From:
Zainab Mahmoud
Date: Fri, 6 Jan 2012 07:57:33 -0500
(EST)
To:
Subject: Greetings and questions..Thank you for
reading.
Dear Sir,
Thanks for taking the time to read this, I know
you are a very busy man and I hope you will reply even if briefly.
I am
Zainab Mahmoud, 23, a doctor working in Ireland.
I stole your email address
from email threads from my father (he does not know I am sending this!)
I
have read a lot about the current situation in Nigeria re: subsidy, I have
listened to your interview on BBC in support of it.
I, like many Nigerians,
don't fully understand the economics of this.
My view is I agree that
subsidy is not sustainable but what I know is lack of it is simply not
'survivable' for many Nigerians.
I also agree that subsidy should be on
production and not consumption.
Correct me if I am wrong, but a lot of
this subsidy goes to corruption.
So if we say NO to subsidy removal, it means
we are fighting the battle of the corrupt. We continue to fee their
pockets!
And if we say YES to subsidy removal and fuel prices double it means
we have made the state of the corruption permanent and will continue to feed
their pockets, only this time from our empty pockets!
You are respected
by a lot, me inclusive, but..
Why isn't your stance stronger about making
cuts in other areas like recurrent expenditure?
Why should Nigerians buy fuel
at the same price as non-oil producing countries?
I want to make it as
short as I can.
It took a lot of courage to email you directly but we don't
get the information we need!
Our media is hopeless and our Minister for
information even more so.
Thank you again for your
time.
Sincerely,
Zainab Mahmoud.
From: Sanusi
Lamido Sanusi
To: Zainab Mahmoud
Sent: Fri, Jan 6,
2012 1:47 pm
Subject: Re: Greetings and questions..Thank you for
reading.
Zainab hi
Good questions. Actually I have been screaming
about government recurrent expenditure and overheads since 2010-as well as the
corruption in subsidy regime.
It was my criticism of overheads that led
to my wahala with national assembly. And I keep fighting it. However if u look
at the 2012 budget the entire recurrent exp of the executive arm is N1.8tr of
which N1.6tr is personnel costs. So cutting this means paycuts and retrenchment
and this is politically suicidal.
Cab subsidy be phased? Possible and
maybe govt will reach that compromise but better to do it once and for all. I
have advised a phased approach if that will give a political solution but don't
know
Sent from my BlackBerry® smartphone provided by Airtel
Nigeria.
From: Zainab Mahmoud
Date: Fri, 6 Jan 2012 14:36:15 -0500 (EST)
To:
Subject: Re: Greetings and questions..Thank you for reading.
Thank
you very much for replying! I appreciate it.
Can I please take more of
your time and make a few more points?
From what you have explained and
the happenings it appears that the Government are not willing to make cuts in
their expensive lifestyles but want the masses to take the burden of their
mismanagement!
If the Government had suggested a phased approach alongside
cuts in their 'overheads' I am sure it would have had a better
welcome.
May be the protests need to take a new turn and push for cuts in
recurrent expenditure.
If the subsidy is removed completely and petrol is
sold at N141, doesn't that mean that Nigerians will continue to fund corruption
endlessly because the true price of refining Nigerian oil cant be equal to the
price our neighbouring non-oil producing countries buy petrol at.
Why
cant we push for better border policies and sanctions on importation of petrol
rather than worsen the already dire condition of the average
Nigerian?
Can I get your permission to share this explanation
with my fellow youths via twitter and facebook?(I will scribble out ur email
ofcourse)
Sincerely,
Zainab Mahmoud.
From: Sanusi
Lamido Sanusi
To: Zainab Mahmoud
Sent: Fri, Jan 6,
2012 3:00 pm
Subject: Re: Greetings and questions..Thank you for
reading.
Well two things; in real (ie inflation adjusted terms)
expenditure is coming down. Budget this year is 6pct higher than last year but
inflation is at about 11pct.
Secondly I am sure we can get government to
chip away at spending but in terms of materiality it will be symbolic. With a
budget of about N5tr a N10b or N20b dent in spending makes a political statement
but has little impact on such things like deficit/GDP, debt/GDP, debt
service/revenue ratios, or reserves, exchange rates and inflation.
Fuel
subsidy removal knocks off N1.4 tr which is equivalent 30pct of expenditure in
2011 and more than 100pct of capital budget and a third of total debt. I agree
that we need both the symbolic and the material but in terms of macro level
analysis items talked about-feeding in the villa or gardening are insignificant
relatively speaking, which is not to say they shouldn't be looked at.
On
borders in theory smuggling is illegal. In practice if you have money you can
bribe officials on both sides and smuggle goods. A government subsidy of N80 for
every litre is enough money cross the borders. Saudi arabia is surrounded by
countries like bahrain and oman and yemen and kuwait all of which sell cheap
fuel so no arbitrage opportunity. Once you have a huge price differential, goods
will flow to the higher price market-legally or illegally. We learn this in
price theory as a subject called price fixation. Prices below equilibrium always
result in rent seeking and black markets or scarcity.
You may
Sent from my
BlackBerry® smartphone provided by Airtel Nigeria.
From:
Zainab Mahmoud
Date: Fri, 6 Jan 2012 15:09:22 -0500
(EST)
To:
Subject: Re: Greetings and questions..Thank you for
reading.
Thanks again!
The economics of it appear complicated and
I will be lying if I said I understood all that.
How do you explain this
to the average Nigerian who earns the minimum wage of N18000 and because of
subsidy removal is now expected to spend N15000 on petrol?
Subsidy is not
sustainable but lack of it isn't either!
From: "Sanusi Lamido
Sanusi"
Date: Fri, 6 Jan 2012 20:30:02 +0000
To: Zainab
Mahmoud
ReplyTo:
Subject: Re: Greetings and
questions..Thank you for reading.
The short term impact at the micro
level is reduction in disposable income after fuel and transport costs, as well
as a fall in real income due to inflation. Painful.
If the fiscal space freed
up leads to improved power, infrastructure and productivity then we get growth,
jobs and industrial development in the medium to long term.
Success depends
on implementation of sound policies and improvement in governance and
accountability. What I think is that Nigerians intuitively understand why this
has to be done but don't believe government can deliver on the promise so they
may end up with pain without gain. I don't blame them as the record of govt has
been poor. Its up to govt to prove them wrong.
Sleep well continue tmrw have
bad migraine
Sent from my BlackBerry® smartphone provided by Airtel
Nigeria.
From: "Zainab Mahmoud"
Date: Fri, 6 Jan 2012 20:31:42 +0000
To:
ReplyTo: zainabmahmoud@aol.com
Subject: Re: Greetings and
questions..Thank you for reading.
Thank you very much,
Allah ya
kara sauki.
Via BlackBerry® from Vodafone
