Fuel Subsidy Removal and the Lives of Rural Dwellers in Nigeria (original) (raw)
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Journal of Business and Economic Development, 2020
Subsidy has been one of the means of trickling economic effect down to reach majority adopted by many countries, including Nigeria. Recently, in Nigeria, subsidy on petroleum was removed which has led to a great macro-based debates. However, a study on such effect on individual might better provide important information on the impact of the policy, especially the impact on wellbeing of the poor. Thus, this study assessed the impact of fuel subsidy removal on the socioeconomic characteristics of households in Maiduguri metropolis, Borno state, Nigeria. Survey data were collected and analysed using descriptive statistics and simple regression method. Result on socioeconomic characteristics revealed that about 70.4% of respondents in the study area were male, about 61.3% were married, 41.5% fall within the ages of 30-39 years. Besides, 50.7% had tertiary education, 52.1% were civil servants and about 34.5% have income level ranges between ₦40,000-₦59,999 monthly. It was also revealed that 56.3% of the respondents had 8-10 family members, while 57.7% of them have 1-5 dependents. On the other, the inferential statistic result revealed that the households' characteristics variable were positively related to fuel subsidy removal, significant at 1%, except households' age. For sustainability, attention should be focused on workers' wages and salaries increase, family planning and transportation costs reduction as these may alleviate hardship of fuel subsidy removal on low-income earners in Nigeria.
FUEL SUBSIDY REMOVAL AND POVERTY IN NIGERIA: A LITERATURE REVIEW
Fuel subsidies in Nigeria have been a contentious issue for decades. However, the recent removal of fuel subsidy by President Bola Ahmed Tinubu led administration has resulted in a looming fuel shortage crisis and left millions of Nigerians terrified about the knock-on effects on their daily lives. Meanwhile, the removal of the fuel subsidy has led to increased prices for transportation and commodities, adding to economic hardships, businesses struggle as they are forced to spend more money on fuel consumption. Hence, this paper examined fuel subsidy removal and poverty in Nigeria. By utilizing the theory of price elasticity of demand, the paper aimed to examine the rationale behind the fuel subsidy removal, the socioeconomic implications of fuel subsidy removal and suggested palliative measures to cushion the effects of fuel subsidy removal in Nigeria. By utilizing content analysis method, the paper reveals factors such as private sector participation in the importation of petroleum products, availability of petrol at all times for all Nigerians and permanently banishing queues from petrol stations across the nation and free the country from the endless pains and sufferings that come with fuel scarcity, revenue generation, stimulating economic development among others as rationales behind fuel subsidy removal. The paper equally pointed at high cost of living, high rate of crime, and increase in poverty level as people and businesses struggle for survival among other socioeconomic implications of fuel subsidy removal in Nigeria. The paper concluded by recommending rural electrification, increase in the minimum wage and food importation/distribution among other feasible palliatives as suggested measures to cushion the effects of fuel subsidy removal in Nigeria.
Fuel subsidy removal and welfare of the working class in Nigeria: Policy options for the state
Journal of social sciences and management studies, 2024
Subsidy provisioning has been a feature of market economies around the World since the end of the Second World War. In Nigeria, and other Third World countries, subsidy provision is a major instrument by which Government attempts to enhance the welfare of the masses. Over the years, successive governments in Nigeria have attempted to keep the prices of certain commodities affordable by providing one form of subsidy or the other. The Premium Motor Spirit (PMS) popularly known as Petrol in Nigeria is one of the commodities covered by subsidy until 29 th May, 2023 when the newly inaugurated President Ahmed Bola Tinubu in his inaugural speech declared an end to it. A major consequence of the removal of the fuel subsidy is the cut-throat pricing of PMS throughout the country. This paper attempts to interrogate the effect of fuel subsidy removal on the welfare of the working class in Nigeria with a view to ascertaining available policy options for the State. The paper adopts the neo-classical economic theory of government policy and argues that a fundamental responsibility of the State is the protection of the welfare of the citizenry through its various policy decisions. Relying on documentary evidence, the paper found that the removal of fuel subsidy has worsened the living conditions of the working class as not only do workers now have to pay more for fuel; the multiplier effect of a continuous rise in prices of PMS on other basic necessities has made life unbearable. Consequently, the paper suggests a novel approach to the conundrum where in the Federal Government would ensure domestic refining of crude oil for local consumption or reach an understanding with other countries for a non-commercial refining of crude oil for the country.
The Politics Of Fuel Subsidy, Populist Resistance And Its Socio-Economic Implications For Nigeria
Global Journal of Human Social Science Research, 2012
The study examines the politics of fuel subsidy removal in Nigeria. The descriptive nature of the study has necessitated the extensive use of desk research. The paper argues strongly that the policy derives its instrumentality from the theory of development racism, which only benefits the rulers of the country and multinational companies and not the citizen. This explains the massive protests by the Nigerian Labour Congress, Civil Liberty Organisations and the masses of Nigerian that usually accompanied fuel subsidy removal. We have recommended that for the smooth operation of the petroleum sub-sector, government must always engage the people in policies that will affect them. We also recommended for the building of more refineries in order to make the product more available to the people and at an affordable pump price. This could be done through private/public partnership.
The socio-economics of the 2023 fuel subsidy removal in Nigeria
BizEcons Quarterly, 2023
The removal of fuel subsidy in Nigeria in 2023 has triggered a profound shift with far-reaching implications across economic, social, and environmental spheres. This study probes into the complex web of consequences arising from this drastic policy transformation, examining both the direct and indirect effects on the Nigerian society and economy. While the reallocation of resources from subsidies to vital sectors like healthcare, transport and education holds positive transformative potentials, ensuring effective utilization and equitable distribution of these funds warrants meticulous consideration. Achieving tangible improvements in essential services without unintentional negative consequences emerges as a central challenge. Drawing from historical precedents of subsidy removal attempts in Nigeria, the study underscores the importance of managing public sentiment and stakeholder reactions. The complexity arising from the interplay of economic, political, environmental, and societal factors necessitates a holistic approach. The study highlights the significance of informed decision-making to mitigate negative short-term impacts, harness long-term gains, and safeguard the vulnerable segments of the population. Policymakers must adopt a holistic approach that balances economic efficiency, social welfare, environmental sustainability, and inclusive growth. By addressing these multidimensional implications and drawing insights from both domestic and international experiences, Nigeria can navigate the complexities of subsidy removal effectively and work towards a prosperous and egalitarian society.
The Impact of Fuel Subsidy Removal on Socio-Economic Development in Nigeria
2014
This study investigates the impact of the fuel subsidy removal on the socio-economic development in Nigeria. Using a price pass-through model, the study employed the error correction model to investigate both the short and long run impact of fuel subsidy removal on socio-economic development in Nigeria using data from 1980 to 2012. The test for trend variability (unit root) to determine the stability of data was done using the Augmented Dickey Fuller and Phillip-Perron test. The study therefore discovered that the fuel subsidy removal does not have short run impact on the social well-being of Nigerians. However, the long run impacts of this policy tells a sterling story, as it was revealed that the deregulation of the downstream sector will ultimately leads to future economic development of the country. This result is therefore consistent with theoretical and some empirical findings that removal of distortions and market efficiency results in economic growth. It is however recommend...
SGI-JOURNALS, 2020
While several studies have examined the link between the activities of International Oil Corporations (IOCs) and environmental degradation with implications for poverty in the Niger Delta region of Nigeria, there is still some gap in terms of understanding how poverty is both exacerbated and sustained. As a result, this study examined how IOCs exacerbate and sustain poverty in rural areas of the Niger Delta. To achieve this broad research goal, the study adopted the survey design in addition to the theoretical assumptions of the Marxist Political Economy perspective. Hence, a sample of 380 respondents from four crude oil host communities in four states of the Niger Delta, were selected using purposive and systematic random sampling techniques. Data were collected using a self-designed questionnaire as well as observational techniques. The data gathered were analyzed using simple percentages, frequency distributions and the chi-square statistical technique. Based on the results from the analysis, the study found that the IOCs exacerbate poverty in rural areas of the Niger Delta by destroying the traditional livelihood of the people through activities that undermine farming and fishing. Furthermore, the IOCs sustain poverty through a syndicate structure of wealth repatriation and abysmally low reinvestment in industrial growth in these areas. Based on this, the study recommends among others that since the ruling class is in alliance with the IOCs in the business of exacerbating and sustaining poverty, there is a need for the people to organize themselves in a peaceful but revolutionary manner to demand for resource justice.
2024
As a citizen of Nigeria, the fuel subsidy removal has been a major policy decision that has continued to directly affect the daily lives of millions especially the vulnerable and low-income earners. The policy was aimed to address longstanding issues in the country yet its execution was met with widespread discontent, revealing deep flaws in its planning and implementation. The subsidy removal sparked widespread outrage and hardship among Nigerians. As a citizen I witnessed first-hand the scourging effects of the poor implementation of the policy. This analysis will discuss what went wrong with the fuel subsidy’s removal, what could have been done differently. And possible recommendations to the current situation.
Developing Country Studies, 2016
Nigeria has struggled with several developmental policies since independence in 1960. These policies seem to have failed to address numerous challenges that prompted their adoptions, mainly because of the character of Nigerian state, alien nature of the policies, poor implementation and class preferences. This paper examined the gap between class consensus and public choice in Nigeria’s policy process with a specific focus on subsidy removal. It argued that lack of synergy between rentier class preferences and the pressing needs of Nigerians as well as leadership distrust seemed to have remained the greatest dilemma confronting subsidy policy in Nigeria. It concluded that this seemingly disconnect between the rulers and the ruled coupled with unrepentant pseudo and pretences of government have characteristically plunged subsidy removal policy in the morgue where political brigands audaciously plunder the gains accruable from it. The study adopted qualitative descriptive analytical m...