The issue of fuel subsidy has generated so much indignation all over the country. The reason for the heat is obvious; Nigerians readily remember the immediate hikes in the price of virtually every product or service as petrol prices climbed from less than 20 kobo/litre in the early 1980s to the current regulated price of N65/litre.
The Central Bank of Nigeria has been unusually silent on the widening gap between the official exchange and the Bureau de Change (BDC) rates of the naira to the dollar.
Under normal circumstances where political and public offices are geared towards the service of the people, there is little or no personal gain in capturing power or its retention. Very few Nigerians now believe the flowery promises that politicians make on their campaign trails, but we recognize the rapid transformation to affluence of these self-proclaimed servants of the people!
The Dream Economy envisioned in government’s “‘Vision 20:2020’ seeks to position Nigeria as one of the top 20 economies in the world by the year 2020. In economic terms, this translates to having a Gross Domestic Product (GDP) of at least US$900 billion by that date compared to about US$212 billion as at 2008″ – (Source: Nigeria Vision 2020 Economic Transformation Blueprint – pg. 26, work-in-progress as at 5/10/2009).
Media correspondents and the reading public often pose questions on the economy to this column. My responses to two of such inquiries will form the content of today’s piece.
In her maiden address to journalists on Wednesday, 24/08/2011, the Coordinating Minister of the Economy and Minister for Finance, Dr. Ngozi Okonjo-Iweala, alerted Nigerians that Nigeria’s domestic debt was about N5.2 trillion ($33bn), while external component is about $5.3bn. In other words, at today’s exchange rate of N152=$1, Nigeria’s total debt is over $39bn; that is about $4bn above ‘crisis’ level of $35bn in 2006, when we were stampeded to part with almost $18bn from a healthy reserve base of over $50bn. As at August 2011, our current debt burden exceeds our ‘paltry’ reserve base of about $33bn, but surprisingly, our ex-IMF President assures us that “Nigeria is in good shape, as the debt profile is only 20% of Gross Domestic Product”.
Nigerian housewives know too well that sinking feeling when all items on the household shopping list cannot be covered by the regular budget. Our womenfolk have since become past masters (or mistresses) of the rigours of creative adjustment.
There is an increasing universal recognition that the prime essence of government is the actualisation of a thriving and beneficent economy; last week, President Goodluck Jonathan formally inaugurated the engine room that would serve as the arrowhead for the determination of his place in history as Nigeria’s number one citizen.
In the wake of the Central Bank’s pseudo liberalization of dollar supply to the foreign exchange market, naira rate tumbled from over N140=$1 to today’s rate of about N130=$1 in the black market, leaving a spread of just about N2 from the official rate.
The Central Bank of Nigeria has been unusually silent on the widening gap between the official exchange and the Bureau de Change (BDC) rates of the naira to the dollar.
