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CBN defends govt's economic reforms
From Abiodun Fagbemi, Ilorin
A DEFENCE of the Federal Government's economic reforms, especially the deregulation of the downstream petroleum sub-sector came from the Central Bank of Nigeria (CBN) yesterday.
CBN's Deputy Governor, (Policy) Mr. Ernest Ebi said at the apex bank's executive policy seminar in Ilorin that the policy thrust of the government was to increase the private sector's involvement in the petroleum market.
Ebi, who was represented at the event by Dr. Okwu Nnanna, therefore described the reactions of the Nigeria Labour Congress (NLC) leadership to government's action on petroleum deregulation through strikes as being uncalled for.
He said: "The National Economic Empowerment and Development Strategy (NEEDS) was adopted with a view to strengthening government's institutions, creating additional wealth of the nation through efficient allocation of resources, and reducing poverty through the encouragement of private initiatives.
"The deregulation option would put the private sector in the driver's seat in the petroleum downstream sector and thus provide the economy with efficiency gains in the form of savings from procurement, distribution and domestic refining."
Reacting to the planned resumption of the suspended strike by the NLC over the fuel deregulation, Ebi said the exercise would be futile.
According to him, "the strike is not necessary. No amount of strike by the NLC or any other body will save the situation."
For the CBN official, the palliative measures being packaged by the Federal Government to cushion the effect of the deregulation were necessary. He predicted that the oil sector would soon follow the trend in the communication sector where the price of wireless telephone system has drastically reduced.
He added: "Although the option could be painful, especially in the short run, it offers very bright prospects in the medium-to-long term. For instance, the availability of the product will bring about law pricing and consumer benefits in the long run. The positive effects of deregulation are wholesome and imperative to the socio-economic turn-around of the country.
"The NLC therefore should be more constructive when reforms become inevitable, because such reforms cannot but be carried out. By the time we deregulated the communication system, it was tough, but today the price of the GSM has fallen. Equally, by the time the private sector comes into the oil, the price will equally fall."
To hasten the private sector's involvement in the deregulation exercise, Ebi urged government to announce its decision on the plans for the existing refineries in the country.
The seminar, organised by the CBN's research department in collaboration with human resources department, was the 12th of its kind.
The seminar serves as a forum at which some of the executive staff of the bank keep abreast of current economic and financial issues that directly or indirectly affect the formulation, implementation and outcome of monetary policies.
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