The Missing Link in Nigeria’s Fiscal Consolidation

​ABUJA – The Emir of Kano and former Governor of the Central Bank of Nigeria (CBN), Muhammadu Sanusi II, has issued a scathing critique of the Federal Government’s fiscal trajectory, questioning the logic behind Nigeria’s escalating debt profile despite the termination of the multi-trillion naira petrol subsidy regime.

​Speaking in a televised interview with News Central TV on Friday, Sanusi argued that while the removal of subsidies and the liberalization of the foreign exchange market were “good interventions,” the failure to achieve fiscal consolidation has left the economy in a precarious state.

​The Borrowing Paradox

​Sanusi’s intervention comes at a sensitive time. Just this week, the Federal Government revised its 2026 borrowing plan upward by ₦11.31 trillion, bringing the total projected borrowing for the year to a staggering ₦29.20 trillion. Simultaneously, President Bola Tinubu has requested Senate approval for a fresh $516.3 million (approx. ₦774 billion) syndicated loan from Deutsche Bank to fund the 1,000km Sokoto–Badagry Superhighway.

​”We’ve removed the subsidy. We’re now spending it. What we should not see is fiscal consolidation. You cannot remove wastages and continue borrowing,” Sanusi declared. “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?”

​Refining Success vs. Fiscal Failure

​The former apex bank chief noted a positive shift in Nigeria’s energy sector, praising the transition from a heavy importer of petroleum to an exporter, largely due to domestic refining capacity coming online. However, he warned that these structural gains are being offset by poor monetary sequencing.

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​Sanusi argued that liberalizing the exchange rate in an environment of “loose monetary conditions” before tightening the money supply caused the Naira to fall into a “bottomless pit.”

​The Debt Trap Warning

​With nearly 100% of revenue reportedly diverted to debt servicing at various intervals and a 2026 budget deficit projected at over ₦31 trillion, Sanusi cautioned that the government must show the benefits of its reforms.

​”When you get to a point where 100% of your revenue goes into debt service, you cannot continue,” he warned, urging the administration to synchronize its “Renewed Hope” infrastructure projects with actual fiscal savings rather than fresh liabilities.