Muhammadu Sanusi II, former governor of the Central Bank of Nigeria (CBN) and emir of Kano, has criticised the federal government’s fiscal approach, warning that subsidy removal must translate into reduced borrowing.
In a video posted on X by News Central, Sanusi said while the removal of fuel subsidy and the liberalisation of the exchange rate were necessary reforms, the government must follow through with fiscal discipline.
“I have always said the subsidy regime was unsustainable. We cannot continue supporting foreign refineries. We’re an oil-producing country,” he said.
He noted that Nigeria now operates a domestic refinery and has reduced reliance on imports, describing the development as positive for the economy.
“We’re even exporting to Europe, and this is very good for the economy,” he added.
However, Sanusi raised concerns about the timing and coordination of the reforms.
“Removing subsidy or liberalising exchange rates are good interventions. But were they done at the right time? And were there other things that should have been done?” he asked.
He argued that implementing such reforms without tightening monetary conditions contributed to the sharp fall of the naira.
“If you remove subsidy and liberalise exchange rates in an environment of very loose monetary conditions the naira drops to a bottomless pit,” he said.
Sanusi also warned about Nigeria’s growing debt profile. As of December 2025, the country’s total public debt stood at N159.28 trillion.
“When you get to a point where 100 percent of your revenue goes into debt service, you cannot continue. Where is the money going to come from?” he queried.
He stressed that the benefits of subsidy removal must be visible in government spending patterns.
“We’ve removed the subsidy. We’re not spending it. What we should see is fiscal consolidation,” he said.
“You cannot remove wastages and continue borrowing,” he added.
Sanusi questioned the rationale behind continued borrowing despite savings from subsidy removal.
“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.
His comments come amid ongoing debates over the impact of recent economic reforms and the government’s borrowing strategy.
