The Emir of Kano, Muhammadu Sanusi II, has raised concerns over the Federal Government’s continued borrowing, despite the removal of petrol subsidy.
Speaking in an interview aired by News Central TV on Friday, the former Governor of the Central Bank of Nigeria said while recent economic reforms were necessary, concerns remain over their timing and implementation.
Sanusi noted that the removal of fuel subsidy and the liberalisation of the foreign exchange market were inevitable, but warned that weak fiscal discipline could undermine their intended benefits.
He criticised Nigeria’s past reliance on foreign refineries, describing it as a systemic failure for an oil-producing nation to depend heavily on imported petroleum products.
According to him, recent developments in domestic refining represent a positive shift, as the country moves towards self-sufficiency and export of petroleum products.
He, however, questioned the sequencing of the reforms, arguing that liberalising the exchange rate in a loose monetary environment contributed to the sharp depreciation of the naira.
Sanusi explained that such policy measures require complementary steps, including tightening of money supply, to achieve stability.
He further queried the rationale behind continued borrowing by the government, despite savings from subsidy removal.
According to him, eliminating subsidy payments should have created room for fiscal consolidation rather than increased debt accumulation.
Sanusi warned that without visible benefits from the reforms, public confidence could erode, stressing the need for prudent management of resources.
His comments come amid recent reports indicating an increase in the Federal Government’s borrowing plan for 2026, as well as fresh loan requests to fund infrastructure projects.
The former apex bank chief maintained that while reforms were necessary, their success would depend on disciplined execution and proper alignment of fiscal and monetary policies.
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