The Emir of Kano, Muhammad Sanusi II, has applauded President Muhammadu Buhari’s resolve to focus on eradicating poverty.
President Buhari had, in a speech marking the maiden celebration of June 12 Democracy Day, promised to take 100 million Nigerians out of poverty.
Speaking at the 3rd National Treasury Workshop convened in Kano by the Office of the Accountant General of the Federation, Emir Sanusi said the president’s speech was well received “nationally and internationally”.
The Emir however noted that addressing poverty will require taking difficult and painful decisions to free up resources for investment in education, health and infrastructure “and the funding needed for these investments cannot be raised from taxation during an economic slowdown”.
Also Read: CBN Commences Buhari’s 100m Jobs Project
One major area of concern is the huge amount the country continues to spend on subsidising petroleum products, Leadership reports.
Emir Sanusi recalled that in his days as Central Bank Governor, he had alerted the nation that in 2011 for example, the federal government earned $16 billion from the oil sector but the nation spent $8 billion in importing petroleum products and $8.2 billion on subsidies of the same products.
“The result is that all the money earned from oil went into petroleum imports. This situation is unsustainable and could eventually lead to bankruptcy if not addressed”, he said.
Continuing, Emir Sanusi recommended that the Federal Government should convert subsidy regime from a “naked hedge”, which it is today, to a proper subsidy.
“For example, the Federal Government could pay 30% of the cost of petroleum products this year, and reduce it by 10% annually until by 2022 the subsidy is eliminated”.
Although, he recognised that it would be politically difficult to remove the subsidy one time, he insisted that Nigerians must be ready to pay a higher price for petroleum products if oil price goes up.
The idea is for the government to put the money saved into education, health and other development projects.
The Emir also advised the Federal Government to stop subsidising electricity tariffs, as poor people will pay cost-recovery tariffs if
they have 24-hour supply of electricity. This enables them earn income from small enterprises and lift themselves out of poverty.
He gave an example of Cote d’ Voire where in Abidjan there is regular supply of power and the citizens pay cost reflective tariffs.
Emir Sanusi however, raised concerns about recent reports that debt service/revenue ratios have risen to 70% and stressed that clearly the nation cannot afford to continue spending on subsidy.
He enjoined treasurers to advise their principals on the unsustainability of these arrangements in order to strengthen the fiscal balance sheet of the government and improve the economy.
At the beginning of his speech, the Emir had expressed reluctance to speak because every suggestion made to improve things is always treated as a criticism.
In fact, he said he had decided not to attend such events but was there to honour the Accountant General of the Federation who hails from Kano.