The following is a guest submission by Innocent Okoro
When the Federal Government announced the removal of fuel subsidy in january 2, it was said that the subsidy on kerosene would remain because kerosene was vital for the daily ‘survival of the people’. The fuel subsidy removal was greeted by mass protests from Nigerians, even serving as a political point for the opposition, because, the people were not properly made to understand the negative effects of subsidy and the need for its removal in order to bring about a better socio-economic outlook in the country. Marred by massive corruption and improper implementation, the fuel subsidy program was simply a waste of tax payers’ money.
Maintaining a litany of subsidies is a very wrong government policy leading to increased taxation and a high debt since the government would continue seeking money to maintain these subsidies, to offset these debts, the government would have to further increase the already high tax, and most times, allocations that should be used in carrying out developmental projects would be spent in servicing debts that always come with high interests. Allowing a free market without government subsidies and interference, however, would bring about efficient and effective service delivery, and competition for customers between firms would drive down the cost of these products to the lowest possible price in addition to a high quality of service. (more…)