Sanusi to Tinubu: You cannot remove subsidy and continue borrowing, what are you borrowing for?

Emir of Kano, Muhammadu Sanusi II, on Thursday questioned Nigeria’s continued borrowing despite the removal of petrol subsidy.

Sanusi spoke at TheNiche 2026 annual lecture, themed ‘Governing the Economy: Choices, Trade-offs, and National Priorities’, held in Lagos.

The royal father’s criticism follows President Bola Tinubu’s $516 million borrowing request to the national assembly for the construction of sections of the Sokoto-Badagry superhighway project.

The national assembly had in March approved Tinubu’s $6 billion external borrowing request, intended to be used partly for debt settlement.

Speaking at the event, Sanusi said the subsidy regime had become unsustainable, noting that Nigeria could not continue to support foreign refineries while neglecting domestic capacity.

According to him, the country has now transitioned to local refining, ending petroleum imports and exporting refined products to Europe, a development he described as positive for the economy.

The traditional ruler said the focus should now shift to fiscal consolidation, stressing that the benefits of subsidy removal must be reflected in improved public finances.

“We’ve removed the subsidy. We are not spending it. What we should now see is fiscal consolidation. You cannot remove wastages and continue borrowing,” Sanusi said.

“You need to see the benefits. If you are not paying the subsidy and you’ve got the money, why are we still borrowing and borrowing? What are we borrowing for?”

However, defending key reforms such as subsidy removal and foreign exchange (FX) liberalisation, the ex-central bank governor said both measures were necessary, while raising concerns about the timing.

“Removing subsidy or liberalised exchange rates, these are good interventions,” he said.

“Now, were they done at the right time? Those are certain questions. Were there other things that should be done that have not been done? These are other issues. I think we must make that decision.”

According to him, embarking on the two policies without first tightening the money supply worsened pressure on the naira.

Sanusi reiterated that the subsidy removal was inevitable, particularly at a time when debt servicing consumed government revenue.

“It is not enough to say, oh, they removed subsidy. You had to. 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 said.

“However, if you decide to remove subsidy and liberalise exchange rate in an environment of very loose monetary conditions, before you have tightened money supply, then [the] naira drops to a bottomless pit. So, that was a timing issue.”