The governor of Nigeria’s central
bank, Sanusi Lamido Sanusi, has
criticized the Federal Government’s
continued spending on reducing
fuel cost, renewing the call for the
removal of a subsidy programme
that has gulped trillions of naira but
has failed to reach ordinary people
as intended.
Mr. Sanusi was speaking on
Monday at a meeting of the House
of Representatives Ad Hoc
Committee on Nigeria ’s local and
foreign loans. He said he supports a
full stoppage of the “immoral”
subsidy because its intent has been
diverted from the target masses to
a “cabal of elite.”
“This subsidy is going to a small
group of people. The greater
Nigerian people are not benefitting
from it. ’’ Mr. Sanusi said.
According to him, ‘‘the subsidy is
creating a pool of funds for a cabal.
These are the same people who
borrow from banks and do not pay;
the same people who are rigging
elections. ”
Mr. Sanusi is the latest in line of a
number of government officials
who have made it clear they would
like to see the removal of the oil
subsidy but the first such public
declaration by a member of
President Goodluck Jonathan’s
administration.
Recent governments have
complained of channelling huge
finances that could have helped
develop infrastructure, into
minimizing domestic fuel cost, and
have proposed a deregulation
programme which is severely
opposed to by the Labour union.
The CBN governor said the
continued existence of the subsidy
has significantly raised Nigeria ’s
debt profile.
According to Mr. Sanusi, “last year,
we spent over a trillion of which we
are borrowing, ” he said. “Why
should we be paying a N570 billion
subsidy that small elite are
enjoying at the expense of the
Nigerian people ?” he said.
The sort of borrowing Mr. Sanusi
referred to, internally and
externally, including those applied
for other purposes, have soured to
a peak figure, raising federal debts
to the highest level in four years.
According to the Minister of Finance,
Olusegun Aganga, who also
attended the event, the country ’s
debt profile stood at $35.94 billion
before the exit of Nigeria from the
Paris Club.
At the end of 2006, the amount
was $3.54 billion; by December
2007 it had risen briefly to $3.67
and hovered at $3.72 at the end of
2008.In 2009, the figure stood at $
3.62 and has already clocked $
4.3billion by ending of March 2010.
Mr. Aganga, however, said the
current debt level of the country
was below the international debt
sustainability ceiling if it is
compared to compared to Nigeria’s
peer countries. This is more so since
over 85 percent of the total debt
was obtained from concessionary
sources, and with a long repayment
period, he explained.
But the two officials both warned
against a relapse into unbridled
borrowing.
“The problem is not about
borrowing but what the monies are
being applied for, ” Mr. Sanusi said.
“There’s a limit to which you can
cut down on expenditure; salaries
have to be paid, roads, hospitals
and other infrastructures must be
done. What we should focus on is
an increase in government
revenue, ” he added.

According to Mr. Sanusi, “last year, we spent over a trillion of which we are borrowing, ” he said. “Why should we be paying a N570 billion subsidy that small elite are enjoying at the expense of the Nigerian people ?” he said.

If that is removed, the generator economy will disappear. Great !

In full support. . . A sham amongst the myriad of shams in Nigeria.

Still can't get over the fact 187 billion will be spent on the National
Assembly in a single year.

I get angry when they keep saying cabal this, Cabal that! Who are the people that constitute this Kabal? If they can't unravel their identity then they should leave the subsidy, I know the moment they do that, that will be tantamount to a hike in fuel price. This Kabal gist has been overflogged abeg, it is old school now!

I just keep falling for this Sanusi guy, he has always been too brash with saying his mind he says it in a way to show that he doesnt care whose ox is gored. On this particular case he is very right again, we can do better as a nation with deregulation, this is not Objs regime we have new people in charge who are more interested in the welfare of its citizens.

I know that once oil subsidy is removed the initial jump may be anoda 10naira but immediately we settle into it the prices will start to drop once the only place we buy our fuel is NNPC mega stations with a lot of queue other marketers would look into their prices I say this is the best time to deregulate, I wish us Goodluck.

so why is Jonathan Goodluck protecting this CABAL?

i think other industry leader should also come out against this subsidy, its always government officials speaking out against govt policies, very weird country, the opposition has gone to sleep, the Manufacturers cant add their voice even though it affecting them, Vice Chancellors are mute


Petrol in some part so f nigeria cost as much as N100 anyway without the DPR lifting a finger

Once the subsidy flies out the door, prices could go as high as Naira 200 per litre. The price was close to that right before the subsidy was introduced. I think it would be a great idea to expose people to the true reality of their generator binge.

Cant remember price of fuel being upto 200Naira in nigeria maybe black market

They can write up new licenses for hundreds of traders willing to following the law to bring fuel in instead of restricting it to few individuals who are very quick to sponsor union members up and down the country calling for a strike.

The best way to look at this is the 30% or less of those who can afford to drive subsidiazed by about 70% of those who do not drive or can afford a car.

Certainly some peolple living on the margin will be affected. Unfortunately there is no to identify them for rebates.

Moreover, I have always felt that if they do not use the money for subsidy, they will steal it anyway. With new people in charge, let us for the best.

The fact is that even the FG is not sincere with its intentions, is it not an indictment on the FG that they constantly complain about a cabal and yet the almight FG with all the federal might and machinery can't do jack about it than give some stupid excuse.
Sanusi to me is all macho & gusto no real substance, he is fond of making loose comments that seem nice without actually understanding the consequence of his comments. Already, there is an uneven pricing system of pump price, in lagos for instance, people buy at #65 but in the SE and some SS states people buy as high as #85 except you are buying from NNPC filling stations. Now imagine how price would shoot up when they yank off the subsidy and the multiplier effect it would have on the cost of other commodities, it is not like Nigerians would feel the impact of the subsidy removed in another form, we would just hear the usual mantra of increasing the FG's budget but no real impact. Abeg, Sanusi should go and sing that song to his fellow elitist that can buy stuff at whatever price. NLC is not dumb for refusing that plan. Everybody dey yarn where e go favour am, Sanusi wan increase money wey dey enter FG pocket, Nigerians wan decrease money wey dey comot for their pocket, just as some people own palava na d way we dey take put our Generator on from morning to nyt. So it is useless trying to sell that Cabal story to Nigerians when we know everyone is trying to protect her interest here. . Cabal indeed, like we are dunce!

[size=13pt]Removal of Petroleum Subsidy[/size]

5 March [size=13pt]2009[/size]

In reaction to the dwindling revenues from crude oil, the mainstay of the Nigerian economy, the Federal Government, through the Presidential Steering Committee on the Global Financial Crisis, announced last week the removal of subsidies on petroleum products.

The Finance Minister, Dr. Mansur Muhtar, who spoke on behalf of the Committee, stated that the government could no longer bear the burden of subsidies, which amounted to N640bn in the year 2008 and totalled N1.6 trillion in the last three years.

Besides, the minister submitted that 'we have found out that we are really subsidizing inefficiencies, fraud (and) racketeering in the whole production chain.' The Federal Government will also privatize the nation's refineries in order to save them from mismanagement and ensure their efficient operations while encouraging more private investors in the downstream sector.

As expected, these announcements have elicited diverse reactions, ranging from outright condemnation of the decisions, to a call for caution in the process of their implementation. Certainly, this newspaper will not pull punches on the mismanagement of the entire petroleum sector by government functionaries, past and present. For instance, what exactly is the cost of extracting a barrel of crude oil in Nigeria? What became of the over $200m dollars expended on the Turn Around Maintenance of the local refineries during the regime of Gen. Sani Abacha and billions of naira spent on maintaining the same refineries from year 2000 till date? Why, in spite of the subsidy, do petroleum products sell higher than the official prices in the entire South-East and parts of the North and South-South? Why are the figures by the Central Bank of Nigeria on the nation's earnings from crude oil always at variance with figures of other agencies of government such as the Nigerian National Petroleum Corporation (NNPC) and the Revenue Mobilization Allocation and Fiscal Commission (RMAFC)?

Whose responsibility is it to arrest smugglers of the products to neighbouring countries? Do the government agencies accused by the Federal Government of gross 'inefficiencies, fraud (and) racketeering' have accounting officers? Who appointed them and whose duty is it to apprehend the so-called fraudsters that create and exploit leakages in the system?

Before the end of the administration of General Olusegun Obasanjo, up to 18 provisional licences were issued to investors who showed serious interest in setting up refineries in the country. Who sabotaged their efforts such that years after receiving the green light, optimism gave way to depression? Questions without end.

Continue . . .

Dis Guy:

Cant remember price of fuel being upto 200Naira in nigeria maybe black market

Sorry . . . meant back in 2008 when Yar adua approved release of more money to NNPC for subsidy. Yes, the cost was almost that high in some places. We had to seriously ration generator use as a result.

Whose responsibility is it to arrest smugglers of the products to neighbouring countries? Do the government agencies accused by the Federal Government of gross 'inefficiencies, fraud (and) racketeering' have accounting officers? Who appointed them and whose duty is it to apprehend the so-called fraudsters that create and exploit leakages in the system?

Before the end of the administration of General Olusegun Obasanjo, up to 18 provisional licences were issued to investors who showed serious interest in setting up refineries in the country. Who sabotaged their efforts such that years after receiving the green light, optimism gave way to depression? Questions without end.

Continue . . .
[quote][/quote] exactly my point. . Just see how casual they sound about funding ineffincies? For God sake, who allowed the inefficiencies? The masses or the FG?. . Scheeew. . That Sanus Guy deserves a backhand slap to silence him, he is fond of responding to the adrenaline rush to his head!

Kobojunkie:

Once the subsidy flies out the door, prices could go as high as Naira 200 per litre. The price was close to that right before the subsidy was introduced. I think it would be a great idea to expose people to the true reality of their generator binge.

Kobojunkie:

Sorry . . . meant back in 2008 when Yar adua approved release of more money to NNPC for subsidy. Yes, the cost was almost that high in some places. We had to seriously ration generator use as a result.

Pls Kobo which part of Nigeria are u talking about?

Quote from Rhymz.
The fact is that even the FG is not sincere with its intentions, is it not an indictment on the FG that they constantly complain about a cabal and yet the almight FG with all the federal might and machinery can't do jack about it than give some silly excuse.


The truth is that one man does not make govt, Sanusi sure approves this monies and most likely knows how these idiots who have placed the nation in check collect these monies and all the legal and illegal claims they make. Just think of it in the light of a civil servant who is entitled to medical allowance which is only meant to be used to pay medical bills, but now connives with the hospital to get papers showing that he went for a surgery and now claims the money, if only few do this the organisation would not feel it but when everybody from the gateman to the MD all practise the same it would almost cost the agency all its allocation. That is what happens in the oil sector right now every marketer claim monies that they are not actually entitled and it has become the norm, those who practise this are so powerful and may be able to sack the president or the minister of petroleum, they could even be part of govt so its not the best way to fight them by been openly confrotational at least we learnt that from Jonathan vs The Cabal in Saudi.

i keep my fingers crossed and from research carried out fuel prices in a deregulated ,arket in Nigeria could be as low as 45naira.

The truth is that one man does not make govt, Sanusi sure approves this monies and most likely knows how these idiots who have placed the nation in check collect these monies and all the legal and illegal claims they make. Just think of it in the light of a civil servant who is entitled to medical allowance which is only meant to be used to pay medical bills, but now connives with the hospital to get papers showing that he went for a surgery and now claims the money, if only few do this the organisation would not feel it but when everybody from the gateman to the MD all practise the same it would almost cost the agency all its allocation. That is what happens in the oil sector right now every marketer claim monies that they are not actually entitled and it has become the norm, those who practise this are so powerful and may be able to sack the president or the minister of petroleum, they could even be part of govt so its not the best way to fight them by been openly confrotational at least we learnt that from Jonathan vs The Cabal in Saudi.

i keep my fingers crossed and from research carried out fuel prices in a deregulated ,arket in Nigeria could be as low as 45naira.


[quote][/quote] Mr Marvix
I beg to disagree with your logic. First your analogy is greatly flawed, you don't need any pranks to get what has been alloted to you as indemnity, it is given to you to be used whether you fall sick or not as long as you are not trying to eat your cake and still have it and I don't see how it relates to this situation. Secondly, Sanusi is one man like you said but he fails to realize that with his careless sweeping utterances, he is quick to point out that the FG should scrap subsidy without having first explore the option advising the FG to take a bold step and root out the member of this cabal, it is one thing to make conjectures about rackets and cabals, it is another thing to have the political will to deal with the problem decisively without passing blames like hot potatoes and forcing the masses to bear the brunt of their own shortcomings. Your claim that the cabal is so powerful that they can remove the President is petty and unfounded. Incase you don't know, the Nigerian President is the single most powerful leader in the whole world, even the President of the US does not have the kind of powers the Nigerian constitution bestows on the President, he can do and undo. If he would stop playing politics and take the bull by the horn, you and I would see that these rogues are not invincible as we wrongly believe, they are just racketeers taking advantages of the loopholes in the government system to make money. Sanusi should shut his mouth and clean up the mess he has created in the economy, the lesser he talks the better cos the last time he talked with so much gusto, our banks stopped lending and the economy shrunk further, let him deal with those and stop groping from talking about power to talking about oil subsidy, those are not his job discription.
Finally your market analysis is misplaced in the nigerian context, subsidy removal is not equal to deregulation.