The Governor of Kaduna State, Nasir El-Rufai, on Tuesday, revealed that in 2021, the President, Major General Muhammadu Buhari (retd.), agreed that it was senseless to be spending trillions of naira as subsidy on Premium Motor Spirit, popularly called petrol, but refused to stop it.
El-Rufai said all 36 state governors, the National Economic Council and the President agreed at the time that the subsidy regime was detrimental to the economy of Nigeria, but Buhari refused to stop the “senseless” subsidy regime.
This came as a former Governor of the Central Bank of Nigeria, Lamido Sanusi, also described the fuel subsidy regime as “stupidity”, stressing that Nigeria was heading towards bankruptcy as a result of it.
He said if the incoming government of Bola Tinubu should continue with the fuel subsidy regime, then the administration would be seen as an unserious one.
El-Rufai and Sanusi spoke during a policy conversation and book presentation organised by Carnegie Endowment for International Peace and Agora Policy in Abuja.
The book, titled, “Economic Diversification in Nigeria,” was written and presented by the Director, Carnegie Africa Programme, Dr Zainab Usman.
The event had some notable participants who also spoke on the fuel subsidy issue, including the Country Director for the World Bank in Nigeria, Shubham Chaudhuri; former Chief Executive Officer, Access Bank, Aigboje Aig-Imoukhuede; former Executive Secretary, Nigeria Extractive Industries Transparency Initiative, Waziri Adio, among others.
Speaking on the fuel subsidy matter, the Kaduna governor said, “Between September and November 2021, the National Economic Council gave us an assignment to work out what to do if we withdraw subsidy, how much will be raised, etc. We worked with experts and the World Bank.
“I chaired the committee that did that job, and we came out with a report on what to do with the resources, which will be transparently explained to Nigerians. Components of it include investment in security, social protection, etc. The report is there.”
He said there was a framework on what to do with what would be saved once subsidy was halted, and how to release more money for education, health, infrastructure, etc.
“Many people don’t understand that in 2021, the budget of the Federal Government for roads was N200bn, and in that same year we projected to spend N1.2tn on subsidy. That’s when it started and we saw the danger.
“And I remember when I went to brief the President on the report, I said, Mr President does it make sense to you for us to spend N200bn on all federal roads in Nigeria in one year, and six times that on cheap petrol?
“He (President) said it doesn’t make sense. So why are we doing it? This is something we’ve been studying for many years, we have a framework and the economic council agreed, all the 36 governors of Nigeria agreed that it should be withdrawn and we had a clear plan on where the money would go.
“Some of it will go to the Federal Government, some to states, local governments, and to interventions. We all agreed. The President said, no! That’s it. How many trillion naira this year? N6tn,” El-Rufai stated.
He said the national budget for health, education, infrastructure, etc, were not up to the N6tn being spent on fuel subsidy in 2023.
“So it doesn’t make any sense. We need to explain this against this subsidy thing,” the governor stated.
On his part, the former CBN governor and former Emir of Kano, Lamido Sanusi, charged the incoming government to stop the subsidy regime, describing it as stupidity.
“When we tried to remove fuel subsidy in 2011, there were huge debates. And the main issue was that you’re going to impose suffering on Nigerians, you’re going to increase the price of fuel.
“And we tried to explain that it’s bad economics; for every $1bn Nigeria spends on fuel subsidy, it is $1bn out of education, $1bn out of healthcare, $1bn out of power, $1bn out of infrastructure.
“So don’t tell me I’m going to increase the price of fuel, because what you 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,” he stated.
Sanusi wondered that “if you do that for 30, 40 years, what kind of country are you going to have? Which is what we have had.”