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- Academic Faults Atiku Abubakar’s Stance On Fuel Subsidy, Dismissing Policy Proposal As Populist Political Rhetoric
- Warns Immediate Cash Crunch Would Wipe Out Capital Spending And Paralyze Civil Service Salary Payments Nationwide
At least 15 northern states risk immediate fiscal bankruptcy and structural collapse within 90 days if the Federal Government capitulates to mounting political agitation to restore the contentious petroleum subsidy regime, an eminent economic historian and legal scholar, Professor Tunji Ogunyemi, has warned.
Appearing on the public affairs podcast Open Forum 360, hosted by journalist Dare Adekanmbi, the Obafemi Awolowo University (OAU) don warned that populist campaign posturing ahead of the 2027 general elections threatens to drag Nigeria back into an unsustainable expenditure trap capable of breaking the nation’s public finance architecture.
Ogunyemi warned that reinstating the payout would instantaneously inflict four structural dislocations on the economy: crippling net accruals to the Federation Account, stripping sub-nationals of the liquidity needed to pay recurrent wages, terminating capital development projects, and precipitating an unprecedented sovereign debt default.
Zeroing in on the vulnerability of the sub-national tier, the academic underscored that the Federation Account Allocation Committee (FAAC) remains the life-support system for almost all federating units, warning that any policy that chokes inflows into the shared pool will trigger an immediate implosion across the northern hinterland.
“The Federation Account is the jugular of more than 30 states in the federation,” Ogunyemi said. “Only about four states in Nigeria can survive without the Federation Account. So 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.”
According to the don, sub-nationals would immediately be plunged into extreme insolvency, rendering governors incapable of meeting statutory recurrent expenditure, starting with civil service payrolls and pensioners’ stipends.
He cautioned that wiping out statutory allocations would completely halt social infrastructure delivery, citing Taraba State as a prime example of administrative entities lacking the internal tax revenue to survive an interruption in federal remittances.
While acknowledging that internally resilient commercial hubs like Lagos, Rivers, and Delta possess sufficient economic depth to weather an allocation drought, Ogunyemi insisted that the overwhelming majority of federating units remain tethered to oil earnings.
On the macroeconomic front, he noted that the resulting fiscal deficit would severely undercut Nigeria’s sovereign standing, disabling the Federal Government from meeting both domestic debt obligations and bilateral external loan repayments.
The scholar also took aim at the campaign trail commitments of the African Democratic Congress (ADC) presidential candidate, former Vice-President Atiku Abubakar, criticizing his pledge to revisit the subsidy policy as dangerous political appeasement.
“I think it is playing to the gallery, with due respect to him,” Ogunyemi said. “He should be a little less opaque about his policy. You don’t want to get political support through votes or more votes by wanting to cut the jugular of your country.”
As political gladiators recalibrate their economic manifestos ahead of the next ballot, Ogunyemi maintained that Nigeria’s petroleum market liberalization must be treated as an irreversible structural necessity, cautioning that sacrificing hard-won fiscal reforms on the altar of electoral populism would permanently shutter state governments and bankrupt the republic.
