The former Governor of the Central Bank of Nigeria (CBN) and former Kano Emir, Muhammad Sanusi, has said that the makeup of the Nigerian Government has made bankruptcy inevitable in the future, as it continually proves too expensive to maintain.
During a webinar titled, ‘Mitigation of the economic impact of COVID-19 and the path to recovery’, the former emir said that during his tenure as governor of the CBN, the government of the time had spent 80 percent of its annual revenue on the payment of salaries and overheads, while the price of oil was more than $100 per barrel.
He said that “extremely high overheads and you need a high contribution margin to break even, you would be looking at how to reduce cost.”
Sanusi said, “Now, I’m sure that with the shortfall in revenues and where oil price is, after debt service, we probably have to borrow to pay salaries. We have got to look at that structure.”
He added, “If you have a company and you have extremely high overheads and you need a high contribution margin to break even, you would be looking at how to reduce cost. So, we have a constitution that says we should have a president and a vice-president, we must have a minister from every state of the federation, whether or not it’s 36 ministries; we should have 109 senators and 360 members of the House of Representatives.
It also said we should have 36 governors, 36 deputy governors, each state with its House of Assembly and comprising many legislators, 774 local government chairmen, councillors, the personal assistants and special assistants (at all levels), staff members and vehicles.
“With these, you are already set up to be bankrupt. This is something I have been talking about for years. We need to ask ourselves; the structure that we have, does it leave us any option rather than to remain unsustainable over time? This is the kind of conversation we need to have as a country.
“Do we need a bicameral legislature; do we need close to 500 legislators in Abuja; do we need the hundreds of state legislators; what are they doing; do we need all these local government chairmen and councillors or do we need to look at that structure?”