SUBSIDIZING PETROLEUM AND OTHER COMMODITIES, could lead Nigeria into worst case of insolvency, unless government eliminates huge resources channeled to that direction. Nigeria’s present debt profile is N24.4 trillion, 12.25 per cent increase from the 2017 standing.
Tuesday, at the third National Treasury Workshop, organized by the Office of the Accountant-General of Nigeria, held in Kano, Sanusi Lamido Sanusi, Emir of Kano, raised concerns over the high cost of subsidizing petroleum and other commodities and warned that Nigeria could be heading towards bankruptcy if the trend is not reversed.
The theme of the workshop is: “Accountability and Transparency as Catalyst to Economic Recovery: The Role of the Treasury and other Stakeholders”. Nigeria’s Accountant-General of Federation, Idris Ahmed, stated that the country’s debt profile is sustainable.
But Sanusi, a former Governor of Nigeria’s Central Bank, insisted the country’s balance sheet was already overstretched. Nigerian government spends 70 percent of the total generated revenue on debt servicing. Sanusi said no nation survives an economy with only 30 percent of its total income spent on basic social infrastructure.
President Buhari’s promise to take Nigerians out of poverty, Sanusi said, could only be realized, if the drained on the economy by petroleum and electricity subsidies are diverted to education, health and infrastructure. Huge spending on servicing of debts, amidst slide in foreign exchanges and other changes in “international matrix”, troubles the former Central Bank Governor.
Sanusi said Nigeria spends 100 per cent of its foreign earnings on imported goods. And urged treasury managers to be firm and open in advising government on the implication of “reckless spending on subsidies”, rather than spending on social welfare and infrastructure development.