Sanusi Says Scrapping Fuel Subsidy Averted Nigeria’s Bankruptcy

By Babatunji Wusu

• Ex-CBN governor calls subsidy wasteful, unsustainable
• Warns Nigeria once borrowed to fund subsidy, later debts
• Urges reinvestment in production, not consumption

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

Speaking at the second edition of the Kano International Poetry Festival on Saturday, Sanusi described the subsidy regime as a drain on government finances, driven by oil price fluctuations, exchange rate pressures, transport costs, and refining expenses.

“Subsidy meant if petrol was N100, Nigerians paid N70 and government covered N30,” he explained. “But government went further, fixing petrol at N65 per litre regardless of global oil prices. Who paid the difference? Government. And that was always going to bankrupt Nigeria.”

He faulted successive governments for neglecting local refineries while spending billions on subsidies that enriched foreign refineries and cost Nigerians jobs. According to him, those resources should have been directed toward production rather than consumption.

The emir recalled warning as CBN governor in 2012 that the policy was like “a man running towards a ditch.” He said Nigeria eventually began borrowing to pay subsidies and later to service debts, making the arrangement unsustainable.

Sanusi stressed that subsidy removal should be seen not just as an economic reform but as an opportunity to rebuild a more resilient and self-reliant nation.