The Emir of Kano, Muhammadu Sanusi II, has questioned the federal government’s continued reliance on borrowing despite proceeds from the petrol subsidy removal.

Mr Sanusi, in an interview posted by News Central on Friday, stated, “If you’re not paying the subsidy and you’ve got the money, why are we still borrowing and borrowing? What are we borrowing for?”

He added, “We’ve removed the subsidy. We’re now spending it. What we should not see is fiscal consolidation. You cannot remove wastages and continue borrowing. I’ve said this before. You need to see the benefits.

The monarch further stated that the potential benefits of subsidy removal and exchange rate liberalisation are being threatened by fiscal indiscipline. 

While raising concerns over the country’s practice of supporting foreign refineries while its domestic refining capacity remained dormant, Mr Sanusi, however, expressed optimism over Nigeria’s current shift toward domestic production.

“I have always said the subsidy regime was unsustainable. We cannot continue supporting foreign refineries. We’re an oil-producing country. Keeping refineries open abroad while we’re not doing our own.

“Today, we have a situation where we have our own domestic refinery. We’re not importing petroleum products. We’re even exporting to Europe, and this is very good for the economy,” he added. 

The former CBN governor expressed concerns over the timing of the policies, adding that liberalising the exchange rate in a loose monetary environment contributed to the currency’s rapid depreciation.

“For me, removing subsidy or liberalising exchange rates, these are good interventions. 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.

“It’s not enough to say, oh, they removed subsidy. You had to. When you get to a point where 100% of your revenue goes into debt service, you cannot continue. Where is the money going to come from?”, Mr Sanusi stated.

The monarch’s statement came against the backdrop of President Bola Tinubu’s consistent borrowings despite subsidy removal in 2023.

On Thursday, Mr Tinubu requested the Senate’s approval for a 516.3 million dollars syndicated loan to finance key sections of the Sokoto–Badagry Superhighway.

The request sparked criticism from Nigerians, including former vice president Atiku Abubakar, who insisted the country must not “borrow blindly” in the name of development.