Subsidy Removal on Inequality and Poverty Alleviation in Africa
Abstract
The effect of eliminating subsidies on reducing poverty and inequality in Africa is investigated in this study. In an attempt to lessen financial strains and improve economic efficiency, many African nations have recently implemented modifications to their subsidies, especially in areas like food and gasoline. The socioeconomic consequences of such reforms, particularly on the underprivileged and vulnerable groups, continue to be a major worry, nevertheless. For low- income households, the elimination of subsidies on needs frequently results in higher living expenses, less access to basic necessities, and less economic possibilities. These repercussions, especially for underprivileged and marginalized groups, have the potential to worsen poverty and widen already-existing economic gaps. According to the report, the adoption of strong, complementary policies and social protection systems is necessary for the withdrawal of subsidies to effectively advance poverty reduction and reduce inequality. Targeted cash transfer programs, educational investments, increased access to high-quality healthcare, and support networks specifically designed for vulnerable groups are a few examples. The results highlight the necessity for policymakers to create and carry out subsidy reforms using a thorough and evidence-based approach. Anticipating and reducing negative effects requires inclusive, context-sensitive measures that take into account each nation's particular socioeconomic realities. By prioritizing the needs of the poor and ensuring social safety nets are in place, African governments can use subsidy changes as opportunities to promote equitable and sustainable economic growth. This study contributes to the broader discussion on poverty and inequality in Africa by emphasizing the importance of inclusive growth and responsive governance. JPASWR jpaswr
Keywords
Elimination of subsidiesreduction of povertyinequalitysocial protectionand inclusive economic growth
References
Abdellatif, M., & Fakhry, R. (2017). Who benefits from universal energy subsidies? Evidence from Egypt. The Journal of Development Effectiveness, 9(3), 389–410. https://doi.org/10.1080/19439342.2017.1306575 ResearchGate African Development Bank (2019). Subsidy Reforms in Africa: A Review of Recent Experiences. African Development Bank. (2019). Assessing the social impact of subsidy reforms in Africa. AfDB Publications. https://www.afdb.org Ajakaiye, O., et al. (2019). The political economy of sustainable development in Nigeria. Nairobi, Kenya: African Economic Research Consortium. Ali, H., Maina, Y. A., & Usman, S. (2024). An empirical analysis of the effect of fuel subsidy removal on Nigeria’s economy. ACM International Conference Proceedings Series (preprint/record). (Proceedings record visible on ACM Digital Library.) IMF Amoako-Tuffour, J., & Asamoah, E. (2015). Energy subsidy reform in Ghana: A case study on petroleum and electricity subsidies. International Institute for Sustainable Development. https://www.iisd.org/publications/energy-subsidy-reform-ghana. Amoako-Tuffour, J., & Asamoah, E. (2015). Fuel subsidies and the poor in Ghana: A benefit incidence analysis. African Development Bank Group. https://www.afdb.org/en/documents/document/working-paper-226-fuel-subsidies-and- the-poor-in-ghana-a-benefit-incidence-analysis-56048 Amoako-Tuffour, J., & Asamoah, E. (2015). Fuel subsidy reform in Ghana: Lessons and implications. African Center for Economic Transformation. Amoako-Tuffour, J., & Asamoah, E. (2015). Subsidy reforms and social impacts in Africa: The case of Ghana. African Development Bank Group. Arze del Granado, F. J., Coady, D., & Gillingham, R. (2012). The unequal benefits of fuel subsidies: A review of evidence for developing countries. World Development, 40(11), 2234–2248. https://doi.org/10.1016/j.worlddev.2012.05.005 Asadu, C. (2023, May 30). Drivers line up for gasoline across Nigeria after new president scraps fuel subsidy. Associated Press. (Syndicated via WJXT/News4Jax). WJXT Assaad, R., & Krafft, C. (2021). The economics of subsidies in the Middle East and North Africa: A political economy perspective. In R. Assaad & C. Krafft (Eds.), The Egyptian labor market post-revolution: Challenges and policies (pp. 209–234). Oxford University Press. https://doi.org/10.1093/oso/9780192894192.003.0009 Assaad, R., & Krafft, C. (2021). The effects of energy subsidy reform on household welfare in Egypt. Economic Research Forum. Assaad, R., & Krafft, C. (2021). The effects of energy subsidy reform on households in Egypt: Evidence from the Takaful and Karama programs. Middle East Development Journal, 13(1), 1–28. https://doi.org/10.1080/17938120.2021.1918623 Assaad, R., & Krafft, C. (2021). The impact of subsidy reforms on households in the Middle East and North Africa. Economic Research Forum Working Paper No. 1457. https://erf.org.eg/publications/the-impact-of-subsidy-reforms-on-households-in-mena/ Basson, C., & Visser, M. (2022). Fuel pricing and gendered transport inequities in South Africa. South African Journal of Economic Policy. Basson, D., & Visser, M. (2022). Energy price changes and household welfare in South Africa. South African Journal of Economics, 90(2), 157–175. https://doi.org/10.1111/saje.12292 JPASWR jpaswr Basson, I., & Visser, M. (2022). Gender-differentiated impacts of fuel subsidy reforms in South Africa. Development Southern Africa, 39(6), 879–895. https://doi.org/10.1080/0376835X.2022.2078803 Bemgba, P. T., & Adadu, Y. A. (2025). The impact of fuel subsidy removal on poverty in Nasarawa State. *Kashere Journal of Politics and International Relations, 3*(3), 151–162. Bisong, P. O., Ushie, E. A., Tersoo, A., & Agbeh, P. (2023). Impact of Fuel Subsidy Removal and the People’s Well-Being in Calabar Metropolis, Cross River State, Nigeria. *Journal of Public Administration, Policy and Governance Research*, 1(3), 117–126. Retrieved from https://jpapgr.com/index.php/research/article/view/36 Chete, O. B. (2020). Factors influencing adaptation to climate change among smallholder farming communities in Nigeria. African Crop Science Journal, 27(1), 45–57. Coady, D., Parry, I., Sears, L., & Shang, B. (2015). How large are global energy subsidies? (IMF Working Paper No. 15/105). International Monetary Fund. https://doi.org/10.5089/9781513520741.001 Cooke, E., Hague, S., & Tiberti, L. (2016). The Ghana Poverty and Inequality Report: Using the 6th Ghana Living Standards Survey. Accra: UNICEF & Ghana Statistical Service. (Included here because you listed “Cooke, et al (2016)”.) IDEAS/RePEc Elhiraika, A. B., & Ahmed, A. (2019). Fiscal policy for financing sustainable development in Africa. United Nations Economic Commission for Africa . https://hdl.handle.net/10855/43891 Elhiraika, A., & Ahmed, A. (2019). Macroeconomic policy and poverty reduction in Sudan. United Nations Economic Commission for Africa . https://repository.uneca.org/handle/10855/43215 Elhiraika, A., & Ahmed, A. (2019). The political economy of fuel subsidy reform in Sudan. United Nations Economic Commission for Africa. https://repository.uneca.org/handle/10855/43787 IMF. (2023). Nigeria: 2023 Article IV Consultation—Press release; staff report; and statement by the executive director for Nigeria (IMF Country Report No. 23/92). International Monetary Fund. https://www.imf.org/en/Publications/CR/Issues/2023/03/20/Nigeria-2023-Article- IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-531771 Inchauste, G., & Victor, D. G. (Eds.). (2017). The political economy of energy subsidy reform. World Bank Publications. https://doi.org/10.1596/978-1-4648-1007-7 International Monetary Fund (2017). Fiscal Monitor: Tackling Inequality. Washington, DC: IMF. https://doi.org/10.5089/9781484312483.089 (full text available via IMF eLibrary). IMFIMF eLibrary+1 Kirsten, Jenkens, Darren McCauley, Raphael James Heffron & Hanness Stephan (2016). Energy Justice: A Conceptual Review. Energy Research & Social Science 11:174–182 DOI:10.1016/j.erss.2015.10.004 Loewe, M., & Westermeier, C. (2018). Social Protection in the MENA Region: Prospects for a New Social Contract? (Discussion Paper 28/2018). Bonn: German Development Institute . ResearchGate Mkandawire, T. (2001). Targeting and Universalism in Poverty Reduction. UNRISD Social Policy and Development Programme Paper No. 23. Geneva: UNRISD. Wjarr Moerenhout, T., Ives, M., & Mostafa, M. (2018). Energy Pricing Reforms in the Middle East and North Africa: Economic and Social Implications. Winnipeg/Geneva: IISD–GSI. JPASWR jpaswr (Representative 2018 Moerenhout-led analysis on subsidy/pricing reform; confirm this is the intended item). pep-net.org Nnadozie, U., Uzoigwe, A., & Ukoha, K. (2022). Examining the response of inflation to exchange rate and interest rate in Nigeria. International Journal of Financial Research, 13(3), 63– 72. (Example 2022 paper by Nnadozie et al.; confirm this is the one you intend.) amseif.ir Okyere, C. Y., Atta-Ankomah, R., Asante-Addo, C., & Kornher, L. (2024). The effect of carbon farming training on food security and development resilience in Northern Ghana. Climate and Development. Advance online publication. https://doi.org/10.1080/17565529.2024.2342682 Partnership for Economic Policy. (2013). *2013 PEP annual report*. Retrieved from https://www.pep-net.org/publications/reports/2013-annual-report Pierson, P. (1993). When effect becomes cause: Policy feedback and political change. World Politics, 45(4), 595–628. https://doi.org/10.2307/2950710 Taylor & Francis Online Plamen & Bonci (2020) — ambiguous. Likely refers to Iossifov and Bonci; I can’t find a 2-author 2020 paper by them together. I did find Bonci et al. (2020) “Monetary policy and inequality in Italy” (ECB Working Paper 2382), but that does not list Iossifov. Please share a title or venue so I can pin this down. IDEAS/RePEc Rawls, J. (1971). A Theory of Justice. Cambridge, MA: Harvard University Press. World Bank Stiglitz, J. E., & Rosengard, J. K. (2015). Economics of the Public Sector (4th ed.). New York: W. W. Norton. United Nations Development Programme (2020). Energy pricing reform and social protection in developing economies. United Nations Development Programme. United Nations Development Programme (2020). Energy subsidy reforms and the poor: A review of issues and evidence. https://www.undp.org/publications/energy-subsidy-reform-and-poor United Nations Development Programme (2020). Human Development Report 2020: The Next Frontier. United Nations Development Programme (2020). Subsidy reforms and social protection: A pathway to inclusive development in Africa. UNDP. https://www.undp.org United Nations Economic Commission for Africa (2018). Africa Sustainable Development Report: Towards a Transformed and Resilient Continent. Addis Ababa: ECA, AfDB & AU. amseif.ir Vanguard News. (2012, January 5). Labour declares total strike Monday. *Vanguard*. Retrieved from https://www.vanguardngr.com/2012/01/labour-declares-total-strike-monday/ Victor, D. G. (2009). The Politics of Fossil-Fuel Subsidies. Geneva: Global Subsidies Initiative . (Seminal early paper on reform politics.) ResearchGate World Bank (2019). Egypt: Takaful and Karama Cash Transfer Program. World Bank Social Protection and Jobs Global Practice. https://documents.worldbank.org/en/publication/documents- reports/documentdetail/308861554825076197/egypt-takaful-and-karama-cash-transfer- program World Bank (2020). Poverty and Shared Prosperity 2020: Reversals of Fortune. World Bank (2023). Nigeria Development Update: Seizing the Opportunity. Washington, DC: JPASWR jpaswr World Bank. (2019). Egypt: Takaful and Karama Cash Transfer Program. World Bank Group. https://www.worldbank.org/en/results/2019/04/03/egypt-takaful-and-karama-cash- transfer-program World Bank. (2019). Implementing energy subsidy reforms: Evidence from developing countries. World Bank Publications. World Bank. (2020). Poverty and shared prosperity 2020: Reversals of fortune. https://www.worldbank.org/en/publication/poverty-and-shared-prosperity World Bank. (2023). Nigeria development update: Seizing the opportunity. https://www.worldbank.org/en/country/nigeria/publication/nigeria-development-update- june-2023 World Bank. (2023). Nigeria: Social protection program update. World Bank Publications. World Health Organization (2018). The Impact of User Fees on Access to Healthcare Services. World Health Organization. (2018). The impact of health financing reforms on access to health care in low-income countries. WHO. https://www.who.int
More Articles from JOURNAL OF PUBLIC ADMINISTRATION AND SOCIAL WELFARE RESEARCH
A Typology of Digital Complaint-Resolution Systems for Public Accountability
Author: Uchechi Mary-Linda Unamma, Ifeanyichukwu Jeffrey Okwesa, Uzoamaka, Iwuanyanwu,
Electronic Tax Monitoring, Fiscal Transparency and Digital Capacity Constraints in Nigeria: A Content Analysis
Author: Ngozi Chijioke, Uchenna Gladys Onwujekwe, Eteng Inah William
The Role of Formal Social Networks in Mitigating Mental Stress Among Older Adults in Poor Urban Communities in Rivers State Faculty of Social Sciences, Sociology Department Rivers State University, Nkpolu-Oroworokwo Port Harcourt, Nigeria
Author: Akani Bobby Okechukwu
Information Literacy Skills and Organizational Learning Among Administrative Officers of Agricultural Research Institutes in Southwest Nigeria
Author: Titilayo Juliet Sodiyan1 Oluwatosin A. Ologboosere2
Beyond Mediation: Climate Stress, Structural Violence, And the Persistence of Farmer–Herder Conflict in Benue State, Nigeria, 2015–2025
Author: Elijah B.U. Chigweyaru, PhD