Project – Fuel Subsidy Removal and Public Trust in Government: An Analysis of Economic Reform and Governance under President Bola Ahmed Tinubu

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Fuel subsidy removal has been one of the most contentious public policy issues in Nigeria’s post-independence history. Since the 1970s, the government has subsidized petroleum products to cushion the cost of living for citizens and support economic stability (Okon & Adebayo, 2021). However, this policy has also imposed enormous fiscal burdens, encouraged smuggling, and created opportunities for corruption within the petroleum sector (Akanbi, 2022).

In May 2023, immediately after assuming office, President Bola Ahmed Tinubu announced the complete removal of fuel subsidies, stating that “subsidy is gone.” This marked one of the most radical economic reforms in recent Nigerian history (Premium Times, 2023). The removal, which had been debated for decades, was justified as a necessary step toward economic sustainability, fiscal discipline, and efficient resource allocation (World Bank, 2023).

While the reform was welcomed by international financial institutions such as the IMF and World Bank for promoting market efficiency and reducing fiscal leakages, it triggered significant public backlash due to its immediate socio-economic consequences—sharp increases in fuel prices, inflation, transportation costs, and general cost of living (Vanguard, 2023).

Public trust in government, already fragile due to corruption and governance challenges, declined further as citizens questioned the government’s sincerity in managing the reform and its commitment to cushioning the economic shocks (Ogunyemi, 2023). The legitimacy of the Tinubu administration’s reform agenda thus depends heavily on citizens’ perception of transparency, accountability, and effective management of subsidy savings.

This study seeks to analyze the relationship between fuel subsidy removal and public trust in government, focusing on how the Tinubu administration’s policy choices, communication strategies, and palliative measures have shaped citizen confidence in governance during the first year of his administration (2023–2024).

1.2 Statement of the Problem

Public trust is an essential ingredient for democratic governance and successful policy reform. In Nigeria, however, a historical pattern of corruption, policy reversals, and mismanagement has eroded citizens’ confidence in government institutions (Adebayo, 2020). Previous attempts to remove fuel subsidies, notably under Presidents Olusegun Obasanjo (2003), Goodluck Jonathan (2012), and Muhammadu Buhari (2016–2022), were met with widespread protests and skepticism (Okon & Adebayo, 2021).

When President Tinubu announced the final removal of fuel subsidies in May 2023, the policy reignited old tensions and public distrust. Although the government justified the removal as an economic necessity, many Nigerians viewed it as another elite-driven reform that disproportionately hurts the poor while benefiting political and business elites (Vanguard, 2023).

Furthermore, the absence of clear communication on the reinvestment of subsidy savings, delayed implementation of palliatives, and perceived insensitivity to citizens’ economic hardships have fueled further distrust (Ogunyemi, 2023). Public reactions, including labour strikes and social media protests, suggest a growing crisis of legitimacy surrounding the Tinubu administration’s economic reform agenda (Channels TV, 2023).

The central problem, therefore, is that while subsidy removal is economically rational, it faces a crisis of political legitimacy and declining public trust. This raises the question of how governance, transparency, and policy communication affect public perceptions of reform in Nigeria.

1.3 Objectives of the Study

Main Objective:
To examine the impact of fuel subsidy removal on public trust in government during the administration of President Bola Ahmed Tinubu.

Specific Objectives:

1. To analyze the rationale and implementation process of fuel subsidy removal under President Tinubu.

2. To assess public perceptions and levels of trust in government following the removal.

3. To evaluate the socio-economic implications of the reform on citizens’ livelihoods.

4. To investigate the role of government communication and palliative measures in shaping public trust.

5. To suggest strategies for rebuilding citizen confidence and ensuring transparency in economic reforms.

1.4 Research Hypothesis

H₁: Fuel subsidy removal under President Bola Ahmed Tinubu has a significant negative effect on public trust in government in Nigeria.

H₀:
Fuel subsidy removal under President Bola Ahmed Tinubu does not have a significant effect on public trust in government in Nigeria.

1.5 Significance of the Study

This study is significant for several reasons. Firstly, it contributes to academic discussions on economic reform and political legitimacy, especially in developing democracies. It provides an empirical assessment of how economic policies influence citizens’ trust in government institutions (Akanbi, 2022).

Secondly, the findings will help policymakers understand the social dimensions of economic reform. Economic efficiency alone is insufficient; without public trust, even well-designed reforms may fail due to resistance and noncompliance (World Bank, 2023).

Thirdly, the research will guide government communication strategies, emphasizing the importance of transparency, accountability, and citizen engagement during sensitive policy transitions. Finally, it will serve as a reference for civil society, scholars, and international organizations interested in governance and reform credibility in Nigeria and other African contexts.

1.6 Scope and Limitation of the Study

This study focuses on fuel subsidy removal as implemented by the Tinubu administration from May 2023 onward. The geographical scope covers Nigeria, with emphasis on urban centers such as Lagos, Abuja, and Kano—areas that have experienced both economic and political responses to the reform.

Thematically, the research examines public trust, governance transparency, and economic perception. Data are derived from policy documents, government reports, media analyses, and public opinion surveys.

Limitations include difficulties in obtaining up-to-date nationwide survey data and the challenge of isolating the effects of subsidy removal from other economic variables such as inflation and exchange-rate volatility (Adebayo, 2020). Nevertheless, triangulation of qualitative and quantitative data will mitigate these limitations.

1.7 Definition of Terms

• Fuel Subsidy: Government financial assistance that keeps the retail price of petroleum products below market rates (Okon & Adebayo, 2021).

• Subsidy Removal: The government’s decision to stop providing this price support, allowing market forces to determine fuel prices (Akanbi, 2022).

• Public Trust: Citizens’ confidence in the honesty, integrity, and competence of government and its institutions (Ogunyemi, 2023).

• Economic Reform: Policy actions aimed at restructuring an economy to improve efficiency, fiscal balance, and growth (World Bank, 2023).

• Governance: The process by which power is exercised in managing a country’s social and economic resources for development (Adebayo, 2020).

1.8 Organization of the Study

This research is organized into five chapters:

• Chapter One presents the introduction, problem statement, objectives, hypothesis, and significance of the study.

• Chapter Two reviews existing literature and theoretical frameworks related to fuel subsidies, governance, and public trust.

• Chapter Three outlines the research methodology, including data collection and analysis techniques.

• Chapter Four presents and analyzes the findings of the study.

• Chapter Five concludes with a summary of findings, policy recommendations, and suggestions for future research.

Project – Fuel Subsidy Removal and Public Trust in Government: An Analysis of Economic Reform and Governance under President Bola Ahmed Tinubu