Nigerian political economist Kingsley Moghalu said that if Stolen crude oil leaks are plugged, Nigeria can afford social security bill of N1.8 trillion per year.
Moghalu made the claim in a political document co-authored with Damian Ude and titled “Nigeria’s Poverty Trap and How to Break It”.
According to both economists, crude oil theft is estimated to cost Nigeria around $700 million per month or $8.4 billion per year. If security measures, effective tax reforms, and rational cuts in wasteful governance costs are taken and consistent, Nigeria could reap huge benefits. Part of the policy document said:
- “Nigeria can afford a stipend of 30,000 naira a month for those citizens who do not have pensions. This would result in a social security bill of, at most, 1.8 trillion naira per year for 5 million older people (and there are a significant number of older people who get pensions and may not be eligible for social security, which should be aimed at people living in extreme poverty).
Gasoline subsidies: The Economists also took up the issue of gasoline subsidies. According to them, the money could be channeled to social protection structures for poor citizens. In 2022, gasoline subsidies received an allocation of N4 trillion. If the subsidies were removed, Moghalu and Ude believe this money could be channeled into investments in subsidized public transport systems in all local government areas in all 36 states and the Federal Capital Territory (FCT). This is to cushion the impact of subsidy removal on the poor and to help control inflationary trends that could arise from rising transport costs.
According to them, a subsidized system, to be developed in collaboration between the central and state governments, would actually require only a small percentage of the fiscal resources that the federal government currently spends on gasoline subsidies.
- “The balance saved from additional spending on gasoline subsidies, which in our estimate would be no less than 3.5 trillion naira per year, would be better invested in social infrastructure such as education and health care, and targeted social protection. , transparent and effective for poor citizens”, opined in the policy document.
For the record: The policy paper also quoted the World Bank as stating that although Nigeria has a Gross Domestic Product (GDP) of $440 billion, 95 million Nigerians will be considered extremely poor by 2022, above the current national average of 89 million, or the 43% of the population. population. This calculation is based on the extreme poverty mark of less than $2.15 per day. More than 90% of Nigerians live in poverty compared to the daily poverty line of $5.5.