Sanusi Questions Nigeria's Borrowing Post-Subsidy Removal

In an interview with Post New Central TV, Muhammadu Sanusi II, the former Governor of the Central Bank of Nigeria, criticized the Federal Government's ongoing reliance on borrowing despite the removal of fuel subsidies. He highlighted that the subsidy regime was unsustainable and that the government should focus on developing domestic refining capacity rather than supporting foreign refineries.

Sanusi expressed optimism about the shift towards domestic production but raised concerns about the timing and sequencing of reforms, particularly regarding the liberalization of the exchange rate. He noted that the current monetary environment, characterized by loose monetary policy, has contributed to the rapid depreciation of the naira.

Sanusi questioned the rationale behind continued borrowing, especially when 100% of revenue is directed towards debt servicing. He pointed out that the government had increased its borrowing plan for 2026 to 11.31 trillion naira, bringing the total projected borrowing for the year to 29.20 trillion naira, under President Bola Tinubu's administration.