GOVERNOR of the Central Bank of Nigeria, Sanusi Lamidoi Sanusi says those calling for subsidy are day dreaming but suggested that what the country needs is  to have an investment climate and environment  to grow the economy.

Sanusi who stated this in Asaba yesterday while delivering a lecture on the Consolidating the ‘Gains of the Banking Sector Reforms’, said, the sum of N620 billion was injected into the nine banks identified to be in gave situation at the early stage of the reform.

The lecture was chaired by the former Head of Government, Chief Ernest Shonekan, has Governors of Delta and Anambra,Mr.Peter Obi and Dr. Emmanuel Uduaghan, Mr. Albert Okumagba and Mr. Jean-Louis Ekra as discussants.

According to him “there is  a very strong correlation betwen very commodity prices and stock prices in commodity exporting countries which Nigeria is no exception.

“At a point oil prices shot up to 147 billion Naira a barrel and Nigeria was producing over 2 billion barrel a day before the Niger Delta crisis. So much money which accrued to the Federation account found its way to the capital market

“We need to have an investment climate and environment. The petroleum sector has to be deregulated. We have spent over 1.2 trillion Naira on fuel subsidy in the last three years. The question is who are the people that took the subsidy?  Nigerian economy has grown at 7_8%, a growth that has come from agriculture as a result of increase land use.

It has not come from improved manufacturing, distribution of petroleum products. If we want the economy to grow at 13_15% annually, we need to provide an investment climate. “Foreigners”, he went on, “can come and set up factories here, employ Nigerian workers, buy raw materials from Nigerian farmers and export from Nigerian soil.

There are people who are willing to do that. The only way you can afford subsidy is if you are producing real goods and services and paying taxes, and not if you are digging oil from the ground and depending on international oil prices”.

Continuing, he said, “the major problem that we have is how to get the bank to lend to small and medium scale enterprises. The banking sector reforms and monetary policies can only keep the economy this far. The banking constraints on economic growth in Nigeria are not monetary. In my view there are five binding constraints.

One is the constraints of critical infrastructure. If you give the banks the money and tell them to lend to the manufacturers…they need power, security, transport infrastructure. If you don’t have that, the banks will not find a viable manufacturing industry. The power problem will need to be addressed. The solution is to implement the legislation on power reform.