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Since May 29, 2023, when President Bola Tinubu made the epochal statement- ‘subsidy gone’, every good thing that was left of the eight years of President Buhari seems to have gone.……CONTINUE READING>>>

Six months down the line, the effect of that proclamation has been telling on Nigeria and the lives of many Nigerians. Even those who clapped at Eagle Square on the inauguration day where the statement was made, are writhing in pain at the effect of the hasty policy.

After the declaration of an end to petrol subsidies, petrol stations immediately increased pump prices upon hearing the announcement and the pump price jumped from N195 to N488/litre in Lagos, N540 in Abuja and up to N570 in some Northern states.

A few weeks later in July, prices shot up again to over N600 per litre across the country, with states in the North and Eastern parts of the country selling petrol for as much as N700/litre today.

A public opinion poll conducted by NOIPolls in July 2023, revealed that 73 percent of adult Nigerians nationwide lamented the negative impact of subsidy removal as the fuel cost affected their spending on other commodities.

Also, 10 percent of adult Nigerians disclosed they can no longer sustain their businesses, another 10 percent complained that they now spend more on transportation fares while 3 percent criticised the high cost of goods and services.

With the soaring pump prices of petrol, the transportation fare across the country automatically went up and this development has been impacting negatively on every aspect of the economy.

First, the cost of transportation increased very significantly. In Lagos for example, a journey of N100 doubled to N200; that of N200 or N300 raised to N500 while that of N500 moved up to N800 and N1,000 in some cases.

Transporters, however, said that increasing the transportation fares was to meet the current realities in Nigeria even though, they claimed the increment does not cover their cost.

They said the adjustment in the pump price of fuel has been taking a toll on their transportation business because it takes a lot of money to fuel the vehicle.

Rafael Godspower, a Lagos commercial driver, told BusinessDay that he used to buy fuel of not more than N4,000 daily pre-subsidy era to do his transport business, but today, he buys up to N10,000 fuel daily for his 7-seater bus known as ‘Korope’ and at the end, takes very little money home.

He said drivers are now working for fuel, and the situation will not only push many out of business but will also put a lot of commercial drivers under serious financial pressure.

Secondly, Nigeria’s inflation started surging unrelentingly such that the annual inflation rate in Nigeria increased to 27.33 percent in October from 26.72 percent in September of 2023, leaving many Nigerians struggling with rising food prices.

As Nigeria’s inflationary pressures continued to mount, the market prices of food commodities also continued to hit the rooftop with food inflation hitting a record high of 31.52 percent in October, thereby pushing many Nigerians into hunger and starvation.

According to Kingsley Uzoma, senior special assistant to the President on Agribusinesses and Productivity Enhancement (SSAP), no fewer than 94.5 Nigerians will face insufficient food consumption as the estimated 88.5 million already experiencing the pangs of hunger will be joined by six million others by the end of this month.

Uzoma, who disclosed this at a recent policy dialogue in Abuja, tagged: ‘Deepening Partnership for Scaling-Up of Information and Communication Technology for Development (ICT4D) for Smallholder Farmers in Nigeria, said it was why President Tinubu declared a state of emergency in food security.

According to him, Nigeria has the highest rate of stunted children globally, and 70 percent of the population is living below the poverty line.

Meanwhile, Elizebeth Orie, a nurse said that feeding in Nigeria has become difficult and a luxury due to the prices of food items.

“Providing for a family of five has become very tough. Bread today is very expensive and now sells at an average of N1,000 while cooking gas sells for N1,100 per Kilogram; tomatoes, onions, rice and beans are now on the high side,” Orie said.

She said that her family used to prepare a pot of soup with N5,000 but today, N10,000 is no longer enough to prepare a pot of soup.

Thirdly, the removal of the petrol subsidy also resulted in the weakening of the naira to a record low of N831.47/$1 at the official window and N1,160/$ in the black market as of November 30, 2023, following the Central Bank’s decision to reduce interventions in the foreign exchange markets in June.

According to the data released by the FMDQ Security Exchange, the naira traded at the official rate of N464.50/$ on May 30, 2023, while it traded at N768/$ on the black market.

“Since the exchange rate started to surge, my clothing business has been the worst hit,” said Moji Abiola, a second-hand clothing seller in a Lagos market.

She said that a bale of cloth that she used to buy for about N250,000 a year ago now sells for N500,000 and above due to the high exchange rate.

According to her, the high cost of buying a bale of cloth has also resulted in the high selling prices of clothes in the market today.

“Clothes are very expensive in the market and not many people are buying them anymore. Many Nigerians are only concentrating on buying basic things such as food, which is also very expensive.

“The high exchange rate and rising inflation are killing our business such that we are managing to stay in business even when the profit margin is now very slim,” Abiola lamented.

No doubt, subsidy payments have always been crowded by issues of corruption and a lack of fiscal transparency, which is why many successive administrations attempted to remove the controversial subsidy but failed because many citizens considered it as their only benefit from the federal government.

Despite becoming a heavy burden to the government as the cost of maintaining the subsidy increased over the years, many believed that it was premature for the Nigerian government to have removed the petrol subsidy without putting measures in place to reduce its inflationary pressure on both the economy and the masses.
Today, poverty is so entrenched in society that many Nigerians are literally eating from the dustbin.

Thus, in addition to cushioning the effect of subsidy removal on poor Nigerians, there is a need to ensure accountability and that the funds saved from subsidy removal are not diverted into personal use but rather used for nation-building.

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