Okonjo’s Subsidy Interview [video]

I understand her to be arguing that lifting the fuel subsidy is a form of wealth redistribution. About three minutes into the video she argues that the poorest segment of the population doesn’t purchase fuel and thus doesn’t benefit from the subsidy. However, the poor do purchase food, and the cost of food partly depends on the cost of fuel used to transport it. The poor do sell goods to passing cars, and the number of cars that can pass them on any given day depends on the cost of fuel. The poor do spend their days working and sometimes their evenings in school, and a school’s capacity to have generator-powered light after dark depends on the cost of fuel. The price of this single product negatively impacts the poor more than any other segment of society in fact. They are the ones who will suffer most over the next few years as they wait for hypothetical social services (which will realistically never come) that will make the removal of the subsidy “worth it.”

One of her more paradoxical arguments is that lifting the fuel subsidy will help fund programs to improve maternal and infant mortality. The reality is that hospitals in Nigeria depend on generators. Those generators power incubators, sterilizers, water pumps, and light bulbs necessary to for health care providers to do even the bare minimum that they are able to now. Within homes, families need to be able to power fans and air-conditioners to reduce the chances of malaria infection among pregnant women and children under the age of five. Ultimately, because there is no reliable source of electricity in the country, lifting the fuel subsidy will make running generators prohibitively expensive and will actually worsen maternal and infant health.

All in all, not a shining example of a quality interview on the part of Okonjo.

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One response to “Okonjo’s Subsidy Interview [video]

  1. All Nigerians understand that Dr. Okonjo-Iweala is currently on active assignment from the World Bank, and as such is required to implement World Bank policies from the inside of the Nigerian government as part of this assignment. The World Bank is no friend of the people of any developing country in which it operates, much less one that has resources that its “donor countries” are interested in (see http://en.wikipedia.org/wiki/World_Bank#Criticisms)….

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