Northern States at Risk if Petrol Subsidy is Restored

Professor Tunji Ogunyemi from Obafemi Awolowo University warned during an interview on Open Forum 360 that reinstating petrol subsidy could result in about 15 northern states in Nigeria being unable to sustain operations within three months. This warning came in response to a proposal by Atiku Abubakar, the presidential candidate of the African Democratic Congress, to restore the subsidy if elected in 2027.

Ogunyemi explained that a return to the subsidy regime would decrease the funds available through the Federation Account, which most states rely on for financing government operations. He noted that only four states (Lagos, Delta, and Rivers) could survive without heavy reliance on federal allocations, while Taraba exemplifies a state significantly dependent on the Federation Account.

Ogunyemi emphasized that reduced revenue would impair state governments' ability to pay salaries and pensions, and it would also challenge the Federal Government's capacity to fund recurrent and capital expenditures. He expressed concern that declining revenues could jeopardize Nigeria's financial standing and creditworthiness.