FUEL SUBSIDY REMOVAL: A shadow over local Nigerian businesses that keeps taking

As the fuel subsidy removal puts more pressure on small-scale businesses in Nigeria, BOLUWATIFE ADEDOKUN, a journalist, visited markets in Oshogbo, Osun State to document the plights of traders

Mariam Lukman, a pepper seller in Alekuwodo market, could not hide the dark cloud that settled over her face. The relentless hike in fuel prices takes a hard toll on not only her business but also her family — she is unable to feed them.

“How can a simple market seller like me survive when the very lifeblood of our economy becomes a luxury we can hardly afford? These fuel prices have become an unbearable burden,” the trader, presumably in her early forties, lamented to this reporter with a sad heart.

She bemoaned that the removal of fuel subsidy was crippling her petty business as low profits began to set in for her, the effect of this was that she feared that she might soon be mired in debts.

Mariam’s words mirror the sad fate of millions of Nigerians who are all catapulted into the epoch of the fuel subsidy removal since the administration of the President Bola Ahmed Tinubu assumes office.

“I beseech the government, with all my heart, to reconsider these fuel prices. Lift the ban on fuel subsidies, for it’s not just my livelihood at stake, but the hopes and dreams of all those struggling in this land. We need respite from this unrelenting burden.”

In May, Tinubu announced during his inaugural address at Abuja’s Eagle Square that there would be no continuation of the petroleum subsidy in his time.

Since then, the development has thrown the citizens of the country into unknown certainties as it has directly or indirectly affected their day-to-day activities.

Transportation costs bring frustrations – Traders bemoan

Like Mariam, other traders are also affected with the removal of fuel subsidy and how it has had a negative impact on their businesses.

Abigail Funmilayo’s frown seems to mirror frustration coupled with the wrinkles on her old face. The aged vegetable seller laments how the removal of fuel subsidy has negatively impacted her business and life.

Her wrinkled face bore witness to the many seasons that had come and gone. She raised her voice, dismayed and distressed, as she explained how the transportation cost that has once been 50 naira had now inflated to an exorbitant 300 naira.

“Back in the day, a bunch of vegetable cost mere 50 naira,” Abigail lamented, her eyes reflecting the memories of a simpler time.

She said, “The government claims to give traders money, but that money never reaches folks like us. It’s always the well-connected ones who benefit.”

Weighing in, Olu Ojo, a male trader, added that buyers are not interested in coming to the market to purchase items they need at homes again because the huge costs they would spend on transportation alone discourages them.

“The fuel subsidy has cast a shadow over our trade. When someone has just ₦1,000 and wishes to buy goods in the market, the thought of spending ₦400 on transportation discourages them, and this hits our sales hard”

“Even the soup that can be prepared with just a penny will cost two or more due to the rising prices of food items since the beginning of the fuel subsidy removal. The government must refurbish the refinery to make fuel more affordable.”

Also speaking, Oladimeji Ganiyat, who sells raw food, told Ripples Nigeria her plight as a result of the subsidy removal.

“The cost of goods has soared because of expensive transportation. Even a simple korope ride, which used to be ₦100, now demands ₦200 with a plea for a trip”

“Rice, once ₦34,000, now stands at ₦44,000. We need the government to open the borders, make foodstuffs more affordable, and create jobs to alleviate the hardship,” she added.

A Dashed Reality

Media reports show that President Bola Tinubu pledged to energize the Micro, Small and Medium Enterprises (MSME) and the manufacturing sector to cushion the impacts of petrol subsidy removal and naira devaluation.

READ ALSO:FEATURE: Fuel subsidy removal: What fate for Nigeria’s refineries?

Meanwhile, small businesses in Africa’s biggest economy have maintained that they are yet to see any evidence of the funds as the negative effects of the subsidy takes hard tolls on marketers.

In another nearby market in Gbodofon area of the state visited by this reporter, Ore Stella, who deals in Boskoro (Western cast-off clothes), couldn’t hide her woes. “The cost of bales has surged from ₦80,000 to ₦120,000 due to transportation costs,” she explained.

Her voice trembling from age-long frustrations, she said: “Bringing the bales to Osogbo, where I sell, has doubled in cost, from ₦5,000 to ₦10,000. Marketers, however, want to buy at the same old prices. Please, government, open the borders to lower costs for BK clothes and essential items.”

Sharing his disheartenment, Hassan Imurutu told this reporter that none of the sellers in the market escaped the hard pinch of the government’s decision.

“The promises made to us before the government came to power remain unfulfilled. Tinubu’s pledges won’t help; they’ll just be politicized. We need lower fuel prices and open borders for affordable food imports,” he said in a voice laden with despair.

Also, Iyafin Arewa, as she called herself, raised her voice, appealing to the government for mercy, especially for the sake of the children. “A journey from Kajola, once ₦300, now demands ₦700,” she lamented.

“The fuel costs are pushing underprivileged Nigerians into begging for survival. Reducing fuel prices will save us.”

She believes that reducing fuel prices was the key to alleviating their suffering, and she earnestly stated, “Empowering small-scale businesses won’t help. Lowering fuel prices is what we need.”

Another woman who preferred to be called Olanrewaju, bemoaned the high costs associated with bringing products from the farm to the market.

“After all these transportation expenses, we’re left with meager profits that barely cover our own meals,” she said, her voice tinged with desperation. “Food products have become prohibitively expensive. We beg the government to come to our aid.”

Expert Wades In

Professor Sheriffdeen Tella, an economics from Olabisi Onabanjo University, Ago-Iwoye, Ogun State, offered his insightful perspective, saying, “The removal of fuel subsidies has increased the cost of production for all categories of producers but more for small businesses because they are not enjoying economies of scale, Cost of transport, costs of buying raw materials in small quantities,” he said.

However, he recognized that the government had taken steps to support these struggling small businesses. “Government has already promised to give them some loans at reduced interest rates.”

“They can also be organized into producer cooperatives which will assist them in bulk financing and purchases, transportation, output sales, etc. This will be in addition to infrastructural development like roads and electricity.”

Prof. Tella emphasized the importance of transparency and responsible usage of these loans.

“Provision of loans to them with subsidized interest rates is appropriate. Hopefully there will be transparency in loan disbursement from the government side and proper application of loans by beneficiaries,” the university don said.

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