A former Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, has attributed the country’s current economic hardship to the failure to remove fuel subsidy more than a decade ago.
Speaking at the Oxford Global Think Tank Leadership Conference in Abuja, Sanusi, who is also the Emir of Kano, emphasised that the decision to remove fuel subsidy was a necessary correction to an unsustainable policy.
Sanusi lamented that the delay in removing the fuel subsidy has led to far greater pain for Nigerians, with inflation rising above 30%.
He recalled warning in 2012 that delaying subsidy removal would have severe consequences, and that inflation would have stabilised at around 13% if the subsidy had been removed then.
Sanusi explained that the arrangement Nigeria operated for years was not a subsidy but a “hedge,” which exposed the country to unlimited financial liability.
He noted that the government paid the difference when oil prices rose or the naira depreciated, and that this was not a subsidy but a form of derivative that led to “bankruptcy by policy.”
On the performance of the current Central Bank leadership, Sanusi commended CBN Governor Olayemi Cardoso, describing him as a competent and principled professional.
He noted that the central bank’s role is to provide stability and an environment conducive to growth, and that the current leadership has made progress in that regard.
Sanusi’s comments highlight the need for bold decisions to address the country’s economic challenges. Aside the removal of fuel subsidy more needs to be done to ensure that the benefits of economic reforms are shared by all Nigerians.
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