Sanusi to FG: Why borrow more after eliminating petrol subsidies?

Kano Emir Muhammadu Sanusi II has criticized the federal government’s debt appetite, questioning why loans persist months after the removal of oil subsidies and forex liberalization.

In an interview broadcast on News Central TV on Friday, the former CBN governor said the two reforms were “necessary” but warned that poor timing and weak fiscal discipline risked erasing the gains.

● “Unsustainable” subsidies, inactive refineries

“I have always said that the subsidy regime was unsustainable. We cannot continue to support foreign refineries. We are an oil-producing country. Keep foreign refineries open while we are not doing our own,” Sanusi said.

He called Nigeria’s decades-long dependence on fuel imports a “systemic failure” for an oil producer and welcomed the turn to domestic refining.

“Today, we have a situation where we have our own domestic refinery. We are not importing petroleum products. We are also exporting to Europe, and that is very good for the economy,” he said.

●Right reforms, wrong timing*

Sanusi supported the removal of subsidies and exchange rate liberalization, but cited the sequencing and fiscal consequences as problems.

With benefit savings in hand, he argued, the need for new loans weakens. The concern is that if the government continues to borrow while revenues improve, the reforms will not result in debt relief or deficit reduction.

The emir’s comments add to a growing debate over how subsidy earnings are managed and whether the budget reflects the sacrifice Nigerians have been asked to make.

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