For those who thought the Push for the removal of fuel subsidy by the "Nigeria Financial heads" (which caused the January protests) was dead and gone, they can now have a re-think as the governor of the Central Bank of Nigeria (CBN), Lamido Sanusi in an interview with Reuters on Friday in New York said that the current system of subsidizing fuel prices is unsustainable.
Mr Sanusi, a former banker who specialized in risk management and who is allied with Finance Minister Ngozi Okonjo-Iweala in the push for reforms, is pushing for the complete removal of the system of subsidizing fuel.
The government tried to scrap the subsidies but backtracked after widespread protests earlier this year and partially reinstated them.
The CBN governor said the government should spend no more than the N880 billion for subsidies in 2012 earmarked in the budget signed by Nigerian President, Goodluck Jonathan on Friday.
“I would simply like to see that the government does not pay a penny more than that, no matter what happens,” he said.
Mr Sanusi also said that a sharp fall in oil prices could spell big trouble for Nigeria.
“There will be a very bad day and a lot of gnashing of teeth if the oil price crashes and we haven’t saved a thing,” he said.
According to the CBN governor, though Nigeria is one of the world’s fastest-growing economies – gross domestic producer expanded by more than 7 per cent last year – and foreign investors have poured money into its financial markets to take advantage of high interest rates, it remains dependent on oil production which accounts for about 80 per cent of government revenues.
He is a leading advocate for an overhaul of Nigeria’s economy to make it less exposed to fluctuations in oil prices, a campaign which has drawn opposition from the country’s powerful state governors.
They fear reforms such as creating a sovereign wealth fund could prevent them from dipping into Nigeria’s windfall oil revenues.
Mr Sanusi noted recent discussions between the United States and other industrialized nations about the possible release of strategic petroleum reserves, and signs that producer countries such as Saudi Arabia might increase output to help bring down oil prices.
“Our major concern is a major decline in the price of oil or (domestic) output would lead to a massive depreciation of the currency, a collapse in reserves and a huge growth in deficits and some of the states outside of the oil-producing region might find actually themselves in a situation where are not able to pay salaries,” he said.
“I am trained to think in terms of ‘what if’ and that’s the mindset I bring to my job. What happens if oil prices go to $50 a barrel? It’s happened before.”
Asked how low oil prices would need to fall before they pose a risk to Nigeria, Mr Sanusi said a decline to around $85 or $90 a barrel – from around $120 now – could lead to a shortfall in projected revenues and higher budget deficits, if Nigeria’s oil output does not increase. Click to signup for FREE news updates, latest information and hottest gists everyday
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Sanusi, you are a crazy human being who will never know joy. God punish u. Thief, barao. How can a country with oil have no working refinery. Which hotel r u staying in New York? I'll be there.
ReplyDeleteI respect Sanusi and I am sure he is well educated but my understanding of an education or expertise is that it is the knowledge that you acquire that helps you make or subdue your natural environment to be more conducive for you and other Nigerians to live.
ReplyDeleteIn this regard Mr Sanusi and Mrs Okonjo have been unable to localize what they learnt abroad and they have also not made our environment any more conducive rather they have made it hostile.
He is not pushing for the stoppage of waste but the removal of subsidy, we are waiting for the government to act,so we can prove to them once again that sovereignty belongs to the people!
All of you who have hands in adding to the hardship of the masses will never have peace. make our refineries function well and stop importation of the products.
ReplyDeleteThanks Mr Sunusi for your concern to stop wastage, Our concern is the terrible hardship that increased fuel price cause. find solution to the problem without killing us. Make the refineries work first.
ReplyDeleteDon't mind this Sanusi that calls himself an expert,its a pity that during his tenure his country Nigeria is still rated among the poor countries of the world,where millions of his fellow Nigerians are poor and suffering daily Sanusi is busy talking of complete subsidy removal.While Government officials and their foreign allies and multinationals are busy stealing from our resources and parting away billions of NAIRA everyday and nothing is happening.Sanusi wot Nigerians want now is how to reduce the looting of our resources and right application of our resources for the betterment of the masses.So Sanusi make u leave us alone make we dey manage our lives,as u na dey do us anyhow for this country GOD DEY SEE UNA.
ReplyDeleteSanusi should be warned, he should learn about helpless people that have Allah(SWT) to fight for them. All who want to multiply our suffering would suffer greatly no matter how highly placed they may be. A government that cannot cater for its people should resign. Obasanjo left a vast reserve which this government and its cronies have squandered.
ReplyDeleteMr.Sanusi,really u are not helping this country in any form at all,the subsidy they removed is their anything to show up for it rather than the hardship this imposed on every citizen.Mr sanusi & his counterparts just pushed GEJ to do what he can not withstand.I promise u & ur counterparts will never go free as u are impacting hardship to this nation in Jesus name.
ReplyDeleteWhen Boko Haram declared war on Nigeria, people are conderming them. What is the essence of education that does not put food on the table and that provides no houses and clothing to the masses? In the name of western education Nigerians can die in poverty. Boko is truly haram! You see one of the sponsors now.
ReplyDeleteWe now know better that their crocodile tears are for their selfish interest or else how do you explain search for world bank presidency when Nigerians have no good means of transportation but okadas and rickety buses, pick food from waste baskets and sleep in any available space. Has she solved problems at home before venturing out. We can forgive her sponsor having admitted his incompetency but must rule as ordained by God? Devil at work