In spite of its support for the removal of fuel subsidy by the Federal Government of Nigeria (FGN), led by President Bola Tinubu, the Youth Party (YP), says it frowned at the implementation if it is without any form of social safety net to cushion the impact and protect the poor.
The party in a statement, insisted that Nigeria cannot justify spending less than a trillion on education and health respectively last year, but over four trillion on fuel subsidies.
“However, most countries subsidise public transport to assist the poor and vulnerable. This would allow the take-home pay of low-wage workers to truly take them home.
“Most importantly, we believe that subsidy on fuel should be gradually removed within a space of 6 months to 1 year to mitigate the impact on the poor.
“During the removal period, the Government should subsidize public transport to reduce the effect on low-income earners and the vulnerable.
“This should be carried out by allowing public transporters to continue to buy fuel at a subsidized rate either through a weekly voucher system or exemption from certain statutory fees with an agreement to maintain transport fare at the same rates,” the party stated.
YP, which suggested that the FGN should partner with the public transport interest groups like the Nigerian Labour Congress (NLC) and the National Union of Road Transport Workers (NURTW) to ensure that the removal of fuel subsidies does not affect the poor, insisted that there is an urgent need for an increase in the minimum wage to assist the poor to manage the effect of the removal of fuel subsidy and the attendant increase in transportation cost.
According to the political party, “Employers may also need to increase their commitment to their social responsibility by revisiting their remuneration structure to protect their junior staff from the severe and dire impact of the removal of fuel subsidy. More needs to be done in the societal interest.
“Furthermore, the Government should accelerate the shift to Compressed Natural Gas (CNG) by prioritizing its abandoned Autogas Policy.
“CNG currently costs N100-110 per unit. This is below N488-540 a litre cost of petrol. Using CNG as an alternative fuel will assist in reducing pressure on subsidies paid out by FGN on public transport. It is also a cleaner and cheaper fuel. Some companies are already successfully using CNG to power their fleet,” it added.
The political party recommended that the FGN should enact a legal framework that incentivizes gas development.
While charging the government to subsidize the conversion cost of the 10,000 petrol or diesel engines to CNG and facilitate the availability of CNG at filling stations, the party said, “It is in light of dire fiscal realities of Nigeria that the Youth Party released its Revenue Strategy titled ‘A Bold Revenue Plan for Nigeria on 22nd March 2020’. The plan contains a number of pragmatic, economically sound and well-thought-out ideas for solving, or at the very least ameliorating, Nigeria’s revenue challenge.
“The underlying philosophy of the plan is to drive an increase in our tax base, whilst reducing tax rates to attract investments and encourage tax compliance.
“Our plan details ideas that would raise $30bn within 3 years by improving our tax and incentive policies and through the efficient utilization of Nigeria’s existing assets.
“Specifically, we propose to drive a 100% rise in corporate tax receipts by reducing the consolidated tax rate from 34.5% to 22.5% and expanding the base of registered corporate taxpayers from 6% to 14% within 2 years.
“Attract new investments in crude oil production that will drive Nigeria’s production from 1.9mbd to 3mbd (million barrels/day) within 3 years by implementing the Petroleum Industry Act (PIA), reducing oil taxes and issuing attractive, competitive and clear rules around Nigeria’s notoriously opaque oil industry;
“Generate $16bn from the sale of 20% of FGN’s 49% equity in NLNG. Generate $S3.5bn from the sale of 25% of FGN’s equity in NPDC.
“Ring-fence the $19.5bn generated from the two equity sales above and dedicate those funds to capital projects to rescue our broken critical public infrastructure and services.
“We would ensure effective use of those funds by domiciling them for management by a globally respected Sovereign Wealth Fund like the Norwegian or Qatar Sovereign Wealth Fund.
“Generate a $1bn annual dividend from efficient private sector management of NPDC. Save over, N100bn annually by reducing the size of our government,” the party concluded.
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