Nigeria has saved over N1 trillion about $1.32 billion in just over two months by scrapping a popular but costly subsidy on petrol and moved to unify its multiple exchange rates, President Bola Tinubu has said. But Tinubu is under pressure as prices soar following the country’s boldest reforms in decades, which labour unions say have hurt the poor. In a television broadcast, Tinubu defended his decision to scrap the petrol subsidy, which he said was benefiting a few elites and that the reforms would help boost the economy. “In a little over two months, we have saved over a trillion Naira that would have been squandered on the unproductive fuel subsidy which only benefited smugglers and fraudsters,” Tinubu said. The president said he was aware of the hardship the subsidy removal had caused and was “monitoring the effects of the exchange rate and inflation on gasoline prices”, adding that he would intervene if and when necessary.

The World Bank said last month Nigeria could save up to N3.9 trillion this year alone after Tinubu’s reforms but warned of growing inflationary pressures in the short term. Unions are pressuring Tinubu to offer relief to households and small businesses. With the unions planning to strike from Wednesday, Tinubu announced plans to provide mass transit buses and fund farmers and small businesses with cheap loans, he said. Earlier on Monday, the government said it had released grains to families, directed authorities in public schools to defer hiking school fees and will provide buses to ease transport costs for students. It also plans to set up a funds from the subsidy savings to build infrastructure. “Sadly, there was an unavoidable lag between subsidy removal and these plans coming fully online. However, we are swiftly closing the time gap,” Tinubu said.

He said “To strengthen the manufacturing sector, increase its capacity to expand and create good paying jobs, we are going to spend N75 billion between July 2023 and March 2024. Our objective is to fund 75 enterprises with great potential to kick-start a sustainable economic growth, accelerate structural transformation and improve productivity. Each of the 75 manufacturing enterprises will be able to access N1billion credit at 9% per annum with maximum of 60 months repayment for long term loans and 12 months for working capital. Our administration recognises the importance of micro, small and medium-sized enterprises and the informal sector as drivers of growth. We are going to energise this very important sector with N125 billion. Out of the sum, we will spend N50 billion on Conditional Grant to 1 million nano businesses between now and March 2024. Our target is to give N50,000 each to 1,300 nano business owners in each of the 774 local governments across the country. Ultimately, this programme will further drive financial inclusion by onboarding beneficiaries into the formal banking system. In like manner, we will fund 100,000 MSMEs and start-ups with N75 billion. Under this scheme, each enterprise promoter will be able to get between N500,000 to N1million at 9% interest per annum and a repayment period of 36 months.

“To further ensure that prices of food items remain affordable, we have had a multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain. In the short and immediate terms, we will ensure staple foods are available and affordable. To this end, I have ordered release of 200,000 Metric Tonnes of grains from strategic reserves to households across the 36 states and FCT to moderate prices. We are also providing 225,000 metric tonnes of fertiliser, seedlings and other inputs to farmers who are committed to our food security agenda. Our plan to support cultivation of 500,000 hectares of farmland and all-year-round farming practice remains on course. To be specific, N200 billion out of the N500 billion approved by the National Assembly will be disbursed as follows: This expansive agricultural programme will be implemented targeting small-holder farmers and leveraging large-scale private sector players in the agric business with strong performance record. In this regard, the expertise of Development Finance Institutions, commercial banks and microfinance banks will be tapped into to develop a viable and an appropriate transaction structure for all stakeholders.

“Fellow Nigerians, I made a solemn pledge to work for you. How to improve your welfare and living condition is of paramount importance to me and it’s the only thing that keeps me up day and night. It is in the light of this that I approved Infrastructure Support Fund for the States. This new Infrastructure Fund will enable States to intervene and invest in critical areas and bring relief to many of the pain points as well as revamp our decaying healthcare and educational Infrastructure. The fund will also bring improvements to rural access roads to ease evacuation of farm produce to markets. With the fund, our states will become more competitive and on a stronger financial footing to deliver economic prosperity to Nigerians. Part of our programme is to roll out buses across the states and local governments for mass transit at a much more affordable rate. We have made provision to invest N100 billion between now and March 2024 to acquire 3000 units of 20-seater CNG-fuelled buses. These buses will be shared to major transportation companies in the states, using the intensity of travel per capital. Participating transport companies will be able to access credit under this facility at 9% per annum with 60 months repayment period. In the same vein, we are also working in collaboration with the Labour unions to introduce a new national minimum wage for workers. I want to tell our workers this: your salary review is coming. Once we agree on the new minimum wage and general upward review, we will make budget provision for it for immediate implementation.

“I want to use this opportunity to salute many private employers in the Organised Private Sector who have already implemented general salary review for employees. Fellow Nigerians, this period may be hard on us and there is no doubt about it that it is tough on us. But I urge you all to look beyond the present temporary pains and aim at the larger picture. All of our good and helpful plans are in the works. More importantly, I know that they will work. Sadly, there was an unavoidable lag between subsidy removal and these plans coming fully on line. However, we are swiftly closing the time gap. I plead with you to please have faith in our ability to deliver and in our concern for your well-being. We will get out of this turbulence. And, due to the measures we have taken, Nigeria will be better equipped and able to take advantage of the future that awaits her. In a little over two months, we have saved over a trillion Naira that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters. That money will now be used more directly and more beneficially for you and your families. For example, we shall fulfill our promise to make education more affordable to all and provide loans to higher education students who may need them. No Nigerian student will have to abandon his or her education because of lack of money.

“Our commitment is to promote the greatest good for the greatest number of our people. On this principle, we shall never falter. We are also monitoring the effects of the exchange rate and inflation on gasoline prices. If and when necessary, we will intervene. I assure you my fellow country men and women that we are exiting the darkness to enter a new and glorious dawn. Now, I must get back to work in order to make this vision come true”.