J12:

More financial transactions are used with the US dollars, also the demand for dollar securities is still very strong.
China is the biggest investor of US government treasuries and bonds. Their major concern as investors, is the payment of their interest.
Yes, recently, they(china, Singapore, Japan) have lost interest in dollar securities and have made huge investments in eurobonds, swissfranc, kroner and other small currencies. . This decision was taken probably because they needed to diversify their investments towards other currencies. However, this won't cause the dollar fall flat on its back because like I said, the demand for dollar securities is still strong.

J12:

Argentina is still a debtor to the paris club of creditors.

0lumide: Too many educated illiterates on this thread!!

They repeat the same thing Okonjo Iweala said during OBJ and she is still repeating same.

Okonjo Iweala on subsidy in obj's era - "We need fuel price increase for money to be available to build infrastructures".

Okonjo Iweala 2012 - "we need to remove subsidy to free up funds to build infrastructures".


NO one is talking about the money we are saving in SWF and borrowing money with interest. How wise is that? The saved money is in foreign banks not in our reserve or our banks. Illiterates will come here and defend Iweala because she is Igbo.

I have 20 naira, I save it. When I need 20 naira, I go and borrow with interest that'll make me pay back 25 naira. So from my 20 naira saved, I have lost 5 naira. and now owing 5 naira!!

That is the economics Okonjo Iweala is preaching.

PROUD-IGBO:


^^^On the bolded.....i'm not an economist, but using common sense one can see the error in your argument:

Assuming i'm strapped for cash as a businessman, and i have $20 saved in the bank with nothing else to invest in my ailing business (in specific/targeted areas).....an investment which if made would rapidly expand my business (ie- turnover, profit and new factories) and i'll then be able to employ more hands; now imagine i was offered a $20 twenty year loan at a very minimal interest rate, to make all the necessary investments to expand, and which would then mean i can still hold on to my $20 savings in the bank; now which option do you reckon i should go for?......bearing in mind that the avenues for waste and fraud have been reduced by tying the loan to measurable and identifiable deliverables.

Borrowing -given our present need for new infrastructure and industries that could help the economy grow- isn't necessarily a bad thing insofar as assurances are given of prudent use of the funds borrowed; we could either be afraid to take bold steps that would make our economy grow, or take the bull by the horns and trust the people we have running the economy to do the right thing (of course with the necessary 'checks' and 'monitoring' by different bodies and agencies like civil society, the press, and our representatives in Abuja).

PROUD-IGBO:


^^^On the bolded.....i'm not an economist, but using common sense one can see the error in your argument:

Assuming i'm strapped for cash as a businessman, and i have $20 saved in the bank with nothing else to invest in my ailing business (in specific/targeted areas).....an investment which if made would rapidly expand my business (ie- turnover, profit and new factories) and i'll then be able to employ more hands; now imagine i was offered a $20 twenty year loan at a very minimal interest rate, to make all the necessary investments to expand, and which would then mean i can still hold on to my $20 savings in the bank; now which option do you reckon i should go for?......bearing in mind that the avenues for waste and fraud have been reduced by tying the loan to measurable and identifiable deliverables.

PROUD-IGBO:


^^^On the bolded.....i'm not an economist, but using common sense one can see the error in your argument:

Assuming i'm strapped for cash as a businessman, and i have $20 saved in the bank with nothing else to invest in my ailing business (in specific/targeted areas).....an investment which if made would rapidly expand my business (ie- turnover, profit and new factories) and i'll then be able to employ more hands; now imagine i was offered a $20 twenty year loan at a very minimal interest rate, to make all the necessary investments to expand, and which would then mean i can still hold on to my $20 savings in the bank; now which option do you reckon i should go for?......bearing in mind that the avenues for waste and fraud have been reduced by tying the loan to measurable and identifiable deliverables.

Borrowing -given our present need for new infrastructure and industries that could help the economy grow- isn't necessarily a bad thing insofar as assurances are given of prudent use of the funds borrowed; we could either be afraid to take bold steps that would make our economy grow, or take the bull by the horns and trust the people we have running the economy to do the right thing (of course with the necessary 'checks' and 'monitoring' by different bodies and agencies like civil society, the press, and our representatives in Abuja).

seanet01: Don't kind of understand this logic.
If we have sincere budget deficits then borrowing is inevitable.
But borrowing to finance phantom deficits has always been our problem.
This people inserts projects that were never going to be executed just to embezzle funds meant for it.
Federal Ministries are the epitome of corruption on this aspect.

logica: Dude, no sensible person can rationalize the economic sense in Okonjo's strategy. Firstly projects are not necessarily executed at once and they are also broken down into phases. With this in mind, you should realize we don't need to borrow when the money can be disbursed in phases along with the project phases. As well as the fact that projects can be prioritized. With that laid out, there is absolutely no need to borrow. The analogy being put up there which I responded to assumes that all the funds for the entire list of projects need to be provided all at the same time and at inception which doesn't make sense.

Mind you, it is apparent to the exposed that she's nothing but an Aunt Jemima for the powers that be.

logica: Dude, no sensible person can rationalize the economic sense in Okonjo's strategy. Firstly projects are not necessarily executed at once and they are also broken down into phases. With this in mind, you should realize we don't need to borrow when the money can be disbursed in phases along with the project phases. As well as the fact that projects can be prioritized. With that laid out, there is absolutely no need to borrow. The analogy being put up there which I responded to assumes that all the funds for the entire list of projects need to be provided all at the same time and at inception which doesn't make sense.

Mind you, it is apparent to the exposed that she's nothing but an Aunt Jemima for the powers that be.

X-factoria:


To burst your logic about project prioritization and your "no need to borrow" stance, I'll ask you a simple question: Do you know how much yearly investment is needed to fix/build infrastructure in the next 5,10 or 20yrs?

If you know the answer to the question, compare it with how much Nigeria makes yearly by doing a discounted earnings cash flow for the next 5, 10 or 20yrs?

If you do this right, your folly will become obvious! We do not make enough money to shut the mouth of government critics who will always open their guts to scream non-performance hence the borrowing although corruption may hinder the intended results.

Now, to educate you on why our savings cannot be used. That foreign reserve and SWF are the security or a form of comfort to the lenders to make fund available to us. They improve our credit worthiness as a nation and the direct impact of that would be seen in our credit ratings. Lenders won't accept Nigeria's sovereign risk without those things in place. In addition, as madam Ngozi suggested, we are able to negotiate better loan terms - interest rates, longer tenor etc because we have a favourable rating made possible by the foreign reserve and the SWF. So it is not as simple as your N20/N25 arithmetic!!!

pazienza: And so, i ask, to whose purpose was it that nigeria remained one,and who were the foot soldiers used to achieve this purpose? Who were awo and Gowon taking orders from? Who were one Nigerian leaders taking orders from when they implemented the SAP? You lots should not talk about igbos again,the show would have been over in 1967,but you lots decided to lick the british ass,enjoy your one nigeria,those who actually won the war have the spoils,nothing you can do about that.

0lumide:

Please leave tribe out of this, let's debate based on economic policies of Kokonjo Iweala.

If someone is being a bigot, just ignore. But the truth is that many Igbos here are supporting Okonjo because she is Igbo and that's wrong. I want Olusegun Aganga fired too and I liked Barth Nnaji's contribution to our power sector which is what boosted out power supply.

If this were a thread to go tribal on, trust me, I would have given you reasons why Awolowo wasn't a western puppet maybe Gowon was but I can never tell.

J12: She's right. Even the US states has a huge debt profile. Liquidity is all that matters.

J12:

She's been at the highest level of financial management for up to ten years(nationally and internationally). I don't think any other financial manager can perform better than her.

julioralph: No matter what, Sanusi should show respect to Madam oh. I don talk my own.

Omen100:

Billions, u are making a lot of sense able contributions these days, pls keep it up billions

X-factoria:

Now, to educate you on why our savings cannot be used. That foreign reserve and SWF are the security or a form of comfort to the lenders to make fund available to us. They improve our credit worthiness as a nation and the direct impact of that would be seen in our credit ratings. Lenders won't accept Nigeria's sovereign risk without those things in place. In addition, as madam Ngozi suggested, we are able to negotiate better loan terms - interest rates, longer tenor etc because we have a favourable rating made possible by the foreign reserve and the SWF. So it is not as simple as your N20/N25 arithmetic!!!

seanet01: Don't kind of understand this logic.
If we have sincere budget deficits then borrowing is inevitable.
But borrowing to finance phantom deficits has always been our problem.
This people inserts projects that were never going to be executed just to embezzle funds meant for it.
Federal Ministries are the epitome of corruption on this aspect.

logica: Really? Minimal interest rate? How minimal? Can you give details? Tying the loans to measurable and identifiable deliverable? You did the tying right? So that $20 you saved, what would you be doing with it anyway?

0lumide:
Uhh? You are letting your bias interfere with your understanding of logic and principles!

Again here I go. I will explain my self clearer.

I have 20 naira saved and I need 20 naira. instead of tappin into my saved 20 naira, I borrowed 20 naira with interest that will make me owe 25 naira.

Now if I'm to pay back the money I borrowed, the money I saved will be gone and I will still be owing 5 naira!!!! Is it simple now? That is Okonjonomics

X-factoria:

Do you know how much yearly investment is needed to fix/build infrastructure in the next 5,10 or 20yrs?

PROUD-IGBO:




^^^FG plans 11 airport terminals with N106bn Chinese loan

The Federal Government has concluded arrangements to borrow N106bn from the Chinese Export Import Bank to finance the construction of 11 international airport terminals.

The Minister of Aviation, Ms Stella Oduah, who disclosed this at a press briefing in Abuja on Thursday, said the money would be used to construct six commercial and five cargo terminals over the next 24 months.

Cities that will host the new airport terminals include Abuja, Lagos, Port Harcourt, Kano and Enugu.

The loan, which will be utilised by a Chinese firm for the construction of the terminals0, has a tenure of 22 years, a moratorium of five years and an interest rate of two per cent per annum.

Oduah said, “Following the approval of Federal Executive Council, we have concluded arrangements to commence the construction of not just one, but five brand new world class international airport terminals.

“The contracts for the construction of the five airports have a lifespan of 24 months. The projects are to be executed with a concessionary loan of 22 years with five years moratorium at an interest rate of two per cent.

“Mobilisation to site by the contractors is expected to commence within 90 days. What this means is that before the end of the lifespan of this administration, we would have been able to bequeath to Nigerians airports of their dreams.”

This, according to her, is a giant and bold step by the present administration to provide Nigerians and the travelling public with airports that truly tell the story of what the nation is all about.

She added, “What we have today is not befitting of us as the giant of Africa; so, we are quite privileged to be given the opportunity to be part of this epoch-making transformation in the aviation sector in Nigeria.

“This development must of necessity transcend the immediate euphoria that comes with the realisation that our dreams for standard airports are about to come to fruition. It is the profound effect and implication of this development that is of utmost importance to us.

“Airports, worldwide, have evolved beyond the concept of a place where passengers and cargo are lifted and or dropped. They have become the main engines of growth for their economies and contribute huge chunks to their Gross Domestic Product.”

Although the minister did not mention the firm that had been nominated by the Chinese government for the construction of the 11 airports, she said the Bureau of Public Procurement had verified the pricing to ensure that it was competitive.

Oduah said the remodelling of 11 existing airports in the country had reached 80 per cent completion and would be put to immediate use in the next few months.

The second phase of the remodelling of the airports would begin soon; the minister said, adding that at the end of the exercise, all 22 airports under the management of the Federal Airports Authority of Nigeria would wear a new and modern look.

http://www.punchng.com/business/business-economy/fg-plans-11-airport-terminals-with-n106bn-chinese-loan/

********* ********* *********

For you guys that refered to my earlier post, kindly note the news article i posted above; it's projects like this that i'm refering to.

If you digested my post well, you'd have noticed i said that there's nothing wrong with borrowing given our infrastructural/industrial deficit, provided such borrowing is tied to 'measurable and identifiable deliverables' like in the case of the one taken for the airport expansion.....so biko, try and understand what i'm saying first b/4 laying into me.

Also, in the scenario i painted, Logica cynically asked what exactly the terms and conditions of such a loan would be......and you went ahead and gave your own scenario with a 'loan' that could only have been given by Shylock himself (high interest rate, a short duration and NO moratorium period); compare that with the BOLDED part in the article i posted above on the Airport Terminals loan, and you'd have an idea of what i mean.

Cheers.

Jeel: Ngozi is tested and proven,Sanusi is only trying to make name.

0lumide:

Tested and proven? where? Our re-emerging middle class almost died out under her and OBJ. And now under her and GEJ the lower middle class are faced with threats of being poor and you say she's proven? proven where?

IMF's policies since the 80s has seen the rising third world put down again and it's people like Okonjo Iweala and Okonjo Iweala that are in there.

Olusegun Aganga is from same Goldman Sachs that helped crash the greek economy.

So I ask, how is Okonjo Iweala proven? Unless proven to be a failure and kuli kuli economist!!

thegoodjoehunt:

My fear is that JP Morgan might have gambled and lost some of our Oil Money.

The bank recorded a 2Billion dollars loss in May this year. How are we sure that is all that was only loss and the only solution to keep this country running is by borrowing.

thegoodjoehunt:

My fear is that JP Morgan might have gambled and lost some of our Oil Money.

The bank recorded a 2Billion dollars loss in May this year. How are we sure that is all that was only loss and the only solution to keep this country running is by borrowing.

pazienza: 2billion dollars loss? Nawa o! These people are going down sooner than expected.

cap28:

no china is gradually trying to disengage from the dollar because they know that the US dollar is losing its value on a daily basis, if china decides to dump the dollar its value will plummet drastically and this will lead to a stampede by other nations to dump it as well this will ultimately lead to the collapse of the US dollar, for now china is playing it cool - but the risk of this happening is still very high.

cap28:

i never said that they were not still owing - i said that they refused to pay which is what nigeria should have done.