I open this thread for finance and business majors in the institutions like me so that we can discuss and tackle questions and topics in courses offered in the finance and economics department, as well as challenge ourselves, and prescribe books. Not every lecturer offer students the luxury of throwing questions at them at will. I intend for us to make concrete contributions probably with references to back them and the key is to find meaning and understanding in our field of study. I also intend for this thread to be perpertually existent; to serve as an instrument of learning as we further in education. Who knows, perhaps in the end, we may form a syndicate of economists and finance individuals that will take on the ministry of finance or finance offices in the public service lol.
However, i'm a beginner, so please pardon my ignorance.

Our contributions is the oil that will keep this thread smoking. If you have seen this, show your interests. I already have a stack of questions for us to tackle.

Ok. I'm in

Ok
happy sunday
Now, in the course of studying i bumped into a question. They say the central bank is the apex financial institution in any country and it is the bank that issues the legal tender money. The CBN dosen't issue money for free, so how does the currency circulate?

Assuming all federally generated revenue is kept with the CBN: In Nigeria, at present, the oil industry would be accountable for a greater part of the fund, and we are paid in dollars. Therefore, part of this fund will form our foreign exchange reserve as reserve currency and the other part would be expended as stipulated in the budget. Inotherwords, one way by which the currency might be able to circulate would be through domestic government spending. Therefore one would have to work in the civil service or with an employer who works or have worked in the civil service to get the currency.
Someone challenge this assertion.

@zico
you are not completely wrong neither are you completely right.
first, your assertion above is tainable only on the assumption the central bank is the only financial institution in existence.
secondly, George Mankiw said that economics is no activity (ies) planned and executed by one single institution (the government) but a series of interactions involving both the government, individual households and firms. the implication of the above economic thought is that government alone can not at any point 'effectively' administer economic activities involving such aggregate factors as employment, income, price stability etc

Joe.:
@zico
you are not completely wrong neither are you completely right.
first, your assertion above is tainable only on the assumption the central bank is the only financial institution in existence.

The central bank of Nigeria is the 'sole' issuer of legal tender money throughout the federation (NSPM, structure)
Issue: to give sth to sb, especially officially (oxford)
The annual labour of every nation is the fund which originally supplies it with all the necessaries of life which it annualy consumes... (Adam Smith). Therefore the value of production by a country is expressed as its money.
Now, our economy's main income-base is in the oil industry.

Joe.:
@zicoGeorge Mankiw said that economics is no activity (ies) planned and executed by one single institution (the government) but a series of interactions involving both the government, individual households and firms.

the activity of issuing money is done solely by the CBN, asforementioned. The money come from trading crude oil through NNPC based on Smith's standpoint :the US dollar would be the most widely-accepted currency in the world, therefore we would be paid in so. This money so paid would be remited in a account that the CBN would be responsible for. The CBN is the only giver of naira. He would give to government to carry out domestic spending, that way there will be money in circulation.
Now, private firms, there incomings are for there private pockets after excise duties has been discounted which would be kept with CBN also.... What do you say to these, for now.

At this critical economic depletion, is it wise for Nigeria to privatize?

nnafather: At this critical economic depletion, is it wise for Nigeria to privatize?

There is no depletion in fact. There is growth and i mean real growth especially in the agric sector. Privatisation to well-known world class companies for infrastructure development, Financial Services, IT, Communications, Audit, Airport management, etc is the best thing that can happen to a country like Nigeria. It breaks the stronghold of lazy public servants and unnecessary government interventions in the free market.

As you can see, not much attention to this thread cos even the public servants who could present their views on privatisation are busy eating AMALA in the office with very little regard for anyone and anything else

@ZICO: I still try to understand the logic of your argument. However, I can say this. For the energy companies into oil exploration(Upstream) such as Shell, Agip-Naoc, Exxon Mobil, Addax Exploration, Chevron etc, the crude they lift if it is not under a joint venture arrangement is expected to be sold to their offshore clients and the proceeds transferred to nominated foreign accounts. Usually, since the oil price is denominated and exchanged in USD, it is expected that the funds will sit in the account that should be domiciled in the US or even in nigeria(although same virtual float sits in the US). Such portion will and should not come to CBN. Therefore, the oil companies when they need to spend naira for the cyclical transactionary purpose normally will sell at the prevailing interbank exchange rate to banks. That way they provide another alternative source of foreign exchange.

The four sector economy model, assert existence of consumer,firm,government and net export. Also firm(investment) and Government are autonomous. while consumer and net export sectors have induced components apart from autonomous components. This is typical keynessian economic model. While classical economies believe in famous say's law'supply creates it own demand' and their would be equillibrium always.

This thread go make sense, am on my way home. I will definitely contribute and also learn from this thread

I have been lured by the incomplete information. The question according to zico0.... "They say the central bank is the apex financial institution in any country and it is the bank that issues the legal tender money. The CBN dosen't issue money for free, so how does the currency circulate?

First, the central bank don't issue or give money for free, there are costs involved in printing monies, the difference between these costs and the profit so to speak is called Seigniorage. After printing, there are several means of putting this monies in circulation. In no particular order, first, we have lending to commercial banks for little or no interest depending on the monetary policy at the time. In other words, central banks lends money to other banks whom in turn lend this money to individuals or firms(circulating). Secondly, we have OMO(open market Operation) where central bank sell or buys bonds to either get money into the system or take money out of the system or circulation. central bank sell bonds to get money out of the system and out of circulation and buys them back when it wants to put it back in circulation. Thirdly, it lends to government, the government get this monies and spends it thereby circulating.....,


Hope this helps.

Seigniorage

eddycolo: I have been lured by the incomplete information. The question according to zico0.... "They say the central bank is the apex financial institution in any country and it is the bank that issues the legal tender money. The CBN dosen't issue money for free, so how does the currency circulate?

First, the central bank don't issue or give money for free, there are costs involved in printing monies, the difference between these costs and the profit so to speak is called Seigniorage. After printing, there are several means of putting this monies in circulation. In no particular order, first, we have lending to commercial banks for little or no interest depending on the monetary policy at the time. In other words, central banks lends money to other banks whom in turn lend this money to individuals or firms(circulating). Secondly, we have OMO(open market Operation) where central bank sell or buys bonds to either get money into the system or take money out of the system or circulation. central bank sell bonds to get money out of the system and out of circulation and buys them back when it wants to put it back in circulation. Thirdly, it lends to government, the government get this monies and spends it thereby circulating.....,


Hope this helps.

Seigniorage

Sweet!

I'm in...

Mujitapha: The four sector economy model, assert existence of consumer,firm,government and net export. Also firm(investment) and Government are autonomous. while consumer and net export sectors have induced components apart from autonomous components. This is typical keynessian economic model. While classical economies believe in famous say's law'supply creates it own demand' and their would be equillibrium always.

not everybody is doing or have a second degree here, so u may want to diress a bit

Caracta: Ok. I'm in

your master of circular flow of income and how Central Bank creates money will help you a lot

[quote author=toothpaste]

There is no depletion in fact. There is growth and i mean real growth especially in the agric sector-\[/quotel

Can you prove there is growth in the agric sector. Oil is still dominant. Whats important in privatization is transparency.

I am in.
Zico,
I will let you be because you said you are a fresher (a beginer) in the field.
Money or currency circulation is mostly done through commercial banks like UBA, ZENITH, GTB, 1stBank etc. I wish to bring this to a layman's understanding. When new notes are issued, just like when #1000 notes came out newly, you get it from commercial banks. This money is in turn used in buying and selling and so the circulation contnues.

Interesting! I'm in
#space booked#
I'll Brb

[size=15pt]VERY LUCRATIVE AS YOU CAN SEE...[/size]

Economics hmm one of the most dangerous course to study in the university( especially university of Lagos, I'm an Akokite) if you're not a reader , your dreams will be shattered and Only insane sane men make first class in Economics , hence every first class economics student is a first class insane sane. Student, fear them ooo. Economics students!!!

Open Market Operations(OMO)

Thanks for this thread.
First and first I have a question:
I'm actually an undergraduate student in business, but I would like to switch to Economic or finance for my master. I would like to know which one is better and offer more job opportunity?

Or should I go for international business/

Thank you for openning this thread!

This is my question: Why is there an inverse relationship between the prices of bonds and interest rates?

Also, would anyone be so kind as to suggest some microeconomic research topics that would make use of logit mode of analysis. I'm stuck on getting a topic.

Thanks in anticipation.

Interesting!!! I'm in. Hope to learn a lot from you guyz.

just saw the topic, being longing for a tread like this. lets also discuss the issues bordering on our financial institutions. be back for a more in depth discussion

NicE

I suggest we drop our BBM pins and other contacts. For easier and better Communication. My Pin is 28F24A27