• The Emir of Kano, Muhammadu Sanusi II, has questioned Nigeria’s continued borrowing despite subsidy removal
• Sanusi warned that poor timing and weak fiscal discipline may erase the reform gains
• He also raised concerns about policy sequencing and lack of complementary reforms as he questioned why savings from subsidy removal are not reducing borrowing needs

The Emir of Kano, Muhammadu Sanusi II, has raised concerns over Nigeria’s rising debt profile, questioning why the Federal Government continues to borrow despite eliminating petrol subsidy payments.

Speaking in an interview aired by News Central TV on Friday, April 24, the former Governor of the Central Bank of Nigeria warned that poor timing and weak fiscal discipline could undermine the gains of recent economic reforms.

Sanusi maintained that while the removal of fuel subsidy and the liberalisation of the exchange rate were necessary steps, their implementation lacked the strategic coordination required to yield sustainable benefits.

He also criticised Nigeria’s long-standing dependence on foreign refineries, describing it as a systemic failure that drained national resources.

“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.

However, he acknowledged recent progress in domestic refining, noting a shift from heavy importation of petroleum products 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 questioned the sequence and timing of policy decisions, arguing that certain critical steps were overlooked.

He explained that currency devaluation was inevitable under an artificial exchange rate system, especially amid excessive money supply.

“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.”

Sanusi further argued that liberalising the exchange rate in a “loose monetary environment” accelerated the naira’s 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.”

The monarch also questioned the logic behind continued borrowing, insisting that the funds saved from subsidy removal should translate into reduced fiscal pressure.

“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.

Recent data shows that the administration of President Bola Tinubu increased its 2026 borrowing plan by N11.31 trillion, bringing the total projected borrowing to N29.20 trillion.

Additionally, the President has sought Senate approval for a fresh $516 million loan to fund the Sokoto-Badagry Superhighway project.

Senate clears Tinubu’s $6bn loan plan to fund budget gap, ports upgrade

Meanwhile, TheRadar earlier reported that the Nigerian Senate had approved President Bola Tinubu’s request to secure external loans totaling $6 billion, a move aimed at addressing fiscal shortfalls and funding key infrastructure projects.

The approval came shortly after the President formally transmitted his request to the Senate, signaling the Executive’s urgency in sourcing funds for priority sectors of the economy.

The funds are intended to support budget deficit financing and meet existing debt obligations.