Growth and Welfare Implications of Full Market Pricing of Premium Motor Spirit in Nigeria: Policy Analysis in a Structuralist CGE Model
No Thumbnail Available
Date
2017
Authors
Odior, E.S.O.
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Sustainable Development in Africa
Abstract
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.
Description
Keywords
Growth , Welfare , Fuel Subsidy , Computable General-Equilibrium
Citation
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