Nigeria’s Senate approved President Bola Tinubu’s request to borrow $800 million from the World Bank on Thursday, a move aimed at mitigating the impact of soaring fuel prices caused by the discontinuation of a longstanding but costly petrol subsidy. This expedited decision follows Tinubu’s appeal for Senate approval earlier in the day.
The funding will be used to enlarge the National Social Safety Net Programme, a scheme designed to protect Nigeria’s poorest and most vulnerable citizens against economic shocks.
The purpose of the facility is to expand the reach of the programme’s support. The goal is to increase the number of poor and vulnerable Nigerians who can benefit from shock responsive safety net support, as President Tinubu stated. The programme plans to provide a monthly stipend of 8,000 naira (approximately $10.32) for six months to 12 million impoverished households. This financial support is expected to indirectly benefit approximately 60 million individuals.
Dele Alake, a spokesman for President Tinubu, elaborated on the immediate measures designed to alleviate the effects of terminating the petrol subsidy. These include the free distribution of grains and fertilizers to poor households and small-scale farmers. In contrast, large-scale farmers will receive these items at a discount.
The authorities of Africa’s largest economy also aim to increase the minimum wage, with the specifics expected to be ironed out in the next month during negotiations with the main labour unions.
Since taking office at the end of May, Tinubu has embarked on some of the most significant reforms in Nigeria for decades, tackling high debt burdens and other economic issues. The fuel subsidy, which had kept fuel prices low for many years, had become increasingly costly, with the government spending $10 billion on the subsidy alone last year, contributing to escalating government debt.
In parallel with the Senate, the House of Representatives, the lower chamber of parliament, also gave the green light to President Tinubu’s request to adjust the 2022 supplementary budget on Thursday. This move will permit the government to allocate 500 billion naira to alleviate the impacts of the fuel subsidy’s removal. The changes will mean that funds previously earmarked for other projects can be redirected.
($1 = 775.0000 naira)