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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.