“N8,000 is Significant”: World Bank Says FG’s Palliative Will Increase Household Earnings by 10 Per Cent
- The World Bank has said about 50% of Nigerians will see their household earnings go up by 10% with President Bola Tinubu's palliative
- The global financial institution added that the proper implementation of the palliative will ensure poor Nigerians never skip a meal
- However, an analyst who spoke to Legit.ng insists that the federal government should stimulate the economy rather than give N8,000 as palliative
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The Federal Government's intention to give out N8,000 as temporary relief after eliminating the fuel subsidy has drawn a reaction from the World Bank.
The global bank claimed the action would result in a 10% increase in income and accessible earnings for nearly 50% of Nigerians.
Recall that Legit.ng reported that the National Executive Council (NEC), under President Tinubu, finally agreed on palliative measures for Nigerians.
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According to Alex Sienaert, the World Bank's lead economist for Nigeria, the money from the government will prevent many Nigerians from skipping meals, keeping children out of school, or visiting the hospital.
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Palliative will help Nigerians
Sienaert praised the administration for recent economic changes, particularly the one on subsidy elimination and the proposed palliative, during an economic assessment session at the Lagos Business School, according to a story in Punch.
He said:
The other thing we often hear is that N5,000 or N8,000 is a trivial amount of money. I think people will be shocked to know that for a huge number of Nigerian households, it is a very significant amount of money.
Inferring from statistical reports, he said that 50% of Nigerian households make less than N60,000 monthly. On this note, he added:
So, if you are giving them N5,000 or N8,000 extra for six months to help tie them over, you are increasing their earnings and available incomes on the order of 10 per cent. For many households, it would be meaningful.
According to Sienaert, the cash transfer would not cost the government a large sum of money in comparison to the benefits that subsidy elimination will provide.
He added that palliative could help poor and vulnerable households get through hard times without doing things that harm their prospects, like pulling out of school, not going to the hospital, skipping a meal, or whatever the case may be.
He argued that the amount is a significant amount of resources compared to what is being released.
His words:
I know what has been in the news is the idea of a N5,000 or an N8,000 cash transfer to needy households for about six months. If you look at that the cost of that, it would be equivalent to just about one month worth of spending on the subsidy that was happening before it was cancelled under the old exchange rates and still less than two months’ worth under the new one.
Stimulate economy rather than give N8,000 palliatives
However, Deji West, a financial and business consultant, disagrees with Sienaert, referring to the scheme as rubbish and adding that it is not the way to go.
West told Legit.ng:
It is better to create employment or venture into things that enables the creation of up to 5 million jobs in 3 industries. It is better to use the money to stimulate economy or give employers incentives to employees.
According to West, giving out money is crazy economics, as it will lead to more hardship after just a few days of accolades.
Similarly, a commentator on social media suggested that the N500 billion can be utilised to purchase thousands of 60-seater buses that will ease the stress for commuters and create jobs for many.
Following President Tinubu's withdrawal of the N8,000 palliatives, the National Executive Council (NEC) agreed on new palliative measures to cushion the effects of removing fuel subsidy in Nigeria.
President Tinubu gives fresh directive on N8k palliative
In related news by Legit.ng, President Bola Tinubu ordered the immediate review of the planned N8000 conditional cash transfer to Nigerians to mitigate the effects of eliminating fuel subsidy.
According to reports, Tinubu ordered that the entire package of the government's palliative measures be made public to the Nigerian people, according to the president's spokesperson, Dele Alake.
Source: Legit.ng
