Page4 <strong>The</strong><strong>Trumpet</strong> MAY <strong>17</strong> - <strong>30</strong> <strong>2023</strong> <strong>The</strong><strong>Trumpet</strong> Group Field: 07956 385 604 E-mail: info@the-trumpet.com News Nigeria’s fuel subsidy: it’s time to kill it and spend the money in ways that benefit the poor Continued from Page 3< <strong>The</strong><strong>Trumpet</strong>Team PUBLISHER / EDITOR-IN-CHIEF: ’Femi Okutubo CONTRIBUTORS: Moji Idowu, Ayo Odumade, Steve Mulindwa SPECIAL PROJECTS: Odafe Atogun John-Brown Adegunsoye (Abuja) DESIGN: Xandydesigns@gmail.com ATLANTA BUREAU CHIEF: Uko-Bendi Udo 3695 F Cascade Road #2140 Atlanta, GA <strong>30</strong>331 USA Tel: +1 404 889 3613 E-mail: uudo1@hotmail.com BOARD OF CONSULTANTS CHAIRMAN: Pastor Kolade Adebayo-Oke MEMBERS: Tunde Ajasa-Alashe Allison Shoyombo, Peter Osuhon <strong>The</strong><strong>Trumpet</strong> (ISSN: 1477-3392) is published in London fortnightly THINKING OF WRITING A BUSINESS PLAN? We can help you develop a professional business plan from only £250. For more information, contact us at 07402792146 or email us at: tolu.oyewole@consultant.com direct labour and • a special loan program for entrepreneurs in the informal sector. Investments such as these would ensure Nigeria gets the biggest bang for its buck, rather than the current wasteful spending on the corruption-infested fuel subsidies regime. Nigeria’s fuel subsidies have encouraged arbitrage, whereby unscrupulous business people buy fuel at the subsidised price and resell it at a higher price across the country’s borders. This practice is partly responsible for the perennial fuel scarcity in Nigeria. Bubble In Christ Music Band For your Music band with classic rendition for all occasions, with traditional, contemporary African international and Gospel filled with professional decent Presentation. More Musicians, Singers, Instrumentalists, handy men, Music directors band coordinators, Audio and/or video technicians, Drivers, Marketing Personnel are welcome. Contact: Olugbenga on 07438 264613 Shell Petrol Station Cash transfers: Savings from scrapping the fuel subsidy could be used to augment Nigeria’s Conditional Cash Transfers programme. This was introduced in 2016 as part of the Buhari administration’s Social Investment Program (SIP). Eligible individuals are entitled to a monthly cash payment of 5000 Naira (about US$11). But only 784,<strong>17</strong>6 individuals received the payment in 2020. Fuel subsidy removal will enable the government to significantly increase this number. Individuals with an income of N<strong>30</strong>,000 per month or less should qualify for a new cash transfer program. It can be designed to last for six months. To cushion the effects of subsidy removal, the Nigerian government has obtained a $800 million relief package from the World Bank. <strong>The</strong> money, which should be added to the pool of funds available for the conditional cash transfer program, is expected to be distributed to 10 million households as cash. Apart from being an assurance that the government does care for them, a cash transfer would also help stimulate the economy by spurring the demand for goods and services, which has been stagnant. <strong>The</strong> inflationary impact of cash transfers from fuel subsidy savings will be minimal, since new money is not created in the economy. In any case, inflation in Nigeria is mainly due to supply constraints, rather than demand. Safety nets: <strong>The</strong>re are no institutionalised safety net programmes for most Nigerians, which is why they regard the fuel subsidy as one way in which the government supports poor people. <strong>The</strong> harsh reality is that fuel subsidies benefit mainly upper class households, who consume most of the fuel in Nigeria. To overcome the perception – and to provide genuine support for those struggling to survive – the government should use the savings to subsidise mass transport systems, agricultural inputs, education, affordable healthcare and lowincome housing. Conclusion At first blush, one might think it’s politically risky for the Bola Tinubu administration to start on the rocky foundation of scrapping Nigeria’s fuel subsidy. But fixing difficult and politically unpopular economic problems is a hallmark of effective leadership. If implemented properly, fuel subsidy removal may be an important legacy of the Tinubu administration, one that will differentiate him from past administrations. * Stephen Onyeiwu is a Professor of Economics & Business at Allegheny College in Meadville, Pennsylvania. This article is republished from <strong>The</strong> Conversation under a Creative Commons license. Read the original article.
MAY <strong>17</strong> - <strong>30</strong> <strong>2023</strong> <strong>The</strong><strong>Trumpet</strong> Page5
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