Sanusi Lamido Sanusi - Governor, Central Bank of Nigeria HARDtalk

Time now for HARDtalk. Welcome to the programme. The high

price of oil is powering Nigeria's economy to new heights. This year,

it's predicted to have grown by over 6%. So why do some experts say it's

more vulnerable now than it was during the global economic meltdown

of five years ago? If they are right, it has happened on Sanusi

Lamido Sanusi's watch. The Governor of Nigeria's Central Bank, Sanusi

Lamido Sanusi has accused politicians of flooding the country

with dollars to lubricate election campaigning for a presidential poll

that's still 18 months away. By then, Governor Sanusi's term of

office at the bank will be over. Could he have his eye on a new one `

in the presidential palace? Sanusi Lamido Sanusi, welcome to

HARDtalk. Thank you. What you think is holding Nigeria's economy? The

economy has been growing at. The growth rate is good. The big

challenge is how to make the great inclusive and how to make it less

vulnerable for shocks. A major problem is structural reform. We

will education. The reforms would help with investment in

infrastructure. When you are on this programme a couple of years ago, he

complained about lack of support away from oil. Agricultural, 42% of

the GDP. But only received 1% of bank lending. You said we have to

criticise: the right industrial policy for the link `` for the bank

to help the economy. There has been listening happening. A trade

investment came out with a draft industrial revolution plan. With

recognised the importance of secondary sectors. There is a new

programme. It has addressed the issue of fraud in subsidies. We are

trying to fix agriculture changes. The bank issue for Nigeria is we

have to improve productivity for agriculture, from primary production

to `` production. The GDP fell last year. Is that the fault of the

politicians? No. Last year, there was a unique thing because of the

floods. Our production this year has rebounded. It is not where we want

to go still. Output is 2.3 tonnes per hectare. There is a lot that is

to be done in terms of irrigation, fertilisers. Markets. Politicians

think they have solutions to these problems. The first of the annual

economic summit will be up at agriculture this year. There have

been trumpeting some of the changes, for example, Chen `` plans to be

self`sufficient in rice production by 2015. They want to impose a 100%

tax on Polish rice imports. Is that the way to make major is economy

competitive? I do not believe tariffs either way. Paris to address

the problem. I have made it clear. `` tariffs. Tariffs will make rice

smuggling a problem. The challenge with agriculture is dealing with

productivity. It is about irrigation, seeds, fertilisers,

trading, access to markets. It is also a bout corruption. A person

from an American `based company, active in your country, state that

at the summit, $10 million worth of agricultural equivalent was delayed

into Nigeria because Customs and other agencies sought bribes.

Another farmer in palm oil production said they had to provide

their own electricity. Structurally, there is something wrong. There are

structural problems. In the last year, the government has been saying

the right things. Saying the right things? Are they doing the right

things? With fertiliser subsidies, it has addressed the issue of

corruption in subsidy regimes. They are focused on cocoa. They are

focused on food crops. Some things have been fixed with local

production. It takes a long time. For the first time in a long time,

we recognise we have arrested plush `` productivity. Tariffs are not the

solution. They will is important. Vast majorities of revenue comes

from the taxes on oil. `` oil. Why do you think output is allowed to

drop? There is a problem with the bill. It will invest `` attract

investment in all sector. There is a problem with production because of

the oil theft. There is a lack of transparency in the sector. Those

issues have to be addressed. In someone said it was criminal accrued

in a report. Nigeria is economy drives for competition for the

resources. For government encourages violent opportunities around will it

the doors for organised crime. It that's what it is not tackled more

vigourously denied there are political questions. We are a

resource rich economy. There is a struggle. We have to ask fundamental

questions about the state itself and whether it is ready to change and

address these issues. There are individuals who benefit from this.

They want to resist change. Some of those are in powerful positions.

Obviously, everywhere in the world, you have alliances between economic

and political powers. Our tea break those up? It will take a lot of

political will. How do you break them up? There is discourse going

on. People are focused. You have been credited with Karen up some of

those relationships in the banking sector. `` tearing up. Eight of the

chief operating officers of some of Nigeria's commercial banks were no

longer in their jobs. Have you seen off of your influence, your

credibility as governor of the Central Bank, to put pressure on the

politicians to do something about these problems? The only thing I can

do is clean up my own area. Of course, I know that are a number of

people in government who work on that. We can make more progress. I

hope we will. It seems to be the reverse. Shell closed its trans`

Nigeria pipeline September. Hundreds of thousands oil barrels per day in

production because of leaks due to theft. That was that in a week after

it was reopened. The whole structure around the industry, the lifeblood

of Nigeria, seems to be undermined by exactly the forces that should be

there to protect it. If you listen in the last few months, the

President, the Finance Minister, the petroleum Minister, they say this is

a big issue. It last two months, the beginning of an election campaign. I

have the meetings with the head of security services. They talk about

what they are doing on that. There will be progress. Frankly, it is

something that needs to be done like yesterday. You are blamed for

suspiciously high demand for dollars of currency exchanges earlier this

year. He talked about the dollarisation of the economy by the

political elite. What is your evidence that is what lies behind

the surge in demand? I mention that is one issue. We discovered an of

things that have brought. There was an increasing suspicion for dollars.

In import of goods and services. In looking deeper, and then of course,

going across... Joining the dots and if the reports, it was clear to me

that some of that had gone into politics. Some of that goes into the

importation of goods that have been banned. That a worried that a

fundamental flaws in the economy and if the oil price were to drop,

Nigeria might be in trouble. It is natural when the US Fed might think

there is a slowdown in flows and pressure on the exchange`rate. Some

of the pressure from the speculative... And... East. On the

political side, you have any idea which party organisations or

groupings, or supporters might be involved? We have an economy that is

so highly what `` dollar rise. Everybody is in it. You have people

asking for dollars four transactions. You people at moving

dollars because it is easier to move huge amount of currency. Also,

some might wonder what you have been doing for the last two years at the

governor of the night `` Central Bank. A fair comment. Best late than

never. You are in the last few months of your job. You had your

successor will pursue this. We are talking about this earlier from the

collection. It is more than a year away. You must be worried that kind

of potentially could make his election not a very clean one. ``

election. I can always talk about expensive or cheap. We have

elections in 2011 which were some of the most expensive in the world.

Election is everywhere are copping the pain. But you spent it on

advertising. You spent it on my spammers and two for everybody. It

spent on paying people to vote a particular way? I do not have any

proof about that. `` T`shirts. It is difficult for Central Bank governors

everywhere around the world. It is typical but is it difficult in

Nigeria? I think it is. You have the pressure of the electorate wanting

to see actual deliverables. You also have the expensive process. In

Nigeria, 776 local governments have a chairman and counsellors who are

elected. If 160 members of the House of representatives. Too many

politicians. 36 governors. Too many. Basically, conducting

elections across that it expensive. The logistics. To be fair, the

Federal Government is reducing its budget for next year. Within that

government running cost, that is going to go up by 10%. The Finance

Minister reckons. That means that money on other things that are

important, like infrastructure. Is that wise? I have made this comment.

They are unpopular back home. I think the size of government is too

big. We spend too much money on salaries and allowances. Why are

they not listening to you? You are the governor of the Central Bank. In

2010` 2011, the President is still listening. I do not know if he can

change things that easily. He is the President. In 2011, we had an

increase in wage. I knew it would increase the government. It is not

discretionary. You are going to reduce how much to spend on... 10%

increase? That is a lot. With oil production, as you want them about

optimism? If we plug the loopholes, all of the gaps in the production

stoppages, we should be able to do 2.4 million barrels per day. If. I

think this one is Mr recognises that. It is still more conservative

than the 2.5 million barrels used in last year 's budget. There is the

option to read the rainyday fund again, the Axa 's crude count. It

has been reduced from $9 billion to $5 billion. `` access crude account.

If there is a shortfall, yet of which is a big problem. If we make

assumptions that are too, we are having no savings. Are you worried

they might do that again. The IMF said his goal offers in uncertain

environment needs to be rebuilt. I'm sure the Finance Minister is

worried. Again, what can we do? The things we need to address. We are

paying too much on fuel subsidies. There is the question of salaries.

It services. A lot of the spending is not discretionary until we can

actually get rid of those are not going to create this pace that we

want. `` debt services. Subsidies are an issue you have expressed as a

force for sleep forcefully and publicly about. `` forcefully and

publicly about. They do not scrap it. That was the original plan. You

are pressing hard for that. Was that politics getting in a way of

rational economics? There is a limit on how much the

government can impose austerity on people, when they are out on the

streets. It has taken a long time for anyone to even dared talk about

reducing subsidies. It has been cut by 50%. Some of the companies that

were being investigated for claims they were abusing their role in the

subsidy process, the process by which fuel which has been exported

for treatment has been reimported, and people are given financial help

so they can afford to buy it, some of those companies were under

investigation for fraud, and yet some of them are back employed by

the government. It looks like they have backed down pretty quickly. The

outcome for the population is not an improvement. The Finance Minister

did authorise an investigation. The report was handed over to law

enforcement agencies. Why did you lose the argument on getting rid of

the subsidies? You were one of its most prominent public proponents. We

have not lost the argument. One way or another, it has to go. It has to

go. It is not sustainable. We have got a programme which reduces

spending, but a lot of it... If you do not invest in capital, you will

not have development. When should it go? Should it be part of the

presidential election? It should be a number of issues. We have a

situation where they are building a refinery. We need to reduce our

dependence on imports. It will reduce the amount of subsidies. We

need to help the investments that go into that thou, downstream it. And I

think we should take action on those who have been involved in previous

fraud. What kind of timeframe will be realistic to make the changes and

bring the public with you? I think it is not on the table in the year

before the elections. What would happen, this government or a new

government... Posted 2015, how long do you hope it will take? As soon as

a sub or. `` as possible. They have responded to the public protest. For

many Nigerians who feel they do not get any benefit from the country's

loyal world, that is one concrete benefit. Even at the decade of

strong growth, the number of people living in poverty dropped by less

than 4%. Down from just over 64%. In a sense, a lot of people are

entitled to feel angry about their lot in modern Nigeria. Their roster

shall issues. You have growth that is fuelled by agriculture and that

is coming from... Not productivity. So until we improve productivity, it

will lift up the population. Second, you see a weakness in technical

education and investment. That is what you need to make your growth

more inclusive. Otherwise you have the big headline figures that do not

trickle down. How far do you think that economics rather than religion

in the north, the aspiration for independence, are driving that kind

of instability and insurgency that we see in Nigeria? I believe that a

lot of the insurgencies are tied to economics. Whenever you have any

horizontal inequalities, where they feel they are marginalised, which is

happening in the Niger Delta, you create an environment in which

people become radical. It could be ethnicity, it could be religion. At

the end of the day, they are tied to poverty. You have been taking part

in the world is lambing is `` economic Forum. Do you think the

Western banking system have provided any part for providing the field for

this extremely is on? I do not think so. It is one additional piece of

furniture that helps diversify and deepen the financial system. David

Cameron wants to make London the Centre for Islamic finance in

Europe. To the extent that it can increase financial inclusion and it

is to the less `` the real economy and based less on average, it is

good for stability. Why are you handing out central bank funds to

causes of your own? They are not mine. They are national causes. They

donated to victims of a bomb blast. It is central bank policy. It is

consistent. You have been giving money to universities. I have been

investing, in building structures. It is something that we can do as

part of corporate social responsibility. Let me put to you

what one blogger had to say last year, at the time. He said, when the

floods came in the south`west, displacing hundreds of people, and a

long period of sustained fighting, the central bank kept its coffers

closed. Does this not found the embers of scored? He does not know

in 2002, the central bank did the same for the Lagos bomb blast. The

intervention did not begin with me. They are central bank policy. One

member of the house of representatives thinks not. He

tabled a motion caught the misuse of Central funds. There is no legal

provision. They have not been able to establish any wrongdoing. What

people are wondering, whether you have a motive for doing this. That

you are making these general `` generous donations of taxpayers

money, you are not an elected politician, there is an election

coming up, and they are thinking whether you are thinking of your own

future? I do not need to spend money. I have brought down

inflation, I have a stable exchange rate, I have a track record to go

on. A consultant on transparency, he was quoted as saying, he is taking

some politically motivated decisions that can harm the economy. He is

disappointed with the way that he is going on giving government money to

his friends. Who are these friends? The big and is of bombings, the

universities? Are they friends. There are universities all over the

country. Who are these friends? There is an election coming up. We

talked about the presidential election. People think it is time

for a new man in the job. The ruling party is split over Goodluck

Jonathan's desire to run in 2015. Do you think it is the turn of a

northern? I do not think elections should be based on where the

president comes from. I think we have done that before and we have

seen the cost of it. People should focus on what individuals have to

deliver. There are some people, who think you have got quite a lot to

deliver. Your term as central bank governor and stick some. You said

you will not seek a central term. You are from the north which would

be an attraction. It was reported that some influential figures in the

north have put you at the top of their list of potential candidates.

Has anyone approached you? People talk and people tell you that you

should go into politics. I have never gone into anything for which I

have no preparation. I was prepared to be governor of the central bank

because I was based in economy `` economics. I do not know anything

about politics. People will say what they want to say. Have you been

approached? I have been spoken to. People have spoken to me and they

continue talking to me. I have given the same ansa. I am not ready, I do

not want it. You are not ready? In what sense are you not ready? You

run the central bank of Nigeria. You claim credit for some big chant ``

changes, the fall of inflation. Is that not what people want from their

politicians, improvement in their daily lives? Doesn't `` being a good

central bank governor does not make you a good politician. Is that what

worries you? Yes, if I go into politics I would destroy everything

that I have done. And there is no way that you could be persuaded to

rethink that? No, I cannot survive one year in that space. That is an

extraordinary conclusion to draw from modern Nigeria's political

life. I think it takes a particular type of skill. I do not have those

skills. Sanusi Lamido Sanusi, governor of the central bank of

Nigeria, thank you for joining us on HARDtalk.

It is a varied night of weather. There is rain in the south, frost in

the north. We will keep the variety going over the week at head. It

should be a fine day for many of us. But the rain clouds will return

later in the week. It will be quite blustery. The rain is still

lingering across the south`east first thing in the morning. Quite a

breeze as well.