Sanusi criticises continued borrowing after subsidy removal, urges Tinubu to uphold fiscal discipline
Former Central Bank of Nigeria (CBN) Governor and 16th Emir of Kano, Muhammadu Sanusi II, has criticised the federal government’s continued borrowing despite the removal of petrol subsidy, saying the practice undermines the purpose of the reform.
Speaking in Abuja on Tuesday at the Oxford Global Think Tank Leadership Conference and Book Launch, Sanusi commended President Bola Tinubu’s administration for removing fuel subsidy and unifying exchange rates, describing the policies as “painful but necessary.” However, he cautioned that the gains would be short-lived without fiscal discipline and transparent management of public funds.
“If you stop paying subsidies but continue borrowing more, it means you’ve filled one hole only to dig another,” Sanusi said. “The real challenge now is the quality of government spending and the management of the revenues saved.”
Sanusi, who served as CBN governor between 2009 and 2014, blamed Nigeria’s current economic hardship on years of policy inconsistency and political populism. He recalled how opposition politicians resisted fuel subsidy removal in 2012, leading to long-term economic consequences.
He urged the Tinubu administration to reduce wasteful government spending, citing the size of the cabinet and lavish use of convoys as examples of fiscal indiscipline.
“Why do we need 48 ministers? Why are we still borrowing after removing subsidies?” he queried. “If you fill one hole, why dig another?”
The emir also warned against sycophancy in governance, stressing that leaders must surround themselves with honest advisers rather than praise-singers.
“When leaders surround themselves with people who only praise them, they stop hearing the truth. That’s why reforms fail,” he added.
Sanusi also revisited the 2012 Occupy Nigeria protests, noting that insecurity at the time forced former President Goodluck Jonathan to shelve plans to remove subsidy. He maintained that Nigeria’s failure to act then has worsened today’s economic pain.
Read also:Nigeria’s current account surplus rises sharply to $5.28 billion in Q2 2025 — CBN
The former CBN chief explained that past subsidy payments were unsustainable, as the government had been borrowing not only to fund subsidies but also to pay interest on borrowed funds.
Turning to monetary policy, he praised recent efforts by the CBN to stabilise inflation and reduce naira volatility, while urging continued collaboration between fiscal and monetary authorities to achieve lasting stability.
Meanwhile, Finance Minister Wale Edun reaffirmed the government’s commitment to ensuring that ongoing economic reforms directly benefit poor Nigerians. He said 15 million households are already receiving digital cash transfers under a transparent, identity-linked system.
Also speaking at the event, former Ekiti State governor Kayode Fayemi praised Tinubu’s courage in removing fuel subsidy but noted that effective management of the policy is crucial to easing the hardship on citizens.
Atedo Peterside, founder of Stanbic IBTC Bank, echoed Sanusi’s warning, saying: “Pain doesn’t automatically bring gain. Gain only follows pain when government spends wisely and supports the poor.”
According to the Debt Management Office (DMO), Nigeria’s total public debt stood at ₦152.39 trillion (about $99.68 billion) as of June 2025—just short of the $100 billion mark—reflecting continued borrowing amid rising exchange rates and external obligations.
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