The debt service ratio is one way of calculating a business's ability to repay its debt. It compares income to debt-related obligations.

Bankers often calculate this ratio as part of their considerations of whether or not to approve a business loan.

Take note of the bolded, will revisit that in a moment.

You see, the debt management office told us in June, 2023 that this ratio is 73%

https://www.thecable.ng/dmo-pegs-debt-service-to-revenue-ratio-at-73-5-says-its-unsustainable/amp

KPMG predicted 100% before Dec 2023

https://www.thecable.ng/kpmg-nigeria-may-spend-over-100-of-its-revenue-on-debt-servicing-in-2023/amp

Just taking a simple average, that figure is not less than 88% now.

The implications is that we can no longer borrow and all our revenue is used to service debt. Naira is printed at a crazy rate to meet FG financial obligations and these monies are looted and used to buy the scarce dollars driving up the price higher.

It's an infinite loop ➿ that will total destroy the value of naira. Our net reserve according to JP Morgan is 3.75bn USD. So we can't even defend the naira. Dangerous times ahead

What we have in our hand is the supply problem.

If supply keeps getting worse, the problem of the FX will continue to the highest.


Economists in the house, come and explain how this work

Last year while working on a project for a client, I stumbled on a piece written by PwC, an advisory for African markets....the Nigerian situation is so terrible, that I could not hide. I drop it here anonymously.....

On the forex situations, I encourage him to go get 20,00,000 NGN and buy USD, that within three months he will cash out Big time doing nothing! Smart guy, he did accordingly and just sold his last batch of USD, making a hefty RoI.

You see, inflation is good for those with cash, and very bad for those without!

Well, as usual those with corn in Their back pocket called me all sorts of names....well I'm glad the few corn in their pockets is gradually running out, then they will taste the power of bad leadership!

Elections truly has consequences!

lastkingsman:
The debt service ratio is one way of calculating a business's ability to repay its debt. It compares income to debt-related obligations.

Bankers often calculate this ratio as part of their considerations of whether or not to approve a business loan.

Take note of the bolded, will revisit that in a moment.

You see, the debt management office told us in June, 2023 that this ratio is 73%

https://www.thecable.ng/dmo-pegs-debt-service-to-revenue-ratio-at-73-5-says-its-unsustainable/amp

KPMG predicted 100% before Dec 2023

https://www.thecable.ng/kpmg-nigeria-may-spend-over-100-of-its-revenue-on-debt-servicing-in-2023/amp

Just taking a simple average, that figure is not less than 88% now.

The implications is that we can no longer borrow and all our revenue is used to service debt. Naira is printed at a crazy rate to meet FG financial obligations and these monies are looted and used to buy the scarce dollars driving up the price higher.

It's an infinite loop ➿ that will total destroy the value of naira. Our net reserve according to JP Morgan is 3.75bn USD. So we can't even defend the naira. Dangerous times ahead

metaluterus:
Until the BDCs are financially shut down

you can't do that never.

BDC is just a format. No sane person who knows Nigerian govt and how it is run will remit dollar or pounds to a CBN that will allocate it to corrupt officials to resell to their relatives looking to import goods at double the rate CBN is buying.
You have to size people's dollar to do that.

metaluterus:
Until the BDCs are financially shut down

BDCs are not the problem.

FX is simply dollar inflow and outflow. The equilibrium is the price. In Nigeria, the dollar outflow is so much and it's still rising. The four major components (Exports, FDI, FPI and Remittances from Diaspora)that facilitated inflow have been decimated. Only remittances are still holding the price from crash landing

Ok

You still dey do analysis. With Tulumbu as president, we can expect 5000 naira to a dollar by 2026. On your mandate we shall stand, on your mandate, on your mandate we shall stand.

COMRADES, you don't need a soothsayer to tell you that, even birds of the air know that tinubu is incompetent

tensazangetsu20:
You still dey do analysis. With Tulumbu as president, we can expect 5000 naira to a dollar by 2026. On your mandate we shall stand, on your mandate, on your mandate we shall stand.

Chai. That's mean diesel/fuel (without subsidy) will be retailing around 4500N/L+ and to full Toyota Corolla tank will cost around 250,000+.

Chai, it's finished and Tulumbu is looking every strong to go for second term starting 2027 - 2031

All because we have two consecutive vegetables as president.

lastkingsman:


Chai. That's mean diesel/fuel (without subsidy) will be retailing around 4500N/L+ and to full Toyota Corolla tank will cost around 250,000+.

Chai, it's finished and Tulumbu is looking every strong to go for second term starting 2027 - 2031

When we told them, they said we were crazy. I already knew that tibubu will be worst than buhari right from 2020. It's why I ensured I voted. If it was another person I wouldn't even mind to be honest.

lastkingsman:
The debt service ratio is one way of calculating a business's ability to repay its debt. It compares income to debt-related obligations.

Bankers often calculate this ratio as part of their considerations of whether or not to approve a business loan.

Take note of the bolded, will revisit that in a moment.

You see, the debt management office told us in June, 2023 that this ratio is 73%

https://www.thecable.ng/dmo-pegs-debt-service-to-revenue-ratio-at-73-5-says-its-unsustainable/amp

KPMG predicted 100% before Dec 2023

https://www.thecable.ng/kpmg-nigeria-may-spend-over-100-of-its-revenue-on-debt-servicing-in-2023/amp

Just taking a simple average, that figure is not less than 88% now.

The implications is that we can no longer borrow and all our revenue is used to service debt. Naira is printed at a crazy rate to meet FG financial obligations and these monies are looted and used to buy the scarce dollars driving up the price higher.

It's an infinite loop ➿ that will total destroy the value of naira. Our net reserve according to JP Morgan is 3.75bn USD. So we can't even defend the naira. Dangerous times ahead

Leave all the gimmick metrics and use your head.

It's simple, you exchange rate depends on your demand for other peoples currency vs other peoples demand for your currency. Which is directly related to you imports vs exports. For Nigeria, our imports is nearly twice our exports, which is not really bad. So we are relatively rich and I demand. But through incompetence, theft, and over centralization, the Naira is continously being devalued. And when I speak of incompetence, it's about the current CBN Governor and his Boss. Both are clueless, just like the previous administration.

No end in sight, the price discovery continues!

lastkingsman:
No end in sight, the price discovery continues!

$1 = 1520N (official)!

lastkingsman:


$1 = 1520N (official)!

$1 = 1700N

Congratulations Nigeria

Bigkoko:
Last year while working on a project for a client, I stumbled on a piece written by PwC, an advisory for African markets....the Nigerian situation is so terrible, that I could not hide. I drop it here anonymously.....

On the forex situations, I encourage him to go get 20,00,000 NGN and buy USD, that within three months he will cash out Big time doing nothing! Smart guy, he did accordingly and just sold his last batch of USD, making a hefty RoI.

You see, inflation is good for those with cash, and very bad for those without!

Well, as usual those with corn in Their back pocket called me all sorts of names....well I'm glad the few corn in their pockets is gradually running out, then they will taste the power of bad leadership!

Elections truly has consequences!

Naira depreciation is bad for everyone including those hedging by stockpiling USD as long as you live & spend in naira.