‘If You’ve Removed Subsidy, Why Still Borrowing?’, Emir Sanusi II Queries Federal Govt’s Fiscal Strategy

The 16th Emir of Kano, Muhammadu Sanusi II, has questioned the Federal Government’s continued reliance on borrowing despite the removal of petrol subsidy, warning that poor fiscal discipline could erode the gains of recent reforms.

Speaking in an interview with News Central TV on Friday, the former Governor of the Central Bank of Nigeria (CBN) said while the removal of fuel subsidy and the liberalisation of the exchange rate were necessary, their timing and implementation remained problematic.

“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?

“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,” Emir Sanusi II said.

He, however, expressed optimism over Nigeria’s shift toward domestic refining, noting that the country has moved from being a major 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.

Despite supporting the reforms, Sanusi II raised concerns about sequencing, arguing that policy execution without proper monetary tightening contributed to the naira’s sharp depreciation.

“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.”

He explained that implementing exchange rate liberalisation in a “loose monetary environment” worsened currency instability.

“If you decide to remove subsidy and liberalise exchange rates… before you have tightened money supply, the naira drops to a bottomless pit. That was a timing issue,” he said.

The monarch further challenged the government’s fiscal direction, questioning the rationale behind continued borrowing.

“We’ve removed the subsidy… what we should now see is fiscal consolidation. You cannot remove wastages and continue borrowing,” he said.

His remarks came amid concerns over Nigeria’s rising debt profile. Reports indicated that the Federal Government has increased its 2026 borrowing plan by ₦11.31 trillion, bringing the total to ₦29.20 trillion.

President Bola Tinubu also recently sought Senate’s approval for a fresh $516 million loan to fund the Sokoto–Badagry Superhighway project, further fuelling debate over the country’s fiscal direction.