Sanusi Warns Nigeria’s Rising Borrowing Threatens Petrol Subsidy Gains

Context Sanusi, former Central Bank governor and Emir of Kano, has long criticised Nigeria’s reliance on foreign refinancing. He welcomed the recent shift to a domestic refinery that now supplies the local market and exports to Europe. However, he questions whether reforms like subsidy removal and exchange rate liberalisation were sequenced correctly.

Key Facts The Federal Government increased its 2026 borrowing plan by 11.31 trillion naira, bringing total projected borrowing to 29.20 trillion naira. Sanusi stated that after removing the petrol subsidy, the government should not continue borrowing because it undermines fiscal consolidation. He also noted that Nigeria now has a domestic refinery, is not importing petroleum products, and is exporting to Europe, which benefits the economy.

What It Means Continued borrowing could absorb the fiscal savings meant from subsidy removal, limiting debt‑service relief and slowing economic recovery. While domestic refining reduces import bills and creates export revenue, rising debt may offset those gains if not paired with tighter spending. Analysts warn that without clear debt‑reduction targets, reform benefits may remain elusive.

Watch next: whether the government allocates subsidy savings to debt reduction or new projects, and how refinery output influences the trade balance and naira stability.