If Subsidy Has Been Removed and We Have the Money, Why Are We Still Borrowing?— Sanusi Lamido Sanusi Questioned FG

Former Central Bank of Nigeria Governor, Sanusi Lamido Sanusi, has raised concerns over Nigeria’s current fiscal and monetary direction, questioning continued government borrowing despite subsidy removal and exchange rate reforms.

Speaking on the country’s economic policies, Sanusi said the removal of fuel subsidy and liberalisation of the foreign exchange market were necessary steps, but stressed that timing and implementation remain critical to their success.

“I have always said the subsidy regime was unsustainable. We cannot continue supporting foreign refineries when we’re an oil-producing country keeping refineries open abroad while we’re not doing our own,” he said.

He noted that Nigeria’s current domestic refining capacity and reduced fuel imports should have improved fiscal stability. “Today, we have our own domestic refinery. We’re not importing petroleum products. We’re even exporting fuel, and this is very good for the economy,” he added.

However, he warned that macroeconomic instability can undermine reforms if not properly managed. “Artificial exchange rates, especially when you’re printing money, cannot work there was going to be a devaluation,” he said.

While acknowledging the necessity of subsidy removal and exchange rate adjustments, Sanusi questioned government borrowing patterns. “If you’re not paying the subsidy and you’ve got the money, why are we still borrowing and borrowing? What are we borrowing for?” he asked.

He argued that fiscal discipline is now essential. “We should now see fiscal consolidation. You cannot remove wastages and continue borrowing at a higher rate,” he said, stressing that the benefits of reforms should reflect in reduced fiscal pressure.

Sanusi further cautioned that policy sequencing matters, warning that removing subsidy and liberalising exchange rates without tightening monetary conditions could destabilise the economy. “The naira drops to a bottomless pit there is a timing issue, Continue Your, Reading. .