Growth and Welfare Implications of Full Market Pricing of Premium Motor Spirit in Nigeria: Policy Analysis in a Structuralist CGE Model
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Journal of Sustainable Development in Africa
This study provides an insight into sustainability issues arising from a full market pricing of premium motor spirit (PMS) (a 100% fuel subsidy removal) in Nigeria and its implications on macroeconomic growth and public welfare. Methodologically, the study used a Structuralist Computable General-Equilibrium model to run simulations that indicate the nature of the effects of PMS full market pricing over the period 2015 – 2020. The findings show that 100% increases in PMS will amplify both the income and consumption losses of households, worsen inflation and better-off government account balance. The findings also show that, government income witnessed positive growth, while output, investment and current account had both positive and negative effects. This study provides a basis for recommendations on the adjustment path that the country need to take in order to mitigate the adverse impact of 100% fuel subsidy removal and draws some useful policy options for a sustainable developmental reform in Nigeria.
Growth , Welfare , Fuel Subsidy , Computable General-Equilibrium
Odior, E. S. O (2017), Growth and Welfare Implications of Full Market Pricing of Premium Motor Spirit in Nigeria: Policy Analysis in a Structuralist CGE Model: Journal of Sustainable Development in Africa, Volume 19, No.3, Clarion University of Pennsylvania, Clarion, Pennsylvania. Pp, 1-29