Nigeria’s current economic model is impracticable, panning the government’s excessive spending on debt servicing, the Emir of Kano Muhammadu Sanusi has said
Sanusi, a keynote speaker at the second edition of the Kaduna State Investment Summit, said the government erred by earmarking only 34 percent of its revenue for capital and recurrent expenditures.
He said: “The Federal Government of Nigeria is spending 66 percent of its revenues on interests on debts, which means only 34 percent of revenue 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.”
Economic growth, Sanusi said, could only come from government’s investment in the economy. But he was downbeat on the possibility of the federal and state governments being able to grow the economy owing to unsustainable borrowing patterns.
“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,” he continued.
“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 citizens 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.”