The Emir of Kano, Muhammadu Sanusi II, has revealed that former President Goodluck Jonathan’s suspension of fuel subsidy removal was not in response to public protests but rather due to fears of Boko Haram’s suicide attacks on demonstrators.
Naijaonpoint reports that Sanusi made the disclosure while speaking at the Oxford Global Think Tank Leadership Conference, themed “Better Leader for a Better Nigeria.”
The Emir, who at the time of Jonathan’s administration was the Governor of the Central Bank of Nigeria (CBN) and a major promoter of fuel subsidy removal, said the government was more concerned about national security threats than the street demonstrations.
He explained that the policy described as fuel subsidy was essentially “a hedge,” with the government paying to maintain fuel prices at a fixed level.
He said, “It was not a subsidy, it was a hedge. You see, a subsidy by definition, the government says I’ll pay X percent of the price. That’s the subsidy. I’ll pay 20 percent of the price. Whatever it is. Price goes up, you pay more, I pay more. Price goes down, you pay less, I pay less. What we had in this country is what in risk management you call a naked hedge. The worst possible derivative you can have.
“The government said to Nigerians, 200 million Nigerians, you will not pay more than X amount per litre. On petrol, no matter what the price of petrol is. So all price goes up from $40 to $140, the federal government pays the difference.
“Exchange rate moves from $155 to $300, the government pays the difference. Interest rates move from 5 percent to 15 percent, the government pays. Remember the price of petrol and what the calculations include, the cost of crude, the cost of the by-product, the cost of transportation, even interest rates, demurrage.
“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. So this was the point in 2012. Now, if Nigerians had allowed the Jonathan government to remove the subsidy in 2011, that 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 percent inflation. That was where we were.”
On Jonathan’s decision to suspend the planned subsidy removal, the Emir said, “And you know, the only reason the government compromised at that time, maybe you should know this, the only reason the government compromised and did 50% not 100% was Boko Haram. Because there were thousands of Nigerians on the streets in Lagos and Kano and Kaduna and all that. We had suicide bombers in the country.
“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.”
He noted that Nigeria is a classless society, explaining that, “If you take the people you call leaders, go to the Senate, go to the House of Reps, you can go and pick 109 Nigerians at random, without election.
“Put them in the Senate chambers and the results may not be different from what you’re getting out. Because the truth is, you have highly educated people in government, but they live like illiterates. They forget their education behind.
“When you talk about praise singing, why would a man who is an educated man, an accomplished man, why would he be a praise singer to anyone? Why would he not be able to face his boss and say, for that, we’re not doing very good, this is the truth? And how would a person in government not have the confidence to listen to those around him and take criticism?
“You have got people who are supposed to be the representatives of the values of society. By the time you become a governor, honestly, you should be beyond looking for money. You have been given an opportunity to take care of the lives of millions of people, to educate children, to save lives, to provide healthcare, to build infrastructure, while all you are thinking of is a house? I mean, are you that cheap?
“And you see them, and I remember the day they leave office, after a few years, they die, and the children are fighting over the money. Then they get the money, and then they go on drugs, and everything is wasted. That money would have been better spent, educating millions of young people, and save their lives. So if we really want to fix this country, we need to have a class. The ruling class needs to have values. Values beyond the market.”
He decried that many leaders are surrounded by sycophants, adding that, “We need to begin to ask as leaders who do we surround ourselves with?”
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