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Analysis -- Fuel subsidy cuts test faith in African governments
Reuters ^ | Friday the 13th, January 2012 | Richard Valdmanis

Posted on 01/13/2012 9:02:10 PM PST by SunkenCiv

A growing trend of African countries promising to free up money for social spending by slashing fuel subsidies will test public faith in governments, amid widespread fear the cash will vanish in a haze of graft and mismanagement.

Nigeria, Ghana, Guinea, Chad and others have all cut back on expensive fuel subsidy programmes in recent months.

For economists, the cuts have been an encouraging sign, raising hopes that reforms are taking root in the continent even as it braces for the fallout of the European debt crisis.

For millions of Africans, however, the changes have created nothing by pain.

Nigerians have taken to the streets across the country this week, furious at an overnight doubling of petrol prices and suspicious that the money might be diverted by corrupt officials...

Economists argue that if the region's governments manage the savings properly, some of the world's poorest countries will see improvements in transport, health care, education and energy, as well as an influx in investment.

Nigeria alone is expected to save more than $6 billion (3 billion pounds) a year by ending its subsidy programme, while other countries like Cameroon -- which has said it will cut subsidies in 2012 -- would save an annual $600 million...

The OPEC member's biggest oil union said it is ready to halt oil output by the weekend if the government does not reinstate the subsidy, piling pressure on President Goodluck Jonathan to reach some kind of compromise.

(Excerpt) Read more at uk.reuters.com ...


TOPICS: Foreign Affairs
KEYWORDS: africa; cameroon; chad; ghana; guinea; nigeria; opec
"(Additional reporting by Clair MacDougall and Kwasi Kpodo in Accra, Tim Cocks in Lagos; Writing by Richard Valdmanis; Editing by Andrew Heavens)"

1 posted on 01/13/2012 9:02:17 PM PST by SunkenCiv
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

2 posted on 01/13/2012 9:04:05 PM PST by SunkenCiv (Happy Friday the 13th, everyone!)
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To: SunkenCiv
I wouldn't be surprised if Nigeria went into another civil war because of the fuel subsidies and uptick in Islamic violence.
3 posted on 01/13/2012 9:16:45 PM PST by Theoria
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To: SunkenCiv
...promising to free up money for social spending ...

They learned well from our gubmint - smoke and mirrors in the wealth distribution game. Now that the gubmint tells them that the largess of others is to be diverted from fuel to other freebies, they will riot for what they have "lost".

Greece is going bonkers with the "austerity" cuts to the social welfare programs and I think that when we finally get around to doing what needs to be done, far too many Americans will be rioting in the streets and further damaging the teat they are accustomed to sucking on.

4 posted on 01/14/2012 3:00:42 AM PST by trebb ("If a man will not work, he should not eat" From 2 Thes 3)
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