Lagos, a city known for its vibrant and bustling energy, has undergone a profound transformation. The removal of a long-standing fuel subsidy, which had kept petrol prices artificially low for years in Nigeria, has reshaped the landscape of this economic powerhouse. Since June, fuel costs have tripled, causing a ripple effect that has affected transportation, employment, and daily life.
The streets of Lagos, once teeming with private cars and yellow buses, now see fewer vehicles. The notorious traffic jams that once plagued the city have significantly diminished, offering a welcome respite for commuters. However, this newfound tranquility comes at a steep economic cost.
President Bola Tinubu’s decision to end the fuel subsidy and currency restrictions, while aimed at addressing economic challenges, has led to a weakening of the local currency and skyrocketing fuel prices. The consequences have been felt most acutely in Lagos, a city that often mirrors the nation’s economic dynamics.
The impact on small businesses has been severe, with many closing their doors. Low-income workers, who commute from the suburbs to business districts, have faced a dilemma. Rising transportation costs have eroded their salaries, forcing some to resign from their jobs.
In an ironic twist, the once-dreaded commute from Ikorodu to Victoria Island, which used to take hours during rush hour, now takes less than an hour due to reduced traffic.
Data from the National Bureau of Statistics reveals a nearly 47% drop in the contribution of road transport to the economy compared to the same period the previous year, and the situation may have worsened since then.
Economists and politicians had long debated the fate of the costly fuel subsidy, agreeing that it was unsustainable. However, there were differing opinions on how to phase it out responsibly, including the need to fix local refineries, diversify the economy, and provide support for transportation and agriculture.
President Tinubu’s abrupt removal of the subsidy, though well-intentioned, caught many off guard. The move, while aimed at curbing corruption and inefficiency in the system, triggered immediate price hikes and economic instability.
Small businesses, like motorcycle food delivery services, have been hit hard, with some workers losing their jobs or switching to bicycles due to the high cost of fuel. Even the city’s Bus Rapid Transport system has seen a 30% increase in ridership after the government lowered fares.
In an attempt to cushion the blow, President Tinubu announced over a trillion naira in savings from the subsidy removal, promising benefits for families, tuition loans for needy students, and talks of raising the minimum wage.
However, the current hardships have prompted some to rethink their stance on the fuel subsidy. Many now argue that if implemented transparently, it could benefit everyone, particularly by keeping transportation costs low.
President Tinubu has assured the public that there are no plans for further petrol price increases, hinting at a possible return of the subsidy. This highlights the challenges of eliminating a popular policy, even for a leader who prides himself on making tough decisions.
While there have been pockets of protests against the hardship, they have not gained the momentum seen in previous nationwide demonstrations. Lagos, typically at the forefront of such movements, finds itself in an unusual state of calm, both literally and metaphorically.
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