The Emir of Kano, Muhammadu Sanusi II, has raised fresh concerns over Nigeria’s fiscal direction, questioning the Federal Government’s continued borrowing despite the removal of fuel subsidy.
Speaking in an interview shared by News Central TV on Friday, the former Central Bank of Nigeria Governor said key economic reforms such as subsidy removal and exchange rate liberalisation were necessary, but warned that poor timing and weak fiscal discipline could undermine their expected benefits.
He criticised Nigeria’s long-standing dependence on foreign refineries while domestic capacity remained unused, describing it as a structural failure that has only recently begun to change.
“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 noted that recent developments show a shift toward local refining capacity, adding that Nigeria is beginning to benefit from reduced imports and even exports 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.
While acknowledging the direction of reforms, he stressed that the sequencing and timing of policy decisions remain critical concerns.
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 argued that implementing exchange rate liberalisation without tightening monetary conditions worsened currency pressure.
“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 also questioned why government borrowing continues even after subsidy payments have been eliminated, insisting that fiscal gains should be visible.
“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.
Follow Us on Facebook – @LadunLiadi; Instagram – @LadunLiadi; Twitter – @LadunLiadi; Youtube – @LadunLiadiTV for updates
