Why Nigeria Needs To Get More Low Interest 'DI Loans'. - Politics - Nairaland
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| Why Nigeria Needs To Get More Low Interest 'DI Loans'. by 989900: 7:44am On Apr 17, 2016 |
United States. GDP (nominal): 18 trillion Population: 322 million National Debt: 19 trillion Debt as % of GDP: 106.15% Debt per Citizen: $59,393 Brazil. GDP (nominal): 2.5 trillion Population: 206 million National Debt: 684 billion Debt as % of GDP: 27.04% Debt per Citizen: $3,303 [b]Canada. GDP (nominal): 1.4 trillion Population: 35 million National Debt: 810 billion Debt as % of GDP: 56.45% Debt per Citizen: $22,521 China. GDP (nominal): 10 trillion Population: 1.3 billion National Debt: 5.3 trillion Debt as % of GDP: 65.35% Debt per Citizen: $3,979 France. GDP (nominal): 2.3 trillion Population: 66 million National Debt: 2.2 trillion Debt as % of GDP: 97.33% Debt per Citizen: $35,213 Germany. GDP (nominal): 3.2 trillion Population: 84 million National Debt: 2.3 trillion Debt as % of GDP: 73.5% Debt per Citizen: $28,077 Greece. GDP (nominal): 188 billion Population: 11 million National Debt: 395 billion (largely external debt) Debt as % of GDP: 294.55% Debt per Citizen: $36,593 India. GDP (nominal): 2 trillion Population: 1.3 billion National Debt: 835 billion Debt as % of GDP: 40.15% Debt per Citizen: $645 Japan. GDP (nominal): 4.5 trillion Population: 126 million National Debt: 9.4 trillion (largely internal debt) Debt as % of GDP: 215.25% Debt per Citizen: $70,293 Malaysia. GDP (nominal): 264 billion Population: 31 million National Debt: 146 billion Debt as % of GDP: 55.42% Debt per Citizen: $4,793 Nigeria. GDP (nominal): 500 billion Population: 170 million National Debt: 60 billion (roughly) (external debt:$12b) Debt as % of GDP: 12.15% (roughly) (external debt ratio: 2.5%) Debt per Citizen: $352 Russia. GDP (nominal): 980 billion Population: 146 million National Debt: 145 billion Debt as % of GDP: 14.5% Debt per Citizen: $1000 Singapore. GDP (nominal): 277 billion Population: 5.5 million National Debt: 292 billion Debt as % of GDP: 105.55% Debt per Citizen: $52,590 South Africa. GDP (nominal): 350 billion Population: 55 million National Debt: 150 billion Debt as % of GDP: 40% Debt per Citizen: $2,600 Turkey. GDP (nominal): 800 billion Population: 74 million National Debt: 235 billion Debt as % of GDP: 36.15% Debt per Citizen: $3,290 United Kingdom. GDP (nominal): 3 trillion Population: 65 million National Debt: 2.4 trillion Debt as % of GDP: 85.15% Debt per Citizen: $35,193 N.B. The above data are average estimates. Inference: 1. Nigeria is under-borrowed! 2. Most more developed countries we run to are deeply in debt. 3. Borrowing is not a bad thing if, the interest rates are competitive (low), the funds are meant to generate more income, and you can service such debt. 4. External debts can plunge a country to economic anarchy if not well managed. See Greece. 5. Internal debts are less risky. See Japan. 6. Since we have an incurable epidemic of corruption in our system, borrowing could plunge the country into economic demise, hence, the canvass for 'direct investment loans' (you don't get to 'ghana-must-go' the physical money, rather your creditors finance profitable projects on your behalf). #badnewsforpoliticians 7. Nigeria can very well borrow as much as a hundred billion dollars more of such 'direct-investment-project-loans' if available. 8. Such loans will create more jobs and taxes, infrastructure, general growth and development, and catapult us to a level close to countries like Turkey, Malaysia, South Africa, Brazil in terms of general development, while pushing our GDP close to 1 trillion dollars (above Turkey, Russia, and Saudi Arabia)! 9. It's of no use not borrowing to improve your situation, while your intelligent and hardworking kids run to those who have done so; to squat, pay taxes, pay rents, in essence helping those countries pay their debts. Criticisms and suggestions are welcome. Modath, what say you? 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by modath(f): 8:11am On Apr 17, 2016 |
No matter how great or noble an idea is, without the necessary capital to put the plan in motions, it is as good as dead!! Africans have been conditioned culturally to think of "loans" in negative lights.... USA is the world's largest economy & the one with the greatest debt burden.. Securing loans become a problem when it is diverted to unprofitable endeavors.. Most start up businesses will never take off if they are unable to secure necessary loans to finance businesses. Dangote, Maduka, Adenuga & co would have been still sitting on their arm chairs if they had been unable to access funds for expansion of their varied business concerns... *will add some links for the "summarise this" crew later* Mynd44 , lalasticlala , good morning & lovely sunday..  1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by 989900: 8:15am On Apr 17, 2016 |
modath: You killed it! 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by AZeD1(m): 8:31am On Apr 17, 2016 |
I'm with you on the borrow to fund infrastructure projects. The problem with Nigeria is past borrowed funds were wasted on thinks like salary. @modath It's a testament to how bad our educational system in this country. One of the things I have learnt is that rich people find their business with other people's money e.g Dangote. 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by 989900: 8:33am On Apr 17, 2016 |
AZeD1: You're absolutely right on all points! 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by AZeD1(m): 8:48am On Apr 17, 2016 |
989900:Sometime last year, the CBN governor said we should sell off some of our oil assets. As usual, most on the forum blasted him but to me it was a great idea ( though mine was lease not sell). We have a corruption problem so cash ain't safe so why not swap oil for infrastructure? Infrastructure building would create jobs while the government would generate money from taxes. There's no point having money that would be stolen. 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by RockHard: 8:57am On Apr 17, 2016 |
You guys are spot on. The key thing is that the funds not be diverted to frivolous and unfruitful pursuit (e.g paying salaries) but rather infrastructure and economic growth/expansions. Like modath said, the likes of Google, Apple, Microsoft, Amazon, are richer than a lot of countries' economies put together but they couldn't have attained such heights without a combo of venture capital, borrowing and debt-financing -- of course they've spent the money judiciously, hence their continued growth. 2 Likes |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by 989900: 9:02am On Apr 17, 2016 |
AZeD1: #word 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by 989900: 9:04am On Apr 17, 2016 |
RockHard: And the 'ghost workers' get paid too . . . SMH @ Nigeria.  |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by RockHard: 9:07am On Apr 17, 2016 |
989900: Yes bro. Mynd44, Lalasticlala, this topic is FrontPage worthy. Let's broaden the discussion. |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by malton: 9:15am On Apr 17, 2016 |
You've made valid points, OP. I believe that Nigeria can build her own model of success. To achieve this, she'll need funds of course, which necessitates borrowing. The country has so much going for her that she doesn't yet seem to realize: A growing youth population (The growth of any country is tied to youth development. As the old get stuck in their old ways of doing things, the well educated youth takes on the responsibility of pulling things up a notch by applying today's thinking in today's world). That's one advantage even Italy and France cannot boast of due to their aging population which has resulted in stagnating the countries, as there aren't much youths to carryout this task. Kids with great ability to develop incredible technology, although they'll be needing polishing of some sort. Vast expanse of land. Mechanised agricultural practices improve GDP a lot faster than most other avenues. High poverty rate. This would translate in low cost of production. That said, Nigeria needs to channel such funds into: Education. Infrastructure. Technology. Humanity. Brain power is what makes a country like Israel, with no oil or natural resources great. How much more we that have the rarest luck of having the both. Only we need to tune one up a bit. 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by modath(f): 9:17am On Apr 17, 2016 |
AZeD1: Taking out loans to pay Salaries as crazy as it sounds, is a bit more palatable as it ensures there is still a bit of economic activity going on.... There is a developing (or fully established?) Story that the #armsgate #dasukigate $2.1bn was actually a loan from the US!! 
The first rule of business is "other people's money" , hedge funds & venture capitalism exist for a reason.. I feel one of the major reason people are wary about loans & borrowing is the back breaking repayment plans & killer interest rates.... The west's economy would crumble in a minute if their citizens are unable to access "loans" or people think the concept of credit card is "helping out a friend" ? 3 Likes 1 Share |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by AZeD1(m): 10:01am On Apr 17, 2016 |
modath:Taking loans to pay salary is not bad if it's a one off but for the so called civil service states, it's a no no. You'd be shocked at the number of Nigerians to know who VC's are. |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by Bawsse(m): 11:35am On Apr 17, 2016 |
I absolutely agree with you @op...it's so irritating, how the so called wailers will come out to scream "where's is the China loan" not for a second, putting into consideration that these infrastructural investment are more viable in the face of the present economic realities... Nigeria is not rich! We don't have the financial gallantry to risk loan-money embezzlement by corrupt public officials.. Buhari is proving over and over again not to be the dullard here, we've been getting it so wrong for so long, that the road to the right way seems so unrecognizable and unfamiliar.. Abeg buhari, if na only investment without loan u go de bring, continue am like that.. At most, Wetin corrupt politicians go see move, na hoe, cutlass and shovel. 2 Likes |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by 14(m): 12:35pm On Apr 17, 2016 |
I am surprised why many people here are clueless about economics. It not how much the debt is to the GDP, its how much you service your debt from your annual budget. currently Nigeria spends 33% of its annual budget servicing the debt. If nigeria borrows more, like its doing cureently, the debt service budget will shoot over 50%. Nigeria's budget is $30bn and 33% of it will go to pay the debt, thats $10bn from that $30bn. Which means Nigeria has only $20bn left to run the country and fund some projects. Thats where the problem lies. Lets assume nigeria increases its borrowing to about 50% of its annual budgets, that means half of the annual budget wil be going to service the debt. HOPE I MAKE SENSE |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by 989900: 4:45pm On Apr 17, 2016 |
14: I would have agreed with you if we were talking about borrowing to pay salaries, or borrowing to fill up 'Ghana must go'. See point nos. 3, 8, and 9, they answer your concerns. OTOH, we are not servicing our debts with 33% of our budget yet, that was only an IMF forecast. In 2014 it was roughly 17%, and 19% in 2015 (the past administration made a mess of those figures though by their recklessness). BTW, debt servicing can be re-negotiated. And Direct investments loans terms can be 'jiggled' in an infinite number of ways to make payments easy i.e. starting re-payments after project completion, paying very low rates, paying by barter, and e.t.c. These are income generating investments not liabilities. E.g. If the payment schedules are reasonable, and if I've got brilliant ideas to invest it on, I will be f00lish not to take a N10m Naira 1 Like |
| Re: Why Nigeria Needs To Get More Low Interest 'DI Loans'. by AZeD1(m): 12:33pm On Apr 19, 2016 |
14:Borrowed money spent on capital projects can finance themselves e.g, the Lagos to Calabar rail when functional should be run not as a charity but as a profit oriented business. The profit gotten can be used to pay off the loan. You can also give it to the lender to run in a B.O.T manner and we never have to spend any part of the budget for that. Another thing to note is large infrastructure projects generates jobs and stimulate local spending which can leads to increase in revenue via taxes. The bottom line is spending the borrowed money on things that would generate money. PS: There are landlords in the UK who take out mortgages and rent the houses immediately. The landlord owns the house, but the tenant pays for it. 1 Like 1 Share |
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