The subsidy trap: What Nigeria would be reversing, By Akeem Bello
The World Bank and IMF have consistently linked subsidy removal and foreign exchange reform to the rebuilding of fiscal space and macroeconomic stability, while also stressing the importance of sustained implementation and social protection.
A Federal Government may stabilise public finances, but if states do not translate increased allocations into better health, education, transport, agriculture and social services, citizens will understandably feel that reform has produced little benefit.
The social protection role once performed by a universal petrol subsidy should be replaced with fiscally sustainable, well targeted support, while the fiscal space created by reform is invested in productive sectors, domestic refining, infrastructure and public services.
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