₦airaland Forum

Emir of Kano, Muhammadu Sanusi II, has raised fresh concerns over the Federal Government’s growing debt profile, questioning the rationale for continued borrowing despite the removal of petrol subsidy.

Speaking during an interview published by News Central TV on Friday, the former Governor of the Central Bank of Nigeria said key reforms such as subsidy removal and exchange rate liberalisation were necessary, but warned that poor sequencing and weak fiscal discipline could undermine their benefits.

Sanusi criticised Nigeria’s longstanding dependence on foreign refining, describing it as a structural flaw that persisted while local refining capacity remained underutilised.

“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, welcomed recent progress in domestic refining, noting a shift from heavy importation of petroleum products to export activity.

“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 in principle, Sanusi questioned the timing and broader policy coordination, suggesting that critical measures may not have been implemented in the right order.

He said, “Artificial exchange rates, especially when you’re printing money, cannot work. There was going to be a devaluation.

“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.”

The former apex bank chief argued that implementing exchange rate liberalisation 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% 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 further challenged the government’s continued borrowing, insisting that savings from subsidy removal should translate into fiscal consolidation rather than increased debt.

His remarks come amid reports that the Federal Government has increased its 2026 borrowing plan by ₦11.31 trillion, pushing total projected borrowing to ₦29.20 trillion.

President Bola Tinubu also recently sought Senate approval for a fresh $516 million loan to finance the Sokoto–Badagry Superhighway project.

“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?” Sanusi questioned.

Adblg0610:
President Bola Ahmed Tinubu’s request for $516 million for the Sokoto–Badagry superhighway reflects a strategic vision: a transnational corridor linking the far north to the Atlantic, enabling the movement of people and goods while unlocking long-term economic integration. Though questioned by the opposition,especially in the wake of fuel subsidy removal, such infrastructure is not cosmetic; it is generational.
Projects like the Lagos–Calabar superhighway have drawn similar scrutiny, yet they represent enduring national assets. Importantly, removing fuel subsidies does not create instant wealth or surplus; it simply halts a costly, unsustainable expenditure and frees limited fiscal space. Nigeria still faces debt burdens, low revenue, and ongoing obligations, meaning financial relief will be incremental, not immediate.

faoogoke:
This man should know better now especially as a former CBN governor.
Subsidy payments were paid for by government from borrowings.
Government was borrowing to pay for subsidy.
In the real sense there is no savings as a result of the removal of subsidy. Government only stopped borrowing to pay for subsidy.

loveth360:
Yaribasss will start insulting northern leader now for asking good question.

AntiChristian:
Waoh! So because subsidy has been removed we no go borrow again?

franchasng:
Borrow $800billion, use white elephant capital projects like coastal highway to steal $20billion, and also settle your political stooges and warriors from the loan