Says Sanusi : Nigeria Loses N100bn Daily

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The nationwide strike against government's removal of fuel subsidy is costing the economy about N100 billion ($617million) daily, the Governor of the Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, has said.

Also, Sanusi called for an agreement between the Federal Government and labour that would bring about gradual removal of the subsidy.

Sanusi who disclosed this to Reuters, also said he expected inflation to rise to about 14 to15 per cent by the middle of this year, up from its current position of 10.5 percent, due to the impact of subsidy removal.

“Clearly inflation was always going to go up with the removal of subsidy. I think what we've seen is the immediate shock impact of a sudden removal and things will settle down. It took us one and half to two years from 2009 to come down to single-digit from 15.6 percent. I think a realistic target if we actually hit 15 percent, I think we will be looking at end of 2013 before we come back to single-digits,” the CBN Governor explained.

President Goodluck Jonathan was meeting with workers' unions to try and reach a compromise after a four day stalemate at the time of this report.

“I think it's time to make a deal, any kind of compromise should have a final deadline for removal of subsidy,” even as he suggested the option of keeping fuel price at N100 per litre and phasing out subsidies. But he insisted that the details should be left to the government and labour to decide.


Meanwhile, Sanusi while advocating for an agreement between the Federal Government and labour which would bring about gradual removal of the subsidy, said: “Look, the Federal Government can continue paying subsidy at N65 per litre for a while. I am not saying that it is not economically possible for that to be done, but speaking as a Nigerian, I will like to see a win-win situation.”

Sanusi, who disclosed this in a programme monitored on Channels television, also indicated that a short-term reversal to N65 per litre that labour and civil society groups had been agitating for, would not hurt the economy.

According to him, “I will like to see a situation in which the government shifts a little and breaks this policy into one or two instalment and I will also like a situation in which Nigerians also shift a little and understand that we cannot continue to have a Father Christmas kind of situation. If we continue doing this today, our children are going to pay for it.

“I think the discussion between the government and labour should move to how do we do this? Certainly, when I say a phased approach, I am not in any way speaking for the government, I have made it clear that I am speaking as a Nigerian, who is interested in seeing that the system is not over-heated, who is concerned about people dying unnecessarily,” Sanusi said.

I think people should have a right to take to the streets, but I don’t think they have the right to burn or to kill. But i also think that they have a right to be protected and not to be harmed. But if we can get to a point in this country where we can express our different views and debate this issue without bloodshed, then it is very much easier.

“But given what is happening, i think it is extremely important that in the next 24 to 48 hours that we find some sort of solution. Let us reach a discussion that will say, this is where we will be today and this is where we will be by December 2012 and the deliverables on both sides.”

Sanusi however doused the insinuation that the Federal Government took the decision because the country was broke.

“The country is not broke, but a responsible government does not wait for the country to be broke before it can act and that is the point. The signals are all over there and you cannot continue borrowing just to pay for fuel subsidy. Do we wait until we are actually broke before we take the right decision? Look you’ve seen Greece, Spain, the Asian financial crisis, the Latin American crisis and we are clearly heading towards that if we continue borrowing, and such borrowings are not going into the development of infrastructure,” he explained.

Responding to question on why among other government officials, he has been in the forefront of the debate for subsidy removal, Sanusi said: “It is about simply being honest. The fact that some of us have been speaking about this, does not mean we are in the forefront. But having said that, there are times in the life of a government where you have to take some decisions that are unpopular.

“Ideologically, I am a very strong supporter of subsidy, but those subsidies should be subsidies for production, for it to go to the poor and not middlemen. If we have a subsidy that supports the construction of refineries, I will support it, because the refineries will reduce our dependence on fuel, create jobs and probably enhance our export earnings. Subsidies for agriculture, by providing cheap feeds, cheap fertilisers to the farmers, training at low cost, I will support.”

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