President Muhammadu Buhari has defended his refusal to abolish the fuel subsidy despite appeals from the International Monetary Fund (IMF), the World Bank, and other prominent academics.
The President addressed the issue in an interview with Bloomberg.
According to him, the western allies are now discovering the hard way that what looks wonderful on paper can have catastrophic human implications if put into practise.
When pressed to explain why he did not heed the advice to eliminate the fuel subsidy and unify the exchange rate after so many years, Buhari stated, “The majority of western nations currently operate fuel subsidies. Why should we now remove ours? What benefits the goose also benefits the gander!
“Our western allies are learning the hard way that what appears good on paper and what has human implications are not the same thing.” Late last year, my government initiated measures to withdraw the subsidies. After more engagement with interested parties and as the year progressed, this course of action grew increasingly untenable. Increasing domestic production of refined products will also be beneficial. Private businesses and modular refineries (Dangote Refinery, BUA Group Refinery, Waltersmith Refinery) are expected to significantly increase capacity later this year and in the next year.
“The exchange rate is still sensitive to exogenous shocks that might badly impact Nigerian citizens in an instant. As we increase domestic production of gasoline (aided by PIA) and food (agricultural policies), the inflationary threat will recede and we will be able to proceed toward unification.”