Human Behavior Dynamics in the Wake of Subsidy Removal
The long-awaited removal of subsidies was overdue even before the president's official announcement. While acknowledging the hardships faced by Nigerians due to the abrupt elimination of fuel subsidies, it's evident that the increased cost of living, without a corresponding rise in income, has left many struggling. The absence of adequate mitigating measures has amplified the impact of this policy shift. Had these measures been implemented before or immediately after the new policy's introduction, public sentiment might have been more favorable.
Unfortunately, the government's actions to improve living conditions have been slow, underestimating the patience and resilience of the citizens. Urgent action is now imperative to alleviate the burden on the people. While the economic benefits of subsidy removal are recognized, addressing the raised concerns is paramount. My intention is to shed light on the positive aspects of this removal, particularly its influence on human behaviour and the economy.
Incentives drive human actions, whether willingly embraced or enforced. People are inclined to favour actions that bring rewards and avoid those resulting in discomfort. Subsidies made fuel (PMS) affordable, fostering excessive consumption, particularly in car ownership. Cheap fuel led to multiple vehicle ownership, even for those who could manage without. The allure of personal cars outweighed public transport, and excessive fuel consumption was considered a status symbol. This behaviour, however, is undergoing a transformation.
Observing the post-subsidy removal behavioural changes is intriguing. Car usage has decreased, reducing traffic congestion and environmental pollution. Quieter residential areas reflect fewer generator operations, curbing noise pollution. The removal of subsidies prompted Nigerians to explore alternatives, driven by the need to ease fixed-income pressures. This quest has created opportunities for the government to nurture the gas market, enhance infrastructure, and promote renewable energy like solar power. This aligns with Nigeria's environmental goals, of reducing carbon emissions and preparing for climate change.
Traditionally, renewable energy faced obstacles due to high solar panel costs and cheap subsidized fuel. Generators fueled by petrol dominated, overshadowing solar power. This landscape is now evolving. Subsidy removal has made PMS expensive, while solar panels are more affordable, partially due to China's influence. This shift has prompted more vehicle owners to adopt compressed natural gas (CNG) and generators running on Liquified Petroleum Gas (LPG). People are downsizing vehicles and embracing bicycles. This changing landscape spurs innovation, as businesses offer products tailored to the new economic realities.
A promising future awaits Nigerians and the country. Subsidy removal could attract increased foreign investment, driven by automotive industry growth, expanding gas markets, and renewable energy advancements. This shift could create jobs and drive economic progress. I hope the government fulfils its promise to allocate saved resources towards enhancing living standards, infrastructure, and transportation systems, aligning with a progressive vision for Nigeria.