Emir of Kano, Mr Muhammad Sanusi II, has warned that Nigeria is on the verge of bankruptcy as fuel and electricity subsidies, as well as debt servicing, continue to eat into government revenue.
Sanusi, who is a former governor of Central Bank of Nigeria, said this while delivering his address at the ongoing third National Treasury Workshop, organised by the office of Accountant-General of the Federation in Kano.
He advised President Muhammadu Buhari’s administration to scrap fuel and electricity tariff subsidies in order to stabilise the economy.
He said, “In 2011, when I was CBN governor, Nigeria made $16bn from petroleum sales, and we spent $8bn importing petroleum and spent another $8.2bn subsidising the product…and I asked, ‘Is this sustainable?
“The country is bankrupt and we are heading to bankruptcy. What happens is that the Federal Government do pay petroleum subsidy, pays electricity tariff subsidy, and if there is a rise in interest rates, Federal Government pays. What is more life-threatening than the subsidy that we have to sacrifice education, health sector and infrastructure for us to have cheap petroleum?”
Sansui said, “If truly President Buhari is fighting poverty, he should remove the risk on the national financial sector and stop the subsidy regime, which is fraudulent.”
He said the President must tell Nigerians the facts about the economic situation and act promptly to address it.
Sanusi told the participants at the workshop, “We need to ask these questions: why are there high mortality rates, malnutrition, high rate of out-of-school children, among others, while the national treasury goes to petroleum sector?
“In 2016, we were told that we are consuming 28 million litres of petrol per day and just a few weeks ago, we were told that it has jerked up to 60 million litres daily; what went wrong? Since I have decided to come here, you have to accept what I have said here. And please, if you do not want to hear the truth, never invite me.”
The Emir expressed worry about the state of public finance in the country, saying there were a number of very difficult decisions that must be made.
He said, “We should face reality. The President, said in his inaugural speech that his government would like to lift 100 million people out of poverty. It was a speech that was well received, not only in this country but worldwide.
“The number of people living in abject poverty in Nigeria is frightening. By 2050, 85 per cent of those living in extreme poverty in the world will be from the African continent, and Nigeria and Democratic Republic of Congo will top the list.
“Two days ago, I read that the percentage of government revenue going to debt servicing had risen to 70 per cent. These numbers are not lying. They are public numbers. I read them in the newspapers. When you are spending 70 per cent of your revenue on debt services, then you are managing 30 per cent.
“And then, you continue subsidising petroleum products and spending N1.5tn per annum on petroleum subsidy! And then we are subsidising electricity tariff. And maybe, you have to borrow from the capital market or Central Bank of Nigeria to service the shortfall in the electricity tariff. Where is the money to pay salaries? Where is the money for education and other government projects?”