The Emir of Kano, Muhammadu Sanusi II, has questioned why the Tinubu-led administration has continued to borrow money from foreign agencies despite removing fuel subsidy.
While speaking at a public function, the monarch who endorsed the removal of the fuel subsidy, stated that it was the only way out for the country because Nigeria was using all its revenue to service debt.
He stated that Nigerians should be enjoying the impact of the removal of the subsidy through project implementation and not facing hardship due to borrowing which the Tinubu government has done repeatedly.
‘’I have always said the subsidy regime was unsustainable. We cannot continue supporting foreign refineries when we are an oil producing country, keeping refineries open abroad while we are not doing our own. Today we have a situation where we have our own domestic refinery. We are not importing petroleum products. We are not exporting to Europe and this is very good for the economy. Artifical exchange rates, especially when you are printing money cannot work. There was going to be a devaluation.
For me, removing subsidy or liberalising exchange rates, these were good interventions. Were they done at the right time? Those are certain questions and were there other things that should be done that have not been done? These are the isses.
It is not enough to say O they have removed subsidy. You had to. When you get to a point where 100% of your revenue goes to debt service, you cannot continue. Where is the money going to come from? However, if you decide to remove subsidy and liberalize exchange rates, in an environment of very loose monetary conditions, before you have tighetend money supply, the naira drops to a bottomless pit.
So there was a timing issue. Secondly, we have removed the subsidy, we are not spending it. What we should now see is fiscal consolidation. You can remove wastages and continue borrowing. I have said this before. We need to see the benefits. If you are not paying the subsidy and you have the money, why are we still borrowing and borrowing? What are we borrowing for?''
President Tinubu announced the removal of the fuel subsidy on his inauguration day on May 29, 2023, leading to the immediate increase in the price of fuel and cost of living in the country.
Watch a vidoe of the monarch speaking below
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