THE ASSESSMENT OF IMPACTS OF 2016 FUEL SUBSIDY REMOVAL ON LOW INCOME EARNERS IN KATSINA METROPOLIS, NIGERIA

Abstract

Fuel subsidy removal in Nigeria has been ongoing, and attempts were made by several government regimes in Nigeria right from 1980-2016, which led to an increase in the pump price as well as the price of commodities. The study adopts a survey research design, and 384 respondents were used as a sample, using a self-administered questionnaire and a semi-structured questionnaire to collect data from the respondents. The study uses a multinomial logit model to estimate the significance of the factors believed to influence a household's income in the Katsina metropolis, and the result shows that there is a significant relationship between the dependent variable and independent variable in the final model with chi-square value of 155.945. The likelihood ratio test proves that the independent or predictor variables family size (0.04 < p-value) and educational qualification (0.000 < p-value) of respondents were significant, which proves that the predictors contribute significantly to the final model. Some recommendations were made as to why the government should ensure that subsidy reinvestment programmers meet the target that was set to achieve through leasing some of the administrative bottlenecks that hinder people who are vulnerable to getting the scheme and embark on public awareness campaigns on the existence of most of the important program that can significantly relieved most people at the bottom.

Full text

Journal of Sustainable Practice (JSDP) 2024, 1(1): 10-20
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THE ASSESSMENT OF IMPACTS OF 2016 FUEL SUBSIDY
REMOVAL ON LOW INCOME EARNERS IN KATSINA
METROPOLIS, NIGERIA
Shuaibu Umar1*, Radieah Mohd Nor2
1Department of Business Education, Federal College of Education, Katsina, Nigeria
2Centre for Global Sustainable Studies (CGSS), Universiti Sains Malaysia, 11800 USM, Penang, Malaysia
*Correspondence email: abuhuzaifa679@gmail.com
(Received 7 August 2023: Revised 30 January 2024: Accepted 22 February 2024)
ABSTRACT
Fuel subsidy removal in Nigeria has been ongoing, and attempts were made by several government regimes
in Nigeria right from 1980 – 2016, which led to an increase in the pump price as well as the price of
commodities. The study adopts a survey research design, and 384 respondents were used as a sample,
using a self-administered questionnaire and a semi-structured questionnaire to collect data from the
respondents. The study uses a multinomial logit model to estimate the significance of the factors believed
to influence a household’s income in the Katsina metropolis, and the result shows that there is a significant
relationship between the dependent variable and independent variable in the final model with chi-square
value of 155.945. The likelihood ratio test proves that the independent or predictor variables family size
(0.04 < p-value) and educational qualification (0.000 < p-value) of respondents were significant, which
proves that the predictors contribute significantly to the final model. Some recommendations were made
as to why the government should ensure that subsidy reinvestment programmers meet the target that was
set to achieve through leasing some of the administrative bottlenecks that hinder people who are
vulnerable to getting the scheme and embark on public awareness campaigns on the existence of most of
the important program that can significantly relieved most people at the bottom.
Keywords: assessment, impact, 2016 subsidy removal, low-income earners, Katsina Metropolis
INTRODUCTION
Nigeria is considered as one of Africa's oil producers with an estimated 90 million or (45%) Nigerians
earning below N284, 489.27 per annum that are category of low-income earners (National Bureau of
Statistics, 2020 & Stephen 2021), and ever since 70's Nigerian government has been subsidizing petroleum
products. It was introduced as a response to oil shocks in 1973 (Joseph, 2021). Fuel subsidies became
institutionalized in 1977, following the promulgation of the Price Control Act, which made it illegal for
some products, including petrol, to be sold above the regulated price. This law was introduced by the
General Olusegun Obasanjo regime to cushion the effects of the global ‘Great Inflation’ era of the 1970s,
caused by a worldwide increase in energy prices (Joseph, 2021). Between 2006 and 2018, Nigeria spent
about 10 trillion Naira on petroleum subsidies. In 2019 and 2020, about 3 trillion Naira was spent on
subsidies. It means that Nigeria has spent over 30 billion (USD) on fuel subsidies over the past 16 years
or so. In 2018, it spent 722 billion Naira but spent only 459 billion Naira on health. Nigeria's growing fuel
subsidy may have contributed to the country's health-financing gap (Stephen, 2021).
Ismail and Xiaoyi (2015), stated that the global value of subsidies for fossil fuel consumption grew
from 312 billion (USD) in 2009 to 548 billion (USD) in 2013, representing about 0.53% and 0.73% of the
world gross domestic product (GDP) in the respective years. Petroleum products account for over half of
the total subsidies. However, on average, a meager 7% of the total fossil fuel subsidies reached the poorest
20% of the income group in low and middle-income countries (IMF, 2013). Thus, the concern is not only
about the huge amount governments commit to subsidizing fossil fuels but that the ultimate targets of
these subsidies hardly benefit. Despite continuous efforts made by countries to reform these subsidies,

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fossil fuel subsidies are notoriously complex to remove in most countries. Nigeria has a long tradition of
controlling fuel prices and is listed among the top 20 countries subsidizing fuel consumption by the
International Energy Agency (2013).
Though there is a theoretical consensus towards overall damage from subsidization (UNEP, 2003),
many countries remain heavily subsidized with a few recent exceptions of successful reform
implementation, including Morocco, United Arab Emirates, Egypt, China, and Ukraine (OECD, 2016;
Sovacool, 2017; IEA, 2017a; IEA, 2017b). Usually, the explanation behind long-term subsidization trends
can be found in the absence of political will coupled with the risks of possible regressive impacts on low-
income households. The payment of subsidies for refined petroleum products continued afterward, and
most attempts by successive governments to remove the subsidies and increase prices to reflect actual
market prices were met with stiff opposition by labour unions and citizens. A key driver of the continued
payment of subsidies was the sustained increase in demand for refined petroleum products, amidst a
relative decline in local refining capacity. Thus, the inability of domestically refined products to meet the
huge and growing demand led to an increase in the importation of petroleum products that are subsidized.
In Nigeria, two petroleum products are subsidized, Premium Motor Spirit (PMS) and Household
Kerosene (HHK). Currently, the Nigerian government spends a substantial portion of its revenue on
energy subsidies, particularly petrol or gasoline. Over the years, the Nigerian government incurred
unsustainable fiscal costs as well as economic (opportunity) costs on account of fuel subsidy payments.
Although fuel subsidies represent a principal welfare instrument in the country to allow poorer Nigerians
to benefit from the country's oil wealth, their welfare impact on the poor remains small (Onyekwena et
al., 2017).
On the fuel subsidy removal, since Nigeria transitioned to civil rule in 1979, there have been several
attempts to remove subsidies that have been unsuccessful. President Shehu Shagari's government from
1979 to 1983 increased the price of petrol in 1982, from 15.3 Kobo a liter to 20 Kobo. This happened
without the government making reference to easing subsidies, then in 1986, President Ibrahim Babangida
announced a partial removal of oil subsidies, which saw the petrol price rise from 20 Kobo to 39 Kobo
per liter (Udibe & Ugwuanyi, 2018). This followed his implementation of the Structural Adjustment
Program as set out by the International Monetary Fund (IMF) (Danladi & Peter, 2016). There was a huge
uproar against the decision, which reached a crescendo when workers, students, and civil society groups
embarked on massive demonstrations across the country. Massive and sustained protests against
Babangida's economic policies played a big role in his hurried exit from power.
It was during President Goodluck Jonathan in 2012 that action against fuel subsidies was taken,
parred down fuel subsidies, and used the savings to invest in education and infrastructure. But he
encountered virulent pushbacks from labor unions, students, and civil society groups. He was subsequently
forced to cut the fuel price by 30% and President Muhammadu Buhari increased the pump price from
N87 to N145 in 2016 (IMF, 2013).
PROBLEM STATEMENT
Fuel subsidy removal in Nigeria has been ongoing, and attempts were made by several government regimes
in Nigeria right from 1980 – 2016, which led to an increase in the pump price as well as the price of
commodities. Usually, when subsidy is removed, the price of fuel increases, and many individuals,
particularly the low-income populace, often are at the receiving end as this would reflect a fall in the living
standard of this group. However, despite numerous attempts at reform, Nigeria has never successfully
removed fuel subsidies, in large part due to strong popular opposition to reform. On the other hand,
subsidies come at a great cost: spending on other development objectives is lower; the distribution of
resources to the state governments is reduced; the vast majority of the subsidy goes to better-off Nigerians.
The communication gap that exists in the fuel subsidy reform is one of the reasons why Nigerians do not
see any light on subsidy removal reform. Nigerians have come to believe that the removal of fuel subsidies
will inflict untold hardships. They have lost faith in government initiatives, no matter how well-intentioned.
The reality of the scenario is that Nigerians believe that savings from removing fuel subsidies will not be
used appropriately because of corruption. Furthermore, the months in the initial aftermath of the subsidy

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removal will see rising inflationary pressures which could be detrimental to household income considering
the slow pace of household income growth since 2015 (Joseph & Stephen, 2021).
On the contrary, Nigerians need to be told, and the misconception of fuel subsidy reform must be
cleared. Thus far in September 2021, the Federal Government of Nigeria (FGN) has spent N864.0 billion
versus a total of N496.3billion of Nigerian National Petroleum Corporation remittances in 2021 on its
under-recovery program to keep the price of petrol fixed. The FGN's energy subsidy programs continue
to create a gaping hole in the FGN finances. Subsidy programs coupled with the revenue
underperformance, have led to increased debt financing for the FGN. To this end, there should be clear
communication to Nigerians that the removal of fuel subsidies favors the poor or otherwise and eliminates
one of the several perks that the Nigerian elites undeservedly enjoy at the expense of others. The last fuel
subsidy removal in 2016 prompted the government to introduce Social Intervention Programs (SIP) with
the view to fetch the issues that usually arise from fuel subsidy removal. The SIP is designed to mitigate
the effects of fuel subsidy removal and accelerate economic growth through investments in critically
needed infrastructures as well as social services such as education, health care services, job creation, and
vocational training. Despite this initiative, the living conditions of people appear not to have improved as
prices of goods and services are considerably high, possibly as a result of the removal of fuel subsidies. In
view of the above, this research work aimed to assess the impact of the 2016 subsidy removal on low-
income earners in Katsina Metropolis, Nigeria.
Objective of the Study
The general objective of this study is to assess the impact of 2016 fuel subsidy removal on low-income
earners in Katsina Metropolis, Nigeria. Specifically, the study aims at the following:
1. To examine the effect of 2016 fuel subsidy removal on the cost of living of low-income earners in
Katsina Metropolis, Nigeria.
2. To assess the level of awareness of the adopted strategies to cushion the effect of subsidy
removal on low-income earners in Katsina Metropolis, Nigeria.
3.
Research Question
1. What are the effects of 2016 fuel subsidy removal on the cost of living of low-income earners in
Katsina Metropolis, Nigeria?
2. Are you aware of the adopted strategies to cushion the effect of subsidy removal on low-income
earners in Katsina Metropolis, Nigeria?
FUEL SUBSIDY REFORMS IN NIGERIA
Past administrations in Nigeria made several attempts to clear the market inefficiency and economic
distortion as a result of subsidies in the energy sector in Nigeria. During President Olusegun Obasanjo's
regime, on six different occasions, the price of Premium Motor Spirit (PMS) was adjusted to phase out
the fuel subsidy gradually. The initial attempt was to increase fuel prices from N20 to N30 on 1st June
2000. However, there were massive protests against the increase by the labor unions and the public,
resulting in a downward review of the price to N22. Undeterred, the government made further partial
subsidy removal by revising the price to N26 in January 2002 and to N42 in June 2003. Three more upward
adjustments were made in 2004 and 2007 to push the prices of subsidy to N75. All these were efforts to
reduce the burden of subsidies on the Government. The Obasanjo’s attempt was vehemently challenged
by Unions. As such, it succeeded only in reducing the burden; this was because there was a poor
communication strategy and the absence of a multi-stakeholder approach.
In the view of Olarewaju & Ogunesa (2011), as agreed by Chukwuka et al. (2017), the four years
of Yar’adua/Jonathan administration (2007-2011), their administration began by reversing the price
increase implemented by the Obasanjo administration from ₦75 to ₦65. However, the substantive
Jonathan administration (2011-2015) commenced a comprehensive energy subsidy reform process. The
process encompassed a multi-stakeholder approach, with broader engagement with the private sector and
the public at large. The government also embarked on a massive media campaign to seek public buy-in.

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The Government justified the removal of the subsidy on PMS on the grounds that it “will free up to about
₦1.2 trillion in savings, part of which can be redeployed into providing safety nets for poor segments of
the society to ameliorate the effects of subsidy removal.
After the dialogues, deliberations, and consultations, the Federal Government on the 1st January,
2012 announced the total removal of subsidy on PMS, which raised the price of petrol from N65 per litre
to N142. This set off a catalyst for events that disrupted and upended the reform process. The following
day, the Nigeria Labor Congress (NLC) and Trade Union Congress (TUC) reacted to the sudden
announcement of subsidy removal of oil by embarking on a strike action, which disrupted normal activities
over the period (Abutu, 2014).
Following eight days of the strike and protests, the Federal Government reduced the price of
petrol from ₦142 to ₦97. In addition, the government put in place the Subsidy Reinvestment and
Empowerment Programs (SURE-P) as a way of assuring Nigerians that the savings from the subsidy
removal would be spent on activities that will have a direct impact on the lives of poor and vulnerable
Nigerians. A portion of the SURE-P funds also accrued to States and Local Governments for use in
developmental projects (Economic Intelligent Unit, 2013).
Buhari’s administration, effective from January 2016, introduced a new petroleum pricing
mechanism described as “price modulation.” The idea of a pricing modulating scheme was first proposed
by the Mantu Committee in 2005 to institute a formal mechanism for determining petroleum prices within
a short-run pre-set band. According to Ojameruaye (2015), price modulation involves a more regular
revision of petroleum prices to reflect changes in the import price of petroleum and other determinants
of the EOMP. In line with the new pricing policy, petroleum prices have been adjusted twice over the
past year. The first adjustment was a downward review from NGN87 to NGN86-86.5 in January 2016.
This reduction reflects the fall in product cost and freight component of the EOMP. The second review,
which was implemented in May 2016, is an upward review from the initial band to a new one, which ranges
between NGN135-145. This subsequent adjustment reflects the effect of naira depreciation on the
EOMP. More importantly, the ongoing reform also completely deregulates the supply chain for petroleum
importation by allowing entry for any Nigerian entities. This is to ensure competition at the distribution
ends of the petroleum products supply chain.
Recently in November 2021, the Minister of Finance hinted at a final phase of subsidy removal
from July 2022, with the Minister hinting at replacing the program with a N5000 cash handout for the
poorest Nigerians. The move to continue to treat Petrol Motor Spirit (PMS) as a public (which should be
non-excludable and non-rivalries) continues to deter investment in the downstream oil and gas sector and
has left the FGN as the primary importer of PMS, as the price per liter remains fixed. Even though the
Government has stated that the final decision will be made on NEC in June 2022 after the subsidy
provision expires.
METHODOLOGY
This study adopts a survey research design. The research design will be used as an ex-post factor research
design. The population of this study includes all low-income earners in Katsina Metropolis the use of
simple random sampling selected 384 respondents. A two-section questionnaire was used to collect
relevant data, and Descriptive statistics and multinomial logistic regression methods were employed to
analyze the data. The independent variables age, educational level, and family size are used as a proxy for
livelihood regressed on household income, a proxy for fuel subsidy removal. The study assumed that the
fuel subsidy proportionally measures households’ income as this determines the level of purchasing power,
which determines the livelihood.
The study uses a multinomial logit model to estimate the significance of the factors believed to
influence a household’s income in the Katsina metropolis. The multinomial logit model describes the
behaviour of households with factors that have various categories. The choice of the model was based on
its ability to perform better with discrete choice studies (McFadden, 1974; Judge, et al., 1985).

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Model Specification
The study uses a multinomial logit model to estimate the significance of the factors believed to influence
a household’s income in the Katsina metropolis. The multinomial logit model describes the behaviour of
households with factors that have various categories. The choice of the model was based on its ability to
perform better with discrete choice studies (McFadden, 1974; Judge et al., 1985).
Pr[Yi=J] =exp ("j Xi)
∑exp ("j Xi)

=0
……….[1}
Where: ƒ
Pr[Yi = j] is the probability of choosing either of the income level categories, ƒ
J is the number of the choice set,
Xi is a vector of the predictor (Age, family size, dependents, and educational qualification) ƒ
βj is a vector of the estimated parameters.
When the logit equation above is rearranged using algebra, the regression equation is as
follows:
Pi = e(βo + β1X1+ β2X2+ β3X3 … βyXy) ……….[2]
1 + e(βo + β1X1+ β2X2+ β3X3 … βyXy)
The equation used to estimate the coefficient is
ln[ 
1−]= βo + βX1+ β2X2+ β3X3 … βyXy ……….[3]
RESULTS AND FINDINGS
Table 1 shows respondents' views on the impact of the 2016 subsidy removal on the cost of living of low-
income earners in the study area. The result revealed that 24.5% of the respondents agreed that fuel subsidy
removal led to a decrease in income, while only 0.8% disagreed. Thus, the implication is that the
introduction of the policy has seriously affected the income level of people in the study area. Price levels
generally increase, leading to inflation, which invariably affects disposable income. Income is money that
an individual or business receives for providing goods or services or through investing capital. Income is
used to fund people's day-to-day expenditures. The majority of the respondents in the study area receive
their income from salary or wages earned from jobs. Subsidy removal has a direct effect on income by
reducing their purchasing power as clearly shown from the respondent's view as 32.5% as against 3.6%
that disagree and consequently decreased tendency to consume. Milton Friedman’s economic theory
affirms this assertion, the permanent income hypothesis, which states that people will spend money at a
level consistent with their long-term average income. The level of expected long-term income then
becomes thought of as the level of permanent income that can be spent. For example, if a worker is aware
they will likely receive an income bonus at the end of the particular pay period, it is plausible that their
spending in advance of that bonus may change in anticipation of the additional earnings and vice versa.
This implies that a fall in one’s income would bring about a reduction in an individual's consumption
expenditure. Moreover, the study revealed that fuel subsidy removal affected respondents' volume of
savings. About 63.1% of the respondents affirmed that their savings decreased as fuel subsidy was
removed. This indicates that subsidy removal has been an additional liability to respondents in terms of a
reduction in the level of their savings. This could be a result of shock that emanated from subsidy removal,
which has a direct connection with income and savings. Saving as one of the households’ livelihood
components has been negatively affected as most of the respondents have experienced a reduction in their
savings caused by a fall in disposable income. This assertion is in line with the life cycle hypothesis, which
seeks to examine the relationship between consumption and saving. It posits that individuals trying to
maintain a stable level of consumption over time save in their working years for retirement.

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Table 1: Perception of impact 2016 subsidy removal and cost of living of low-income earners
Statement
Strongly
Agree
Agree
Undecided
Disagree
Strongly
Disagree
Decrease in income level
233(64.2%)
89(24.5%)
13(3.6%)
3(0.8%)
25(6.9%)
Decrease in purchasing power
225(62.0%)
118(32.5%)
7(1.9%)
0(0.0%)
13(3.6%)
Decrease in savings
125(34.4%)
229(63.1%)
7(1.9%)
1(0.3%)
1(0.3%)
Decrease in asset procurement
124(34.2%)
186(51.2%)
17(4.7%)
12(3.3%)
24(6.6%
Decrease in obtaining basic
necessities of live
101(27.8%)
256(70.5%)
2 (0.6%)
0(0.0%)
4(1.1%)
Decrease in health facilities
29 (8.0%)
130(35.8%)
105(28.9%)
23(6.3%)
76(20.9%)
Decrease in qualitative education
132 (36.4%)
118 (32.5%)
30 (8.3%)
20 (5.5%)
63(17.4%)
Increase in price of goods and
services
125 (34.1%)
229 (62.4%)
6 (1.6%)
1 (0.3%)
6 (1.6%)
Increase in transportation cost
170 (46.8%)
177 (48.8%)
2 (0.6%)
0 (0.0%)
14 (3.9%)
Increase in price of utilities
150 (41.3%)
175(48.2%)
12 (3.3%)
15(4.1%)
11 (3.0%)
(Source: Field survey, 2022)
Consequently, lifetime resources, rather than current income, are what determine an individual's
level of consumption and savings ratio. In light of the above proposition, fuel subsidy removal has cost
respondents some proportion of their savings that are supposed to serve as future means of sustenance
and has been directed to current use. The respondents, 51.2%, agree that they experienced a decrease in
asset procurement as respondents have affirmed that in order to meet immediate family needs, all their
income is spent on day-to-day needs, which hinders having excess money to procure assets for future
investment. Assets generally enable individuals to increase their net worth, but in some cases, asset
ownership can help families even when the effects on net worth are modest. Conceptually, a central role
of assets is to cushion the decline in consumption that might otherwise arise with a sudden income loss.
As a result, some households have to draw down their assets or use them as collateral to borrow and
replace loss income, thus potentially subjecting them to the danger of lack of financial security provided
by the possession of such assets, as confirmed by Mohammed et al. (2020). It is found that 70.5% of the
respondents agreed that there was a decline in Decrease in obtaining basic necessities of life, while only
0.6% were undecided. The survey, therefore, indicates that removing subsidies on fuel had triggered a
decline in the prospect of households’ basic necessities of life due to increased cost. The respondents,
35.8%, agree that they experience a decrease in the provision of health facilities, while only 6.3% disagree.
The survey, therefore, indicates that subsidy removal affects the household contingency plan of income
as all income was geared toward the transaction motive and ignored the precautionary motive as proposed
by Keynes. The study also revealed that fuel subsidy removal led to a decrease in qualitative education due
to the high cost of other expenses, as 32.5% agreed with the statement while only 5.5% of the respondents
disagreed. An increase in the price of goods and services and an increase in the cost of transportation were
also agreed by 62.4% and 48.8% as against 0.3% and 0.0% that disagreed, respectively. These results were
supported by the study of Agu et al. (2018), the study concluded that fuel subsidy removal led to an
increase in the prices of goods and services, such as hikes in transportation costs and food. Regarding the
increase in the price of utilities, 48.2%% of the respondents agree that this occurred as a result of fuel
subsidy removal, while only 4.1% disagree. The result explains that the policy has cost them in terms of
the price of utilities such as the price of petrol, gas, and other energy price due to the fact that it affects all
utilities in one way or the other. This result is justified by the results of Agu et al. (2018).
Table 2 describes respondents' awareness of the strategies adopted by the government to cushion
the effect of fuel subsidy removal. The distribution of respondents with respect to the introduction of N-
power as a palliative on the effects of fuel subsidy removal in the study area shows that 44.6% of the
respondents agree, while 4.4% disagree. The N-power scheme is the largest and the most popular among
the palliatives because of the high number of direct beneficiaries involved and its multidimensional aspect,
which includes health, education, and agriculture, thus leading to a high level of acceptance by the
respondents. Under this scheme, a total of 200,000 graduates have so far been engaged across 36 states of

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the federation with the view of recruiting an additional 300,000 to serve as volunteer teachers, agricultural
extension workers, and health workers. Distribution of the respondents, 43.4%, agree, while only 5.0%
disagree that NYIF aims to financially empower Nigeria's youth to generate at least 500,000 jobs between
2020 and 2023. Akomalafe (2021) confirmed the result by stating that the Nigeria Youth Investment Fund
(NYIF) has completed its pilot disbursement of loans totaling N165,700,000 to 239 beneficiaries ahead of
the processing of the over three million applications so far received. The distribution of respondents
describes an awareness of Trader moni, farmer noni, and Market moni as palliative measures to cushion
the effect of subsidy removal, as 32.0% agree against 7.4% disagree. The Olateju (2021) study confirmed
that the loan program has increased the profit and expanded the business of the petty traders who
participated in the loan program over and above those petty traders who did not participate in the loan
program in the study area. The result shows that 45.7% are aware of the Digital Youth Nigeria fund, and
8.8% are not aware of the program. The result justifies the digital training of 1600 youth across the six (6)
geopolitical zones with Lagos and Abuja, including software and coding skills, business process
outsourcing skills, Internet basics/IT hardware skills, and animation/graphics skills. Of the respondents
who claimed awareness of the Mobile Device Repair Training Scheme, 43.8% of the respondents agreed
while only 6.9% disagreed (not aware). The respondents’ views show that 55.6% are aware of the Nigerian
Tech Innovators and Entrepreneurs (NTIE) fund, compared to 3.9% who disagree. The result supported
the 268 million (USD) Fund for Nigerian Tech Innovators and Entrepreneurs. These funds are meant to
be in furtherance of the government’s drive to support MSMEs in the country and boost productivity in
non-oil industries.
Table 2: Perception of 2016 subsidy removal and awareness of strategies lunch on to cushion the effect
Statement
Strongly
Agree
Agree
Undecided
Disagree
Strongly
Disagree
N-power Programme
160 (44.1%)
162 (44.6%)
16 (4.4%)
16 (4.4%)
9 (2.5%)
Nigerian Youth Investment Fund
(NYIF)
150 (41.3%)
158 (43.5%)
19 (5.2%0
18 (5.0%
18 (5.0%)
Farmer moni, Trader moni and
Market moni
71(19.6%)
116 (32.0%)
109 (30.0%
27 (7.4%)
40 (11.0%)
Digital Youth Nigeria (DY.NG)
Fund
46 (12.7%)
166 (45.7%)
77 (21.2%)
32 (8.8%)
42 (11.6%)
Mobile Device Repair Training
Scheme
96 (26.4%)
159 (43.8%)
58 (16.0%)
25 (6.9%)
25 (6.9%)
Nigerian Tech innovators and
Entrepreneurs (NTIE)
113 (31.1%)
202 (55.6%)
18 (5.0%)
14 (3.9%)
16 (4.4%)
Graduate Internship Scheme
131 (36.1%)
183 (50.4%)
29(8.0%)
13 (3.6%)
7 (1.9%)
National Young Farmers
107 (29.5%)
195 (53.7%)
45 (12.4%)
7 (1.9%)
9 (2.5%)
Entrepreneurship training
Programme
124 (34.2%)
126 (34.7%)
79 (21.8%)
8 (2.2%)
26 (7.2%)
Small and Medium Enterprise
(SME's) Survival Fund
62 (17.1%)
71 (19.6%)
51 (14.0%)
64
(17.6%)
115 (31.7%)
Conditional Cash Transfer (CCT)
150 (41.3%)
88 (24.2%)
40 (11.0%)
46
(12.7%)
39 (10.7%)
(Field survey, 2022)
The respondents showed that 50.4% are aware of the graduate internship scheme, whereas 3.6%
are not aware. The GIS program recorded that 41,161 graduates have benefited from its Graduate
Internship Scheme (GIS), a youth empowerment program of the Ministry of Finance, since its inception
in 2012. The distribution of respondents revealed that 53.7% agree with Nigerian Young farmers while
only 1.9% disagree. This implies that the majority of the respondents perceive the program. The program
engaged 774000 youth in farming and Agriculture. 37.4% of respondent agree that Entrepreneurship
training programs are a palliative measure to cushion the effect of subsidy removal with the aim to increase
entrepreneurship skills for youths to enhance their ability to engage in sustainable self-employed

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businesses. Only 2.2% disagree. On the contrary, 31.7% strongly disagree (not aware) of small and
medium-scale enterprise funds, while only 19.6% claimed to be aware. The objective of the scheme was
to provide support to SMEs and households. The result pointed out that uncoordinated business plans
and poorly packaged projects were the most significant reasons why SMEs could not access funds from
the scheme. Although the scheme has been helpful to some SMEs, most of them are not aware of its
activities and potential, as confirmed by Aladejebi (2019). The respondents agreed that the conditional
cash transfer is a means of alleviating hardship associated with subsidy removal as the program was
designed to provide funds for people in trading, youth, and farming activities to enable them to withstand
the difficulties associated with inadequate capital. Akande (2017) affirmed that the policy was effective as
it covered all the nuts and crannies of the entire nation, targeting the most vulnerable in society, and it
yielded a positive impact on the beneficiaries. Also, 37.3% of the respondents are aware of and agree with
the program. This implies a high level of acceptance by the respondents, which is not unconnected with
the fact that most of them are civil servants who are literate and aware of most of the governmental policies
and programs, especially those that are directly connected to their well-being. Not only that, they have
people under them as dependents, as reflected by the questionnaire, who might be among the beneficiaries
of the scheme.
Multinomial Logistic Regression Result
The multinomial logistic regression model is used to estimate the significance of the factors believed to
influence a household’s income in the Katsina metropolis. The result in Table 3 shows the estimated
results of the relationship between the dependent variable represented by household income and
household characteristics: household age, educational level, family size, and number of dependents.
Table 3: Case Processing Summary
N
Marginal
Percentage
Level of monthly income
<N20,000
38
10.5%
N20,000-N39,000
77
21.2%
N40,000-N59,000
97
26.7%
N60,000-N79,000
80
22.0%
N80,000-N99,000
41
11.3%
>N100,000
30
8.3%
Age
20-29
173
47.7%
30-39
115
31.7%
40-49
65
17.9%
50 and above
10
2.8%
Educational qualification
Informal
136
37.5%
Primary
63
17.4%
Secondary
78
21.5%
Tertiary
86
23.7%
Valid
363
100.0%
Missing
0
Total
363
Subpopulation
46a
The dependent variable has only one value observed in 22 (47.8%) subpopulations. The model fitness
was assessed using the Chi-square statistics, as shown in Table 4. The Chi-square value was 155.945, and
the P-value is less than 0.05. This proves that there is a significant relationship between a dependent
variable and an independent variable in the final model. The Pearson (177.925) and Deviance (181.506)
statistics tests prove that the model is fit (Table 5). Since the tests are statistically insignificant, the P-
value is greater than 0.05. The Pseudo R-square measures are Cox and Snell (0.349), Nagelkerke (0.361),
and Mcfadden (0.126) as shown in Table 6. The model accounts for 12.6% and 36.1% of the variance

Journal of Sustainable Practice (JSDP) 2024, 1(1): 10-20
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and represents a relatively decent-size effect. The chi-square statistic is the difference in -2 log-likelihoods
between the final model and a reduced model (Table 7). The reduced model is formed by omitting an
effect from the final model. The null hypothesis is that all parameters of that effect are 0. This reduced
model is equivalent to the final model because omitting the effect does not increase the degrees of
freedom. The likelihood ratio test proves that the independent or predictor variables family size (0.04 <
P-value) and educational qualification (0.000 < Pvalue) of respondents were significant, which proves that
the predictors contribute significantly to the final model.
Table 4: Model Fitting Information
Model
Model Fitting
Criteria
Likelihood Ratio Tests
-2 Log Likelihood
Chi-Square
df
Sig.
Intercept Only
518.945
Final
363.000
155.945
40
.000
Table 5: Goodness-of-Fit
Chi-Square
df
Sig.
Pearson
177.925
185
.632
Deviance
181.506
185
.559
Table 6: Pseudo R-Square
Cox and Snell
.349
Nagelkerke
.361
McFadden
.126
Table 7: Likelihood Ratio Tests
Model
Model Fitting Criteria
Likelihood Ratio Tests
-2 Log Likelihood of Reduced
Model
Chi-Square
df
Sig.
Intercept
363.000a
.000
0
.
FS
374.243
11.243
5
.047
Dependents
370.586
7.586
5
.181
Age
382.053
19.053
15
.211
Education
Q
463.439
100.439
15
.000
CONCLUSION
The study concluded that the 2016 subsidy removal has affected low-income earners and impacted them
negatively, which ultimately reflected in their livelihoods. The study also concluded that some of the
socioeconomic characteristics of the respondents captured in the questionnaire influenced the level of
their income where as some had no significant impact on their level of income.
RECOMMENDATION
In the light of the above findings, the following recommendations were made:
1. The government should ensure that subsidy reinvestment programs meet the target that was set
to achieve through leasing some of the administrative bottlenecks that hinder people who are
vulnerable to the scheme.

Journal of Sustainable Practice (JSDP) 2024, 1(1): 10-20
19
2. The government should embark on a public awareness campaign to promote the existence of
most of the important programs that can significantly relieve most people at the bottom.
3. The government must put in place an effective regulatory framework to protect the citizens from
exploitation by petroleum marketers. Therefore, the Petroleum Product Pricing Regulatory
Agency (PPPRA) must be urgently reorganized. The ordinary Nigerian must be protected, and
money aimed at ameliorating the lives of the poor must be protected.
4. Incentives should be made available in the form of scholarships in order to improve their
knowledge/skills so as to sustain their means of livelihood.
5. The government should embark on critical infrastructural development such as roads, hospitals,
and power electrification projects and invest heavily in education.
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