The Economics of Innovation in Nigeria amidst Fuel Subsidy Removal and High Inflation: A systematic review

This systematic review investigates the impact of fuel subsidy removal and high inflation on innovation in Nigeria. Drawing on 26 studies published between 2010 and 2024, it examines how macroeconomic shocks shape firm behavior, sectoral dynamics, and innovation outcomes. Findings reveal that while inflation and rising costs constrain traditional firms, they simultaneously stimulate frugal, necessity-driven innovations, especially in agriculture and informal sectors. Fuel subsidy removal, despite short-term economic pressures, has encouraged investment in renewable energy and energy-efficient technologies. Digital sectors demonstrate resilience and growth, contrasting with challenges faced by manufacturing and heavy industries. The review emphasizes that translating economic shocks into sustainable innovation requires coordinated policy support, robust infrastructure, and effective institutional frameworks to enhance Nigeria’s capacity for adaptive, inclusive, and forward-looking innovation.