The Emir of Kano, Muhammadu Sanusi II, has revealed that former President Goodluck Jonathan suspended the planned removal of fuel subsidy in 2012 due to fears that Boko Haram insurgents might attack protesters.
Sanusi, who was the Governor of the Central Bank of Nigeria (CBN) at the time, made this known on Tuesday during the Oxford Global Think Tank Leadership Conference, themed “Better Leader for a Better Nigeria.”
According to TheCable, Sanusi explained that the nationwide protests that followed the announcement of fuel subsidy removal lasted for about two weeks, grounding economic activities across the country.
He said the policy was misunderstood and poorly implemented under Jonathan’s administration, noting that Nigeria’s fuel subsidy structure at the time was like a “naked hedge”- meaning the government bore all the financial risks to keep fuel prices stable regardless of changes in global oil prices, foreign exchange rates, or interest rates.
Sanusi explained that this system forced the government to keep borrowing heavily, not only to pay for the subsidy but also to service the debt incurred from it. “If you look at the structure, all these costs were being carried by the government. The federal government acted as if it had an endless pocket,” Sanusi said.
He added that Nigeria moved from using its revenue to pay for subsidies, to borrowing for the same purpose, and later to borrowing even to pay interest on those loans — a situation that eventually led the country toward financial insolvency.