Former Central Bank Governor and Emir of Kano, Sanusi Lamido Sanusi, has attributed Nigeria’s current severe economic hardship and soaring inflation largely to the country’s failure to remove fuel subsidies over a decade ago. Speaking at the Oxford Global Think Tank Leadership Conference in Abuja on Tuesday, Sanusi explained that the delay in subsidy removal has resulted in unbearable financial liabilities for the government.
Sanusi described the subsidy arrangement not as a genuine subsidy but as an open-ended hedge. This financial setup obligated the government to cover the difference whenever oil prices soared or the naira depreciated sharply. For example, when crude oil prices rose from $40 to $140 per barrel and the naira weakened from ₦155 to ₦300, the government absorbed the massive cost difference, leading to unsustainable borrowing.
He warned that Nigeria’s economy is now burdened with debt amassed not only to pay subsidies but also to service the interest on those loans, amounting to a policy-driven bankruptcy. Sanusi cited historical projections from his tenure as CBN Governor, noting that if subsidy removal had been executed around 2011, inflation would have risen modestly to around 13% before stabilizing.
Instead, the continued subsidy delay has led to inflation surpassing 30%, increased fuel prices from ₦65 to about ₦160 per litre, and widespread economic distress. Sanusi emphasized that while subsidy removal brings hardship, it is a necessary correction to unfettered financial exposures.
He commended the current government under President Bola Tinubu for finally taking the painful but essential step of removing the subsidy and harmonizing exchange rates, actions vital for Nigeria’s long-term economic stability.
Sanusi’s statements highlight the costs of delayed reform and the difficult balance governments must strike between immediate public pain and sustainable economic health.