The 16th Emir of Kano and former Central Bank of Nigeria (CBN) governor, Muhammadu Sanusi II, has expressed concern over the federal government’s continued borrowing despite the removal of the petrol subsidy by President Bola Ahmed Tinubu’s administration.
Speaking in Abuja on Tuesday at the Oxford Global Think Tank Leadership Conference and Book Launch, Sanusi said that while the removal of fuel subsidy and the unification of exchange rates were “painful but necessary steps,” the reforms would fail without prudent management of public funds.
He commended Tinubu’s administration for implementing the reforms but warned that the government must ensure fiscal discipline and transparency to achieve meaningful results.
“If you stop paying subsidies but continue borrowing more, it means you’ve filled one hole only to dig another. The real challenge now is the quality of government spending and how revenues saved are managed,” he said.
Sanusi, who headed the CBN from 2009 to 2014, attributed Nigeria’s current economic challenges to years of policy inconsistency and populist governance.
“In 2012, we warned that the subsidy was unsustainable, but politics took over. The same people who opposed its removal have now inherited the problem and had no choice but to do the right thing,” he noted.
The former apex bank chief questioned government spending priorities, particularly the size of the federal cabinet and lavish official expenditures.
“Why do we need 48 ministers? Why do we need convoys of vehicles? Why are we still borrowing even after removing subsidies?” he asked.
Sanusi stressed the importance of transparency in governance, warning that poor spending could reverse the gains of recent reforms. He criticised sycophancy in government, noting that praise-singing deprives leaders of honest advice.
“People who tell the president the truth are branded enemies. That’s why those who give real advice, like Aigboje Aig-Imoukhuede and myself, are often seen as adversaries,” he said.
Jonathan’s Compromise and the 2012 Subsidy Protest
Sanusi explained that insecurity prevented the Goodluck Jonathan administration from removing the fuel subsidy in 2012.
“The only reason the government compromised then was Boko Haram. If a suicide bomber had attacked protesters, the crisis would have escalated beyond control. President Jonathan had the will, but he made that compromise to save lives,” he said.
He described Nigeria’s former subsidy regime as a “naked hedge”—a risky economic model that exposed the country to global market fluctuations.
“We went from using revenues to pay subsidies, to borrowing money to pay interest on borrowed money. That was the road to bankruptcy,” Sanusi explained.
He argued that had Nigeria removed the subsidy earlier, the inflationary impact would have been mild and short-lived.
“In 2012, removing the subsidy would have pushed inflation from 11 to 13 per cent, and we could have stabilised it within a year. Now we’re facing over 30 per cent inflation because of delay and political games,” he said.
Sanusi also recalled how some opposition figures, including his friend Kayode Fayemi, opposed the move for political reasons despite understanding its necessity.
“He admitted to me that subsidy removal was right, but as an opposition member, his job was to make the government look bad,” Sanusi recounted.
The emir further explained that the CBN’s role is not to guarantee a “strong” naira but to reduce volatility.
“It’s better to have a stable exchange rate at ₦1,400 for six months than watch it spiral to ₦2,000. Stability, not artificial strength, is the goal,” he said.
Sanusi acknowledged that recent reforms had improved government revenues and reduced debt-service ratios, noting that the Finance Ministry “deserves credit” for improving fiscal metrics.
Edun: Reforms Will Benefit Poor Nigerians
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, assured Nigerians that ongoing reforms are designed to uplift the poor.
He said the government had introduced a transparent digital system to deliver direct financial support to 15 million households across the country.
“Each beneficiary is identified by name and national identity number, with payments made directly to bank accounts or mobile wallets,” Edun stated.
According to him, the initiative enables real-time monitoring of disbursements and ensures accountability.
Edun added that the government would soon publish data on beneficiaries who had received various payment tranches to boost public confidence.
He also revealed plans for a ward-based development programme to empower small businesses, cottage industries, and local entrepreneurs across Nigeria’s 8,809 wards.
“The aim is to ensure that the benefits of these reforms reach the grassroots and create sustainable livelihoods,” the minister said.
Oteh Advocates Long-Term Capital Investment
Arunma Oteh, former Director-General of the Securities and Exchange Commission (SEC) and founder of the Oxford Global Think Tank, called for urgent efforts to mobilise long-term capital to address Nigeria’s infrastructure gap.
Oteh, who also served as a World Bank vice president, said Nigeria must raise its infrastructure investment from the current 4–5 per cent of GDP to at least 12 per cent to achieve sustainable development.
“China invests about 24 per cent of its GDP in infrastructure. Nigeria must step up to attract reasonably priced, long-term capital for both public and private sectors,” she advised.
She urged the CBN and the Finance Ministry to enhance access to capital for small businesses and infrastructure projects.
Fayemi: Jonathan Lacked Conviction on Subsidy Removal
Former Ekiti State governor Kayode Fayemi said former President Goodluck Jonathan lacked the conviction to fully implement subsidy removal in 2012.
He explained that contrary to public belief, most governors supported the policy but Jonathan failed to follow through.
“The Nigerian Governors’ Forum was the major advocate of subsidy removal. President Jonathan simply lacked the conviction to implement what he believed in,” Fayemi said.
He commended President Tinubu for demonstrating political courage by ending the subsidy immediately after assuming office in May 2023.
“Tinubu could have backtracked when public pressure mounted, but he stayed the course. That courage deserves recognition,” Fayemi added.
He, however, emphasised the need for the government to effectively manage the policy’s impact on citizens.
Peterside, DMO Raise Fiscal Concerns
Atedo Peterside, founder of Stanbic IBTC Bank, echoed Sanusi’s concerns, stressing that fiscal discipline is crucial to ensuring that the pain of reforms translates into tangible benefits.
“Pain doesn’t automatically produce gain. Only wise spending and support for the poor can do that,” he said.
According to the Debt Management Office (DMO), Nigeria’s total public debt stood at ₦152.39 trillion as of June 2025, equivalent to $99.68 billion.
The debt portfolio includes bilateral loans from China, France, Germany, and Japan; multilateral debts from the World Bank, Islamic Development Bank, and African Development Bank; as well as domestic securities such as FGN Bonds, Treasury Bills, and Sukuk.
The largest portion, ₦80.55 trillion ($52.68 billion), comes from FGN securities, while Eurobonds account for ₦26.48 trillion ($17.32 billion).
Nigeria also owes the World Bank Group ₦29.65 trillion ($19.39 billion) and the African Development Bank Group ₦5.82 trillion ($3.8 billion).
Syndicated loans stand at ₦321.09 billion ($210 million), while promissory notes and other obligations amount to ₦1.12 trillion ($735 million).
The DMO noted that the recent rise in total debt was driven by new borrowings and the impact of the appreciating exchange rate on external debt obligations.
