Now the original opponents of subsidy withdrawal have come to terms with the reality of the economic situation and finally agreed to taking the action.
The policy action is too sudden and too hard for the majority of the people to bear. It’s almost impossible in some instances. This is because the gap in differentials is too big to be managed by many individuals especially that there are no palliatives anywhere and at any level to cushion the effects of such a sudden action. The purchasing power of many individuals is still as poor as it was many years ago.
Even though subsidy removal is an economic neccesity to free resources and plough them back towards the development of other critical sectors, provide infrastructure,education, boost agriculture, etc its sudden withdrawal without palliatives can create more harm to the economy and the people than good. It can heighten inflation if measures are not put in place to fill in the gaps.
In some countries where things are done right for the interest of the people, measures are normally put on ground before such policies are implemented. In Indonesia for instance, government was said to have commenced mass cash transfers to its citizens as palliatives so as to strengthen their purchasing power and cope with the subsidy withdrawal within the critical period.
The federal government of Nigeria should use the 3.6 trillion naira budgeted for in the 2023 budget for subsidy to provide palliatives to Nigerians and make life easy for them. The provision is to take care of the subsidy for 6 months beginning from January to June. We are still in June and therefore the action is still within the time frame. Last year 443 billion naira was budgeted for the same period and the money went down the drain.
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