The Emir of Kano, Muhammadu Sanusi II, has raised fresh concerns over Nigeria’s fiscal direction, questioning why the Federal Government continues to rely on borrowing despite scrapping petrol subsidies.
Speaking in a recent interview, the former Governor of the Central Bank of Nigeria acknowledged that removing fuel subsidy and liberalising the exchange rate were necessary steps. However, he warned that poor timing and weak fiscal discipline could undermine the expected gains from those reforms.
Sanusi criticised Nigeria’s long-standing dependence on foreign refineries, describing it as a systemic failure for an oil-producing nation.
“I have always said the subsidy regime was unsustainable. We cannot continue supporting foreign refineries while neglecting our own,” he said.
He noted, however, that recent developments in domestic refining mark a positive shift, pointing out that Nigeria is beginning to reduce imports and even export petroleum products.
“Today, we are seeing local refining capacity improve. We are no longer heavily dependent on imports, and that is good for the economy,” he added.
Despite backing the reforms in principle, Sanusi questioned the sequencing of policy decisions. According to him, liberalising the exchange rate in a loose monetary environment contributed to the rapid depreciation of the naira.
“Artificial exchange rates cannot be sustained, especially when money supply is high. But if you liberalise without tightening monetary conditions first, the currency will come under serious pressure,” he explained.
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He stressed that subsidy removal alone is not enough without visible fiscal consolidation, warning that continued borrowing raises serious concerns about government spending priorities.
“If subsidy has been removed and funds are now available, why are we still borrowing? What exactly are we borrowing for?” he asked.
His comments come amid reports that the Federal Government has significantly increased its borrowing plans for 2026, alongside fresh loan requests to fund major infrastructure projects.
Sanusi maintained that while reforms are necessary, their success ultimately depends on discipline, proper sequencing, and a clear demonstration of benefits to the economy.
