...insists subsidy is a drain pipe of Nigeria's resources
Renowned Professor of Political Economics and former Deputy Governor of the Central Bank of Nigeria, Kingsley Moghalu has urged the outgoing administration led by President Muhamadu Buhari not to incur debt to the incoming administration.
Moghalu, while reacting from the United States to the $800 million World Bank loan to cushion the palliative effect on average Nigerians on Channels Television ' Politics Today', disclosed that the incoming government will inherit a N77 trillion debt.
He said: "I am one of those who believe Nigeria is borrowing too much and generating too little in revenue in paying back these loans. We are borrowing for a lot of wrong reasons and I don't think it is right to borrow money to pay palliative. It is not a sustainable approach to the matter of subsidy removal.
"But seems it is not a new loan according to the Minister of Finance, it is more appropriate for the new administration to make his own decision on how to go about his obligations in terms of subsidy removal and to cushion the effect of palliatives. It's too late in the day to be drawing that loan at this time. There would be a handover in the next 10 days, the incoming administration should look at it and determine how he wants to proceed.
"The incoming government will inherit a N77 trillion debt. I think it's too late for the outgoing administration to be taking debt for the incoming administration. We have had a battle for the past 50 years between economic rational thinking and political and economic superstition.
"Subsidy is based on a superstition that it helps the poor, it distorts the fuel supply chain in Nigeria, saying that subsidy is directly increasing Nigeria's physical deficits, subsidy is based on a fraud. We all know it is highly inflated. It is a drain pipe of Nigeria's resources and is making the government broke every year. A government that is broke, continues to borrow more. The new government has to have the political will to stop subsidy.
