Former Governor of the Central Bank of Nigeria, Muhammadu Sanusi II, has raised fresh concerns over Nigeria’s growing debt profile under President Bola Ahmed Tinubu, questioning why borrowing persists despite the removal of fuel subsidy.
Sanusi made the remarks on Friday during a public event, where he expressed worry over what he described as a disconnect between government policy objectives and current fiscal outcomes. His comments come at a time when many Nigerians continue to face economic hardship following the removal of subsidy on petrol in 2023.
Speaking candidly, the former apex bank chief challenged the rationale behind continued borrowing, noting that the subsidy removal was initially justified as a means of freeing up government resources for development.
“Why are we still borrowing?” he asked. “The whole argument for removing subsidy was to free up funds for development. If we have removed it, where is the money going?”
Sanusi explained that the subsidy removal policy was presented to Nigerians as a necessary economic reform designed to reduce pressure on public finances and redirect funds toward critical sectors such as infrastructure, healthcare, and social services. However, he noted that the country’s rising debt levels appear to contradict those expectations.
According to him, the current fiscal trajectory raises important questions about revenue utilisation and policy implementation, particularly in light of the sacrifices made by citizens following the subsidy removal.
The removal of fuel subsidy, one of the earliest and most consequential decisions of the Tinubu administration, triggered an immediate increase in petrol prices, which in turn led to higher transportation costs and a general rise in the cost of living. While the government has maintained that the policy was necessary to stabilise the economy, critics argue that its benefits have yet to be fully realised.
Sanusi emphasised the importance of transparency in managing public finances, insisting that Nigerians deserve clear and detailed explanations regarding how government revenues and savings from subsidy removal are being utilised.
He warned that a lack of openness could erode public trust in economic policies and weaken confidence in government reforms.
“There must be transparency. People need to know where the money is going. Without that, it becomes difficult to sustain trust in these policies,” he said.
While acknowledging that borrowing is not inherently problematic, Sanusi stressed that loans must be tied to productive investments capable of generating economic returns. He noted that countries often rely on borrowing to finance development, but such borrowing must be accompanied by visible outcomes and measurable impact.
“Borrowing is not a sin,” he said, “but it must be for something that will add value to the economy. Nigerians should be able to see the results of these loans in real terms.”
He further argued that when loans are properly utilised, they can stimulate growth, improve infrastructure, and enhance public services. However, without clear evidence of impact, continued borrowing risks increasing the country’s financial burden without delivering commensurate benefits.
Sanusi’s remarks add to an ongoing national conversation about Nigeria’s fiscal direction and economic management. In recent months, economists, policy analysts, and civil society organisations have raised similar concerns about rising debt levels, revenue challenges, and the sustainability of government spending.
The debate has also focused on the need for improved revenue generation, efficient public expenditure, and structural reforms to strengthen the economy. Analysts have pointed out that while subsidy removal was expected to create fiscal space, other factors such as declining revenues, currency pressures, and increased spending obligations may be influencing the government’s borrowing decisions.
For many Nigerians, however, the immediate concern remains the impact of economic policies on their daily lives. Rising prices of goods and services, coupled with stagnant incomes, have heightened expectations for tangible improvements in infrastructure, healthcare, and social welfare.
Sanusi’s intervention is therefore likely to resonate with a broad segment of the population seeking accountability and clarity in governance. His position reflects a broader demand for policies that not only promise reform but also deliver measurable outcomes.
As of the time of filing this report, the Federal Government has not issued an official response to Sanusi’s comments. However, his remarks are expected to further intensify discussions around fiscal responsibility, transparency, and the long-term sustainability of Nigeria’s economic policies.
With pressure mounting on the government to demonstrate the benefits of its reforms, stakeholders say the coming months will be critical in determining whether the expected gains from subsidy removal and other policy measures can be realised and effectively communicated to the public.
