 We're glad to know you're still there watching breakfast on the plus TV Africa right now We're talking about what is happening in the National Assembly where the president Bola Ahmed tinaboo is seeking the reps Approval of five hundred billion Naira for palliative After the subsidy removal we have the principal partner wood regions court Consulting today in the house in the person of mr. Shegoon shock with on he is here in the capacity of a public affairs Analyst good morning and welcome to the program mr. Shock with on Okay the president has gone to the National Assembly for 500 billion Naira For palliatives. Let me just take what you feel about That palliatives over fuel subsidy removal. What do you think? well It's very interesting This request I'm not exactly sure What they intend to do what what the government what the president meant by palliatives Because there was no explanation as far as I could find Which regards to what the exact ones are to provide those palliatives. Let me also remind, you know, everybody that's doing that We also have the 800 million dollars World Bank loan still pending Right. So if you convert that to Naira at the current exchange rates, that's somewhere around the same 500 million billion Naira Comes to probably about 600 billion Naira. So we're talking about a 1.3 trillion Naira Available to the government if this is approved for the provision of palliatives So it's important to just put that on the table on the one side Another point that I think is important to note in this request is that it's not a request for fresh funds It's a request to convert part of the 897 billion supplementary budgets that the President Wari had sent to the National Assembly late last year for according to the government at that time to provide infrastructure pushing the impact of the flooding And some security issues that the country faced at that time So so There's a lot to unravel, you know with this request What if if that is the case if what the president is has done is to request for a compression really of the supplementary budget in other words He's trying to change the purpose of part of the 800 and 97 billion Naira that had been previously approved by the National Assembly Strangely is trying to change part of the purpose of that or divert part of that money to provide palliatives What happens in that case to the original intent of that money, you know So is it that there was no need at that time one how come even though that money had been approved as at that time Disbursements obviously Hasn't happened otherwise the president wouldn't be asking now for some of that to be converted to To be used for palliatives, which means that some of that money that money has not been used for the purpose It was approved for in the first place. Why you know, so there are a lot of questions to ask with regards to all of this However, having said all of that 1.3 trillion Naira as palliatives cumulatively will be at least crutch the surface of the impact that the subsidiary Removal would have on the most vulnerable people in Nigeria and the people that that subsidy Was helping to be an active players in the Nigerian economy You know, so and I think it's important for us to ask questions with regards to what exactly This font will be deployed to and how quickly that deployment will happen how quickly this font will impact The the spending of purchasing power of the average Nigerian such that you can then say that it would have the desired Effect on overall economic well-being of the country Well, another question you didn't ask from what you were asking when it will be given and all that is how often Will this be given because I was looking at I made some kind of calculation When you say 500 billion Naira Divide that by 120 million people. I'm not removing anybody in Nigeria and saying you are the rich person They shouldn't come to you and all that. I'm talking about Nigeria as a whole 120 million people dividing 500 billion Naira would be like only 4004,000 something 4666 Naira or so that everybody will get so how often will this be given to for it to be called a palliative? because if I am given 4666 Naira as I'm sitting here it wouldn't take me to work for two days So how often will this be given? Is it is this is the palliative for four years? Is it for one year will they be giving it every month and if they're giving it every month was the difference between that money They will be spending and the fuel Subsidy money that they were spending or that they could have been spending now that they know the data of the fuel that we consume Let's say we were spending like 500 that 500 billion per month in fuel subsidy And now we know that because we were only financing or getting this fuel for other countries as well We now have a good data about the the fuel that we are consuming in Nigeria That means maybe we can be spending like a hundred billion Instead of 500 billion anymore. So what will that? What difference will that bring to us? How often will they be giving us this palliative and all that and having asked that because you are not in government You cannot answer that let me ask you personally Are you even comfortable knowing the antecedents of government's successive governments about palliative at least the nearest one? The the most recent one is the COVID-19 palliative with all that experience Are you even comfortable with the word palliative making the life of Nigerians better? Well, okay, so taking everything that you said into context I think it's also important to note that the government had when the Eight hundred million dollars World Bank loan came into the public conversation To the public space the government had said that this was going to be used for conditional cash transfers So you are not far off the mark if you assume that now that the president is talking of the five hundred billion Palliative approval that he is speaking about conditional cash transfers as well, but it's important to know that he didn't say so The the the purpose has not been declared to take that analysis for that what the analysis you just gave now Look if you were and I said this at that time Eight hundred million US dollars into Naira even at this rate would come to around six hundred billion Naira to divide that amount of the vulnerable or even if you limit that to according to the government the 15 million most vulnerable in their Most vulnerable household register You will still arrive at a figure that will be Very small Compared to the issues that those houses or those individuals are facing and it will only be useful for just one month So if you assume that you are giving five hundred billion Naira As palliatives and you're going to use that for conditional cash transfers It will only suffice for one month at this too So what then happens subsequent months if these funds are deployed to conditional cash transfers They would not even scratch the surface of the impact that this would have on these same people They were trying to provide palliatives for now since the government did not talk about conditional cash transfers They just said palliatives there are so many other ways that palliatives can be provided the challenge that I've had and you know The contradiction of the entire palliative conversation is to fold one the funds the amount of money you would require to Provide just one type of palliative as we as we just analyze now if you talk about conditional cash transfers This money is just barely scratches the surface if you talk about from using Providing palliatives for example In the in the in the area of transportation Which is which is one of the areas where the impact of the subsidiary mobile will be most felt in the immediate So let's assume that you want to use this funds entirely to provide buses that would maybe Transport people either at a highly subsidized rate or for free You will only be able to provide about three buses per word In the entire country with six hundred with five hundred billion Naira have done the numbers about three buses per word that would do absolutely nothing Even if you are talking about large luxury buses that can transport a hundred people for three It doesn't scratch the surface the kind of money that you require and this is the contradiction The kind of money that you require to provide palliatives that would impact the people would be multiples of the subsidy itself But for this for the palliatives to work you will be spending trillions of Naira Over a sustained period of time to acquire buses for example Using the public profile procurement guidelines will take you nothing less than nine months What happens in the intervening period? You know if you decide that you are going to apply the subsidies To to providing healthcare services or to improving education it will take you years For that money to trickle down to the people and the five hundred billion obviously can do nothing Which regards to any one of those things whether it's transportation whether it's healthcare So the palliative conversation is it's a it's a red herring It's it's a waste of time you cannot provide palliatives to replace subsidies In fact, let me put it this way The only palliative that Nigerians need to take regarding subsidiary mobile is the return of the subsidy itself That's the only palliative that can work the only way to push in the effect of subsidiary mobile is to is to put the subsidies back in place and And this is the conversion that we must continue to have look Subsidiary mobile is hurting is going to hurt the economy in a fundamental way That we are simply refusing to acknowledge as as private sector people as opinion leaders as people that understand the way economies work the subsidies in themselves are supposed to provide a cushioning effect that would put the most vulnerable sectors of society into the economic cycle That it would ensure that they are a part of the consumption This of the country such that based on their consumption Investment in production can then follow and then economic activity and economic growth would happen You take those subsidies out you kill off the economic value of your large population and Therefore you constrain the capacity of your economy to grow at the rates that we need to be growing at People must recognize this and stop talking about the dummy the subsidies are doing from the fiscal Budgeting site that is only one side of the equation and it in my opinion the least impactful side of the of the equation Six trillion error in subsidies per annum comes to about 30 percent of your entire budget Volume so it sounds bad But there are other things that we need to talk about for example the size of that budget itself Why are government revenues only trending in the region of 10 to 12 trillion era a year? We know that Nigeria has a capacity to generate far more than that in multiples if loopholes and and Leakages are plugged. Those are the conditions we need to have not the removal of the subsidy you take that subsidy away Yes, you save some money in terms of the budget But the application of that money in the first instance You can't even guarantee it and then the impact of that application in terms of driving economic growth will take it and a Ridiculously long time to happen Subsidy removal is not the answer and I think it's important for the president and the government to recognize this the answer to our fiscal problems is fixing Leakages in our revenue profile is fixing wastage in God, but they will argue that it will be argued that That's part of fixing of the leakages because money was going to things that maybe we're not really as They were projected to be so that is plugging that leakages They rules. Yeah, but so if that argument comes up, what do you say? I agree And what the question is what quantum of the subsidy? Figure the monthly of another subsidy figure is going into real subsidies is actually impacting the lives of the plan What quantum of that is bringing people's pockets because they are front on subsidies That is the task that government must be bold enough to take on and deal with So we all know that there's a good chunk of the subsidy figure that is just it's it's corruption people are simply eating that money in quotes To use a local balance. Yeah, right. So what quantum of that? Represent graft fix it. Stop it and you you don't you don't Decapitate because you have headache now. It's a uroba program Recording before you don't decapitate your head because you have headache you take Canada or some other whatever, you know And I'll just if you want to use so what we need what the government has done is to decapitate itself is to decapitate this specific intervention rather than Finding out the elements of it that is dreaming with corruption and taking it out of the way, right? So for me the argument that subsidy removal is a plug-in of one of those leakages is not a complete argument It's only a part of the subsidy that is a leakage and you should fix that part not take the subsidies away entirely and before I Stop on that point It's important to note and like I've been saying and I think I've seen a number of other public commentators say this Repeatedly it's important to note that even the most the biggest Capitalist nations in the world for example the United States for example the United Kingdom the issue Excuse me, sir. Every single one of these countries have subsidies in various areas of the economy It's not even just energy or petroleum. It's subsidized food. It's subsidized production. It's subsidized health health care, right? So the argument of taking subsidies away simply fly in the face of reason and logic This is not the answer. It's not the solution The solution is to fix draft is to fix the leakages and is to reduce the cost of governance That is the conversation we must continue to push into the public domain until it sinks in I know that people Have been told these things for so long that they've come to accept it as a fate accompli But it's not true. So we need to continue to repeat these things again On the program and mind to recognize that the subsidy is not the problem. The problem is grass The problem is wastage So let's fix the graph part of the subsidy and let the subsidy is the rest of the subsidy to do the job That subsidies do all about the world which is boosts consumption Okay. Yeah, well This is where we will have to cut this today Well, we were talking about buses and I was just imagining if the buses come to the world Let's say two buses pay what Who is going to be fueling these buses if it is still the government? I will fuel the buses then what is the difference and then I was just thinking What's the definition of misappropriation you budget money for a particular thing and then you want to use it for another thing No matter how important that thing may be that is what the definition of misappropriation is people have suffered During the flood people are suffering because of insecurity and you want to take that and you do palliative That we do not even know what it's going to take what shape is going to take and is that not misappropriation Or do you wave that word because is the president that is doing it? Well, there are questions that we need to answer like you have said the Solution may not be the removal of fuel subsidy But looking in what to see how graft could be curbed and every other thing that is making or spend unnecessarily Like the cost of governance as well. Thank you so much. Mr. Shokweton for coming on the show this morning You too we've been talking with mr. Shago Shokweton a principal partner Wood region's court consulting We'll take a break when we return we treat another topic, but we will be looking at the weather now to see what is happening Stay with us