SANUSI EXPRESSES FEAR OVER VISION 2020
Central Bank of Nigeria (CBN) Governor, Mallam Sanusi Lamido Sanusi, has expressed fear over the nation's Vision 2020 Programme, saying the relevant structures were not in place few years to when the programme is supposed to kick off.
Sanusi made the observation on Friday in Asaba, Delta State capital at the First Distinguished Lecture Series of The Knowledge Centre, Onicha Ugbo, Aniocha North local government area.
The erudite scholar noted that if the Vision 2020 programme of the government was to succeed, the power problem in the country needed to be addressed while security and transport infrastructure should be put in place, stressing that there is also need to have a very conducive investment climate, even as the petroleum sub sector has to be deregulated.
' I love the Vision 2020 but my fear is that the power situation needs to be addressed. The solution is to implement the legislation on power reform. Our ambition is to generate 6,000 megawatt of electricity. How many industries can it carry? South Africa with just 40 million people generates over 40,000 megawatts. You need to create an environment.
'We have to transform the environment. This is the only country in the world where over 70 percent of the power is privately generated. I have no doubt that if the national grid was to collapse, manufacturers will still be in business. Everyone who has power supply depends on generators. Nigerians pay seven naira for power if it is available and N45 if not available. So, why not reduce the tariff to N22 and make it available? I express this opinion at every occasion. The industrial revolution started in England with the discovery of electricity. We need to have an investment climate and environment.
The petroleum sector has to be deregulated. We have spent over1.2 trillion Naira on fuel subsidy in the last three years. The question is, who are the people that took the subsidy? Nigerian economy has grown at 7-8%, a growth that has come from agriculture as a result of increased land use. It has not come from improved manufacturing, neither distribution of petroleum products.
If we want the economy to grow at 13-15% annually, we need to provide an investment climate. Foreigners can come and set up factories here, employ Nigerian workers, buy raw materials from Nigerian farmers and export from Nigerian soil. There are people who are willing to do that. The only way you can afford subsidy is if you are producing real goods and services and paying taxes, and not if you are digging oil from the ground and depending on international oil prices.'
Talking about the banking industry, Sanusi said that lack of investor sophistication helped create the problem in the nation's financial sector, and went ahead to describe the banking sector in the country as a funny casino , advocating
the development of the capital market so as to attract long term money and long term investments.
He went ahead to enumerate the constraints facing the banking sector .
'The major problem we have is how to get the banks to lend to small and medium scale enterprises. The banking sector reforms and monetary policies can only keep the economy this far. The banking constraints on economic growth in Nigeria are not monetary. In my view there are five binding constraints. One is the constraints of critical infrastructure. If you give the banks the money and tell them to lend to the manufacturers, they need power, security, and transport infrastructure.
If you don't have that, the banks will not find a viable manufacturing industry.'
Disclosing what went wrong with the Nigeria banking sector, Sanusi said there is a very strong correlation between commodity prices and stock prices in commodity exporting countries which Nigeria is no exception.
'At a point, oil prices shot up to 147 billion Naira a barrel and Nigeria was producing over 2 billion barrels a day before the Niger Delta crisis. So much money which accrued to the Federation account found its way to the capital market.
Corporate governance is at the heart of the problem. Some banks with shares of N22 per share suddenly collapsed to three naira. We are ready to defend our action at the court. Lack of investors' sophistication helped create the problem. Most investors lack sufficient knowledge of the workings of the stock exchange.'