Volume 60, Issue 336, September - December 2024

Fuel subsidy removal, insecurity, the impact on rising food inflation in Nigeria: A comparative of time series analysis and machine learning techniques

Samuel Oweh Abang^1♦, Kenneth Onaiwu Arasomwan², Oluwafemi Ayodele³

¹Ph.D. Department of Economics, Faculty of Social Sciences, University of Calabar, Nigeria
²Ph.D. Base Manager, INTELS (Integrated Logistics Services), Delta Ports, Warri, Delta State, Nigeria
³Ph.D. Candidate Department of Economics, Faculty of Social Sciences, University of Uyo, Nigeria

^♦Corresponding Author
Ph.D. Department of Economics, Faculty of Social Sciences, University of Calabar, Nigeria

ABSTRACT

This study made use of a time series and machine learning techniques to examine the impact of fuel subsidy removal, insecurity on food inflation in Nigeria. The scope of the study spans between 1984-2023. A predictive model was developed in other to analyze the impact of fuel subsidy removal on food inflation, while nearing in mind the controlling effect of insecurity. The results of the study show that the removal fuel subsidy removal significantly increases food inflation, while insecurity worsens this effect. Furthermore, the result as presented by the machine learning language indicates that a 10 percent increase in fuel prices will lead to a 5.6 percent increase in food inflation, with insecurity increasing this impact by 2.3 percent. The study hence recommends that government should be concerned on the consequences of removing fuel subsidy while also finding lasting solution to insecurity so as to abate food inflation.

Keywords: Fuel subsidy, insecurity, food inflation, vector error correction model

Discovery, 2024, 60, e27d1483

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DOI: https://doi.org/10.54905/disssi.v60i336.e27d1483

Published: 09 November 2024