EFFECT OF OIL SUBSIDY REMOVAL ON NIGERIA’S ECONOMIC DEVELOPMENT

The article evaluates the effects of oil subsidy removal on Nigeria’s economic development. The paper explores descriptive and qualitative analysis to investigate the economic implications of this significant policy decision, as the outcome of the descriptive analysis shows the component documents and characterizes the immediate and medium-term economic changes following the policy implementation, while the qualitative analysis employs the depth social-economic implications and stakeholders perspectives. The study draws on four theoretical frameworks: Dutch Disease theory, which emphasis on how the exploitations of natural resources can lead to economic distortion, Public Choice Theory, which applies economic principles to political behaviors, examining how individual rational choices by political actors, bureaucrats, and interest groups shape public policy, New Institutional Economics Theory, which emphasizes on the crucial roles of institutions in shaping economic outcome, Economic Theory and subsidy Distortions which is rooted in public finance and welfare economics. The study assesses the historical context of oil subsidy since the return to democratic governance in 1999 which reflects a complex interplay of political economy factor, economic pressures, and social dynamics that have shaped the country’s approach to petroleum product pricing and distribution and multifaceted economic designs with far-reaching implications for Nigeria’s developmental trajectory. The paper concludes that the sustainability of the oil subsidy removal depends critically on the government’s ability to maintain fiscal discipline while addressing the social costs of the adjustment. The article recommends long-term sustainability measures through robust investment in education, healthcare and skills development to build human capital necessary for sustained economic growth.