FUEL SUBSIDY REMOVAL AND SOCIO-ECONOMIC DEVELOPMENT IN NIGERIA: A STUDY OF LAPAI LOCAL GOVERNMENT AREA OF NIGER STATE
Keywords:Fuel Subsidy, Inflation, Neocolonialism, Poverty, Socioeconomic development
Fuel subsidy has been at the front burner of Nigeria's political and economic discourse in recent times. This is unsurprising as oil has occupied a central position in the country's fiscal outlook for decades. Subsidy which was originally created to help the masses came under heavy attack in the last ten years as the pressure on the government to remove the policy gained traction. NEITI report showed that fuel subsidies gulped N316.7bn in 2015; N99bn in 2016; N141.63bn in 2017; N722.3bn in 2018; N578.07bn in 2019; and N134bn in 2020. According to the NNPC, petrol subsidy gulped N2.565tn between January and August 2022. There have been arguments and counter-arguments against the removal of this policy. The protagonists argue that continuing the policy is a fiscal time-bomb and is unsustainable while antagonists question the narrative by pointing at contradictions of the corruption of the political class. This study interrogates the politics of fuel subsidy removal with the aim of analyzing its impact on the socioeconomic development of the country with specific focus on inflation and poverty level. The study benchmarks its focus on the situation in Lapai Local Government Area of Niger State. Extant literature showed that existing studies paid scant attention to eliciting data from the people directly affected by the policy. This study which adopted the neo-colonial theory as its theoretical framework, argued that the removal of fuel subsidy was hastily done to respond to the whims dictated by the Bretton Woods institutions, notably the IMF and the World Bank. Primary and secondary data were used and simple descriptive statistics was also adopted as methods of data analysis. After conducting a survey of respondents residing in Lapai local government area, the study found that the removal of fuel subsidy has exacerbated inflation and worsened poverty levels in Lapai local government area, and consequently widened the trust gap between the citizens and the government. The study recommends that the government must fix the menace of corruption in the country's subsidy regime and make efforts to manage this policy before it destroys the fabrics of the Nigerian economy.
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