Subsidy removal saved Nigeria from bankruptcy — Sanusi

Emir of Kano and former governor of the Central Bank of Nigeria (CBN), Muhammad Sanusi II, has said that the removal of petrol subsidy was what saved Nigeria from imminent bankruptcy.

Speaking at the second edition of the Kano International Poetry Festival (KAPFEST), organised by the Poetic Wednesdays Initiative, Sanusi described the subsidy regime as unsustainable and a major drain on government finances.

He explained that the policy forced government to shoulder the burden of fluctuating global oil prices, unstable exchange rates, transportation costs, and refining expenses.

According to him, the arrangement meant Nigerians paid below market price for petrol, while government covered the difference regardless of international oil market trends. “Subsidy was simply the government saying, ‘If petrol is N100, Nigerians will pay N70 and I will pay N30.’

“But beyond that, the government also placed a hedge, fixing petrol at N65 per litre whether oil was $10 or $100 per barrel.

“Who paid the difference? The government. And this was always going to bankrupt Nigeria,” he said.

Sanusi faulted successive administrations for failing to repair local refineries, noting that subsidies only enriched foreign refineries and drained jobs from the Nigerian economy.

He argued that if the billions of naira spent on subsidies had been invested in refining capacity, the country would not be facing its present challenges.

While stressing that he was not opposed to subsidies in principle, he insisted they should be directed at production rather than consumption.

Recalling his warnings as CBN governor in 2012, Sanusi said the subsidy system was like “a man running towards a ditch.”

He noted that government revenue had become too weak to sustain the payments, forcing the country to borrow not only to fund subsidies but also to service the debts that followed.

“It became unsustainable.

“That is exactly what I said would happen, and this is where we are,” he added.

The monarch urged Nigerians to see subsidy removal not just as an economic necessity but also as an opportunity to rebuild the nation on a foundation of sustainability and self-reliance.