Removal Of Fuel Subsidy By Dr. Kenny Odugbemi
| Image Credit: TheNationOnline |
The removal of fuel subsidy in Nigeria has significant economic implications, including:
1. Trial and error syndrome: The government's approach to subsidy removal has been marked by a trial-and-error approach, leading to uncertainty and instability in the economy.
2. Experimentation cum failure mode: The repeated attempts to remove the subsidy without a comprehensive plan have resulted in failures, causing economic shocks and hardship for citizens.
3. Structural imbalance: The subsidy removal has exposed underlying structural imbalances in the economy, including a heavy dependence on oil revenues and a lack of diversification.
4. Family dependency ratios: The removal of the subsidy has disproportionately affected low-income households, leading to increased family dependency ratios and poverty rates.
Additional implications include:
- Inflation: Subsidy removal has led to higher fuel prices, contributing to inflation and reducing purchasing power.
- Unemployment: The economic shocks caused by subsidy removal have led to job losses and higher unemployment rates.
- Economic growth: The repeated failures and uncertainty surrounding subsidy removal have hindered economic growth and development.
- Social unrest: The hardship caused by subsidy