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More revelations made by the Emir of Kano and former Governor of the Central Bank of Nigeria, Muhammadu Sanusi ll, have continued to emerge from the recent Kaduna State Economic Summit held in Kaduna, the state capital.
Explaining issues on the planned $30b loan by the federal government, he revealed that currently, Nigeria was spending 66 per cent of its revenues to pay interests on debts and an economic model driven by such lopsided expenses cannot work or pass the test of time.
According to him, “The Federal Government of Nigeria is spending 66 per cent of its revenues on interests on debts, which means only 34 per cent of revenues is available for capital and recurrent expenditures”.
Already, several economic analysts aver that if the loan is finally accessed at this time the economy is spending 66 per cent of total earnings on debt service, repayment and servicing will push up debt servicing expenditure to over 85 per cent and that means collapse of government.
Sanusi added that “That model cannot work. If you look at the 2017 budget of the Federal Government, I sometimes wonder what Nigerian economists are doing? In the 2017 budget presented by the Federal Government, the amount earmarked for debt servicing is in excess of the entire non-oil revenue of the Federal Government, but that is not the problem. The problem is that it is a budget that is even going for more debts.”
He warned both the Federal and states government to stop borrowing because the economy has surpassed borrowing limits, saying the best option now is to look for ways to attract investments.
Sanusi further warned that “Growth can only come from investments. It cannot come from consumption”.