@ 4Play

you don't understand the perculiarity of nigeria. Nigeria depends solely on crude oil exportation.

the fact that you strenghten the naira would not affect the production of crude oil

at the moment, crude oil is produced at about 2,000,000 barrels per day.

the trade is usually done in dollars not in naira.


Nigeria can make it work to its advantage, I know you are worried about exportation but do you know we can, for the moment, focus on building the industries by importing technical knowlegdge and machineries for the next ten years to build our industries.


Nigeria doesnt need to bother with exportation because its already there in the form of crude oil.

I wouldnt want to double the strength of the naira like you suggested but I would suggest keeping it fixed for about 10years, thast should the trick.

stranger12:

@ 4Play
you don't understand the perculiarity of nigeria. Nigeria depends solely on crude oil exportation.
the fact that you strenghten the naira would not affect the production of crude oil
at the moment, crude oil is produced at about 2,000,000 barrels per day.
the trade is usually done in dollars not in naira.

We get paid in dollars for our oil but after that how is the revenue spent in Nigeria?Does the FG pay its workers in dollars?Are contractors in Nigeria paid in dollars?The last time I checked,Nigeria uses the Naira and all that dollar revenue has to be exchanged for Naira.

Give nigeria oil 15 to 20 years,it's dried up,the only legacy would have been up to date infrastrutures and long term investment on human and material resourses.It is just annoying for our socalled leaders to be so blind and dumb in the 21st century world when even the Inuit at the far end of the world are in the race for constructive civilization.Things that the egyptians, the greeks and the romans have done thousands of years ago and still today,we haven't started cleaning up our streets,we have to start from the basics like Idiagbo tried to do,then inculcate it in the children,then a new culture begins,a culture of discipline,of resourcefulness,of creativity and most of all of common sense.

Hmmm. All the insults notwithstanding, I have done my homework and I remain convinced that the only result of this move will be a cheaper dollar leading to a temporary import boom and nominal deflation, (not inflation).

4 Play:

We get paid in dollars for our oil but after that how is the revenue spent in Nigeria?Does the FG pay its workers in dollars?Are contractors in Nigeria paid in dollars?The last time I checked,Nigeria uses the Naira and all that dollar revenue has to be exchanged for Naira.

True,

But do you know that technically, the government can print new naira notes and pay civil workers and nothing negative will happen if the amount of naira in circulation is just right for its 140 million citizens? The job of the government is to determine the amount of naira in circulation. If you want to stop inflation, stop putting too much naira in circulation. If you think its too little, inject a little bit more to balance things up.

There are ways to inject more naira into circulation (reduction of tax)
And there are ways to reduce the amount of naira in circulation (increase tax)
I'm not an economist but I believe the Tax system can be used to regulate currency,

The benefit of foreign reserve and foreign currency is importation of ideas, of infastructures, of machineries and to bribe other countries.
But I don't think the Nigerian government sees this.


_{Just kidding about the last bit regarding bribing}

Do you know that N5 paper was more expensive than its value.


Nigerians, please dont sleep until you understand global economics

stranger12, I need you to stop assuming that we don't understand economics far better than you do. Is that ok?

Seun:

stranger12, I need you to stop assuming that we don't understand economics far better than you do. Is that ok?

I never claimed to be a guru in that field,

. . . you only inferred .

My inference is that you think you understand economics more than us, which is ridiculous but not surprising.

@seun

what if stranger12 understands economics more than all of us?
I say good, teach me something I didn't already know.

@post

Money from oil is the only revenue naija gets legally, unlike the Alaskan Govt, our govt will never share that money, because:
1. Purposely inaccurate census
2. Land use decree
3. Over reliance on oil money
4. Need to finance corruption
5. South-south was carved out to "feel special" and loose their majority power working with the Igbos in the east and the yorubas in the west.

Seun The Government could pay a Portion of the revenue to the citizens, but they would have to be careful not to put too much into the hands of ordinary citizens. Currency is Printed According to The Worth of Resources in the Market. If the Government were to give money to people that don't give a damn about Mining etc, what would happen is Drastic decline in Production. Yes Inflation would be Alleviated, but Nigeria's Economy would Plunder.

After a while There would be less Money in Circulation and to meet Demand, Inflation would have to be Induced.  What would happen Is a Mega Inflation and then sudden drop inflation That's what I predict would happen. Inflation would rise immediately to around 200% and then drop to around 2% after a year or so.

An Economy where few people benefit from Resources is better than one that doesn't Function at all and There is No money to distribute or Allocate.

You people better stop discussing this malicious idea before one politician sees it and starts implementing it.

This thing is feasible, but not exactly like this. The NNPC would be privatised and its shares sold to those that actually have oil on their land. If you're from Bayelsa state and there is no oil on your land, nothing for you. Anyhow, when these shares have all been distributed among the true oil producers, government can now tax the NNPC just like a normal company. This way, the shareholders can get their revenue directly, plough back their investment, spend it or sell their shares.

This is a process that requires serious planning and careful management yet I think it is most likely going to make no difference. Look at Alaska today after years of recieving oil revenue and payment of dividend, are they the richest state in the US right now? High per capita in places like Halibut of about $90,000, but low in places like Aleneva; about $4,000. If this obtains in the Niger-Delta, with the poor infrastructure on ground, the high earners would take their revenues to more comfortable places like lagos, Abuja or abroad and spend it and the low earners will remain. Not moving forward or even back.

u cant compare nigeria with alaska ok, they pay taxes duh!

That's what am saying. If Nigerians are to split this money, the government will impose high taxes on them and put in place more stringent means of collecting those taxes. No be wetin I talk be that.

That's what am saying. If Nigerians are to split this money, the government will impose high taxes on them and put in place more stringent means of collecting those taxes. No be wetin I talk be that.

NigeriaONE.com

I am sorry but noone should  paid citizen for oil. It is morally wrong,  But govt should pay the citizen money for finding oil on their land,  and not royality,  Oil is a gift of God and not man made,  it is not like cocoa that people plant,  It is a lazy man agruement  to collect royality from what you did not plant,   

look if you do this the north would suffer,  and just some individual in Nigeria and even in the niger delta would enjoy,  even less than 10% of the people of the Niger delta can lay claim to owning a land,  so if you give the 10% of the niger delta people royality what about the 90% of them, 

The issue is to create a fair system,  and I believe that the new increase in VAT,  should be retain,  but only collected by the individual state,  Just like it is done all over the world,  In canada,  they have the same system,  under a dffirence name,  14%   ,  The first 7% goes to the federal and the second 7% goes to the state where you buy the product.  It is the same all over the world, 

This is how it works,  When you go and buy anything,    you pay 5% to the federal and you pay another 5% to the state you buy the thing in,    example,  if I am in Kano state, I would pay 5% to kano state and pay 5% to the federal govt,


If I am to pay for petrol,  The new petrol increase should be paid to the state ,  example Jigawa state must be paid the differences of the new prices,   It is called point of sell oil derivation ,  Without a buyer , noone would buy the oil from the niger delta,  so if the people of Kano , jigawa, bauchi are using the oil in the south,  they should get derivation from oil to run their state,  from the point of sale,  which I mean the petrol state,  this is how it is done all over the world,   You can not have the southern state get oil derivation and to give the buyer of the oil based on derivation is is unfair,  and we should correct that part. using this increase,  it should go to the oil buyer sales using derivation too.

better still a example,   If I go to a petrol station in Kano state,  I should pay kano state govt,  the different in the new petrol price,  And also pay kano state the difference in the new 5% increase in VAT,  This is how it is done,  This is the only way to have uniform development,   You can't just pay only Niger delta 13% derivation , without paying the consumer state like kano state, jigawa, bauchi state ,  consumer oil derivation at the point of state,  If we continue with a one sided system only the niger delta would develop and other part of Nigeria would not,  We need to introduce a 13% POINT OF SALE OIL DERIVATION  and  a 5% STATE VAT  ,  If we do not introduce this the north would suffer at the end of the road,

Just imagine only one part of Nigeria getting derivation,  and the other do not ,  the scale will result in inbalance in the system,

Nigeriaone.com

ever did economics in school , u can share oil revenue in cash to people, that influation idiot , how will u develop ur infracture? try use brain when posting sh& t ok?

Why can't your father share his salary among his children?

Distributing the money will move us forward. Not because of the money, because the effect is merely re-distributive, but because people will become more responsible. Because people will not have any government to abuse anymore. My aim is to make them feel that the responsibility for development is theirs; that the power is in their pockets and not in Aso rock or under the "honorable" governor's bed. I want to thank the 14 people who saw the merit in this.

Nigeria can be like Kuwait and allocate certain amounts of money to citizens through services. There is no risk to the economy, the HDI of Nigeria improves, There is no inflation and the people of Nigeria will feel the impact.

There can be certain amounts of money given to people through Packages like;

*A New house for every married couple in Nigeria (Kuwait already implements this)
*One New Car for every new family
*TV Set. Microwave, Oven, Fridge, Freezer etc for New Families
*Brand New Boats for coastal communities along with fish nets and reels etc.
*A new Car for every Nigerian Citizen that turns 18

Of course these packages, will not be feasible if Nigeria's economy is not sustainable. There will have to be Manufacturing plants in Nigeria etc, Nigeria will have to have adequate Infrastructure etc.

This is Nigeria, not Kuwait, we're not that rich and neither are we responsible enough!

That's ridiculous.

Nigeria has far more resources than Kuwait, and the only reason why Nigeria isn't good today is because Nigerians don't want the country to be good.

There's nothing wrong with my plan, it can be achieved without any side effects, I think in that coming years it could probably be realized. and yes Nigeria isn't Kuwait it is Nigeria, just as America isn't Kuwait or Spain isn't Kuwait.

Thanks for the Geography lesson but I believe we were discussing economics.

@Seun

Nigeria makes $40billion from crude oil yearly. If you split it among 150million people, that's $340 each. That will result in a payment of N40,000/annum or N3,500/month. That's change. Very petty change.

Don't forget that it costs money to distribute money. And besides, if Nigeria should close its account to be "dashing" citizens N3,500 monthly what will the country carry on business with? How will they pay workers? Will they not construct any roads?

Please we should quit this Ghana-must-go, share-the-money discussion before it gets to the ears of the masses.


@dblock

Nigeria is not Kuwait! The population of Kuwait is 2.5million, if Nigeria's oil revenue of $40billion is distributed among Kuwaitis, each citizen will have $16,000. That'll be N170,000/month. So please don't be comparing Nigeria with Kuwait. GEO 001: Nigeria is not Kuwait.

And just for your information, Kuwait makes $50billion/annum from crude oil. So if they split it among their 1.2million citizens, that'll be $20,000/annum each. N200,000/month. So please don't compare 2 people with a bowl of garri to 150 people with the same bowl of garri just because they are both bowls of garri. That is illogical logic.

Whoever said Nigeria was Kuwait.

If certain amounts of money are Distributed annually, the Plan will be feasible. Plus I did say that this should only be implemented after Nigeria has made it's industrial Break Through. After Nigeria has already capitalized on The Non Oil exports and improved the economy.

Kuwait produces more Oil than Nigeria, but by 2025 , African Oil Producers like Nigeria, Libya, Algeria, Sudan, Angola and South Africa will inevitably surpass The Middle Eastern Countries as the World's Black Gold hot spot and the worth of Oil will be Quadriple what it is today.

Two people with a Bowl of Gari is equal to 150 people, if they have 75 bowls of Gari. My point being, that by the time that this plan should be put into place, Nigeria should already be refining Crude Oil at oil at 100%, Nigeria should be Producing, Petrochemical Items, such as Vaseline, Plastic etc and exporting it to neighboring countries, and Nigeria would already have exploited it's Non Oil Sector.

So you cannot, possibly tel me that this is illogical, when it is evident that it can be achieved. You cannot tell me that China cannot achieve such a Plan, or Brazil.
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Some Stats.

Nigeria's current Refinery Capacity:
445,000 bpd.

Kuwait's current Refinery Capacity
930,000 bpd.

Kuwait, has a Larger Refining Capacity and a Lesser Population, but apart rom Nigeria's Crude being of more Value (Bonny Light) Nigeria has a more Robust Non Oil Sector.

By 2050 Nigeria will have a GDP of $11,437 to $18,000 placing Nigeria in the Top 50 GDP Capita and only a stone's throw away from Kuwait.

Also I never said that Nigeria should distribute Revenue, I said that the Government should introduce certain Packages.

This is envisioning, and Short Sightedness from people is one of the reasons why Nigeria Lags Behind and other countries zoom past.

So if anyone has something besides Geography to discuss, then Tahhhhhhhhh.

Guy, there will be no handout to anyone. By 2050, all proven Nigerian crude oil would have completely depleted.

Anyway, thank God you said when Nigeria has attained economic breakthrough. But you should also ask yourself why the USA which is by far the richest country in the world is not "dashing" cars, houses, microwave ovens and fridges to all their citizens even after a hundred years of economic breakthrough.

That is just not the way life works.

And finally, 2 people drinking 1 bowl of Garri and 150 drinking 1 bowl of Garri with expectation of 75 more bowls in the future is not the same thing.

Point Taken, however I don't think that Nigeria will not be in a situation were it can hand out such packages by 2050.

I don't consider The US The economic Power House of the world, to me that country is just an Over Rated Agbaya, Nigeria shouldn't strive to be like America, but like a industrialized Economy were The Middle Class is Fueled by such Packages etc.

The "Reason" why I proposed that Nigeria hand out these packages, is so that Nigeria's Middle Class is strengthened.

I would estimate that Nigeria's Middle Class is 7% to 15% of the Population. Of course America won't be handing out such Packages, because they already have a Middle Class that consists of most of their Population.

There are Three Situations here.

Countries like the United Arab Emirates and Kuwait, with Low Populations and High incomes, they can afford to embark upon lucrative Projects and developments etc.

Countries like the U.K, America, France, Germany. have a Strong Middle Class but they cannot afford Complacency.

and Lastly Countries like Nigeria, Angola, Sudan, Egypt and India. They are emerging Economies with an Abundance in resources, they have the capability to become Regional or Global Super Powers, however they have a Weak Middle Class that needs to be Expanded.

Nigeria is no U.A.E with Cash Flowing over the Top, but Nigeria does have resources that should be able to expand its Middle Class into what it should be.

But you should also ask yourself why the USA which is by far the richest country in the world is not "dashing" cars, houses, microwave ovens and fridges to all their citizens even after a hundred years of economic breakthrough.

Yes but this Necessities and Amenities have being Given to the citizens of America Indirectly through Jobs.

Very good point

But the Naira will further lose its value

Nigeria should leave O.P.E.C. in my opinion. They're attempting to make the price of crude skyrocket by cutting production, but as the economy slows, the price won't go up, because demand slows. Nigeria should expand on how much crude we produce a year, because the price of crude isn't going to reach $147 a barrel for a long time, especially with countries like Iraq, Brazil, and Russia increasing their output, while we're in O.P.E.C. cutting down our production, thinking prices will go up.

I say they increase production to at least 5,000,000bpd, because the price of crude isn't going to increase any time soon, we might as well make a greater profit while producing more.

Oil revenue paid out to citizens?For where dat one dey happen?

^It happens everywhere but Nigeria. It is at the root of why we don't develop and why there is so much corruption. Politicians just love to be in the thick of lots of dosh that is why; rather than have the country collect taxes (which civil servants are in charge of), the FG owns the oil wells and all the land they are situated on.

Oil money is easy to make govt; simply acquires the land, gets shell or chevron to ship in the equipment and then they signs documents giving the FG 60% ownership . After which money starts flowing. No effort.
Its so easy and volumes of money so high that we have lost interest in our cocao, tin, rubber, oil palm, gold, uranium, semi-precious stones etc. Most gruesome is that we have lost interest in the human as a resource (unlike Japan for instance).

The system of govt is directly related to our under development and high levels of corruption. Heaps of easy money governed by a single non competing body (FG) = corruption = mental decay = physical decay = perennial underdevelopment, poverty and squalor.

Alaska is just a state of what population compared to a nation of 150 million people with different everything.
Wont work

Seun:
If the oil money is not enough to enable Nigerians to directly purchase the services that they need, such as private food, healthcare, and education, then it cannot be enough to enable government to provide the same services. It will be up to every Nigerian to prioritize his needs and spend the money on what he/she feels is more important.

Seun, even if you didn't read economics, you should be much smarter than this. Interesting old thread here.