FUEL SUBSIDY REMOVAL AND DOMESTIC INVESTMENT IN NIGERIA
Member Ahemen , Cyprian Ushahemba Asen and Abel Moses Odoh
Volume 5 Issue 2
Abstract
This study examined the effect of fuel subsidy removal on domestic investment in Nigeria. The quarterly data spanning the period from 2005 to 2024. The mixed order of integration of variables warranted the use of Auto Regressive Distributed Lagged (ARDL) model. The study found that fuel price exerts a negative and statistically significant effect on domestic investment in both the short run and long run. To mitigate the negative impact of fuel price volatility on domestic investment, we recommend that the Nigerian government should consider establishing strategic petroleum reserves or targeted subsidy mechanisms that can stabilize fuel prices, particularly in the short term, and provide predictability for investors. Keywords: Fuel Subsidy, Domestic Investment, ARDL
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