Sanusi: Fuel Subsidy Removal Saved Nigeria from Bankruptcy

By Joseph Iyaji | Akahi News

The Emir of Kano and former Governor of the Central Bank of Nigeria (CBN), Muhammad Sanusi II, has stated that the removal of petrol subsidy was the only measure that prevented Nigeria from sliding into bankruptcy.

Speaking at the second edition of the Kano International Poetry Festival (KAPFEST), organised by the Poetic Wednesdays Initiative, the respected monarch described the fuel subsidy regime as unsustainable, warning that it had placed an unbearable financial burden on the government for decades.

Subsidy Burden ‘Was Always Going to Bankrupt Nigeria’

Sanusi explained that the government’s policy of fixing petrol prices regardless of global market conditions was a ticking time bomb.

“Subsidy was simply the government saying, ‘If the price of petrol is N100, Nigerians will pay N70 and I will pay N30.’ Beyond that, the government also placed a hedge, fixing petrol at N65 per litre irrespective of whether the international price of oil was $10 or $100 per barrel. Who paid the difference? The government. And this was always going to bankrupt Nigeria,” he said.

He recalled warning as far back as 2012, while serving as CBN governor, that the subsidy system was akin to “a man running towards a ditch.”

According to him, at some point the government was not only borrowing to pay subsidies but also borrowing to service the debts, an approach he described as reckless and unsustainable.

Subsidy Enriched Foreign Refineries, Not Nigerians

Sanusi criticised successive administrations for failing to rehabilitate domestic refineries, saying the billions spent on subsidy only enriched foreign refineries while exporting jobs that should have remained in Nigeria.

“If you look at the billions and billions spent on subsidy and imagine that money invested in refineries, Nigeria would not be where it is today,” he argued.

He stressed that while he had no objection to subsidising production to stimulate local industry, his consistent opposition was to “subsidy on consumption”, which in his view drained public resources without creating value.

A Chance for Economic Renewal

Sanusi urged Nigerians to see the removal of fuel subsidies not just as a painful necessity but also as an opportunity for economic reform and national renewal.

He maintained that the resources previously used to maintain an unsustainable subsidy regime could now be channelled into critical sectors such as health, education, infrastructure, and industrialisation to reduce Nigeria’s dependence on imports.

“The removal of the subsidy is not just an economic reform; it is a chance to rebuild a stronger, self-reliant Nigeria,” he concluded.

Sanusi’s remarks come amid ongoing public debates about the impact of subsidy removal, with critics pointing to rising costs of living, while economists argue that the policy was vital to prevent fiscal collapse and attract long-term investment.

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