Fuel Subsidy Expenditures and the Challenges of Economic Development in Nigeria, 2011-2024
Recently, the fuel subsidy removal mantra has generated heated arguments among the scholars and the stakeholders in Nigerian political milieu. The centripetal and centrifugal positions of the scholars over the issue revolve around the impact of the gesture on Nigerian economy. Therefore, the study observed that the impact of fuel subsidy expenditures on economic development in Nigeria has not attracted enough scholarship; hence, this serves as the objective of the study. We adopted Ex-post Facto research design as the methodology of the study and collected our data from secondary source through documentary method of data collection. The data so collected were analyzed through content analysis with the aids of tables. Theoretically, we utilized neoliberal theory as a fulcrum around which the study oscillated. The theory maintained among others that unfettered markets and minimal state intervention will maximize efficiency, economic development and individual freedoms in the global economy. The core relevance of the neoliberal theory is that it advocates for the deregulation of Nigeria’s downstream oil sector, specifically urging the government to relinquish the control of fuel prices and allow the invisible hands of demand and supply to determine them. However, the study found that Nigeria’s fuel subsidy policy yields mixed outcomes, delivering affordability to consumers while concurrently straining national resources and exacerbating corrupt practices. The paper therefore recommends that the government should adopt market-driven petroleum pricing and encourage private investment in refineries to promote economic growth and development and also diversify the economy by advancing other sources of income, which will reduce the level of reliance on oil economy.
KeyWords: Economic Development, Diversification, Fuel Subsidy Removal, Subsidy Expenditures and Neo-liberalism
