The Emir of Kano, Muhammadu Sanusi II, has questioned why the administration of Bola Ahmed Tinubu has continued to borrow from foreign agencies despite removing fuel subsidy.
While speaking at a public function, the monarch, who endorsed the removal of fuel subsidy, said it was necessary as Nigeria had been using all its revenue to service debt.
He said Nigerians should be enjoying the benefits of subsidy removal through visible projects rather than facing hardship driven by continued borrowing by the government.
Sanusi said the subsidy regime was unsustainable, noting that Nigeria could not continue supporting foreign refineries as an oil-producing nation while neglecting its domestic refining capacity.
He added that the country now has a domestic refinery and is no longer importing petroleum products, describing the development as positive for the economy.
He also said artificial exchange rates, especially when driven by excessive money supply, were ineffective and would inevitably lead to currency devaluation.
He described the removal of subsidy and the liberalisation of exchange rates as necessary reforms, but questioned whether they were implemented at the right time and whether complementary measures had been adequately addressed.
The emir said it was not enough to remove subsidy, stressing that the country had reached a point where all revenue was being used to service debt, making the policy unavoidable.
He, however, warned that implementing such reforms in a loose monetary environment without tightening money supply would weaken the naira significantly.
He said there were clear timing issues in the implementation of the policies and noted that despite subsidy removal, the expected fiscal consolidation had not been achieved.
According to him, government should cut waste and utilise available funds effectively instead of resorting to continuous borrowing.
Sanusi questioned the rationale behind continued borrowing, asking why the government was still taking loans despite no longer paying subsidy, and what the borrowed funds were being used for.
President Tinubu had announced the removal of fuel subsidy on his inauguration day, May 29, 2023, a move that triggered an immediate rise in fuel prices and the cost of living nationwide.
