By Ayo Kehinde
The Emir of Kano, Muhammadu Sanusi II, has raised fresh concerns over the Federal Government’s sustained appetite for borrowing, warning that Nigeria risks undermining the gains of recent economic reforms if fiscal discipline is not enforced.
Speaking in an interview aired by News Central TV, Sanusi directly questioned why the government continues to accumulate debt despite the removal of petrol subsidy—one of the most significant fiscal adjustments in recent years.
His remarks come amid a sharp increase in the Federal Government’s 2026 borrowing plan, which was recently revised upward by N11.31 trillion to N29.20 trillion.
In addition, President Bola Tinubu has approached the Senate for approval of a fresh $516 million loan to finance the Sokoto–Badagry Superhighway.
“We’ve removed the subsidy. We’re now spending it. What we should not see is continued borrowing without fiscal consolidation,” Sanusi said
The former Central Bank governor acknowledged that the removal of fuel subsidy and the liberalisation of the foreign exchange market were necessary and long overdue.
However, he warned that poor timing and weak coordination of these reforms could erode their intended benefits.
“If you’re not paying subsidy and you’ve got the money, why are we still borrowing and borrowing? What are we borrowing for?” he asked.
Sanusi also criticised what he termed systemic inefficiencies in Nigeria’s petroleum sector, particularly the long-standing reliance on foreign refineries while domestic capacity remained underutilised.
He described the practice as unsustainable for an oil-producing country.
However, he noted a positive shift in recent developments, with Nigeria increasingly relying on domestic refining and even exporting petroleum products—a transition he said reflects progress but must be backed by consistent policy discipline.
Beyond borrowing, Sanusi raised deeper concerns about the sequencing of reforms, particularly the liberalisation of the exchange rate in what he described as a “loose monetary environment.”
According to him, failing to tighten money supply before such a move contributed significantly to the rapid depreciation of the naira.
“Artificial exchange rates cannot work, especially when you’re printing money. But if you liberalise in a loose monetary environment, the naira drops to a bottomless pit. That was a timing issue,” he explained.
He further warned that without clear fiscal consolidation—cutting waste, improving revenue utilisation, and reducing reliance on debt—Nigeria may struggle to translate reform efforts into real economic stability.
Sanusi emphasised that while the country had reached a point where subsidy removal was unavoidable, especially with revenues previously consumed by debt servicing, the next phase of governance must focus on ensuring that the savings are effectively deployed.
“It’s not enough to say reforms have been made. The real question is whether those reforms are being managed in a way that delivers results,” he added.
