Effect of Fuel Subsidy Removal on the Economy of Nigeria

The removal of fuel subsidies in Nigeria has been a contentious issue, with some experts believing it will liberate much-needed resources and others arguing that it will increase poverty. This study examines the effects of fuel subsidy removal on Nigeria's economy for the period 2017-2023. The study adopted a survey research design and relied mainly on qualitative methods of data collection. Primary data were analyzed using qualitative content analysis. Price elasticity of demand was used as the theory to underpin the study. Error Correction Model (ECM)was used to analyze the data collected. The study revealed that the removal of fuel subsidies has direct economic consequences, including high inflationary pressures, debt reduction, increased poverty, and vulnerability, as well as protest and social unrest. The study therefore recommended that the government should ensure transparency and accountability in the management of funds saved from subsidy removal. The study also recommends that the government should prioritize tackling widespread hunger, increasing unemployment, and declining standard of living. Finally, the study further recommends that, the funds saved from subsidy removal should be transparently redirected toward critical infrastructure development. Investing in transportation, energy, and healthcare infrastructure will not only create jobs but also promote long-term economic growth and development.