Disaster looms if Nigeria doesn’t end multiple exchange rates, fuel subsidy- El-Rufai

As Nigeria continues to battle with rising inflation and rising poverty, the Governor of Kaduna State, Nasiru El-Rufai has warned that Nigeria will end up like Sri Lanka if it does not  tackle the issue of exchange rate alignment and remove fuel subsidy.

The Governor raised this concern  at the World Bank’s Nigeria Development Update and Country Economic Memorandum in Abuja.

The global bank called on the Federal Government to stop petrol subsidy and multiple exchange rates order to chart a new growth path.

Speaking, El-Rufai said that all  Nigerian Presidential Candidates are all campaigning on the removal of petrol subsidy and elimination of multiple exchange rates and not using politics for it.

He warned, “If we continue on this track, we would end up like Sri Lanka.”

The Kaduna State Give who was formerly the Head of Bureau if Public Enterprises said that  state Governments are at the receiving end more than Federal Government in terms of fiscal pressures, adding that since 2021, NNPC has not been making contributions from proceeds of oil revenues, claiming domestic oil revenues are not enough to cover petrol subsidy.

He stated the Governors had seen the problem since March 2021, and come up with solutions.

El-Rufai said, “We agreed that by November 2022 fuel subsidies should go because we saw it would affect the solvency of many states, and affecting many states, but somehow the consensus was not implemented”

“Most states, other than oil producing states still receiving derivation, are under pressure, except Lagos state which has a large tax base.

“We all know and can see the impacts of the fiscal threats on Nigerians, ranging from minimum wage to earnings of Nigerians, ideally we should be multiplying wages of Nigerians but we simply can’t afford it, many states are struggling, and we are back to 2014-15 levels when the Buhari administration inherited 27 sub nationals with salary arrears.”

He added this has a major impact on States Governments, unlike the Federal Government, as states do not have access to Central Bank financing,

He said, “How can we deliver that when we are struggling to pay salaries of civil servants, most state governments are not as large as the FG, I can assure you at least half the states are struggling already and these reforms must be implemented.”

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