The Emir of Kano, Mohammed Sanusi II, on
Wednesday joined several prominent Nigerians and
industrialists calling on the Federal Government to
sell out some national assets to enable the country
wriggle out of recession.

Speaking in Lagos, at the launch of the 2016 Banking
Sector Report published by the Afrinvest West Africa
Limited, Sanusi said one of the options available to
government is to sell down some oil assets and the
refineries to private sector operators that will pump
dollar into the economy, so as to strengthen the
Naira.
He said: “One option is to sell down some assets, sell
down some refineries in a manner that does not hurt
your strategic interest. Sell down some oil assets, sell
down some refineries, in a transparent manner that
gives you value. You can also have options to buy
them back later”.

According to him, such steps would lead to increase
in foreign exchange inflows into the economy, which
is what the economy needs right now.
He also urged government to create level playing
field for both the Nigerian and foreign investors.
“And do what I said which what are the kind of
policies that will attract foreign investors. We have to
get to a point when we welcome investors of all
nationalities, who are willing to set up production
plants here to turn our own raw materials into
finished goods. Rwanda, Ethiopia have all done that
very well. There is nothing we are saying that haven’t
been done by other African countries. We need to go
into investment-driven model. China has grown into
investment-driven model. Nigeria needs to move into
in to investment-driven model,” he said.

Speaking further, he said: “Any model that tries to
chase away foreigners will not create jobs for the
youth. We need to be an economy that creates
opportunity for the youths. It also includes the
independence of the Central Bank of Nigeria (CBN). I
love the finance minister, but when the CBN said we
are not reducing interest rate, I said, yes”. This, he
explained was that the CBN should continue to
protect its independence.

Sanusi said Nigeria’s growth have over the years,
been driven by rising commodity prices, and the
rising domestic debt that went into consumption.
“So, real wages basically kept increasing. In 2011,
with oil prices at $110 per barrel, we were spending
80 per cent of government revenues on personnel
cost. It was not sustainable, it was a problem I
identified but no body listened. That model has
reached the limit of its capacity. How much can you
tax people to make up? There is a limit to what you
can borrow. Now, we are spending 35 to 40 per cent
of your revenues on debt services,” he said.
“I think it is a positive thing, when the fiscal
authorities and the many people in the private sector
said they wanted a lower rate of interest rate. I was
concerned that the CBN will succumb to pressure.
And the fact that the CBN did not succumb to the
pressure is a fact that it is beginning to claim its
independence which is a very positive thing. And
these are economic questions, you make choices. I
can see why the CBN does not want to lower interest
rate at this time”.

“If you lower Monetary Policy Rate (MPR) at 100 or
200 basis points today, it is not going to lead to rapid
increase in credit growth. Its not. You will not see an
increase in credit growth that will reverse downward
trend in output by lowering MPR by 100 or 200 per
cent. You would, however, further fuel inflation, and
you will reduce the yield in fixed income at a time
you are trying to attract foreign exchange,” he said.
He said the CBN got the decision right, adopting a
flexible exchange rate, and secondly, tightening
monetary policy.
He urged the CBN to fully allow the flexible exchange
rate to work without interruption.
“And these things really require courage, because
some of the decisions you will take, will seem to fly in
your face in the first week or two. But look at the
fundamentals. The naira today is undervalued. The
fixed income is suffering high yields. The Lagos Stock
market, if you look at the assets prices picking ratios,
you got a gross undervaluation. If you allow people
to come in and sell their dollars at market prices,
people see they are going to make profits in the
equities market and fixed income and also currency
appreciation,” he said.

“So, long as you do not allow that, you will not have
the float you want. Now, it is the inflow of the dollars
into the economy that will take the naira towards its
fair value and take it to where you want it to be not by
fiat. The market does not accept orders. It will never
happen, it has never happened,” he said.
“We need the CBN to take that risk, and courage to
implement the flexible foreign exchange policy. Let
the market work in the next two or three weeks and
see, as people know they can come in, sell their
dollars, buy stocks, sell their dollars, fixed income,
make a profit in currency and capital acquisition, you
are going to have gradually narrowing of the gap
between the interbank and the parallel rate and have
more liquidity in the market,” he said.