Impacts of Subsidy Removal on Urban Dwellers in Ikeja Local Government Area of Lagos State, Nigeria

Abstract

This study assesses the impacts of the fuel subsidy removal on transportation expenses, cost of basic goods, quality of housing, and cost of healthcare among urban dwellers in Ikeja Local Government Area (LGA) of Lagos State, and evaluates their general perception of the policy. The study was a descriptive cross-sectional study involving a 260-member study population, which was selected via a simple random technique. Most of the respondents were females (60.4%), in the age group of 46 - 55 years (31.5%), students (27.4%) and private sector workers (26.9%). The average monthly income of most (38.4%) of the respondents was between ₦50,000 ($34) and ₦100,000 ($68), while the household size of the majority (48.2%) was 5-6 people. The fuel subsidy removal has a significant incremental impact on the transformation expenses (p = 0.000), the cost of basic goods (p = 0.000), and the costs of healthcare among the urban dwellers (p = 0.000). All perceived the subsidy removal as an unfriendly policy (p = 0.912), although it did not have a significant negative impact on their quality of housing (p = 0.175). In general, the study reveals that subsidy removal had a significant negative impact on the overall costs of living among urban dwellers. The study posits the negative impacts of the subsidy removal on transportation fares, cost of basic goods, healthcare costs, and overall cost of living among urban dwellers in the Ikeja Local Government Area of Lagos State. The government should consider implementing some targeted interventions, such as cash transfers, transportation subsidies, and other forms of support, to cushion the impact of subsidy removal on vulnerable populations.