Sanusi Faults Continued Borrowing Despite Petrol Subsidy Removal
The Emir of Kano and former Governor of the Central Bank of Nigeria, Muhammadu Sanusi the second has questioned the Federal Government’s continued reliance on borrowing despite the removal of the petrol subsidy.
Speaking in a media chat at the weekend, Sanusi stated that while the removal of fuel subsidy and the liberalisation of the exchange rate were necessary, the timing and lack of fiscal discipline are threatening to erase the potential benefits.
He noted the current shift toward domestic production, noting that the country has moved from a heavy importer of petroleum products to an exporter which he said is very good for the economy.
According to the monarch, Nigeria’s practice of supporting foreign refineries while its domestic refining capacity remained dormant was a systemic failure that needed to be addressed.
He however faulted the removal of subsidy and liberalization of the exchange rates in an environment of very loose monetary conditions which he said was counter-productive and challenged the Federal Government’s continued borrowing despite eliminating subsidy payments.
