Buhari's policies breed corruption - Sanusi

Alhaji Sanusi

 The Emir of Kano, Alhaji Lamido Sanusi II has criticized Nigerian President Muhammadu Buhari’s endorsement of the Central Bank of Nigeria’s (CBN) foreign exchange policy.

Sanusi, a former governor of the CBN, said the policy encourages corruption.

Although he applauded Buhari’s removal of “wasteful and corrupt fuel subsidies”, Sanusi said the current forex policy endorsed by the President encourages similar rent seeking and corruption, which had plagued the subsidy regime.

In an interview with the Financial Times, Sanusi commended Buhari for putting an end to the (crude) swap regime, which is also one side of rent seeking and corruption and for making the Nigerian National Petroleum Corporation (NNPC) start producing accounts.

“These measures are good for the economy and display strong political will to change the system. But getting monetary and fiscal policies right will be crucial for broader progress in structural reform,” he said.

However, Sanusi told the publication that President Buhari’s anti-corruption stance was “totally inconsistent” with the forex regime he supported and that it “encourages corruption and rent-seeking similar to the fuel subsidy regime”.

“The monetary policy regime has “very obvious drawbacks that far outweigh its dubious benefits,” he said.

“Unfortunately, because the exchange rate is right out there in front now, monetary policy is being seen as the barometer for broader economic thinking.

“It is sad that on this one policy you get it so wrong that you risk taking away attention from everything else you are doing,” he said.

On why he resisted the devaluation of the naira during his tenure as CBN governor, Sanusi said it was because the country at that time “had reserves of over $40bn and an oil price at over $110.”

According to him, there are no easy ways out of the current situation and “devaluation is a bitter pill.”

The country’s economic woes were now being exacerbated, with the currency peg and restrictions in the foreign exchange market creating “a lot of speculative and precautionary demand”.

Exporters and investors, he said, “are holding on to foreign currency, as no one would sell at the rate the government is setting”, while “the government does not have the reserves to keep the exchange rate at its official level in the market”.

“These policies have been tried in different parts of the world and in this country before and they have just never worked. No matter what the stated intention behind them, they are wrong.”