Assessing the Impact of Fuel Subsidy Removal in Nigeria on the Poor in the COVID-19 Era

Abstract

The Nigerian oil wealth has not translated to an improved standard of living for It, people most of who are living in abject poverty. This is just because the resources are not being efficiently and effectively utilized to achieve its developmental goals. Consequently, a poor health system and an economy solely dependent on crude oil export for its government revenue has posed serious challenges to the economy amidst the coronavirus pandemic causing untold hardship to the citizens. In the midst of this, the Buhari led government announced the full deregulation of the downstream oil sector in the country and full removal of subsidy on petroleum products. This paper therefore is an examination of the effect of the fuel subsidy removal on the Nigerian poor and its overall benefit to the Nigeria economy using descriptive research design method. The paper noted that while the poor will suffer more in the form of higher transport fare and increased price of food items and other commodities, subsidy removal is in the overall interest of the whole economy as funds will be channeled to improving infrastructural amenities especially in the health care, education and transport sectors. The paper then recommends transparent honesty on the part of government in expending the funds saved from fuel subsidy removal to improve infrastructures and create social welfare programs that will ameliorate the effect of the fuel subsidy removal on the poor.

Keywords: Deregulation, Coronavirus, COVID-19, Infrastructure

JEL Classification: O10, O21