[News] Petrol subsidy is pushing Nigeria to bankruptcy – Sanusi warns

Former Emir of Kano, Sanusi Lamido Sanusi has warned against petrol subsidy which he said is having a negative impact on the nation’s economy.

Speaking at a book presentation in Abuja on Tuesday, May 9, Sanusi said it amounts to “stupidity” for the Federal Government to  continue  subsidy payments when it is clear that it is pushing the nation into ”bankruptcy.”

The former Governor of Central Bank of Nigeria who called on the incoming government of Asiwaju Bola Tinubu to stop the policy, added that those in support of subsidy must realise that “cheap fuel” is not more beneficial to the poor than education,   healthcare and power.

He said;

“In  2011, we tried to explain that it’s bad economics; for every $1 billion Nigeria spends on fuel subsidy, it is $1 billion out of education, $1 billion out of healthcare, $1 billion out of power, $1billion out of infrastructure.

“What you (people in support of subsidy) are saying is that for the poor people in this nation, cheap fuel is more important than education, more important than healthcare, more important than power, etc. If you do that for 30, 40 years, what kind of country are you going to have? Which is what we have had.

“As subsidy is, you’ll say if the price is X, we’ll pay 20 percent of it. That’s a subsidy. You will never pay more than X. For a product, whose price I do not control, it doesn’t matter whether the oil price is $200 or $150 a barrel, the Nigerian government has an unlimited pocket, and it will fund the difference.

“The exchange rate can move from N150 to N500 and the Nigerian government will fund it (subsidy). It’s stupidity. You’re heading to bankruptcy. We are walking into bankruptcy with our eyes open.

“We can’t ignore that, and therefore, if I have a new government on May 29 that tells me, ‘Oh, I’m going to continue paying this subsidy for the next three years,’ I’m going to say you’re not serious.

“I’m going to just close my eyes and get ready for the next election in 2027 because we’re going to be here in 2027 talking about the same things.

“People say phase it, but what happens if you start phasing and a year from now you’ve had a massive devaluation? ”