A negative value for net export does not mean a country has no exports, rather it means that it imports more than it exports (a phucked economy). Currencies can only be accurately valued by comparing against values for export items.

all4naija: You are talking about volume and composition by sector. You speak as if oil is not being imported into the country. You speak as if oil products are not be used within the country. However, the largest contributor in Nigeria case is oil.

Why i said that is because of the part in bold by the OP, suggesting that agriculture earns more money for Nigeria. The fact is that good that are produced and consumed locally without being exported still make up GDP. My point is Agriculture may makes up 40% of our GDP, but that doesn't mean it brings 40% of our earnings as a nation.

shymex: ^^^^We can definitely survive without the oil from Niger/Delta - and I hope this will shut certain people up about other regions being parasitic..

We make more money from Agriculture than oil...

ekt_bear:

lmfao!

OK, so only look at the sovereign nations there. Do you notice any which have high GDP but negative net imports? There are plenty.....

What are you on about? Haven't you see that Nigeria depends on export in this case. I have never argued that cannot be possible for a nation to have less contribution from net export to its GDP.

This is an old and silly debate we used to have on Nairaland years back.

Nigerian Government cannot survive without oil.

Large majority of Nigerians do survive without oil.

Can large majority of Nigerians survive without the services Government provides ie roads, hospitals etc etc? No!

Only an undeveloped country sees agriculture contribute 30-40% of GDP.

That basically means a lot of people are surviving for themselves. There is no Western country with more than 5% Agriculture contribution to GDP.

shymmex:

Check this out:



^^^^^Oil still remains a smart part of our economy - can an economist explain that to me, plz?

Because of what GDP actually means. Trade remains a largely informal sector which a significant part of Nigeria's urban dwellers earn a living from. I think one issue here is when people think of Nigeria they think too much of cities. Majority of Nigerians apparently live in rural areas. But not to get things twisted, oil drives things in that country (which is not something anybody is claiming we should be proud of by the way).

Beaf: A negative value for net export does not mean a country has no exports, rather it means that it imports more than it exports (a phucked economy). Currencies can only be accurately valued by comparing against values for export items.

Agreed!

So, if we purchase more than we sell - that means we run on a deficit every year, right?

And if we run our annual budget on deficit, that means the oil isn't really worth all the noise.

It's high time we reduced our dependence and noise about oil, and focus on other sectors of our economy..

Oil is a curse in disguise...

Let's take all4naija's 70% of GDP estimate and see where it leads us.

~2 million barrels of oil per day. ~$100 value. ~365 days.

octave:4> 2*1e6*100*365/1e9
ans = 73

So $73 billion economy from just oil exports. Let's say associated oil services add +50% to that. We get to roughly $110 billion.

Now, using all4naija's 70% figure, we get that the total Nigeria economy is $160 billion.

I think the general sense people have is that Nigeria's economy is closer to $250 billion+, not only $160.

So either the economist are vastly overestimating the size of Nigeria's economy....or this 70% estimate produced by all4naija is way too high.

Piyke:

Why i said that is because of the part in bold by the OP, suggesting that agriculture earns more money for Nigeria. The fact is that good that are produced and consumed locally without being exported still make up GDP. My point is Agriculture may makes up 40% of our GDP, but that doesn't mean it brings 40% of our earnings as a nation.

Do the logic -- government spending + consumer+ investment+ all exports minus value of all imports * a period of time(in a year).That is GDP! We are leaving growth rate out of it

Ibime: This is an old and silly debate we used to have on Nairaland years back.

Nigerian Government cannot survive without oil.

Large majority of Nigerians do survive without oil.

Can large majority of Nigerians survive without the services Government provides ie roads, hospitals etc etc? No!

Only an undeveloped country sees agriculture contribute 30-40% of GDP.

That basically means a lot of people are surviving for themselves. There is no Western country with more than 5% Agriculture contribution to GDP.

I disagree with the bolded part.

Where are these roads, hospitals etc?

The roads are death traps; and there is no free medical health care in Nigeria...

Every Nigerian pays for his/her health care..

all4naija: That is a big joke. What is the Naira exchange rate. How much do those agricultural products worth in the international market?

Who's talking about international market?

When you go to purchase a bag of rice and you're taxed 5% on the sale value, isn't that taxes? What has that got to do with exchange rate when your consumption is local/domestic?

ekt_bear:

Perfect. Then we are in complete agreement.

So, regarding your comment about Nigeria w/o oil and Somalia.

I take it that you believe that it is impossible to tax those other sectors of the economy? Or something that would take a lot of time to do?

It's not impossible, what Nigeria needs is TRUE FISCAL POLICIES in place. We also need to practice true federalism. Taxing agriculture is no new thing, for instance, the U.S. Dept of Agriculture tax farmers, where do you think money from food stamp comes from?

Florida for instance tax heavily on their hospitality industry... go figure. So you see why FL is a tourist state

All I'm saying is simply tax business based on their output and industry.

manny4life:

Who's talking about international market?

When you go to purchase a bag of rice and you're taxed 5% on the sale value, isn't that taxes? What has that got to do with exchange rate when your consumption is local/domestic?



It's not impossible, what Nigeria needs is TRUE FISCAL POLICIES in place. We also need to practice true federalism. Taxing agriculture is no new thing, for instance, the U.S. Dept of Agriculture tax farmers, where do you think money from food stamp comes from?

Florida for instance tax heavily on their hospitality industry... go figure. So you see why FL is a tourist state

All I'm saying is simply tax business based on their output and industry.

shymmex:

I disagree with the bolded part.

Where are these roads, hospitals etc?

The roads are death traps; and there is no free medical health care in Nigeria...

Every Nigerian pays for his/her health care..

Try living for one week without venturing on these roads (however forked up they are).

I'm sure you do not trek wherever you go.

Ibime: This is an old and silly debate we used to have on Nairaland years back.

Nigerian Government cannot survive without oil.

Large majority of Nigerians do survive without oil.

Can large majority of Nigerians survive without the services Government provides ie roads, hospitals etc etc? No!

Only an undeveloped country sees agriculture contribute 30-40% of GDP.

That basically means a lot of people are surviving for themselves. There is no Western country with more than 5% Agriculture contribution to GDP.

This is true.

But I think the reason people get so annoyed about being told that they're living off of oil is because they know that without oil they wouldn't "be Somalia" like some people are claiming (well, actually, maybe much of the North would be Somalia) and they know that there are many successful countries that don't rely on oil. They are right to question the exaggerated picture being painted of oil keeping them from Somalian poverty, but at the same time they should acknowledge that oil contributes majorly to the development of all regions of Nigeria. I don't know why this last part seems so hard to do.

shymmex:

I disagree with the bolded part.

Where are these roads, hospitals etc?

The roads are death traps; and there is no free medical health care in Nigeria...

Every Nigerian pays for his/her health care..

So there are no roads in Nigeria which people rely on? If there are who built them? You can argue abot corruption and all that but please drop this particular line of reason of yours, it is absurd. Whether poorly or grossly inefficiently, government provides some services which millions of people rely on.

all4naija:

Sky Blue:

So there are no roads in Nigeria which people rely on? If there are who built them? You can argue abot corruption and all that but please drop this particular line of reason of yours, it is absurd. Whether poorly or grossly inefficiently, government provides some services which millions of people rely on.

Most of the federal roads in Nigeria (Southern Nigeria) were built way back before oil became the major source Nigeria's income..

Most of the oil money is in the swiss bank accounts of the greedy elites...

This all4naija sef...na wa o

70% of economy

wetin man go hear

ekt_bear:

Who cares about international market. Is a man's labor only of value if he can make stuff to sell internationally?

Is pounded yam only of value if you can sell to Yankee?

Won't a Nigerian pay you money for pounded yam too?

Thank you. Just like I tried explaining to him,

WHAT HAS EXCHANGE RATE GOT TO DO WITH LOCAL/DOMESTIC PRODUCTION/CONSUMPTION?

I really want to hear this argument because it's about to bamboozle me.

I think he believes that when the naira decreases in value, necessarily the value of 1 unit of a Nigerian's labor also decreases.

So if the the naira plummets from N100 versus a dollar to N200 versus a dollar, then the laborer will continue to charge his same N1000 for an hour of labor...meaning he values his labor at half the value just because the naira depreciated.

However, I don't think that things work this way.

shymmex: Our revenue from oil = $52.2 billion in 2011.

GDP = $415 billion in 2011

http://en.wikipedia.org/wiki/Economy_of_Nigeria
.
Oil is overrated, the earlier we stop calling other people parasites - the better for us.

That is not GDP nominal. I though we are all about the GDP nominal as per se exchange rate used for trade than set of standards of comparing what a currency can purchase in relationship to another country.

The $50 billion dollars from oil is nominal in the sense that is what is on exchange rate on prevailing international trade. $413 billion GDP(ppp) is calculated on relative value if brought to the prevailing market value is different.

There is no argument there in your link though. Just that you like to miss things up for the reason of the term GDP.Whereas there are different ways of calculating GDP.

Real GDP is the nominal - that is what we are discussing about here!

shymmex:

Most of the federal roads in Nigeria (Southern Nigeria) were built way back before oil became the major source Nigeria's income..

Most of the oil money is in the swiss bank accounts of the greedy elites...

And these roads haven't had any work done on them since then? Is it only the federal government that builds roads? What about state governments that get oil derivation which majority of their financial budgets depend on, don't these states also build roads? What about Local governments that also get money from oil derivation given to states? Are roads the only infrastructure that can be built? Are you saying no new infrastructure has been built since the 70s?

Please stop this line of argument, it is just utterly absurd, it really is.

ABUJA alone that people can't shut up about, what do you think built that city please, do tell. Agriculture? And all these roads and ministyr buildings and parks in that city, they were built in the 60s? please, please, please, stop.

Ibime: This is an old and silly debate we used to have on Nairaland years back.

Nigerian Government cannot survive without oil.

Large majority of Nigerians do survive without oil.

Can large majority of Nigerians survive without the services Government provides ie roads, hospitals etc etc? No!

Only an undeveloped country sees agriculture contribute 30-40% of GDP.

That basically means a lot of people are surviving for themselves. There is no Western country with more than 5% Agriculture contribution to GDP.

I absolutely disagree with you. If we have no oil, government will be serious with tax collection and that alone will supersede revenue from oil.
Nigeria is fvcked up because our government abandoned tax collection which is the main source of revenue in Western countries. Agriculture and Import/Export are ahead of oil and that's what it is.

If we dump oil today, a mere 15% of our GDP, Nigeria will become better.

Obiagu1:

I absolutely disagree with you. If we have no oil, government will be serious with tax collection and that alone will supersede revenue from oil.
Nigeria is fvcked up because our government abandoned tax collection which is the main source of revenue in Western countries. Agriculture and Import/Export is ahead of oil and that's what it is.

If we dump oil today, Nigeria will become better.

The groundwork for that has to start today. This is not about what the ideal is. As things stand right now, if we wake up tomorrow without oil, what do you think will happen? That tax money will magically flow into the budget?

ekt_bear: I think he believes that when the naira decreases in value, necessarily the value of 1 unit of a Nigerian's labor also decreases.

So if the the naira plummets from N100 versus a dollar to N200 versus a dollar, then the laborer will continue to charge his same N1000 for an hour of labor...meaning he values his labor at half the value just because the naira depreciated.

However, I don't think that things work this way.

You are the one missing the point. It means you don't know how GDPs are calculated.

Sky Blue:

The groundwork for that has to start today. This is not about what the ideal is. As things stand right now, if we wake up tomorrow without oil, what do you think will happen? That tax money will magically flow into the budget?

Unfortunately, the groundwork hasn't begun, NASS and the executive are playing their trial and error code games. There's the handwriting on the wall that Nigeria is approaching the brink of collapse - U.S., the major buyer of Nigerian crude has drastically reduced their volume purchase. Nigeria has to export to Asia to meet her daily export benchmark. Until Nigeria's economy collapses, no one will understand.

manny4life:

Unfortunately, the groundwork hasn't begun, NASS and the executive are playing their trial and error code games. There's the handwriting on the wall that Nigeria is approaching the brink of collapse - U.S., the major buyer of Nigerian crude has drastically reduced their volume purchase. Nigeria has to export to Asia to meet her daily export benchmark. Until Nigeria's economy collapses, no one will understand.

Why that line in bold when many of you believe oil is not contributing as large as 70%?!

Sky Blue:

The groundwork for that has to start today. This is not about what the ideal is. As things stand right now, if we wake up tomorrow without oil, what do you think will happen? That tax money will magically flow into the budget?

If we wake up tomorrow and oil ceases to flow, we'll have an initial set back but we'll bounce back stronger. Oil has always been seen as a curse because it turned our heads upside down and we pursued it without sense. Oil adds very little to the real economy; easy large revenue with no strong footprint. How many people are employed in the oil/gas sector? Can it be correlated with the amount coming in from that sector? Definitely not, oil simple ruins economy that's why wise Dubai quickly moved into real estate and are better off now.

all4naija: Why that line in bold when many of you believe oil is not contributing as large as 70%?!

Dude, contributing what exactly? GDP or Revenues, which?

I've always maintained that OIL contributes about 72% of Nigeria's Revenues, but contributes about 15% of Nigeria's GDP. What part of it are you confused about?

With regards to the U.S. reducing purchase volume, isn't it common sense that if your major buyer reduced about 50% of their purchase from you, revenues will decline? Same rule applies, U.S. reduces purchase volume, Nigeria has to export to Asia to meet up revenue benchmark else they'll run deficit and can't pay their bills.

Man

Discussing with this dude is like banging your head against the wall. Have fun..I'm going to get a workout in lol.

Peace

Lie , Lie, Lie, all lies!!!. They want to fool us again

manny4life:

Dude, contributing what exactly? GDP or Revenues, which?

I've always maintained that OIL contributes about 72% of Nigeria's Revenues, but contributes about 15% of Nigeria's GDP. What part of it are you confused about?

With regards to the U.S. reducing purchase volume, isn't it common sense that if your major buyer reduced about 50% of their purchase from you, revenues will decline? Same rule applies, U.S. reduces purchase volume, Nigeria has to export to Asia to meet up revenue benchmark else they'll run deficit and can't pay their bills.

It contributes close to 90% revenue and 70% of the GDP!

all4naija: It contributes close to 90% revenue and 70% of the GDP!

. . . and where did you get that from?