Sharing the Subsidy Palliative: The Role of Technology

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Recently, it was announced that the federal government would give each state 5 billion naira as palliative to cushion the burden of removal of fuel subsidy on the residents.

It is obvious that 5 billion naira for each state is not a fair distribution. Lagos and Kano with very high populations get same amount with Ekiti and Osun that have lower populations. This defeats the principle of equity.

Truth is, there is no perfect method to share the money. Any program that involves human beings can be corrupted. However, some methods are more prone to misappropriation than others.

This post is not about what is the ideal palliative (financial, infrastructural, etc) for Nigerians. The federal government has taken a decision on financial palliative. My concern is how the aid could be distributed appropriately.

In my opinion, the use of the BVN would allow for an equitable sharing of the palliative. It will also reduce misappropriation greatly.

Some days ago, during his interview on Arise News, Dr Nnaemeka Obiaraeri, Investment Banker and Development Economist, said that about 0.4% of Nigerians had at least 500,000 naira in their bank account. He didn’t mention the date his figure was obtained. While this is not a measure of real wealth of Nigerians because some persons still keep their monies at home, it is an objective data nevertheless.

I give the man the benefit of the doubt that his figure was correct.

The next question is, "How do we share the money?" This is simple, using technology.

With the BVN, the government through instructions to the banks, has a good idea of how much people have in their accounts.

Those with account balances below an undisclosed amount (to the public) should benefit from the palliative. Everyone needs infrastructural palliative. Not everyone needs financial palliative if they have “enough” already.

Firstly, to prevent people hurriedly withdrawing money in order to have a low account balance, after announcement of the sharing of palliative in August, account balances much earlier, eg 17th of July (when most companies must have paid June Salary, which a lot of people would have withdrawn partly or wholly, and July Salary has not been paid) can be used as benchmark to share the palliative. With the press of few buttons, all banks in Nigeria should be able to provide the account balances of their customers using their BVN.

Next thing is for the government to decide what account balance will benefit or not. After this has been done, the palliative is shared in inverse proportion to the account balances - those with more money in their accounts get lesser palliative and vice versa.

This automated method is a good way to remove many people at the state and local government levels from profiting unfairly in the sharing of the palliative. Also, should misappropriation be detected, the few personnel in charge of sharing the palliative, at the government level and in the banks, can easily be fingered and prosecuted.

This is one way of using technology to ease lives. 

Photo inset: A potentially corruptible way to share the palliative.

Ademola Orolu


About the Author

Ademola is a Consultant Family Physician and writer. He founded the online health magazine, The Family Doctors, and was its Editor-in-Chief from 2017 to 2020. He is the medical director of Nathaniel Health Consulting, a family hospital in Matogbun, Ogun State. 

He is an author of many books including storybooks. He regularly writes on health-promoting topics and encourages positive behavioural change in his articles.


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