Sanusi: Oil Theft, Increasing Govt Spending Greatest Challenges To The Economy

Governor of Central Bank, Mallam Sanusi Lamido Sanusi has identified the greatest challenges facing the Nigerian economy as oil theft and increasing government spending. Sanusi said this in Lagos, while delivering a keynote address at the Udo Udoma and Bello Osagie 30th anniversary lecture. According to him, the situation where some people successfully steal crude oil, refine and ship outside the country, and the fact that government spending is on a continuous upward trend, will continue to make it impossible for the economy to move at the desired rate. “We have a problem that is entirely home grown. Oil theft, increase in government spending are greatest challenges of the economy. And people who are investing in our markets are watching and when there is little panic, the economy may collapse. So we cannot take the stability that we currently have for granted. We should stop oil theft, leakage and build our reserves,” he said. Sanusi however noted that the CBN’s monetary policies have made tremendous impacts on the exchange rates, especially in defence of the nation’s currency. “The CBN is not looking for strong or weak naira. We are instead, looking for a stable currency. This is because we understand how a weak currency impacts the lives of ordinary Nigerians. Our biggest problem remains the threat to the exchange rate, because we should be resisting appreciation and not fighting depreciation as currently is the reality.” Sanus also lamented the inefficiency in the country’s value chain, stressing the need to improve on that to drive the economy and make the banking industry lend more to the sector. “We have moved agriculture lending from 0 to 4 percent in two years and today, Nigerian banks have up to N500 billion in agriculture. This is because we can abuse the banks from now till tomorrow or employ all sorts of tricks to get the banks to lend to agriculture and they will not. So sometime ago, we invited Standard Chartered from Kenya and Standard Bank from South Africa to come and explain to us how their banks are lending to the agriculture sector and they said that the whole issue revolves around value chain, which is actually the answer to the problem of the entire economy,” Sanusi said.