Inflation may rise beyond single digit on subsidy removal

Efforts by the Central Bank of Nigeria and the National Bureau of Statistics to maintain the countrys inflation rate at a single digit may be defeated should the Federal Government carry out its plans of removing subsidy on fuel, the former President, Association of National Accountants of Nigeria, Dr. Samuel Nzekwe, has said.He said this was because Nigerias economy was generator-driven, stressing that most companies, artisans and homes relied on generators.Nzekwe, in a statement made available to our correspondent last week, argued that consequently, the prices of goods and services would definitely increase.Then, the under-privileged, which government is trying to protect would suffer more under this condition, he added.The Federal Government, through the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had announced plans to withdraw subsidy from fuel, stressing that it spent heavily subsidising the commodity which only benefited a few rich persons in the society.Two weeks ago, President Jonathan presented the proposed 2012 budget that excluded allocation for fuel subsidy to the joint session of the National Assembly in a brief ceremony.The proposed 2012 budget stood at N4.749tn, representing a six per cent increase over the 2011 N4.48tn budget.Nzekwe suggested that government should make a definite pronouncement, rather than remain silent on subsidy allocation in the 2012 budget, adding that government should improve power supply in the country before going ahead to remove the subsidy.An average household in Nigeria, including the impoverished masses, one way or the other uses fuel everyday, he said. He called on the FG to scrutinise the report of the Senate Committee investigating the activities of the Nigerian National Petroleum Corporation to ascertain the actual figures of crude oil exported as well as imported refined petroleum products..
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