Muhammad Sanusi II, emir of Kano and former governor of the Central Bank of Nigeria (CBN), has recommended steps President Muhammadu Buhari must take to revive the Nigerian economy.
In a document acquired by TheCable, as presented at the meetings of the Joint Planning Board (JPB) and National Council on Development Planning (NCDP), Sanusi highlighted the problems with economy, proffering solutions for the Buhari-led admin.
ELIMINATE WASTEFUL AND ABUSE-PRONE SUBSIDIES
Sanusi highlighted the abuse of subsidies in Nigeria and the need to totally put an end to subsidy regimes. He applauded Buhari for the steps taken so far on subsidy, which has become visible in Nigeria’s consumption pattern.
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“The Buhari administration has already made great progress in stopping the fraud associated with the subsidy regime,” Sanusi said.
“PMS import volumes have fallen from an average of 57 million litres/day in 2011 to 35 million litres/day in 2016. This is an achievement. The next step should be a full and unequivocal elimination of subsidy regime.”
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FIX FAILURES IN THE POWER SECTOR VALUE CHAIN, STARTING WITH DISCOs
Sanusi said the president’s team must “petition for a specific debt raising programme to address unpaid arrears. Until this happens no new investment can take place”.
“Raise public awareness about the necessity of cost-reflective tariffs, including the hike in 2016. Raise fresh capital to pay off arrears to Gencos. These are N235bn and building. The higher the tariffs go (as they are bound to do) the more quickly they will build,” he said.
“Until these backlogs are paid, no one is going to invest in new generation capacity. Force Disco owners to make stipulated investments in metering. What I’m told is that many disco owners have failed to honour their terms of the agreement, both in investing in metering and upgrading the old infrastructure.
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“Until this failure in the value chain is addressed, collection rates will never be good enough to achieve cost recovery, and the government/NBET will always be on the hook for the shortfall.”
He also called for a resolution of gas supply issues.
DIGITISE STATE LAND REGISTRIES, STREAMLINE RELEVANT LEGISLATION
Quoting World Bank’s Doing Business index, Sanusi said: “Nigeria remains one of the most difficult countries in which to register property. State governments can do something about this.
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“In fact, Lagos State has already taken great strides towards simplifying the procedure of registering land by merging all relevant laws into a single piece of legislation.”
He asked that land registries be taken online and made easier for businesses in Nigeria.
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RE-PRIORITISE PUBLIC SPENDING TOWARDS INVESTMENT IN HUMAN CAPITAL
“In Nigeria, the public sector wage bill went up from N443bn in 2005 to N1.659 trillion in 2012, driven by a 53% increase in civil servants’ wages in 2010,” he said.
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“The government has consistently prioritised recurrent expenditure over investment – all the more so in times of economic difficulty and leading up to elections.”
He called for investment in human capital if Nigeria must make its way out of this economic quagmire.
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PRIVATE SECTOR INVESTMENT IN CAPITAL EXPENDITURE
“The economy has quadrupled in nominal terms since 2005, and the population has grown by over 40 million, but capex has barely changed.
“The major problem for Nigeria is revenue. Across all 3 levels of government, it collected just US$117 per person in 2015, and invested US$17. Kenya, with half of Nigeria’s level of wealth on paper, collected almost twice as much in taxes.
“If Nigeria is going to adopt an investment-driven model, it cannot rely on the public sector alone.”
Sanusi urged Buhari’s men to let the private sector also drive investment.
SET FX RATE TO INCENTIVISE CAPITAL INFLOWS, CATALYSE FDI
“Nigeria has made dramatic changes to its FX regime, moving from a hard peg to a free float. These bold steps have gone a long way to restoring its credibility.
“On a trade and inflation weighted basis, the naira has gone from one of the most over-valued currencies in the world to one that is now under-valued.
“A major barrier to bringing capital in from abroad has been removed; a major incentive to take capital out has also been removed.”
He said such incentives must be maintained as government set interest rates at levels that deter capital flight, dollarization.
BEWARE OF CHINA… PROTECT INFANT INDUSTRIES
“Beyond fixing the basic supply side issues, Nigeria also needs to take measures to protect its infant industries.
“Large surplus countries like China have been using the promise of investment and cheap debt to gain unfettered access to Africa’s local markets.
“But the relationship has become imbalanced. Without manufacturing capacity of its own, Africa can never provide meaningful employment for its youth.
“Successful policies in cement and auto assembly should be replicated for petro-chemicals and agro-processing.”
He concluded that government must get the appropriate macro policies in place and create a supportive business environment.
11 comments
The people in Kano, especially, the masses, the mostly uneducated believe HRH, the Emir of Kano said thing against the present administration and its policies, and many more things that the highly respected and very well educated person, that is the Emir, will not utter, are being ascribed to him. The Emir is, from things I have heard him say and read, usually very objective and down-to-earth at it and would not resort to petty talk as some are trying to make the masses believe in Kano city where everyone prides himself as “Mai Yawun Baka”!!!
Service to nation and raising national issues consciousness is not determine by status, its a collective sacrifices of all progressive and patriotic . Thanks lamido
“Masu YawunBaka” have taken the opportunity of the Emir’s advice to spread all sorts of their hearts’ desires to the unwary, and especially the uneducated masses of Kano, misrepresenting HRH’s advice and ascribing to him word that could not have come from this most respectful person. I believe the Emir speaks his mind in a down-to-earth manner but always with objectivity!! “MasuYawun Baki” should slow down and not mislead the masses into believing what are not!!!
According to the US president Barack Obama; change requires more than righteous anger,it requires a program and it requires organising.
President Buhari has only expressed anger at the way things were going in Nigeria, he has not been able to organise his administration around sound policies, he has sorrounded himself with half educated and self seeking cronies,he is set in his old ways and has shown to all that he is a tribalist,this is the most divisive government in the history of Nigeria,too much blood is being shed by muslims across the country,mostly by Fulani herdsmen, it seems the president is reluctant to do anything about these killings and none has been tried and convicted for killing Christians, we pray that these killings do not lead to retalliations that can ultimately lead to war, may GOD deliver Nigeria from War.
What has Fulani herdsmen issue got to do with the economy. The issue is that there is scarcity of forex because past governments had built the economy on revenues from crude oil. The price of crude oil has fallen in the international market, coupled with reduction in production due to vandalism. We should be talking about diversifying the economy away from crude oil. And agriculture is surely the way out. Agriculture will ensure local supply of food and also earn us forex.
Think twice before you vote that is our problem we Nigerian
What the emir said is the plain truth, but I will like to add that we should consider reducing the cost of maintenance of a bicameral legislature. It is too expensive for NIG. In addition the 5% local government allocation to the Emirates should be reviewed down. This will give the local authorities more funds to deliver their promises to the masses.
I’m surprised he never mentioned the re-current expenditures which actually has been constantly growing since 1999. Nigeria can’t afford the present democratic system due to many reasons especially since oil is the only tangible foreign exchange earner.
Why put the cart before the horse?
One of the proposed seven steps by Muhammad Sanusi II, the Emir of Kano on how PMB government can revive the Nigerian economy is to ‘fix failures in the power sector value chain’
I agree with him. Stable electricity power supply is germane to stable economy.
However, I am not surprise to read that HRH Sanusi supports 2016 hike in electricity tariffs. He possibly responded based on what he was told.
Can Fashola or PMB explain to Nigerians why we must pay more for a product that we did not buy?
Or why should ‘more pay’ comes before ‘better service’?
Sanusi possibly was never told how long many of us have being paying for electricity we never consumed, (the so called estimated billing), so as just to remain connected, in case…
What’s more! Sanusi wants Nigerians to know that if electricity tariffs go higher, then, PMB will be able to fix failures in the power sector…
My interpretation: as the masses pay money they did not get, for product they did not buy, backlogs of debts in the electric power sector will be cleared, then ‘they’ can come and buy into it, making it their own.
Can someone tell me how many core northerners pay for electricity power consumed?
Who then will keep paying the increasing higher tariffs suggested by HRH?
#Let’s-do-it-right
I am not impressed with his list..Though his suggestions are sound but they are not the catalyst that will jump start the economy. M y recommendations are as follows: 1. Sell off all non-performin enterprises namely the four refineries, petrochemical, ajaoukuta,aluminium smelter at ikot abasi, papaer minns and all moribund federal own enterprises.. 2. regineer the whole of the public service system, implement the Oronsaye report, reduce the civil service staff strength by 40% and digitalise the civil and create online portals and website for people to get things done without interacting with civil servants..3 Concession all federal highways and airports..4..create large industrial estates not for big industries but for cottage industries and giving of loans to Nigerians to setup these cottage industries..these industries will be aimed specifically at producing locally at least 80% of the items that we currently import..we have no business impoting items like toothpick,tissue paper,clothes,electric bulbs and other household electric items..5.create agro-processing facilities to process agricultural produce which will be aimed at the local production of starch used for pharmaceutical, ethanol and other raw materials used in industries..6..partner with private sector to set up a modern petrochemical industry in the niger delta..7..Get foreign investors ineterested in developing a steel industry in nigeria to service the sub saharan africa market..8. invest heavily in nolly wood and nigeria’s music industry..9..Creat a massive technology park in the 6 geo-political zones..10. encourage massive invesment in solid mineral mining..11..invest pension funds in massive house projects in major cities and build like one million apartments in 4 years.. apartment buildings should use local building materials and should be high rise on not less than 6 storey..12.get the cbn to reduce benchmark interest rate to 8% and encourage the use of mobile payment system to increase efficiency in the banking system..13..get MTN and other telecoms to sell 49% of their stake to Nigerians otherwise they should be nationalized and then privitized..these are some of my suggestions
The foundation for the present crisis was laid in the 60’s when the founding fathers refused to dismantle the very extractive political structures in place. This only gave birth to primordial acquisitive tendencies encouraged by the capture of power. So when oil was discovered it only compounded the problem, and oil turned in to a curse for the country. Fact the wheel must turn full circle, there are no quick fixes until we go back to creating a more inclusive political institution that give some reasonable chance for excellence in leadership to emerge. The problem of Nigeria is beyond tinkering with economic logic it goes much deeper. Nigeria will only go round and round until it desires to address the fundamental issue of proper political institutions and inclusive economic arrangement, that frees us from the rentier economic structures in place. or The check point collection point that characterizes the economics of this nation.