The Emir of Kano and former governor of the Central Bank of Nigeria, CBN, Muhammadu Sanusi II, has called on the Federal Government to prioritise its expenditure, wondering what the N1.4 trillion currently spent on fuel subsidy could have brought the country in terms of infrastructure.
Speaking on Power Lunch, a CNBC programme, yesterday, Sanusi said the Federal Government needed to prioritise its expenditure to be industrialised.
Sanusi said that by simply improving the allocation efficiency, the government could make greater impact.
He said: "I have looked at some of the deliberate policy decisions that have been taken, such as the continuation of the fuel subsidy, we are spending a trillion naira to 1.4 trillion naira on petroleum subsidies.
"Imagine what we could do with that. How many refineries will be built? How many power plants you could build? How much you could fix on your transmission.
"So we need to decide for ourselves and understand that every dollar we spend, we have made a choice. We need to decide what is our priority and by this we can free up resources from some of these areas and put them into these areas."
While speaking on how to increase revenues, he said countries that had the highest ratio of revenue to GDP were those that seemed to be faring very well on the transparency international corruption perception index.
Consequently, he said Africa needed to focus on improving transparency and public financial management, adding that collaboration between the government and private sectors would help drive industralisation in the country.
"There's a surplus of capital in the world, which is why we've had many many years of low interest rate. There's a saving glut, but the reason you've got these so much capital is that they are looking for outlets.
But those outlets can only come when the government begins to address the risks associated with investments and dealing with externalities and coordination problems. And as I said, If you want someone to come and invest in garment factories, well fix other issues. Make sure you give him electricity, give him the roads, give him security, then he invests and sets up.
"By coming together, identifying those areas and sitting with private sectors and asking what do you want us to do for you as a government? So you don't force them to internalise all those externalities," Sanusi said.
Also speaking at the 2018 annual meetings of the African Development Bank Group in Busan, Korea, Sanusi said Africa's economic transformation will be best achieved through fast-tracking regional cooperation and the execution of hard-nosed structural reforms that focus on the development of the continent's human capital and material resources.
"Nine out of every 10 countries in Africa have huge trade deficits with China, but Asia developed mostly on domestic investments and resources," he said.
Sanusi II proposed a number of structural reforms, covering strategic investments in agriculture, infrastructure, education and small and medium enterprises.
He called for "deliberate industrial diversification", noting that China has begun to move its mega-sized manufacturing capabilities out of low-cost industries.
"The African Development Bank has the intellectual resources and clearly is better positioned to negotiate with China on behalf of Africa as a bloc of nations. Europe approached global trade as a bloc so why can't African nations do the same? This is clearly another area in urgent need of the Bank's intervention," he said.
The emir said Dangote Group would account for 60 per cent of Nigeria's manufacturing GDP on completion of its pipeline projects.
Manufacturing currently contributes just 8 percent to the country's total GDP.