Nigerian Economy Loses N 100 Billion Everyday Strike Continues – Sanusi

According to the Governor of the Central Bank, Nigeria loses N 100 billion daily to the labour strike. The calculations are estimates based on the projected Gross Domestic Product (GDP) for the year and are divided by number of productive days i.e. no public holidays or weekends.

The CBN governor also stated that inflation was expected to increase as the economy reverberates from the fuel subsidy removal. Speaking to an international news agency, Sanusi stated that inflation would it the mid-teens in 2012 and be back to single digits by the end of 2013.

His words: “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.”

Speaking on fuel subsidy to a television program in Lagos, Sanusi also stated on  that government was in fact capable of continuing to maintain pump price regime of N 65, however the CBN governor said government cannot continue to play the role of “Father Christmas” as it was injurious to the economy.

His words, ““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.”

On the ongoing labour strike, the governor stated “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.”

He refuted insinuations that the country removed subsidy because it was broke, stating that a responsible government does not continue to pile up debts, especially debts not related to the development of the economy.

His words: “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.”

3 Comments

1. 

   Mimi

   January 13, 2012 at 12:53 pm

   Obviously, the indefinite nature of the strike means more would be lost. it’s the 7th day of the protest…You do the maths (100 billion X 7 X indefinite)…and all this for 1.3trillion…so much for exemplary people in government. If Nwela and her caucus don’t think this through and revert their decision on Oil Subsidy, we all know what’s at stake.

   And I’m disappointed in Sanusi glorifying N18,000 minimum wage (during the Lagos debate) as though it were some sort of luxury- I don’t blame him.
2. 

   Linusekpo

   January 14, 2012 at 8:51 pm

   He claim he is better than soludo
3. 

   doughboy

   January 16, 2012 at 11:52 am

   My dear CBN governor, the masses arent impacted by your analysis. We have such a vile system of government which includes yourself, who doesn’t believe in handing out rations for the hungry to atleast feed. As you know, well meaning countries pay handouts to their unemployed citizens and still greatly subsidize agriculture to the extent that a cow in Europe and America is subsidized an average of $2/day.  
   One seems to
   wonder what is the role of a government “of” “by”
   “for” the people. What is the “REAL VALUE CREATION” to
   Nigerians of this so called SUBSIDY REMOVAL. With the level of inflation on
   basic commodities that erupted from this misinformed decision, Is it not vile
   for any government to see the colossal damage of a decision and not reverse
   it?.

   It’s unfortunate that we have all tiers of
   government calling for more money to their purse, especially the likes of Edo state governor, when this money would be of no real value to any project. It would be
   insincere for anyone to think that the price of any project wouldn’t raise
   astronomically with the price of PMS more than doubling.

   It’s
   disturbing to hear our Finance Minister, on Aljezeera news that they
   are in discussion with road transport unions and this subsidy removal wouldn’t
   cause increase in the price of transportation. Have we lost the basic
   understanding of the impact of PMS pricing on Nigeria’s economy?.

   Yourself and Finance Minister came on AIT to say our boarders are
   porous despite several of hundreds of billions voted on security and we are yet
   to see anyone prosecuted. They are also aware that several billions have been
   spent on our refineries with no result and also no one has been prosecuted. It
   was worth noting that you agreed that the real issue to be treated
   is ” CORRUPTION”.
   With the banking reforms which you championed and saw more than 15,000 job cuts in the banking industry, i’m yet to hear anyone ask, ” what is happening to these people or any other deprived Nigerian”. No government cares, Mr. Sanusi. Other countries we should emulate have answers to the soul of their dying but we with unrealisitc statistics send people to their early grave.
   Kindly tell our President he can get supplied human beings ” Nigerians” at the rate of less than 350,000naira/day to his kitchen and would cost less than 130million/annum rather than close to 1billion budget.