Abuja, Nigeria — Former Central Bank of Nigeria (CBN) Governor and Emir of Kano, Sanusi Lamido Sanusi, has said that Nigeria’s current economic hardship is the direct result of the government’s failure to remove the fuel subsidy more than a decade ago.
Speaking at the Oxford Global Think Tank Leadership Conference in Abuja on Tuesday, Sanusi described the subsidy regime as a “dangerous financial arrangement” that placed the nation in a position of limitless fiscal exposure.
According to him, what Nigerians commonly called a fuel subsidy was effectively an open-ended hedge, where the federal government guaranteed that citizens would not pay beyond a fixed pump price regardless of fluctuations in oil prices or exchange rates.
“The government told 200 million Nigerians they would not pay more than a fixed amount per litre, no matter what happened to oil prices or exchange rates. When oil went from $40 to $140, the federal government paid the difference. When the naira depreciated from N155 to N300, the government paid the difference,” Sanusi explained.
He added that the policy not only drained public finances but also forced the government into a cycle of borrowing to sustain the subsidy payments.
“At some point, we were borrowing money not just to pay subsidies, but to service the interest on the loans taken to pay those subsidies. That was bankruptcy by policy,” he stated.
Sanusi, who served as CBN governor from 2009 to 2014, recalled that he had warned the federal government as early as 2012 that postponing subsidy removal would have long-term inflationary and fiscal consequences.
“If we had removed it then, inflation would have risen slightly from 11 to about 13 per cent and stabilised. Now, we are facing inflation above 30 per cent. This is the cost of delay,” he said.
The Emir noted that Nigeria’s fiscal troubles stem largely from a pattern of short-term political decision-making taking precedence over sound economic policy. He stressed that this has fueled public misunderstanding of the distinct responsibilities of government institutions such as the Central Bank and the Ministry of Finance, further complicating efforts to stabilize the economy.
Sanusi’s comments come at a time when Nigerians continue to grapple with rising inflation, high living costs, and a weakened naira — challenges that many analysts link to years of policy inconsistency and heavy fiscal dependence on oil revenues.
