The former CBN governor, Sanusi Lamido Sanusi, said on Thursday that Nigeria’s reliance on oil production alone is not sufficient to guarantee prosperity for the country.
Sanusi made this statement while delivering the keynote lecture at the Distinguished Lecture Series of the Nigerian Institute of International Affairs (NIIA) in Lagos.
According to the former emir of Kano, Nigeria’s dependence on oil is not a working strategy to make us rich; however, it can put the country in great trouble.
Sanusi observed that it’s important to bring the economy into public discourse because that’s the only way through which Nigeria’s economic predicament can be addressed.
Referencing oil-producing countries such as Saudi Arabia, Kuwait and Gabon, he stated the country merely produced 2.3 barrels per day for an average Nigerian.
- “Oil is not enough to make us rich but enough to put us in trouble.
- “Nigeria will never get rich from producing oil.
- “At best, it represents working capital that can enable the launch of other industries.
- “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,” he said.
Subsidy removal and unification of the naira
Speaking further, the former CBN governor commended President Tinubu for removing subsidy and unifying the multiple exchange rate, noting that these two structural reforms will bolster economic growth in the country.
He also stated that while in 2011 he revealed the danger subsidy and multiple exchange rates posed to the economic landscape, many people refused to listen to him because of vested interest.
He said,
- “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 that encourages production and growth.
- “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,
- “We said, if we did not do something about those subsidies, we would end up where we are today.”
Short-term and Long-term Solution
Furthermore, Sanusi advised the President to focus on the diversification of the economy from oil reliance as a long-term strategy to the present economic challenges.
He said that while conditional cash transfer can be used to cushion the effect of these reforms in the short term, the government should have a long-term plan to ensure that Nigeria becomes a productive state.
- “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 added.
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On his part, Prof. Eghosa Osaghae, the Director-General of NIIA, characterized Nigeria as a nation blessed with abundant resources and the largest democracy in Africa.
He noted that the country had been through challenges but expressed optimism that it would surmount all challenges
- “We have continually proven to be the giant, and we must lead others there,” Osaghae said
