Electric cars take front stage, as Nigerian govt unveils six post-subsidy palliatives

The deployment of electric vehicles will lead the Federal Government’s post-subsidy palliatives to cushion the effect of the hike in prices of Premium Motor Spirit (PMS), also known as fuel.

FG disclosed the six post-subsidy palliative recommendations on Thursday following public criticism after the sudden removal of fuel subsidy by President Bola Tinubu without putting in place measures to curtail the fallout of the decision.

The post-subsidy palliatives were recommended by the National Economic Council (NEC) after a presentation by Anambra state governor, Chukwuma Soludo, on behalf of the NEC ad hoc committee.

Key takeaways from the post-subsidy palliatives recommendation

Electric, autogas vehicles

Since the removal on May 29, 2023, fuel prices have skyrocketed from N189 per litre in May to settle between N568 and N617 per litre across Nigeria.

This has driven transportation costs up and underlined the importance of electric vehicles to make the transportation system in Nigeria affordable.

Already, some companies like JET Motors have been assembling and deploying electric vehicles for personal and commercial purposes to help mitigate fuel consumption in the transportation and delivery markets.

Revealing FG’s post-subsidy palliative recommendation, Vice-President Kashim Shettima, who presided over the NEC meeting, said: “We will also deploy electric buses and cars with charging infrastructure across the country.”

Also, the government intends to support EVs with the deployment of compressed natural gas (CNG) vehicles.

Recall Ripples Nigeria reported that FG had approved 9,000 autogas filling stations after a surge in fuel prices.

The deployment of electric and autogas vehicles will serve as mass transit to reduce petrol costs on motorists and also create employment through the establishment of manufacturing and assembly plants for EVs in every zone of the country.

Financial provision

The government has also resolved to increase access to capital for public servants at the state and federal levels to alleviate the financial implications of the subsidy removal.

To tackle the hardship, payment of outstanding liabilities of public servants, including pensions and gratuities, was recommended to the government.

READ ALSO:Jet Motors intensifies clean mobility push, delivers locally-produced electric vehicles to Nigerian govt

Also, credit with single-digit interest rates will be made available to support the businesses of micro, small, and medium enterprises (MSMEs).

Distribution of grains and fertiliser

With President Tinubu’s public declaration of food insecurity, the NEC recommended that states should distribute grains, fertilisers and other food items.

It was recommended that the grains, fertilisers and other food items should be distributed at the rate of the National Emergency Management Agency (NEMA) to reduce the financial burden on Nigerians.

This will curb inflation on food items and prevent prices from escalating, as the states will share the grains and fertilisers at subsidised rates or without a fee.

Minimum wage review

Also, the council called for a new minimum wage in the face of soaring inflation and devaluation of the naira, which is down 66.41 per cent this year.

The government was asked to consider negotiating salary increments, as the current N30,000 minimum wage no longer holds the same value as it did when it was implemented in 2019.

However, the possibility of a new minimum wage is not anytime soon, as Soludo said: “As part of those recommendations, over the medium, longer term… is the possibility of negotiating a new minimum wage.

“That obviously will be on the table,” he said, “But that has to be negotiated through the appropriate structures for doing that over time,” Soludo added.

Cost of living allowances

Aside from payment of outstanding liabilities of public servants, including pensions and gratuities, a cost-of-living allowance was also proposed.

According to Shettima, the cost-of-living allowance was recommended to reduce the financial burden of federal and state civil servants.

Reduce the cost of governance

The government was also advised to free up capital by reducing the cost of governance, considering the financial burden the citizens are expected to bear.

The reduction of the cost of governance has been a topic of debate in Nigeria for years. Former President Muhammadu Buhari promised to sell off Jets in the presidential villa to cut waste. However, the majority of the jets remained till he left office.

Speaking on the need for the government to embrace cost-saving measures, Soludo said the number of cars used by public officials should be reduced.

He said it is “an issue that each tier of government should now focus on as an area of concern” and public officials should “be sensitive to the times” and “knock off the waste and the irrelevances”.

Note that the Federal Government didn’t give a timeline as to when the recommendations will be implemented.

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