IDEAS home Printed from https://ideas.repec.org/a/bjc/journl/v13y2026i2p321-328.html

Fuel Subsidy Removal and Fiscal Reallocation in Nigeria (2023–2025): Implications for Economic Growth

Author

Listed:
  • Diri, Darapu Tumini

    (Department of Banking and Finance)

  • Chibuogwu, Dupe Ejabena PhD.

    (Department of Accounting)

  • Nwosu, Eleazar Chimezie

    (Department of Banking and Finance)

  • Otoibhili Emmanuel Ehikioya

    (Department of Banking and Finance)

Abstract

This study examines the fiscal and macroeconomic effects of fuel subsidy removal in Nigeria during the postsubsidy period (2023–2025), focusing on fiscal reallocation and economic growth. Using annual time-series data for 2023–2025 and an Autoregressive Distributed Lag (ARDL) approach, the study investigates whether fiscal savings from subsidy elimination are redirected to productive sectors and how these allocations affect economic growth. Empirical findings indicate that subsidy removal significantly improves fiscal savings and partially enhances fiscal reallocation to capital and social sector spending. Fiscal reallocation positively influences economic growth, although short-term inflationary pressures and exchange rate depreciation moderate the benefits. The study concludes that fuel subsidy removal can promote sustainable growth if accompanied by effective fiscal reallocation, macroeconomic stability, and social protection policies.

Suggested Citation

  • Diri, Darapu Tumini & Chibuogwu, Dupe Ejabena PhD. & Nwosu, Eleazar Chimezie & Otoibhili Emmanuel Ehikioya, 2026. "Fuel Subsidy Removal and Fiscal Reallocation in Nigeria (2023–2025): Implications for Economic Growth," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 13(2), pages 321-328, February.
    • Handle: RePEc:bjc:journl:v:13:y:2026:i:2:p:321-328
    as

    Download full text from publisher

    File URL: https://rsisinternational.org/journals/ijrsi/uploads/vol13-iss2-pg321-328-202602_pdf.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijrsi/view/fuel-subsidy-removal-and-fiscal-reallocation-in-nigeria-2023-2025-implications-for-economic-growth/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rajagopal & Vladimir Zlatev, 2025. "Economic and Cultural Factors," Springer Books, in: Decisions in International Trade and Logistics, chapter 0, pages 67-95, Springer.
    2. Nick Huntington-Klein & Claus Pörtner & Yubraj Acharya & Matus Adamkovic & Joop Adema & Lameck Ondieki Agasa & Imtiaz Ahmad & Mevlude Akbulut-Yuksel & Martin Eckhoff Andresen & David Angenendt & José-, 2025. "The Sources of Researcher Variation in Economics," Working Papers hal-05187084, HAL.
    3. Jonathan F. P. Rose, 2025. "Meta economics: generating moral economies," International Review of Applied Economics, Taylor & Francis Journals, vol. 39(2-3), pages 175-180, March.
    4. Bjertnæs, Geir H.M., 2025. "Economical driving and taxation of road use," Energy Economics, Elsevier, vol. 142(C).
    5. Jorge Sá & Ana Lúcia Luís & Paulo Rodrigues, 2025. "The causes of economic growth: Revisiting our ignorance," Edelweiss Applied Science and Technology, Learning Gate, vol. 9(2), pages 1108-1115.
    6. Ye Fahmi Assagaf & Ahmad Basofi & Enaldi, 2025. "Economic growth and development in the Tropics," Community Development, Taylor & Francis Journals, vol. 56(1), pages 170-172, January.
    7. Dennis L Buchanan & Mark H A Davis, 2025. "Extractive Industry Finance and Mineral Economics," World Scientific Book Chapters, in: METALS AND ENERGY FINANCE Interrelationship between Technical and Financial Risk in Mineral Projects, chapter 1, pages 1-9, World Scientific Publishing Co. Pte. Ltd..
    8. Antonio V. B. Mota Filho, 2025. "Bernard Shaw and the making of Fabian economics," Brazilian Journal of Political Economy, FGV EAESP, vol. 45(2), pages 303-319, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dimitris Georgarakos & Geoff Kenny & Justus Meyer & Maarten van Rooij, 2025. "How do rising temperatures affect inflation expectations?," Working Papers 843, DNB.
    2. Franz Seitz & Joerg Flemmig, 2025. "A Note on Keynesian Models Used in Standard Textbooks," Economies, MDPI, vol. 13(10), pages 1-13, September.
    3. Marcus, Jan, 2025. "Replication code as a cornerstone of the credibility revolution 2.0," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 117(C).
    4. Slichter, David & Tran, Nhan, 2023. "Do better journals publish better estimates?," MPRA Paper 118433, University Library of Munich, Germany.
    5. Bensch, Gunther & Rose, Julian & Brodeur, Abel & Ankel-Peters, Jörg, 2025. "The Robustness Dashboard," I4R Discussion Paper Series 234, The Institute for Replication (I4R).
      • Bensch, Gunther & Rose, Julian & Brodeur, Abel & Ankel-Peters, Jörg, 2025. "The robustness dashboard," Ruhr Economic Papers 1167, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bjc:journl:v:13:y:2026:i:2:p:321-328. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Renu Malsaria (email available below). General contact details of provider: https://rsisinternational.org/journals/ijrsi/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.