The Emir of Kano, Alhaji Sanusi Lamido Sanusi, on Friday in Abuja described President Muhammadu Buhari‘s administration as lacking the right policies to fix Nigeria’s economy, even as he warned of grave consequences of borrowing $30bn from external sources.
He also said even if the Senate approved the loan, no foreign nation or financial institution would be willing to grant the country such a loan.
Sanusi said this in his paper titled: “A plan to restore confidence, direction and growth,” during a policy dialogue organised by an economic think tank, the Savannah Centre for Diplomacy, Democracy and Development.
The former Central Bank of Nigeria’s governor — who also said the CBN is “illegally” lending to Federal Government — further stated “the problem of the current government is not having the right policies to fix the current economic woes.”
The ex-CBN governor argued that for a country that has five exchange rates, it would be difficult for a $30bn loan request to sail through.
He said since the country’s foreign exchange lacked credibility, the Federal Government should embrace private sector investments as a means of pushing the economy out of recession.
Sanusi also said oil alone could not help Nigeria out of the current economic situation because it would “never make Nigeria rich.”
He said, “I can tell you for free, if the Senate today approves that we can borrow $30bn, honestly, no one will lend to us. It should be approved and I will like to see how you will go to the international market with an economy that has five exchange rates.
“There is one rate for petroleum marketers, there is inter-bank rate, there is another for money market operators such as Western Union, MoneyGram, there is bureau de change rate and there is a special rate that you get when you call the CBN for a transaction.
“So who will lend you money when they don’t know your exact reserve and exchange rate? I want to see who will lend you money when the Niger Delta bombing of oil facilities is there, when the main source of the loan repayment is oil.”
Sanusi further said the country’s population had increased by over 40 million people since 2015, saying that unfortunately, the government had found it hard to increase capital expenditure.
He also warned on the continuous dependence on the Chinese government, saying that imports from China had scrapped the nation’s local industry.
“We trust China too much. We need to be very careful. They are killing our textile and other industries and yet they are selling to us,” he said.
He urged the government to reduce its debt service through greater loan concessionary.
He said the country had in the past 15 years been borrowing money to pay salaries and fuel subsidy, adding that there was a possibility that the country would keep borrowing in the next 15 years, as previous loans were not channelled into health, power or other infrastructural development.
Sanusi also said the June 2016 forex reform should be implemented to unite the market through a single transparent rate rather than creating four new rates.
“The Senate should support tax incentives and other benefits to encourage the private sector,” he added.
Sanusi, who further noted that the CBN’s lending to the government since Buhari came into power had spiked from about N1.5tn to over N4.5tn, added, “The CBN-FGN relationship is no longer independent. In fact, one could argue that their relationship has become unhealthy.
“CBN’s claims on the FGN now top N4.7tn — equal to almost 50 per cent of the FGN’s total domestic debt. This is a clear violation of the Central Bank Act of 2007 (Section 38.2) which caps advances to the FGN at five per cent of last year’s revenues. Has CBN become the government’s lender of last or first resort?”
“Nigeria produces one barrel of oil for 80 Nigerians; Saudi Arabia produces one for three Saudis,” he said, noting that growth in any economy should be driven by “consumption, investment and net export.”
Stating that he would not be afraid to criticise the government, Sanusi said, “I can’t apologise for being who I am. In the government I served, I did not keep quiet. When I am not serving the government, I cannot keep quiet.”
Presidential spokesmen, Femi Adesina and Garba Shehu, could not be reached as of the time of filing this report on Friday.
They were attending a dinner organised in honour of the visiting King Mohammed VI of Morocco at the time.