The Emir of Kano, Muhammadu Sanusi II, has raised fresh concerns over Nigeria’s fiscal trajectory, questioning why government borrowing continues to rise despite the removal of petrol subsidy, a reform expected to ease pressure on public finances.
In an interview published by News Central TV on Friday, the former Governor of the Central Bank of Nigeria backed key economic reforms but warned that weak policy coordination and poor sequencing could erode their intended gains.
Sanusi, a long-time critic of the subsidy regime, reiterated his stance on its unsustainability, linking it to Nigeria’s dependence on foreign refining.
“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.
He, however, acknowledged recent improvements in domestic refining capacity, describing the shift from import dependence to export activity as a positive development.
“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 endorsing subsidy removal and exchange rate liberalisation in principle, Sanusi questioned whether the reforms were executed in the right sequence.
“Artificial exchange rates, especially when you’re printing money, cannot work. There was going to be a devaluation,” he said.
“For me, removing subsidy or liberalising exchange rates, these are good interventions. Were they done at the right time? Those are certain questions. Were there other things that should be done that have not been done? These are other issues.”
He argued that liberalising the exchange rate without tightening monetary conditions contributed to the naira’s steep depreciation.
“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?
“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’s remarks come amid rising borrowing projections by the Federal Government. Reports indicate that the 2026 borrowing plan has been increased by ₦11.31 trillion, pushing total projected borrowing to ₦29.20 trillion.
President Bola Tinubu has also sought legislative approval for a fresh $516 million loan to fund the Sokoto–Badagry Superhighway.
Against this backdrop, the former apex bank chief questioned the fiscal logic of continued borrowing, insisting that savings from subsidy removal should translate into reduced deficits rather than expanded debt.
“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. I’ve said this before. You need to see the benefits.
“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.