Nigeria’s decision to remove fuel subsidies has ignited intense discussions nationwide, with economic analysts, political leaders, and everyday citizens debating its consequences. While many agree that eliminating fuel subsidies was a sound policy choice, aimed at freeing up government resources for other pressing needs, critics argue that the policy’s implementation strategy has left much to be desired. The result, according to experts, is a policy that had the potential for economic liberation but has instead brought increased hardship to Nigerians, highlighting a disconnect between policy intent and execution.
To begin with, the case for subsidy removal is strong. For years, fuel subsidies drained billions of dollars from government coffers, a situation that led to increased borrowing, limited funding for critical infrastructure, and growing inflation. Economic analyst and former Central Bank of Nigeria (CBN) Deputy Governor Kingsley Moghalu noted, “Subsidies were a fiscal burden that Nigeria could no longer afford. Removing them was necessary to restore economic balance and create space for more productive government spending.” This sentiment is echoed by other economists who argue that subsidies primarily benefited wealthy fuel importers while doing little to improve the lives of average Nigerians.
However, the implementation strategy has been widely criticised. Many believe that the government should have taken steps to cushion the economic blow to households before pulling the plug on subsidies. This was echoed by the chief executive of AntHill Concepts Limited, and member of the Board of Economists, NATIONAL ECONOMY, Dr. Emeka Okengwu. Okengwu said he does not support the manner in which the subsidies removal is being implemented because it is unwise for a government to pull off subsidies from products it does not produce. He said real subsidies removal are supposed to be introduced during the production process through what are called subsidy instruments, which can be introduced in the form of tax rebate, waivers. while stressing that he is in complete support of subsidies removal, he said there is the need for the government to ensure that revenues derived from the removal of subsidies be plowed back judiciously to revive critical infrastructure that would boost the economy.
Okengwu further stressed that the lack of preparatory measures, such as alternative transportation options or targeted cash transfers for the most vulnerable, left many Nigerians feeling abandoned.
Public policy expert and university professor Dr. Bisi Adebayo commented, “Removing subsidies without a clear plan to address the immediate impact on the population was a misstep. We had to anticipate that fuel prices would skyrocket, and with that, the cost of living.” According to Adebayo, a phased approach with initial relief measures would have been more effective, especially in a country where millions live below the poverty line.
The shock of the subsidy removal has driven up the cost of transportation, goods, and services, disproportionately impacting Nigeria’s lower-income populations. According to the National Bureau of Statistics (NBS), inflation hit a two-decade high shortly after the subsidy was removed. Economists have pointed out that while subsidy removal was necessary to cut down fiscal waste, a simultaneous increase in social safety nets could have reduced the burden on citizens. Renowned Nigerian economist Dr. Muda Yusuf remarked, “It’s like doing surgery without anesthesia. The idea was right, but there was no buffer for those who would feel the greatest impact.”
In an address to the press, activist and union leader Issa Aremu argued, “The government left people to bear the brunt of the transition alone. If you look at other countries that removed fuel subsidies, they introduced measures to ease the impact. Here, we had a blanket policy without safeguards.”
One of the proposed strategies that experts said could have softened the transition is a phased subsidy reduction rather than an outright removal. Additionally, investing in alternative energy sources, such as gas-powered transportation, and upgrading public transport systems could have helped Nigerians adapt more smoothly. Financial economist at Nnamdi Azikiwe University, Dr. Felix Echekoba, stated that fuel subsidies should be removed gradually and only after significant progress was made in diversifying the energy sector. “A gradual removal with corresponding investment in alternative infrastructure would prevent a total shock to the economy,” he stated.
He said the speed at which the government removed fuel subsidy between June 2023 and now was hawkish and difficult for vulnerable Nigerians to cope with.
A clearer communication strategy from the government could also have alleviated some of the tension and helped Nigerians understand the long-term benefits of subsidy removal. Development economist at Adeleke University, Professor Bello, criticised the approach as hasty and opaque. “When you’re enacting a policy that impacts daily life to such a degree, people need to be informed and prepared,” he explained. “The government should have involved more stakeholders and communicated a roadmap for the people to follow, instead of making a sudden announcement,” he stressed.
Many Nigerians agree that subsidy removal could ultimately benefit the country if the freed funds are redirected into sectors like healthcare, education, and infrastructure. But there is widespread skepticism about whether these funds will indeed be invested in ways that will improve the quality of life for ordinary citizens. Public perception remains a challenge for the government, with the populace weary of corruption and waste.
Lagos-based entrepreneur Tayo Olumide observed, “If people saw genuine investment in infrastructure and services, the impact of subsidy removal would be easier to swallow. Right now, all they see is higher prices.”
Echekoba observed that there is a strong consensus that policy-makers need to reconsider the way they implement economically necessary but potentially disruptive policies. A more transparent, gradual, and inclusive approach would be critical if Nigeria is to implement similar policies successfully in the future.
Nigeria’s decision to remove fuel subsidies may have been economically sound, but the poor execution of the policy has left many struggling with rising costs. For subsidy removal to achieve its intended outcomes, it is clear that the government must learn from this experience and work towards developing policies that not only make fiscal sense but are also socially and politically considerate.
