Sanusi who was speaking at the eighth convocation of the Igbinedion University, Okada, Edo State, expressed fear that the economy would not improve to meet the nation’s target of being one of the 20 largest economies in the world if 25 per cent of the nation’s expenditure continued to be expended on the recurrent expenditure of the National Assembly. Sanusi insisted that there must be cuts in recurrent expenditure.
He said the nation must focus on policies that would bring development through increased capital expenditure, stressing that if this was not done, the economy would continue to remain in comatose.
Sanusi who delivered a lecture entitled “Growth prospects for the Nigerian economy,” said that 25 per cent of the Federal Government’s yearly expenditure went to the National Assembly, noting that this was a development that was capable of hindering the economy further if not redressed.
Bulk of government spending
He said: “If you look at the budget, the bulk of government spending is recurrent; recurrent expenditure. That is a big problem; 25 per cent of overhead of Federal Government goes to the National Assembly. We need power, we need infrastructure, so we need to start looking at the structure of expenditure and make it more consistent with the development initiative of the country.
“A country like Ethiopia which came out of war just yesterday is growing at 11 per cent per annum and by 2012, Ethiopia will be generating 4,000 megawatt of electricity which is more than what Nigeria is generating today. It is one thing to complain about Nigeria’s problem, the situation is heightened when you see pockets of success around Africa.
Adopting right policies
“In ten years, if we do not adopt the right policies, the Ghanaian economy could overtake our economy on per capita basis. Look at Angola. We helped Angola solve a civil war and today Angola is exporting more oil than us and Angola has gone further on diversification. There is a big problem and the problem is a policy problem, so the answer is the pursuit of the right policies in the short to medium terms.”
Sanusi also frowned at the banking sector, which he accused of contributing to the slow pace in which the economy was growing.
He said: “Agriculture is 42 per cent of GDP. Only one per cent of bank lending goes to agriculture so the CBN is committed to increasing that proportion but that is not being done by directing banks to lend. It is being done by working with banks and farmers and with policies to open up the sectors that banks can lend on an acceptable lending rate.
“Why should Nigeria be importing rice? What is it that is produced in Thailand or India that cannot be produced here? Why should we be importing all those products? Why should we be importing textiles? In the 1950s and 1970s, the Chinese came to Nigerian textile factories, why are we going to China to import textiles? These are issues that we need to address on quality perspective, create an environment in which capital flows into actual production, into manufacturing, into processing.
“We have become a country that specializes in exporting what we do not produce and importing what we produce. Do you know that Nigeria provide electric power to Niger ? We export power, we don’t have it. The military government of General Sani Abacha conducted a free and fair election in Liberia, we exported democracy and we have not been able to conduct one in this country and anytime there are elections in Africa countries, you will see Nigerian former leaders going there as election observers and these were the very people that could not conduct election in their own country.
Problem of the country
“The problem of this country is not one of not knowing the solution, it is that the solution is not in the interest of a very few group of people who have held the country to ransom. The answer lies in every Nigerian simply standing up to this group that enough is enough.”
While expressing optimism that the nation would get it right if the right things are done, Sanusi added: “If external reserves can be substantially built up to boost the credit worthiness of the economy and attract foreign investment; if efforts are sustained to maintain peace in Niger Delta to boost crude oil and gas output, electricity supply is increased to 15,000_25,000 Mw between now and 2020, to boost manufacturing capacity utilisation and activities in other critical sectors.
“If the banking sector reforms and efforts to resolve liquidity challenges are sustained to channel credit massively to the real sector of the economy, if government sustains the current reforms in the various sectors of the economy to achieve rapid growth and development, things will be better.”