Nigeria Loses 500 Billion Naira To Strike – CBN

Nigeria’s nation wide strikes against the government’s removal of fuel subsidies is costing Africa’s second largest economy around N100 billion (403 million pounds) a day, the central bank governor has said.

Lamido Sanusi said he expected inflation to rise to around 14-15 percent by the middle of this year, up from 10.5 percent now as the impact of subsidy removal is felt on prices. “Clearly inflation was always going to go up with the removal of subsidy. I think what we’ve seen is the immediate shock impact of a sudden removal and things will settle down,” Sanusi went on.

“It took us 21/2 years from 2009 to come down to single-digit from 15.6 pct. I think a realistic target if we actually hit 15 percent, I think we will be looking at end of 2013 before we come back to single-digits.”

Sanusi said it was positive that negotiations were ongoing but he urged government to agree a deadline with unions for removing fuel subsidies altogether, rather than leaving it open ended, which could lead to public demonstrations in the future.

“I think it’s time to make a deal, any kind of compromise should have a final deadline for removal of subsidy,” he said, adding that options could include capping prices at 100 naira a litre and phasing out subsidies, although he said details would have to be left to the government and workers.