THE POLITICAL ECONOMY OF FUEL SUBSIDY REMOVAL: GOVERNANCE AND SUSTAINABLE DEVELOPMENT IN NIGERIA

Adedeji D Gbadebo

doi:10.52166/jsps.v6i3.273

Adedeji D Gbadebo Department of Accounting Science, Walter Sisulu University, Mthatha, South Africa.

DOI: https://doi.org/10.52166/jsps.v6i3.273

Keywords: Fuel Subsidy, Governance, Sustainable Development, Nigeria, Economic Policy

Abstract

The removal of fuel subsidies in Nigeria has sparked significant debates regarding its impact on governance, economic sustainability, and public welfare. This study examines the governance dynamics influencing subsidy removal and its economic implications for long-term development. Utilizing a quantitative approach, the research collected data from 385 respondents in Bida, Niger, and employed a binary logit regression model to analyze the economic, social, political, and external factors influencing policy outcomes. The findings suggest that while subsidy removal aims to reduce fiscal pressure and enhance economic efficiency, it has triggered inflation, disproportionately affecting low-income households and exacerbating economic inequality. The social consequences include heightened public dissatisfaction due to rising transportation and living costs, with government palliatives failing to sufficiently alleviate economic hardship. Politically, subsidy removal has undermined trust in the government due to concerns about corruption and misallocation of funds. The study highlights the need for a transparent framework to manage subsidy savings, accompanied by comprehensive social welfare policies to mitigate negative impacts. Policy recommendations include targeted subsidies for vulnerable groups, improved public transportation, and increased government transparency to rebuild public trust and ensure sustainable economic reforms.

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