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Fuel Subsidy Removal and Fraud Accountability Challenges in the Nigerian Economy: Evidence from Federal, State, and Local Government Areas

Dennis Onyekachi Awa

Abstract

Fuel subsidy removal remains one of the most controversial economic reforms in Nigeria. While proponents argue it frees up government funds for infrastructure and social spending, critics contend that the process is riddled with fraud and lacks accountability. This paper critically examines the implications of fuel subsidy removal on Nigeria’s economy, with a focus on how fraud and poor accountability mechanisms at the Federal, State, and Local Government levels exacerbate economic instability. Using mixed data from government records, audits, and stakeholder interviews, the study finds that the absence of transparent frameworks and institutional oversight has led to widespread misuse of savings from subsidy removal. Recommendations include strengthening fiscal accountability systems, independent audits, and decentralizing petroleum revenue usage to improve governance outcomes.

Keywords

Fuel SubsidyFraudAccountabilityEconomic ReformGovernanceNigeria

References

NEITI. (2023). Fuel Subsidy Report. Abuja: Nigeria Extractive Industries Transparency Initiative. World Bank. (2022). Reforming Subsidies in Oil-Producing Countries: Lessons from Nigeria and Others. KPMG Nigeria. (2012). Subsidy Audit Report. Lagos. BudgIT. (2023). Subsidy Removal and Government Spending in Nigeria. IMF. (2023). Petroleum Pricing and Reforms in Sub-Saharan Africa. Central Bank of Nigeria. (2024). Monetary Policy and Fuel Price Deregulation. Uzochukwu, O. (2022). "Subsidy Politics and Economic Mismanagement in Nigeria". African Journal of Governance, 8(2), 59–77. Oseni, Y. (2024). "Local Government and Fuel Palliatives: Transparency Crisis in Nigeria". Public Policy Quarterly, 6(3), 91–104. Ubah, A., & Nwankwo, L. (2023). "Corruption in the Downstream Sector". Energy Economics Review, 4(1), 12–27. Transparency International. (2024). Corruption Perception Index – Nigeria.

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