It's a shame that the Opposition who see us as stupid is politicizing the 5000 NAIRA note to mean easier ways for GEJ to carry money in 2015 for election bribes or ATEDO Peterside daft talk of making corrupt Nigerians use NAIRA instead of dollars to stuff their caps.

THE REAL REASON IS ECONOMIC. The FEDERAL GOVERNMENT is running a huge budget deficit with the normal budget barely taking care of recurrent expenditure due to the huge wage bill of political office holders e.g. the 2010 budget of 2.6 trillion had 1.3 trillion for political office holders alone( not civil servants sef). To undertake capital projects and pay for fuel subsidy government has to chronically borrow and are being punished with high interest rates from banks more than 15%. That is why the big banks like FBN,ZENITH AND GTB make tons of profit by borrowing to government and shutting out the private sector who cannot secure loans.

This is why Okonjo revealed that the local debt is over 30 Billion Dollars and growing. To make matters worse foreign investors who see the high interest rates compared to the low rates in their country are also borrowing the government money( accounting for the stability of the NAIRA for now as they have to convert their dollars to NAIRA to buy our debt).

THE ONLY WAY OUT FOR THE BROKE GOVERNMENT IS INFLATION TO REDUCE THE VALUE OF WHAT THEY HAVE TO PAY BACK, THEREBY MONETISING THE DEBT. For example if I borrowed 500 NAIRA from you in 1985 and pay back now it cannot be the same money. That is why some people have gone back to the stock market and some are buying Dollars to hedge against the coming inflation. Do not wonder why GEJ AGREES TO THE NEW POLICY, THE GOVERNMENT HAS TO SURVIVE EVEN IF THEY ARE BROKE!!!!

very very faulty analysis. u surely have heard abt NPV before, but u definitely dont know how it's used to work out inflation and bank inteest rates, otherwise u wldnt conclude how u did. abt d foreign investors, i still dont get d logic u tried to present.

citizenisb:

THE ONLY WAY OUT FOR THE BROKE GOVERNMENT IS INFLATION TO REDUCE THE VALUE OF WHAT THEY HAVE TO PAY BACK, THEREBY MONETISING THE DEBT.

So according to you, to make debt service easy for the government when next they borrow, they should "monetize the debt" by printing higher weight bills. That's sounds like further devaluating our dear naira. Its good you know about inflation but with my little knowledge of economics, inflation is not the solution.
Check this, applying your theory, when they borrow for next years budget, they take advantage of printing higher bills to service their debt. The same applies to subsequent loans. In 5 years we would have a 1million naira bill. Imagine what the price of common commodities like sugar, groundnut and cassava flakes would be. And guess what, it would only go one way, up!!!. What then would be the fate of the common nigerian?

I say until they direct our funds properly to the right sectors and in the right proportions, and ensure that these funds are utilized optimally we would have more of these.

A rubbish attempt to say entirely nothing.

Can't pick out what you are on about.

ballabriggs: A rubbish attempt to say entirely nothing.

Can't pick out what you are on about.

He said nothing.

ballabriggs: A rubbish attempt to say entirely nothing.

Can't pick out what you are on about.

Rubbish or not, INFLATION IS COMING !

I did not understand this explanation, at all.

Our leaders are not thinking of the masses in their decisions. Let me tell you the truth, the decision to introduce N5,000 note is for the looters to beat the cashless economic policy by making more money carriable in their agbada and caftan, thereby avoiding the banks.Period!

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^^^

thank u Gerald (hope I am allowed to address you by your first name), for your long write up.

For most part of it, it was a synthesis from sound knowledge of economics. But ur theory developed credibility issues the moment conspiracy theories became its final destination.

Are there global conspiracies? I will be awed if there is/are none.But tossing another one up is what it is - a conspiracy theory. No one is ever sure.

By the way, no concorde plane was involved on 9/11.

Again, good synthesis there.

Well, very good write up!
The beginning was well captured but, the conspiracy twist was something else.

Maybe you are right, maybe you were VERY wrong. I agree with the part where you said,we should read more and start thinking outside the box.

That said, it was a good read.

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