How are you dear reader? I’m sure the subsidy removal gist has reached your side. I have tried so hard not to drop my 2cent on it but it seems my trial is no longer trying but here is my take.
Let me share my thoughts on the pros and cons of the recent removal of the fuel subsidy by the newly elected president and its effect on the different classes of Nigerians. Let’s start with the “not-so-nice” ones.
Increased Cost of Living: The immediate consequence of removing fuel subsidies is a hike in fuel prices which we are already experiencing, abi alarm no reach your side? This can have a direct impact on the cost of living, affecting lower-income households who spend a large portion of their income on transportation and basic necessities.
Possible Social Unrest: Fuel subsidy removal often leads to public outcry and social unrest. Citizens who heavily rely on subsidized fuel may perceive it as an attack on their standard of living. We already know that protests and strikes can disrupt daily activities, thereby causing economic disruptions and social tension.
Now for the good stuff.
Economic Efficiency: According to most economists, one of the key arguments in favour of removing fuel subsidy is that it promotes economic efficiency. Subsidies often result in distorted market prices, leading to overconsumption, wastage, and inefficiencies.
Fiscal Sustainability: Fuel subsidies can strain government budgets, as they require substantial financial resources. By removing these subsidies, governments can redirect the saved funds toward more productive sectors such as education, healthcare, and infrastructure development.
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