Nigeria, a country rich in natural resources, particularly crude oil, has for decades implemented fuel subsidies as a means of cushioning economic hardship. However, persistent economic downturns, fiscal deficits, and global oil-price volatility have intensified calls for subsidy removal. This study explored the intersection between good governance and the removal of oil subsidies within the context of Nigeria’s struggling economy. Despite the economic rationale behind subsidy removal, Nigeria’s attempts have often led to public outcry, inflationary spikes, and increased poverty levels. These outcomes raised concerns about governance quality, transparency and the absence of adequate social protection frameworks that can mitigate the negative effects on vulnerable populations. The main aim of this study is to examine how principles of good governance – such as accountability, rule of law, and responsiveness – can mediate the adverse socio-economic effects of fuel subsidy removal in Nigeria. The study was anchored on the Public Choice Theory and the Good Governance Paradigm, which provide lenses to analyse the motivations behind government policy decisions and the mechanisms through which governance quality affects policy outcomes. A qualitative research design was employed, involving content analysis of secondary data sources, including government policy documents, academic literature, and reports from development agencies. The study also utilised trend analysis of key macroeconomic indicators before and after major subsidy reforms. Findings revealed that subsidy removal in Nigeria has often been poorly managed, lacking transparency and citizen engagement, leading to increased socio-economic burdens. However, in a context where policy was accompanied by credible reforms, palliative measures, and clear communication, public resistance diminished. The absence of a good governance structure was identified as a key factor undermining the benefits of subsidy removal. The study recommended strengthening institutional networks for accountability in public spending, investing in social protection programmes, and ensuring inclusive policy formulation processes. Emphasis was placed on the need for political will and public trust-building measures. For policy reform like subsidy removal to be effective in a depressed economy, governance must be reformed concurrently. This study highlighted the critical role of good governance in fostering socioeconomic resilience, minimising unrest, and ensuring that such reforms translate into long-term developmental gains.
Epoweide et al. (Tue,) studied this question.