The 2015 All Africa Business Leaders (AABL) Award for West Africa which took place last week was attended by top business leaders in West Africa. These leaders, which include Aliko Dangote, Segun Agbaje and the Emir of Kano and Former Central Bank Governor Muhammadu Sanusi II, bagged awards Industrialist of the Year, Business Leader of the Year Award, and Lifetime Achievement Award for West Africa respectively.
The former Central Bank governor who won the lifetime achievement award gave a 19 minutes speech on the state of Nigeria’s economy. During his speech, he talked about the devaluation of the naira, his firm support for the current administration, dwindling oil price, Nigeria’s growth rate and foreign investment.
African countries should learn from Ethiopia
In his speech, he highlighted the fact that African countries are fond of spending more on importing than producing. Nigeria which is Africa’s biggest producer of oil cannot refine its own crude but relies on importation.
“African countries should learn from Ethiopia and decide to build comparative advantage for themselves. Not the legacy of comparative advantage of David Ricardo where you export primary commodities forever and think you could develop,” said Sanusi
On the state of Nigeria’s economy
The former CBN governor also said that the current economic situation in the country is a result of the fall in global oil price and not the fault of the current administration.
Sanusi said that “ I told politicians that there would be a day when we would regret not saving money when oil prices were high.”
Decline in the country’s GDP
Nigeria, the biggest economy in Africa has a debt ratio of 11 percent and currently spends 33 percent of government’s revenue servicing debt. He advised the government to shut down expense lines that have been known historically to be unimportant.
Sanusi noted that “…this country has spent over 5 billion naira on debt servicing and at this rate; this will be over 1 trillion this year which is more than the amount budgeted for health, education and defence combined.”
Exchange rate and fuel subsidy
According to Sanusi, since the government has announced its position on the exchange rate and subsidy, they should rethink this stance since the portfolios flows are gone and there is a high rate inflation. He further stated that the solution lies in loosening the monetary policies and keeping low interest rates in order to mitigate the procyclical stance of finance.
“…economic growth should be prioritised over naira stability. Subsidy has to go, our tax base has to expand, and Value Added Tax (VAT) has to go up,” said Sanusi.
Sanusi’s advice to incoming ministers
He implored the incoming ministers and current governors not to make same mistakes as the previous administration. He said they should know that their responsibility is to advice the president appropriately.
“..I do hope that people will remember that ultimately, when you are part of an administration and do not speak when you should, then you have forever forfeited the right to speak. Loyalty is about telling your boss the truth”
Attracting foreign investors to Nigeria
In view of competing demands, competing sectors, and other alternatives, he encouraged the government to attract foreign investors in order to foster development. Foreign investors should be encouraged in the country.
“…If investors are not encouraged, they will leave us and go to other countries. Nigeria is not the only game in town,” he advised.
In his closing remarks, Sanusi showed his firm support for the current administration and encouraged Nigerians to give their support also in order to bring about desired change.
“A friend does not tell the government what it wants to hear but a friend tells the government what he feels is wrong.”
Source: venturesafrica.com
