Muhammadu Sanusi II, a former emir of Kano, says reducing dependence on petrol will be the long-term solution to the subsidy removal crisis.
Sanusi spoke on Thursday, at a lecture series organised by the Nigerian Institute of International Affairs (NIIA) in Lagos.
The former CBN governor noted that Nigerians had been talking about the removal of the petrol subsidy as far back as 2011.
“We said, if we did not do something about those subsidies, we would end up where we are today,” he said.
“In the short term, the most effective measure to offset the removal of fuel subsidies is cash transfers.
“The design of individual cash transfer programmes varies considerably in reach and coverage. The long-term solution is to reduce dependence on PMS.”
Sanusi said oil is not enough to make the country rich but “enough to put us in trouble”.
The economist said “Nigeria will never get rich from producing oil. At best, it represents working capital that can enable the launch of other industries,” he said.
“Nigeria produces just 2.3 barrels per person per year compared to Saudi Arabia’s 91.4, Kuwait’s 221.6 and Gabon’s 31.7.”
‘HOW TO RESET THE NIGERIAN ECONOMY’
Sanusi said to reset the Nigerian economy, it would be important to bring economics into public discourse.
The former emir said an economy is run based on the ideological orientation of those who control the state.
“If the state is a rentier state where the people in control see it as an avenue to make money for themselves and their families, they are never going to run an economy in a manner that encourages production and growth,” Sanusi said.
“If it is run by people who are thinking long-term and of the legacy they will leave behind for their children and the future of the country, they will run different sets of different policies.
“I think every economist knows that multiple exchange rates are a problem, but as long as politicians are able to give themselves a dollar at 400 Naira and sell at 700 Naira, they are not ready to listen to the economists.”
Sanusi added that the country cannot continue doing the same thing and expect a different outcome.
On Nigeria’s gross domestic product (GDP) and debt ratio, he said the country had a huge revenue problem, adding that one of the solutions to Nigeria’s fiscal problems would be to raise revenue.
He urged that the image of the country should be improved to make it an attractive destination for investments.
