An Obafemi Awolowo University professor has warned that bringing back Nigeria’s petroleum subsidy would sharply cut money flowing into the Federation Account and could leave more than 15 northern states unable to function within months.
Professor Tunji Ogunyemi, an economic historian and public affairs analyst at OAU in Ile-Ife, made the argument on the Open Forum 360 podcast hosted by Dare Adekanmbi. He described any return to the old subsidy regime as “calamitous” and said it would create four serious problems for public finances.
The first, he said, would be lower inflows into the Federation Account, which he called “the jugular of more than 30 states.” Only about four states, he added, can currently operate without those monthly allocations. “If you now say reduce the accrual from the federal account, I tell you more than about 15 states in the north will collapse. They will collapse within three months.”
He listed Lagos, Delta and Rivers among the states that could manage without federal allocations, and cited Taraba as an example of one that could not.
The second problem, Ogunyemi said, would be a return to states being unable to pay salaries, let alone pensions. With less revenue, governments would struggle even to cover basic running costs and would have little or nothing left for capital projects. The fourth, he said, is that Nigeria would struggle to meet its debt obligations.
Ogunyemi also criticised the position of African Democratic Congress presidential candidate Atiku Abubakar, who has accused President Bola Tinubu of planning to restore the subsidy through the back door. The professor said Atiku’s stance was, “with due respect,” politics and “playing to the gallery.” He argued that Atiku should be clearer about the consequences of the policy he appears to favour.
“You don’t want to get political support through votes or more votes by wanting to cut the jugular of your country,” Ogunyemi said.
The comments come amid a running political argument over fuel pricing and federal allocations ahead of the 2027 elections. The professor did not say what should happen next on subsidy policy, only that reversing the current arrangement would, in his view, damage state finances across much of the north.
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