Economy: QuickTake

The cost of living in Africa’s biggest economy has surged since Tinubu announced on May 29 that fuel subsidies have been scrapped, tripling the price of gasoline. A subsequent devaluation of the naira has also fanned inflation, which quickened to 22.8% in the year through June.

Food-price inflation over the same period was more than 25% and frustration turned violent in Adamawa state in northeastern Nigeria on Sunday, where a 24-hour curfew was declared after youths looted a government warehouse where food is stored.

Tinubu, who has declared a state of emergency to tackle food security and supply, asked for patience in his speech.

“Sadly, there was an unavoidable lag between subsidy removal and these plans coming fully on line,” he said. “We are swiftly closing the time gap. I plead with you to please have faith in our ability to deliver.”

The end of the subsidy may help the country save more than 21 trillion naira ($21 billion) in two years, according to the World Bank.

Key Measures:

. 200 billion naira earmarked for agriculture to support the cultivation of 500,000 hectares (1.2 million acres) of land to produce rice, corn, wheat and cassava

. The administration will also provide 225,000 tons of fertilizer, seedlings and other farm inputs and release 200,000 tons of grain from its strategic reserve

. 75 billion naira of concessional lending to fund 75 manufacturers to “kickstart” growth

. 125 billion naira for micro, small and medium-sized enterprises, including 50 billion naira of conditional grants to 1 million nano businesses.

. 100 billion naira to purchase a fleet of 3,000 20-seater buses fueled by natural gas.

“I urge you all to look beyond the present temporary pains and aim at the larger picture,” Tinubu said. “All of our good and helpful plans are in the works. More importantly, I know that they will work.”

In addition, he said the administration is working with labor unions to introduce a new minimum wage.

The Nigerian Labour Congress has called for nationwide protests starting Aug. 2 over what it calls “anti-poor” policies. But the action faces a court injunction and the NLC is holding talks with authorities.


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