Former Central Bank Governor and Emir of Kano, Muhammadu Sanusi II, has asked a hard-hitting question at the Federal Government over Nigeria’s rising debt profile despite the removal of petrol subsidy.
Speaking in an interview aired by News Central TV, Sanusi warned that poor timing, weak fiscal discipline, and loose monetary policies could wipe out the gains expected from recent economic reforms.
“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 acknowledged progress in local refining, noting a shift from heavy importation to export of 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.
But the former apex bank boss raised serious concerns about how the reforms were executed, questioning both timing and sequencing.
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.”
Sanusi warned that liberalising the exchange rate under loose monetary conditions contributed to the naira’s sharp fall.
“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.”
He then delivered his most direct challenge yet, questioning the government’s continued borrowing spree.
“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.
His remarks come as Nigeria’s debt burden continues to surge, with the Federal Government reportedly increasing its 2026 borrowing plan by ₦11.31 trillion to a total of ₦29.20 trillion.
In a related move, President Bola Tinubu has also approached the Senate for approval of a fresh $516 million loan to fund the Sokoto-Badagry Superhighway.
