Petroleum Industry Reforms and the Challenges of Poverty Reduction in Nigeria: A Political Economy Perspective

Abstract

This study examines the paradox of oil wealth and persistent poverty in Nigeria through the lens of petroleum industry reforms and political economy analysis. Despite being one of Africa’s largest oil producers, Nigeria continues to grapple with widespread poverty, underdevelopment, and inequality. The study adopts a qualitative research design, relying primarily on secondary data from scholarly publications, government reports, policy documents, and institutional reviews. It explores how governance failures, institutional weaknesses, and elite capture have undermined the capacity of petroleum industry reforms to alleviate poverty. Particular attention is given to the implementation and limitations of recent policy initiatives such as the Petroleum Industry Act (PIA) of 2021. The findings reveal that reforms in the oil sector have often been symbolic and inadequately enforced, leading to the continued marginalization of oil-producing communities and ineffective redistribution of oil revenues. The study concludes that without a fundamental restructuring of oil governance frameworks to promote transparency, equity, and inclusive development, poverty will remain a persistent challenge in Nigeria. Recommendations are offered to enhance the implementation of reforms and prioritize people-centered development in the allocation of petroleum revenues.