Sanusi’s alarm on Nigerian economy

Former Emir Sanusi

The prediction by the former Governor of the Central Bank of Nigeria (CBN), Khalifa Muhammad Sanusi, that Nigerian economy will soon collapse is, indeed, a clarion call to the nation’s economic managers and policy makers to move swiftly and deftly to avert the impending calamity. Sanusi, noted, and quite rightly, that the crude oil on which the economy is anchored has no future and is no longer sought after globally.  

Addressing the sixth Kaduna Investment Summit, after inaugurating the state development plan 2021 to 2023, to transform the state into a knowledge-based economy, the deposed emir of Kano said despite having difficulty in producing crude oil, which has been the mainstay of Nigerian economy for decades, the product is now being rejected globally, as there are no longer future in carbon with renewable energy taking over. 

While pointing out that the future lies in knowledge-based economy, Sanusi lamented that Nigeria lies behind many African countries in innovation index, ranking 114th globally.

“Work is being redefined. Thirty to 40 per cent of workers in developed economies will need to significantly upgrade their skills by 2030. 

“And what are the major drivers of this redefinition? ICT and remote working, which we have seen even here with COVID. There is increased automation and artificial intelligence. Very soon, robots will take over work in most countries and those who would have job are those who operate the robots or manufactured the robots or service the robot. 

“And you have decarbonisation. For us in Nigeria, the enclave economy that we have, the so called goose that lays the golden egg (oil) is about to die. There will be no eggs. The future is not in the carbons. Few months ago, Germany was able to produce enough renewable energy for the entire country’s need. Today, we are having difficulties selling Nigerian oil, the market is not there.

“So, this is forcing a change, and for us a country that depends on oil, things need to change. Nigeria is ranked 114th in the global innovation index. We are lower than other African countries such as Kenya, Rwanda and Senegal. We are in fact ranked 14th in sub Saharan Africa. I think we should have reality check and know where we are as a country. Let’s stop calling ourselves the giant of Africa, because we are the giant with clay feet. 

“Countries like Kenya, Rwanda and Senegal are ahead of us. I am not even talking about South Africa. Our expenditure on education is only seven per cent of the budget. We are spending less on education than Ghana; I am not talking about as per percentage of the budget; in absolute terms. Even though the Ghanaian economy is much smaller than the Nigerian economy, even though the Ghanaian revenue is less than Nigerian revenue, Ghana is spending more on education than Nigeria. 

“We are surprised that industries are moving to Ghana. Are we surprised that the Ghanaian President has become the leading President in Africa? We are not investing in education and human capital. We have a 68% missing job requirement and the major areas being IT, communication and decision making. 

“The completion rate between entry into primary one and completing university is eight per cent, meaning that out of every 100 pupil who go into primary school, only eight come out of university. And out of those eight, nine percent, which is one of the eight will get job. So, this is the reality in addition to what is happening globally. 

“Now, digitisation to level the playing field is required, if we are deliberate and we shift from consumption to value creation. But, part of our problem is that, even when we have the solution at our feet, we do not take it. If somebody want to innovate in the health sector it is to have data of people who use medical service, the location of hospital to create and innovate solutions that will provide easy access to healthcare delivery and education,” he said.

The renowned economist called on government to provide uninhibited data support and market access for the private sector. 

“If Kaduna state government continues with its e-government plan, it will be a big market itself and will encourage investment which are all knowledge economy aspiration and a shift in government spending to match the priority. 

“Job creation in a knowledge economy is not about creating jobs in Kaduna but equipping citizens with skills to participate in the global economy. Global platforms enable people with development skills to find employment anywhere in the world which is the future of knowledge economy,” he said.

Although, Sanusi’s prediction is not new, it does appear that the Nigerian government is treating the matter with levity. The much hyped diversification is yet to be fully explored as crude oil still accounts for over 80 per cent of the nation’s revenue. We, therefore, urge the federal government to heed Sanusi’s advice by doing the needful in order to save Nigeria’s economy from total collapse.