The Emir of Kano, Alhaji Muhammadu Sanusi 11 has advised President Muhammadu Buhari to remove the subsidy on fuel.
This, according to him, would save the nation’s economy from collapsing.
The former Central Bank governor made this assertion at the All Africa Business Leaders Award West Africa held in Lagos on Friday.
The financial expert, while speaking during the event, declared that Nigeria could no longer afford the many leakages that had ravaged and eaten deep into the economic system for ages.
The monarch, who quoted, CBN figures, said: “in the first two quarters of this year, this country spent over 500 billion naira on debt servicing. At end of this year, it will be over 1trillion which is more than the amount of money budgeted for health, education and defence combined.
“There is no room in the government’s balance sheet for borrowing and spending. We have no option but to block leakages and to stop non-priority expenditures.
“It is for this reason that we cannot afford to spend all our time talking about the past. It is time to look at what we are doing now and ask ourselves if the fiscal stance and monetary stance are the appropriate stances for the situation we are in.
“Does it make sense at this time for the government to continue paying petroleum subsidy? It does not, and we must say it.
“When you need fiscal consolidation, when you cannot borrow, when you are not earning because oil prices are down, you have to shut down, especially those expense lines that have been known historically to be the sights of those seeking rent.This fuel subsidy has to go.”
He also called for the expansion of the tax base and an increase in VAT.
“Our tax base has to expand, VAT have to go up. We can’t continue having an economy where we collect tax from oil companies, collect tax, maybe, from the telecoms companies, and then 60, 70 per cent of the GDP does not pay taxes. This is something that has to be looked at.”
Sanusi also frowned at the anomalies in the economy, saying: “we are Africa’s biggest oil producer but the biggest export from the United Kingdom to Nigeria is petroleum products. We don’t refine our own crude. We don’t have a petro-chemical industry. We burn our gas and we don’t have enough electricity.
“We produce cotton and import textiles from China. We have a large tomato belt and we import tomato paste. Everywhere you turn…we produce cassava, we don’t produce starch. And what we don’t have we export. It is so bad that we had a military government that conducted free democratic elections in Liberia. We exported democracy when we had a military government.”
Recalling his days as the apex bank boss, Sanusi said, “The biggest challenge I had as Governor of Central Bank was convincing politicians that there would be a day when we will regret not saving the money when oil price was high. That the leakages in the oil sector could not continue; that oil was a commodity whose price goes up and goes down and when it comes down, if you don’t have the buffers, you are going to suffer.
“It is one of these moments where if you were not a Nigerian, you would say well, I told you so. But you can’t, because it is a very sad story. It is very obvious and it has happened over and over again. You have high oil prices, high oil revenues and you blow the money away, and when oil prices crash, you don’t know how to face the situation.
“In 2009, we had a huge crisis. Oil prices crashed from 140 dollars to less than 40 dollars. That was the time I was coming to the Central Bank. But at that time, the government had a number of advantages. The previous administration had saved a lot. There were physical buffers. The Central Bank and the Ministry of Finance could pursue countless fiscal and monetary policies, even though we had devaluation, even though we had some inflations, even though we dealt with the biggest banking crisis in our history, the economy continued to grow and people continued to be employed.
“The situation today is different. We spent years deceiving ourselves, calling ourselves the 21st biggest economy in the world based on something called rebasing. We said our debt to GDP ratio was 11 per cent and that the ratio looked very good. Yes we had a debt to GDP ratio of 11 per cent, but we were spending 33 per cent of government revenue servicing debts,” he added. .
Comentários