The Emir of Kano, Muhammadu Sanusi II, has disclosed that former President Goodluck Jonathan’s decision to suspend the removal of fuel subsidy in 2012 was motivated by fears of Boko Haram’s suicide bombings targeting protesters, not by pressure from street demonstrations.
Sanusi, who served as Governor of the Central Bank of Nigeria at the time and was among the strongest advocates for ending the subsidy regime, said the policy was both misunderstood and poorly managed.
Speaking on Tuesday at the Oxford Global Think Tank Leadership Conference themed “Better Leader for a Better Nigeria,” the Emir explained that what Nigeria referred to as a fuel subsidy was essentially a “naked hedge,” which exposed the country to massive financial liabilities.
According to him, the arrangement forced the Federal Government to bear the full cost of maintaining fuel prices, irrespective of changes in global oil prices, exchange rates, or interest rates.
He said, “If you look at the template, all of those amounts were being absorbed. The Federal Government was saying I have an unlimited pocket.
“So move from a point where we were using revenues to pay subsidies to where we had to borrow money to pay subsidies, to where we had to borrow money to pay interest on the borrowed money, we had become bankrupt.
“Anyone who takes a naked hedge ends up being bankrupted, especially with a commodity where you don’t control the price.”
Sanusi further stated that Nigeria’s current economic difficulties could have been less severe if Jonathan’s administration had gone ahead with the subsidy removal in 2011.
He said, “If Nigerians had allowed the Jonathan government to remove the subsidy in 2011, there would have been pain.
“But that pain would have been a very, very tiny fraction of what we are facing today. This is the cost of today.
“At that time, we worked out the numbers in the Central Bank, and I stood up and put my credit in front of the line and said, ‘Remove the subsidy today; inflation moves up from 11 percent to 13 percent. I will bring it down a bit later.’ Oh, that’s about 30-something per cent inflation. That was where we were.”
The Emir revealed that Jonathan’s eventual decision to partially suspend the subsidy removal was due to serious security concerns about possible Boko Haram attacks.
He said, “And it was like, if one day one of these suicide bombers goes to these Nigerians and explodes the bomb, and you have 200 corpses, it will no longer be about subsidy. So I got to give President Jonathan the credit. He was determined to do it.
“The only reason the government compromised and did 50 percent, not 100 percent, was Boko Haram.
“If one suicide bomber had attacked protesters in Lagos, Kano, or Kaduna, and 200 people died, it would have gone beyond subsidy.”
Despite the policy’s suspension, Sanusi commended Jonathan for his courage in pursuing the reforms despite the security threats.
The Emir also used the platform to criticise Nigeria’s political elite, expressing disappointment that many educated leaders abandon moral principles for personal gain.
He lamented the widespread lack of integrity in public office, saying, “By the time you become a governor, you should be beyond looking for money. But many live like illiterates despite their education.”
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