By Damilare Adeleye
The Emir of Kano, Muhammadu Sanusi II, has challenged the Federal Government’s fiscal stance, asking why Nigeria continues to rely on heavy borrowing despite saving billions from petrol subsidy removal.
Speaking in an interview on News Central TV, the former Governor of the Central Bank of Nigeria acknowledged that the removal of fuel subsidy and the liberalisation of the exchange rate were necessary.
However, he raised concerns over the timing and lack of fiscal discipline exhibited by the incumbent government.
The Kano monarch stated that Nigeria’s practice of supporting foreign refineries while its domestic refining capacity remained inactive was a systemic failure that needed to be addressed.
“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, expressed optimism over the current shift toward domestic production, noting that the country has moved from a heavy importer of petroleum products to an exporter.
“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.
“Artificial exchange rates, especially when you’re printing money, cannot work. There was going to be a devaluation.“
For me, removing subsidies 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 in a “loose monetary environment” contributed to the currency’s rapid depreciation.
“It’s not enough to say, oh, they removed the 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 subsidies and liberalise exchange rates in an environment of very loose monetary conditions, before you have tightened the money supply, the Naira drops into a bottomless pit. That was a timing issue.
”Sanusi further challenged the Federal Government’s continued borrowing despite eliminating subsidy payments.“
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 asked.
Recall that in April, the Federal Government increased its 2026 borrowing plan upward by N11.31 trillion, bringing the total projected borrowing for the year to N29.20 trillion.
Similarly, on Thursday, President Tinubu wrote to the Senate, seeking approval for a fresh $516 million loan to fund the Sokoto-Badagry Superhighway.