The Emir of Kano, Muhammadu Sanusi II, has raised concerns over the Federal Government’s continued reliance on borrowing despite the removal of petrol subsidy.
Speaking in an interview shared by News Central TV, the former Governor of the Central Bank of Nigeria said although subsidy removal and exchange rate liberalisation were necessary, poor timing and weak fiscal discipline could undermine their benefits.
Sanusi criticised Nigeria’s past dependence on foreign refineries while domestic facilities remained inactive, describing it as a systemic failure.
“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,” he said.
He, however, expressed optimism about the country’s shift toward local refining, noting improvements in domestic production and exports.
“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.
While backing the reforms, Sanusi questioned their sequencing and execution.
“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,” he said.
He warned that implementing exchange rate liberalisation in a loose monetary environment contributed to the naira’s sharp 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.”
Sanusi also questioned why borrowing persists despite savings from subsidy removal.
“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?” he asked.