When Nigeria floated its currency along with the removal of fuel subsidy, I wrote in June 2023: ‘Nigeria’s floating of its currency, while progressive, will cause severe perturbations in the economy – and a stable state may not come as most experts have predicted… You will see state-wide comparative advantages emerge with energy cost making most northern areas less appealing for localization of “industries”’.
In other words, over time, most states in the northern part will fade economically because variances on energy prices will make things harder for companies to locate there. That concern is now real as fuel scarcity concerns hit the nation: “Nigerians are grappling with fuel scarcity and soaring prices, with costs reaching up to N2,000 per liter in Sokoto and varying across different states.”
Here are some samples, fuel prices per liter.
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- Sokoto: N2,000
- Abuja: N1,300
- Lagos N800
Note the key phrase “varying across different states”; yes, prices of energy will vary significantly across the nation.
When Nigeria floated its currency along with the removal of fuel subsidy, I wrote in June 2023: ‘Nigeria’s floating of its currency, while progressive, will cause severe perturbations in the economy – and a stable state may not come as most experts have predicted… You will see… pic.twitter.com/mSkMhgt3Tr
— Ndubuisi Ekekwe (@ndekekwe) April 28, 2024
Comment: Policy makers of yore used to have the PEF( Petroleum Equalisation Fund) to avoid the situation you just pointed out. Of course with the removal of subsidy and market forces dictating prices, the north is already disadvantaged. But labor costs will still be cheaper for industries
My Response: Good point, the NORTH will have advantages in some areas of course.
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It seems like the fiscal restructuring will do itself, without any political leadership or roadmap. By the time food and energy prices vary significantly across different states, water will gradually find its level. We are underdeveloped and the problems are piling up.
What is the cause of the newest fuel scarcity in the land? There’s no ordinary day in Nigeria.