Sanusi: Why Nigeria has failed to achieve economic growth

Posted by admin CBN (Central Bank of Nigeria), Latest Politics, Top Stories Wednesday, July 13th, 2011

CENTRAL Bank Governor, Mallam Sanusi Lamido Sanusi has given reasons why Nigeria has continually failed to achieve meaningful economic growth.

Sanusi gave the reasons while delivering the First Professor William Okefie Uzoaga Memorial Lecture organised by the Department of Banking and Finance, University of Nigeria, Enugu Campus.

Speaking on the topic “Growing Nigeria’s Real Sector For Employment and Economic Development: The Role of Central Bank of Nigeria”, Sanusi declared that the fundamental problem of the Nigerian economy is value chain.

He lamented that there was no value chain in the nation’s economy as the Nigerian economy produces crude oil but imports petroleum products; pointing out that it was not all about monetary policies but the nation’s economic and trade policies must be looked into.

According to Sanusi, the Nigerian economy had been growing at seven per cent rate annually for the last decade and would double in the next 10 years and queried how inclusive this growth, how viable is the economy and how can this growth be translated into development.

He stated that the breakdown of value chain was the bane of the nation’s economy because if Nigeria’s economy with all the dysfunction is growing at seven per cent what would have been the situation if the country produces all the things that are being currently imported which could be produced locally in the country.

The CBN Governor called on the Nigerian government to protect her local and infant industries because there is no free trade anywhere in the world.

According to Sanusi, Nigerian industries need to be protected as they cannot compete with their counterparts in China, America or Britain and likened the Nigerian manufacturing sector to a young infant who instead of being protected is bullied by adults.

He observed that there was no market for Nigerian produced goods because of importation and taste for foreign goods.

He stated that there was an urgent need for an economic blueprint because the declining rate of the manufacturing sector is worrisome and Nigeria cannot claim to have an economy when the manufacturing sector is mere four per cent of the Gross Domestic Product, GDP.

The CBN governor suggested that agricultural production in Nigeria should change from a way of life to a business venture, that is agriculture should move from primary production to a process and government should give production subsidies to the Nigerian farmers

Also, Sanusi suggested that Nigeria must create an environment that would make banks to feel that it is safe to lend money for agricultural ventures and pointed out that the world over agriculture is the best credit portfolio.

Sanusi declared that he was not actually against subsidies as many Nigerian think because ideologically he belong to the left
but what he is against is giving subsidy to people who import thereby creating jobs in other countries.

The guest speaker stated that the real sector plays strategic roles in an economy as it is the driving force and engine of economic growth and as a major ingredient for capital accumulation.

He observed that getting credit to fund productive activities has been the bane of the real sector because of the nature and depth of the financial sector in Nigeria and the dearth of long tenured financial instrument has been a key constraint to real sector growth.

Sanusi maintained that sustainable development can only be achieved if adequate financial resources are efficiently mobilised and transformed into productive activities that engender growth
and generate employment.

He insisted that he is against subsidises on petroleum products because that money should be given to investors to establish local refineries while his opposition to subsidy on fertiliser is because most of the fertilisers imported are sand and do not meet need because they get to the farmers late.

He further explained that most of the advanced economies in the world still give subsidies to protect local industries but not subsidies on imported goods and products.

-Vanguardwp_posts