ENUGU, Nigeria (VOICE OF NAIJA)- The 16th Emir of Kano, Muhammadu Sanusi II, has queried the Federal Government’s continued borrowing, asking why Nigeria is still taking on debt despite savings from the removal of petrol subsidy.
Speaking in an interview aired by News Central TV, the former Governor of the Central Bank of Nigeria said while recent economic reforms were necessary, poor timing and weak fiscal discipline could undermine their benefits.
“I have always said the subsidy regime was unsustainable. We cannot continue supporting foreign refineries. We’re an oil-producing country. Keeping refineries open abroad while we’re not doing our own,” Sanusi said.
He, however, acknowledged progress in domestic refining, noting that Nigeria has moved from heavy import dependence to exporting petroleum products.
“Today, we have a situation where we have our own domestic refinery. We’re not importing petroleum products. We’re even exporting to Europe, and this is very good for the economy,” he added.
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Despite backing subsidy removal and exchange rate liberalisation, Sanusi raised concerns about how the reforms were executed.
“For me, removing subsidy or liberalising exchange rates, these are good interventions. Were they done at the right time? Those are certain questions,” he said.
He warned that liberalising the exchange rate in a “loose monetary environment” contributed to the naira’s sharp depreciation.
“It’s not enough to say, oh, they removed subsidy. You had to. When you get to a point where 100 per cent of your revenue goes into debt service, you cannot continue. Where is the money going to come from?
“However, if you decide to remove subsidy and liberalise exchange rates in an environment of very loose monetary conditions, before you have tightened money supply, the Naira drops to a bottomless pit. That was a timing issue.”
Sanusi then posed the critical question over Nigeria’s fiscal direction: “We’ve removed the subsidy. We’re now spending it. What we should not see is fiscal consolidation. You cannot remove wastages and continue borrowing.
“If you’re not paying the subsidy and you’ve got the money, why are we still borrowing and borrowing? What are we borrowing for?”
His remarks come amid rising concerns over Nigeria’s debt profile, with the Federal Government recently increasing its 2026 borrowing plan and seeking fresh external loans to fund key infrastructure projects.