28 November 2011, Sweetcrude, Benin City – Sanusi Lamido Sanusi, the Central Bank of Nigeria (CBN) governor, has warned of grave economic consequences for Nigeria if Nigerians did not support the proposed removal of oil subsidy.
According to him, the removal was a painful decision by the government, but, it was necessary to secure the future of the country.
Sanusi expressed the view on Saturday in Benin at the 37th convocation ceremony of the University of Benin, where he was conferred with a honorary degree of the Doctor of Science (D.Sc.).
“It does not at all mean government’s lack of sensitivity to the pain it will cause, but the consequence of not taking the decision now will be a Greek-type of economic situation in few years time,” the Central Bank governor said of the proposal to remove oil subsidy.
He added: “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 an island.
“We continue to have an economy that remains vunerable to movement of economic goods and prices, we cannot ignore that. European countries are groaning under the weight of sovereign debts. Governments are falling under like a pack of cards.
“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 macroeconomic stability”.
“It is important to take to call on academic community to play that role on participating in the extremely difficult and painful economic decision that needs to be taken now in order to avoid disaster in the future”.
“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 ensuring this debate.
“We have to face the fact that we simply cannot continue to live above our means. If we do not take that decision, children are going to have a difficult situation.”
The CBN governor informed that “we are in a better situation than many countries. Two years ago we took decisions that Europe should have taken. Nigerian banks are the most capitalised banks 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.”