A certified international trade professional, Olufemi Boyede, on Friday decried the economic effects of the fuel subsidy removal, noting that small and medium enterprises (SMEs) have been forced to hike the prices of their commodities.

“I just drove out of the dental clinic and I felt I needed watermelon. The watermelon I bought 24 hours for 800 naira — I asked the guy and he insisted that he wasn’t going to take anything less than N2,000,” Boyede said on Channels Television Sunrise Daily.

“The watermelon seller said, ‘Did you not buy fuel now? How much did you buy fuel?’”

The trade expert pointed out that the watermelon seller was aware of the situation in the country.

“He is kept abreast of the situation and if the price of fuel has gone up, 287 percent, then the price of watermelon needs to go up by about 250 percent,” Boyede said.

He noted that whatever touches the SMEs affects the core of the Nigerian socioeconomic space, adding that the sector has high importance.

According to the Small and Medium Enterprises Development Agency of Nigeria (SMELDAN), Nigeria has 41.5 million Nano, Micro, Small and Medium Enterprises.

These businesses reportedly account for about 80 percent of the jobs in Nigeria and contribute 50 percent to Nigeria’s gross domestic product (GDP).

Impact On Other Sectors

On Monday during his inaugural speech at the Eagle Square in Abuja, President Bola Tinubu said the era of subsidy payment on fuel has ended, adding that with the 2023 budget making no provision for fuel subsidy, further payment was no longer justifiable.

“The fuel subsidy is gone,” Tinubu said. His government would instead channel funds into infrastructure and other areas to strengthen the economy, he added.

In Boyede’s view, the impact of the declaration by the President was almost immediate. He noted that ignoring the SMEs sector would be detrimental to the Nigerian economy.

According to him, the pronouncement failed to assess the possible impact on other sectors in the restrategising of their business activity based on the price hike of petrol.

“They have not captured the potential implication of the impact on the sector. Economic activity, especially as concerns the SMEs sector, is a total value chain. Every single segment of the value chain is actually impacted.

“The man who increased his watermelon price from N800 to N2,000 is already explaining that the taxi that he takes is going to charge him N1,000 instead of the previous N400,” the trade expert said.

Boyede lamented that the watermelon seller would be astonished at the price hike within days when he goes to buy other goods for himself.

“There is basically no part of the operations or the commercial transactions that is not going to be impacted by this,” he added. (Channels TV)

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