Nigeria: Professor warns subsidy return could cripple 15 northern states

Tunji Ogunyemi, a professor at Obafemi Awolowo University, has warned that reinstating petrol subsidies could cause more than 15 northern Nigerian states to face financial collapse within three months. The warning was issued in response to a proposal by African Democratic Congress (ADC) presidential candidate Atiku Abubakar to restore fuel subsidies if elected in 2027.

Ogunyemi argued that returning to a subsidy regime would significantly reduce revenue for the Federation Account, which serves as the primary financial lifeline for over 30 Nigerian states. He noted that only four states, including Lagos, Delta, and Rivers, possess sufficient internal revenue to operate without heavy federal reliance.

The professor identified several potential consequences of subsidy restoration, including the inability of states to pay salaries and pensions, a reduction in the federal government's capacity for capital expenditure, and a potential failure to meet national debt obligations.

In a separate statement, Atiku Abubakar defended his proposed “Production Subsidy” model, which focuses on supporting domestic refining and production rather than importing petroleum products. He claimed his approach aligns with strategic energy production policies seen in the United States.