By Gabriel Enogholase
GOVERNOR of the Central Bankof Nigeria (CBN) Mallam Sanusi Lamido Sanusi warns of grave economic consequences ahead if the planned removal of fuel subsidy was not supported by Nigerians.
According to the CBN governor, who spoke in Benin yesterday where he was conferred with a honorary doctorate degree (D.Sc) in science by the University of Benin, although the decision to remove fuel subsidy by government was painful, it was in order to secure the future of the country.
“It is a very difficult time in the world today and economically for policy makers. It is important for every Nigerian to remember that we don’t live in as island. We continue to have an economy that remains vunerable to movement of economic goods and prices. We therefore cannot ignore that. European countries are groaning under the weight of sovereign debts. Governments are falling under like a pack of cards,”he said.
He went further: “The low bond sales of Germany, the strongest economy in EUROPE, sent a warning signal about the future of the Eurozone. India has been under inflation for about one year and high rate has not brought it under control, Brazil is grappling with huge deficit problem; the world faces a risk of double economic recession with the implication for the price of oil, government revenue with the implication for macro, economic stability”.
“It is important to take to call on the academic community to play that a role in the extremely difficulty and painful economic decision that needs to be taken now in order to avoid disaster in the future”.
“It does not mean that government lacks sensitivity to the pain it will cause. But It is a recognition of the consequence of not taking the decision now which will be a Greek-type economic situation in a few years time.
“I have been advised to stop talking about subsidy because it is unpopular. But I will never shy away from being part of the economic decision that has been taken on the basis of what is best in the long term interest to the economy”.
“ To continue borrowing trillions of Naira and subsidising current consumption is to ask our children to pay for our comfort today. Stable economies are sick. There are dark clouds on the global horizon, it is easy to take unpalatable economic decision today that may be political in order to secure the future; the universities have roles to play in this debate. We have to face the fact that we simply cannot continue live above our means. If we do not take that decision, our children are going to face a difficult situation that the future of our country will be involved in”, he said.
Sanusi said that since 1960, the prospect of Nigeria as potential world power was being made, saying that for now, “ we are at a point where we stop talking about those potentials but realising those potentials”.
He stated that the country was in a better situation than many other countries, adding that the decision already taken by the country was what the members of the European Union are taking now.
“ Nigeria banks are the most capitalised banks in the world today. The banks can cope with any shocks and we have taken the decisions that Europe is grappling with and is still unable to take. We have to move beyond financial issue to fiscal issues. It is not enough to fix financial markets, we must look at all areas of risk to the economy.”