Sanusi places full weight behind Subsidy Removal, Says Cost of Living Increases were Expected

Speaking to BBC Africa, Lamido Sanusi stated, “We are in a world where there are serious concerns about sovereign debt. We are in a world where there are concerns about the Euro Zone and what that might do to commodity prices. The fiscal position of the government has to be such that the government can cope with any shocks to the system and the only way to do that is to cut down unnecessary expenditure.”

“We are spending over N 1 trillion in 2011, $ 8 billion at November 2011”.

Responding to the question, “how is it a good thing for Nigerians for  the subsidies to end?”

The increasingly unpopular CBN governor stated, “subsidies should be subsidies for production and not for consumption, subsidies should be paid from savings and not from borrowings and subsidies should not degenerate into an avenue for rent seeking.

The CBN governor stated that Nigeria was in fact subsidizing the entire western African region due to unscrupulous marketers taking advantage of the higher pricing regime in other countries in the region. Many analysts have attributed this to governments lack of policing the downstream sector adequately and the Nigerian citizens do not believe they should be made to suffer due to governments shortcomings.

Responding to comments from journalist and Nigerians on the hyper inflation and increase in prices of food, transportation, rent, and the higher cost of living.

What does the government expect the unemployed youth to do?

Sanusi responded saying that the effects on prices were automatic and expected. But that the pains experienced were supposed to be short term and pale in comparison to the longer term benefits.

He did however side with Nigerian people when he shedded light on his reservations on governments ability to deliver on the long term benefits, saying, “if the proceeds of the savings are managed properly”.

The language from the Governnor did not convey confidence on government’s ability to deliver on the dividends which is precisely the argument millions and millions of Nigerians are making.

In a situation where the Presidency has budgeted N 1 billion for domestic feeding in 2012, and yet asks the people to endure hunger pains, many Nigerians are asking, “who is fooling who?”

Here is a link to the interview

One Comment

1. 

   Ckndekwe

   January 6, 2012 at 10:28 am

   Does the government want to save money for the Nigeria People? 

   Here’s my six point agenda, solutions:1) Remove the subsidy and perks on Mr. President and his ministers. 2) Remove the subsidy and perks on the house and senate.3) Kill governmental corruption and wasteful spending.4) Rebuild our refineries to function at full capacity.5) Ban importation of refined petroleum products.6) Restructure NEPA, aka “PHCN” to provide constant electricity.Nigerians subsidize the lifestyle of Mr. President, his ministers and all top government functionaries. The government should remove the subsidies and perks for all top government functionaries, and make them to live on their salary.Taking these necessary steps will help the government save enough money to rebuild our decaying transportation infrastructures. Oil subsidy is not the problem, governmental corruption, waste and inefficiency is.
   CKCN, California, USA