The 16th Emir of Kano, Muhammadu Sanusi II, has decried the Federal Government’s continued borrowing despite the removal of fuel subsidy and reforms in the foreign exchange market.
Speaking in an interview, the former Governor of the Central Bank of Nigeria (CBN), said while key economic reforms were necessary, poor timing and weak fiscal discipline risk undermining their benefits.
Sanusi reiterated his long-standing position against the subsidy regime, describing it as unsustainable.
“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,” he said.
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He noted improvements in domestic refining, pointing out a shift from import dependence to local production and export.
“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.
Despite supporting the reforms, Sanusi raised concerns about how they were implemented.
“Artificial exchange rates, especially when you’re printing money, cannot work. There was going to be a devaluation,” he said.
He added, “For me, removing subsidy or liberalising exchange rates, these are good interventions. Were they done at the right time? Those are certain questions.”
The former CBN governor warned that liberalising the exchange rate in a loose monetary environment contributed to the sharp fall of the naira.
“It’s not enough to say, oh, they removed subsidy. You had to. When you get to a point where 100% of your revenue goes into debt service, you cannot continue. Where is the money going to come from?” he stated.
He further explained, “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 also questioned why borrowing continues despite savings from subsidy removal.
“We’ve removed the subsidy. We’re now spending it. What we should now see is fiscal consolidation. You cannot remove wastages and continue borrowing. I’ve said this before. You need to see the benefits,” he said.
“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?” he queried.
Recent figures show the Federal Government has increased its borrowing plans for 2026, raising concerns among economists about Nigeria’s growing debt profile, even as reforms aimed at improving fiscal stability take effect.
