S26: Filling the subsidy gap with technology

Introduction

Where are we right now

impact of subsidy removal on our income

impact of subsidy removal on investment

How can we balance the income against investment in this trying times

Introduction

What is subsidy?

Subsidy is when government make a direct (cash grant, interest free loans etc) or indirect payment (tax break, insurance, low-interest loans etc) to individuals and in the case of Nigeria, it is fuel subsidy and it exist because govt fixes the price of gasoline (petroleum) below the international price and uses govt resources to pay for the difference.

it was introduced by Olusegun Obasanjo in the 1970s precisely 1977 as a response to the oil price shock in 1973.

But what is oil price shock in 1973; Organisation of Arab Petroleum Exporting countries OAPEC placed an embargo on United state when the president of US in the person of Nixon request a $2.2bn emergency fund to aid israel. this embargo saw the global price of fuel surge from $2.9/barrel to $11.65 per barrel.

Why remove subsidy?

I am sure there is allocation of worthy enough for subsidy removal since the day fuel subsidy began

However, year on year, fuel subsidy alone eat the large chunk of Nigeria budget year on year. to compare the amount of subsidy between January to June of 2022 was N443bn compared to January to June of 2023, to a woping sum of N3.6trn.

this is a very hot topic, and a hard one to come by, the new dispensation removes it completely and now fuel price has jumped from N195/litre to almost N600/Litre.

Where are we right now ?

where are we right now,

The cost of rent will increase

the cost of raw materials will increase

The cost of transportation will increase

The cost of feeding will increase

We just can't emphasis how deep tissue this effect will have on us. this are uncertain times,

What is the impact on income

subsidy removal translate to income value divided by at least 3

What is the impact on investment

how do you structure investment, how do you keep leveraging opportunities in this trying times

how do you structure investment, how do you keep leveraging opportunities in this trying times

How technology will better position you

What you need to do

  1. cut expenses: cut down on unnecessary purchase, bad habit expenditures

  2. embrace digital skill and improve on it

  3. reduce outing and embrace digital inclusiveness

How Technology can be used to leverage

  1. embrace virtual meeting

  2. embrace social financing

  3. embrace full digital ownership

  4. a work from home strategy will come to play.

  5. business should integrate automation: auto responding to emails and calls, auto-invoicing, automate business process to reduce man-power

Conclusion

brace up, the future is filled with uncertainties, we have been able to understand why subsidy removal is crucial, what we don't understand is if the govt will use the money for what is meant to be. because if the govt doesnt fullfil their end of the reason to remove subsidy we are all in a deep soup.

Note

if the subsidy has been paid for already, then there is no simpathy for people in that business. the govt alone is not going to make this work.

no more traffic,

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