July 25, (THEWILL) – The managing director/chief business officer, Optimus by Afrinvest, the digital platform powered by Afrinvest (West Africa) Limited, Mr Ayodeji Ebo, has advised the Nigerian government to rethink its plan of distributing N500 billion subsidy palliative to poor Nigerians through the cash transfer system.
He said the government should partner with the small and medium enterprise (SME) development experts, such as the Development Bank of Nigeria (DBN) among others, in channeling the palliatives created to mitigate the impacts of the removal of petrol subsidy on the poor citizens across the country.
Mr Ebo, who fielded questions from representatives of select media organisations on the sidelines of the Afrinvest’s mid-year investment parley in Lagos, with the theme, ’The Turning Point: Positioning for Optimal Returns’, argued that distributing huge amounts of money under the cash transfer arrangement planned by the government, would amount to a waste and wrong priority.
Reacting to the N500 billion proposal of the federal government to pay N8,000 monthly to 12 million families for six months to assuage the pains of the deregulation of the downstream petroleum sector, the investment and FinTech expert said the exercise was misplaced and should be seen as a wrong policy.
He expressed doubts over the ability of the government to achieve the intended purpose with an arrangement that lacks credibility and transparency and capable of creating more challenges in the system.
His words: “For me, I do not think that is the right way to channel the savings from subsidy. It’s as good as just giving out the funds. We don’t have records. Trying to just give out N8,000 per month to 12 million families for six months is a wrong policy. What kind of impact will that have? What manner of accountability does that show to Nigerians? That is not the major problem.”
According to him, such resources should be challenged through experts to support the SMEs which constitute the engine of the economy and has the largest capacity for job creation and employment.
He argued that SMEs as the engine of the economy and largest employers of labour, were in the best position to utilise the huge resources being proposed to distribute to the “poor Nigerians” who are most affected by the economic hardship of the new government’s policy to terminate fuel subsidy which has gulped enourmous resources of the nation over the years.
“Now that fuel price has been increased, we have to look at what the transport cost will be. In one month, of course, it can be more than 8,000 naira. That won’t be enough. But we can channel most of the palliatives to infrastructure and create a light rail system that will be run by the private sector. That will reduce the cost of transportation and by extension reduce the cost of goods and services.
“Above all, we can also provide funding for SMEs. As you know, SMEs drive over 50 percent of our economy. We can provide the funds to be disbursed by DBN or other credit funding system. For those that have businesses, you know that if you don’t pay back you will be blacklisted.
“That way, people will have access to those funds and they will pay back. They take the fund, increase capacity and that will create more jobs, and as you create more jobs you are also trying to battle insecurity. If we don’t create jobs we will just be throwing money at the problem and that will not augur well for the economy,” the group business officer, Afrinvest (West Africa) Limited, said.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
