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| HRM Muhammadu Sanusi II |
Kano’s Emir, Muhammadu Sanusi II, has fired a sharp warning: Why is Nigeria still drowning in debt after slashing the petrol subsidy?
Speaking Thursday, April 23, 2026, at TheNiche 2026 annual lecture in Lagos, titled “Governing the Economy: Choices, Trade-offs, and National Priorities”, Sanusi questioned the logic behind President Bola Tinubu’s fresh $516 million loan request to the National Assembly.
The funds, according to the request, target sections of the ambitious Sokoto-Badagry superhighway.
Sanusi’s warning comes hot on the heels of lawmakers approving Tinubu’s $6 billion external borrowing plan in March, partly for debt refinancing, according to the document.
Sanusi acknowledged the old subsidy system was a fiscal black hole, propping up foreign refineries while Nigeria’s own lagged. But now, with local refining ramped up, via Dangote Refinery, the country has ditched imports and even exports refined products to Europe, a game-changer for the economy.
It should be therefore time to pivot to fiscal discipline, he urged, arguing that “Subsidy savings must supercharge public finances, not vanish into more loans.”
“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?”
While defending key reforms such as subsidy removal and foreign exchange (FX) liberalisation, the ex-central bank governor noted that both measures were necessary, but raised 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.
He 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.”
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