Former Governor of the Central Bank of Nigeria and Emir of Kano, Sanusi Lamido Sanusi, has raised concerns over the Federal Government’s continued borrowing despite the removal of fuel subsidies.
Speaking in a widely circulated video on recent economic reforms, Sanusi acknowledged that scrapping the subsidy and liberalising the foreign exchange market were necessary steps. However, he argued that such measures should translate into tangible fiscal improvements.
“If you’re not paying subsidies and you have the funds, why are we still borrowing? What is the purpose of the borrowing?” he queried.
Sanusi explained that the former subsidy regime was unsustainable, largely due to Nigeria’s reliance on imported refined petroleum products, which drained public revenue and entrenched inefficiencies in the oil sector.
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While supporting the current reforms, he stressed that their effectiveness depends on proper timing and coordination. He warned that implementing subsidy removal and exchange rate liberalisation without tightening monetary policy could undermine economic stability and weaken the naira.
According to him, poorly sequenced reforms, especially in a loose monetary environment, could intensify currency depreciation and broader macroeconomic risks.
Sanusi also expressed concern over Nigeria’s debt profile, noting that a significant portion of government revenue had previously been used to service debt, making subsidy removal unavoidable.
He maintained that savings from the policy should be channelled into fiscal discipline and productive use, rather than continued borrowing or inefficient spending.
