Current Volume 9
The Political Economy of Subsidy Removal: Public Response, Institutional Adaptation, and Electoral Consequences in Nigeria's Fourth Republic
Abstract
This article examines the political economy of fuel subsidy removal in Nigeria following President Bola Ahmed Tinubu's May 2023 announcement. Drawing on extensive secondary data from Afrobarometer surveys, World Bank reports, academic studies, and policy analyses published between 2020 and 2025, the paper investigates three interconnected dimensions: public response to the policy, adaptation strategies of key institutional actors, and the emerging electoral implications. The article employs a multi-theoretical framework combining institutional theory, social contract theory, and the political economy of reform literature to analyze the complex dynamics of policy implementation in a weak governance context, while using the secondary means of data collection of published works to harvest its data. The findings reveal that despite the policy's economic rationale, it has generated overwhelming public opposition (85% disapproval), deepened lived poverty (affecting 79% of Nigerians), and exacerbated a profound trust deficit between citizens and the state. Critically, new evidence indicates that only 50% of subsidy savings are being remitted to the Federation Account, with the Nigerian National Petroleum Company (NNPC) retaining the remainder to offset past arrears, undermining the fiscal rationale for the policy. Institutional actors—including the Nigeria Labour Congress, Central Bank of Nigeria, and National Assembly—have demonstrated varying adaptation strategies ranging from mobilization to monetary policy tightening. While electoral consequences remain nascent, preliminary indicators from the 2026 Federal Capital Territory area council elections suggest the policy may be gaining grudging acceptance among some urban constituencies, challenging assumptions that economic pain automatically translates to electoral punishment. The article concludes that the policy's legitimacy and sustainability depend critically on governance frameworks that translate macroeconomic gains into tangible improvements in citizens' welfare and ensure transparent utilization of subsidy savings.
Keywords
Fuel Subsidy, Nigeria, Political Economy, Governance, Institutional Adaptation, Trust Deficit, Electoral Politics
Citations
IRE Journals:
Abodunde Omotayo Jacob (Ph.D.) "The Political Economy of Subsidy Removal: Public Response, Institutional Adaptation, and Electoral Consequences in Nigeria's Fourth Republic" Iconic Research And Engineering Journals Volume 9 Issue 8 2026 Page 2579-2592 https://doi.org/10.64388/IREV9I8-1714715
IEEE:
Abodunde Omotayo Jacob (Ph.D.)
"The Political Economy of Subsidy Removal: Public Response, Institutional Adaptation, and Electoral Consequences in Nigeria's Fourth Republic" Iconic Research And Engineering Journals, 9(8) https://doi.org/10.64388/IREV9I8-1714715
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