Emir of Kano, Muhammadu Sanusi II, has faulted the economic model of the federal government, saying it is bound to fail.
While speaking at the Kaduna State Economic Summit, Sanusi said that the FG’s penchant for borrowing cannot be sustained, noting that Nigeria is currently spending 66 percent of revenues to service debts.
“The Federal Government of Nigeria is spending 66 percent of its revenues on interests on debts, which means only 34 per cent of revenues is available for capital and recurrent expenditures.
“That model cannot work. If you look at the 2017 budget of the Federal Government, I sometimes wonder what Nigerian economists are doing? In the 2017 budget presented by the Federal Government, the amount earmarked for debt servicing is in excess of the entire non-oil revenue of the Federal Government, but that is not the problem. The problem is that it is a budget that is even going for more debts.”
Sanusi advised the FG and state governments to consider the alternative method of attracting investment into developmental projects as opposed to borrowing, which has dire costs.
“Growth can only come from investments. It cannot come from consumption. It cannot come from government balance sheet. It cannot come from borrowing because you cannot borrow unsustainably,” he said.
The former governor of Nigeria’s central bank also criticised the federal government’s plan to source for loan from China.
“We have governors; they go to China and spend one month on a tour and what do they come back with, MoU (Memorandum of Understanding) on debts.
“China will lend you $1.8bn to build light rail. This light rail will be done by the rail workers from China. The trains will come from China. The engines will come from China. The labour comes from China. The driver is Chinese.
“At the end of the day, what do you benefit from it? Your citizen will ride on a train and when you ride on a train, in northern Nigeria, in a state like Kano or Katsina, where are you going to? You are not going to an industrial estate to work. You are not going to school? You are not going to the farm. You borrow money from China to invest in trains so that your citizens can ride on them and go for weddings and naming ceremonies.”