Former Emir of Kano, Muhammadu Sanusi II, has advised governments at all levels to stop borrowing to finance development.
He also blamed the massive poverty in the land to non-diversification of the economy 60 years after discovery of crude oil.
The ex-Central Bank of Nigeria (CBN) Governor said instead of borrowing, governments should invest on human capital and aim to create enabling environment for investments.
He gave the advice on the second day of the Kaduna Economic and Investment Summit (KADINVEST) 5.0 on Tuesday.
Sanusi said: ‘’While everyone looks to the Federal Government for solutions, the truth is that its role in the economy is small, both in absolute and relative terms.’’
The former Emir recalled the success of Nigeria’s pre-oil economy was based on the dynamism of its trading sector and the diversity of its export base.
He argued the diversity of the nation’s export in the pre-oil economy in Nigeria ‘’meant that it was less vulnerable to a terms of trade shock driven by any one export in particular.’’
Speaking on the diversification of the nation’s economy, Sanusi compared Nigeria with Malaysia, saying the latter has transformed from an exporter of primary products to manufacturing over a 30-year period from 1970 to 2000, adding that its ‘’ GDP/capita increased from $310 to $4,045 within that period.’’
The renowned Economist said that Nigeria has generated an increase in wealth from $345 in 1985 to $2,655 in 2015 GDP/capita but ‘’without any structural transformation in what the country actually produced.’’
Sanusi, who quoted the 2016 edition of Atlas of Economic Complexity, said crude oil and allied products generated 89.67% in 1985 and 77.05% in 2015, over a 30-year period in Nigeria.
According to him, the economy is growing but it has not been diversified, which explains the high rate of poverty and high level of inequality.
He said that the difference between African countries and those in Asia is they have diversified from primary to secondary and tertiary sectors of the global economy.
The former Managing Director of First Bank Plc lamented Nigeria is still a consumer nation instead of being a producer by seizing on the investments the government has done in technology.
‘’Africa’s failure has been in not leveraging on the underlying infrastructure—towers and undersea cables—to catalyse the development of other and new industries.
‘’If you use your smart phone which is made in China and order shoes from France and they are delivered to you at home, what have you actually gained? You are just a consumer,’’ he added.
The ex CBN Governor argued the same phone can be put to productive use when it is used to shoot a Nollywood movie and the film clip is distributed.