Sanusi: Jonathan halted petrol subsidy removal over fears of Boko Haram attacking protesters

Emir of Kano Muhammadu Sanusi II says ex-President Goodluck Jonathan suspended the planned removal of petrol subsidy in 2012 due to fears that Boko Haram insurgents could target protesters.

The nationwide protest against petrol subsidy removal lasted for almost two weeks and grounded economic activities across the country.

Sanusi, who was governor of the Central Bank of Nigeria (CBN) at the time, stated that the policy was misunderstood and poorly managed during the Jonathan era.

He spoke on Tuesday at the Oxford Global Think Tank Leadership Conference, themed ‘Better Leader for a Better Nigeria’.

According to the emir, Nigeria’s petrol subsidy regime was effectively a “naked hedge”, where the federal government guaranteed a fixed pump price regardless of changes in global crude prices, exchange rates, or interest rates.

He said the arrangement forced the government to borrow huge sums not only to fund the petrol subsidy but also to pay interest on the loans used for it.

“If you look at the template, all of those amounts were being absorbed. The federal government was saying I have an unlimited pocket,” Sanusi said.

“So we moved 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.”

The emir added that Nigeria’s current economic hardship could have been avoided if the Jonathan administration had implemented the policy in 2011.

“If Nigerians had allowed the Jonathan government to remove the subsidy in 2011, there would have been pain,” he said.

“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 percent inflation. That was where we were.”

Sanusi noted that Jonathan’s decision to suspend the removal was influenced by security concerns.

“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,” he said.

“So I’ve 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.”

The emir also criticised the political elite, lamenting that many educated leaders abandon their values for self-interest.

“By the time you become a governor, you should be beyond looking for money. But many live like illiterates despite their education,” he said.

On September 13, the emir said the removal of petrol subsidy by President Bola Tinubu saved Nigeria from bankruptcy.

The monarch said the subsidy regime was unsustainable, noting that it placed the burden of fluctuating global oil prices, exchange rates, transportation costs and refining expenses entirely on government coffers.