Okay, I think I want to make some clarifications here. Going by the 2016 national Budget of so-called Change, I still wonder why people quickly use current crude oil prices and the disruptive activities of the Niger Delta Avengers as reasons why the economy is currently suffering with PMB and his team being unable to do much about it.

First off, N6.06trillion was the approved budget of which oil related revenues was projected at N820billion. This is just 13.5% of the budget. How can disruption in 13.5% affect other sources of revenue? Mind you, oil benchmark price was put at $38 per barrel with an expected output of 2.2mbpd. Stats show that from January till (May 31st 2016), we have produced an average of 2.103mbpd (95%). At this level it means deficit would only be just N36.15billion. https://ycharts.com/indicators/nigeria_crude_oil_production
If we even dispute the above stats and say production has dropped to 1.4mbpd like some have reported since the last few months. This would mean production is 63.64%, and would mean a total deficit of N298.18billion (which isn't even so). Also average price of crude from January till July ending is $39.52, which is above our budget benchmark price of $38. It currently hovers above $44-$47. So why the excuse of low oil prices?https://ycharts.com/indicators/average_crude_oil_spot_price

What we should do is task the government of the day to work harder rather than keep giving excuses on their behalf. With the naira at around N305 from the CBN now compared with N197 at budget signing stage, it means govt even have more naira income per crude oil barrel sold. The N6.06 trillion budget is supposed to be financed by N1.45 trillion non-oil revenues (23.92%), N1.51 trillion independent revenues (24.92%), and N2.22 trillion deficit (36.6% - who does that?). Government should be more worried about these meeting target instead as just this morning I saw an article on 43.2% drop in second quarter revenues from non-oil (N134 billion drop).
https://www.nairaland.com/3330165/recession-fgs-non-oil-revenue-shrinks
These, my friends, are the real issues.

Thank you.

When i opened the thread trash at first, i thought 'yeah someone is thinking straight'. Maybe you are, that i cant say.

You mentioning

Budget of so-called Change

then i knew where you are driving at.

Sir, if you are selling your bore-hole water for 50# per 25liters, but bcus someone destroyed your pumping machine, you started hiring pumping machines from another company so as to balance your production level. Sir, in this analysed case.... What will happen to the price of your water and by that, what will happen to the demand base and uttermostly your budget?

You can also do well by telling us where the problem lies, your analysis isn't a solution.

You are an anti PMB, don't disguise. Thanks



Anyways



Drabeey was Here

I don't worry myself much about this government and her failures cause I must survive what troubles me is repeating this mistake ever again.

When your friends, your parents or let say people you know are paid a salary, what happens?
One angle

The money goes into a bank.
You spend some of the money on food, transportation, etcIf you do not own your own home, you pay your house rent.
Let us assume that that you do not buy any foreign food or service.
Like Monopoly, the money circulates a few times at the bottom of the economic pyramid( poor) as it moves up and accumulate at the top of the economic pyramid(Rich).
Those at the top of the pyramid in Nigeria have an excessive taste for foreign goods and services even though they are mostly not producers of wealth. They are mostly middlemen who recycle wealth created elsewhere.
Because only a few people are producing real wealth especially foreign exchange wealth from export, More Naira accumulates within the upper part of the pyramid.
We all know what they do with excess money.
They hoard the dough Swiss account Cayman,Seychelles resulting in the removal of forex from Nigeria and living behind excess naira.
Excess naira mean in circulation means excessive inflation.
This makes it difficult for the government to put more naira into circulation.
Based on the disfigured excessive consumption based economy left behind by Jonathan, Nigeria has to look for an $25 billion dollars per annum just to feed our import everything habits.That extra $25 billion is equivalent to our flexible reserve.
If Buhari has allowed Jonathan's economy to continue, It is safe to say that we would have been in the same shape as Venezuela by now with an humanitarian crisis on our hands

Lalasticlala ... kindly do the needful. Would love an intellectual analysis to this.

Yes the facts are very clear. But they'll blame it on militants.
Instead of using the former Administration's method of managing militants, they will keep playing politics with our economy. Imagine negotiation with BH who are killing for no reason while they want to crush militants who are fighting for a course.

mek una hold strong shebi una still hold una pvc ba, jst dey dust am, 2019 is jst around de cona

Op have u ever read currency rate or economic recession in any text book?? Or u are just saying what u feel? ?

As in do u know what type of economy we practice? ?
Do u what low forex reserve and low forex supply do to an economy like ours??

U clearly Dont understand the problem.. . Just buy an economics textbook and read or browse online ans read and stop embarrassing urself

Drabeey:
When i opened the thread trash at first, i thought 'yeah someone is thinking straight'. Maybe you are, that i cant say.

You mentioning then i knew where you are driving at.

Sir, if you are selling your bore-hole water for 50# per 25liters, but bcus someone destroyed your pumping machine, you started hiring pumping machines from another company so as to balance your production level. Sir, in this analysed case.... What will happen to the price of your water and by that, what will happen to the demand base and uttermostly your budget?

You can also do well by telling us where the problem lies, your analysis isn't a solution.

You are an anti PMB, don't disguise. Thanks



Anyways



Drabeey was Here

Lol, funny you. If you had gone through my post properly and without bias, you would have seen that the entire expected crude oil sales contribution to this year's budget is N820bn, which is just 13.5%. What happened to the remaining 86.5%? Why isn't government trying to ensure that is wholesomely intact? Did u see the second quarter drop of non-oil revenues of N134bn? Do you know how 3rd and 4th quarter figures would be?

Yes I had to use the term, budget of so-called change, because, why would they put N2.2trillion deficit in the budget? They want to borrow 36.6% of the budget to finance it? Who does that? It's deception in the first instance bro.

mrvitalis:
Op have u ever read currency rate or economic recession in any text book?? Or u are just saying what u feel? ?

As in do u know what type of economy we practice? ?
Do u what low forex reserve and low forex supply do to an economy like ours??

U clearly Dont understand the problem.. . Just buy an economics textbook and read or browse online ans read and stop embarrassing urself

I guess you're the one unable to address the facts and figures I quoted. My point on this thread is that the same excuses of low crude prices and NDA disruptions being the reason behind govt's inability to revive the economy as touted by most of you lots is pure fallacy and nonsensical.

sleekymag:


Lol, funny you. If you had gone through my post properly and without bias, you would have seen that the entire expected crude oil sales contribution to this year's budget is N820bn, which is just 13.5%. What happened to the remaining 86.5%? Why isn't government trying to ensure that is wholesomely intact? Did u see the second quarter drop of non-oil revenues of N134bn? Do you know how 3rd and 4th quarter figures would be?

Yes I had to use the term, budget of so-called change, because, why would they put N2.2trillion deficit in the budget? They want to borrow 36.6% of the budget to finance it? Who does that? It's deception in the first instance bro.

Internally generated revenue,domestic and foreign borrowing.
The borrowing is to acts as a stimulus and at the same time, start moving the economy from an import dependent economy.

Guys, are you discussing in technical terms ni?
Coz all ds stuvs me I no understand.
Who dey lie, who are they lying to?
Is APC a bigger and a more corporate yam eater?

So much for we country feffule, we dey surfa tiu mush.

In other words, check my signature

oduastates:

Internally generated revenue,domestic and foreign borrowing

Yea...N2.2trn for domestic and international borrowing is too much in my opinion, relative to the total budget. If however that's the route they're going, let them go there already, and finance all they say they would in the budget. Using current oil prices being low as an excuse is just not tenable. Budget benchmark $38, current price is in the $44 range.

sleekymag:


Yea...N2.2trn for domestic and international borrowing is too much in my opinion, relative to the total budget. If however that's the route they're going, let them go there already, and finance all they say they would in the budget. Using current oil prices being low as an excuse is just not tenable. Budget benchmark $38, current price is in the $44 range.

The difference is the difference between the current price and benchmark is 6 and half a dozen.
A rough calculation Using the current price.

Current price -$44
Cost of production / barrel - $30

Gross Profit - $14

60/40 share - $8.4

Joint venture capital - $4

Left over of $4.4 per barrel to go to the federation account
We are currently averaging 1.5 million barrels per pay.

You are looking at only $6 million per day.
or $180 million per month
Or $1.56 billion per year.
Or roughly N600 billion per year.

Going by what Jonathan the political elite did to the excess crude account of $22 billion , this is peanuts. You would not know such an amount was even released

oduastates:
When your friends, your parents or let say people you know are paid a salary, what happens?
One angle

The money goes into a bank.
You spend some of the money on food, transportation, etcIf you do not own your own home, you pay your house rent.
Let us assume that that you do not buy any foreign food or service.
Like Monopoly, the money circulates a few times at the bottom of the economic pyramid( poor) as it moves up and accumulate at the top of the economic pyramid(Rich).
Those at the top of the pyramid in Nigeria have an excessive taste for foreign goods and services even though they are mostly not producers of wealth. They are mostly middlemen who recycle wealth created elsewhere.
Because only a few people are producing real wealth especially foreign exchange wealth from export, More Naira accumulates within the upper part of the pyramid.
We all know what they do with excess money.
They hoard the dough Swiss account Cayman,Seychelles resulting in the removal of forex from Nigeria and living behind excess naira.
Excess naira mean in circulation means excessive inflation.
This makes it difficult for the government to put more naira into circulation.
Based on the disfigured excessive consumption based economy left behind by Jonathan, Nigeria has to look for an $25 billion dollars per annum just to feed our import everything habits.That extra $25 billion is equivalent to our flexible reserve.
If Buhari has allowed Jonathan's economy to continue, It is safe to say that we would have been in the same shape as Venezuela by now with an humanitarian crisis on our hands

I am not even talking about our Forex reserves. Yea, low prices affected that to a large extent. But how would you address the policy flip-flops of the current govt, particularly the CBN with regards to devaluation? Most of the problems we're facing is largely down to the current administration's reactive approach rather than proactiveness. It appears there's no solution in sight.

For those asking for solutions, if PMB had focused his first year on just one thing, reviving our refineries to 80-90% capacity, the demand for forex would have dropped. If he had devalued as far back as last year September, without making the naira float freely, most of our current challenges as a nation would have been avoided.

oduastates:



The difference is the difference between the current price and benchmark is 6 and half a dozen.
Using the current price.

Current price -$44
Cost of production / barrel - $30

Gross Profit - $14

60/40 share - $8.4

Joint venture capital - 4

Left over $4.4 per barrel

Bro, they knew that perfectly that was why they put benchmark at $38, except you want me to believe they're even more clueless. Besides cost of production is less than $30 as Kachikwu said earlier on in the year.

oduastates:



The difference is the difference between the current price and benchmark is 6 and half a dozen.
A rough calculation Using the current price.

Current price -$44
Cost of production / barrel - $30

Gross Profit - $14

60/40 share - $8.4

Joint venture capital - 4

Left over $4.4 per barrel to go to the federation account
We are currently averaging 1.5 million barrels per pay.
You are looking at only $6 million per day.

Your calculation is even wrong. Any price above the benchmark of $38 is meant to go to the excess crude account. From the $38, they have done their calculations already and accurate income to the budget is supposed to be N820 bn.

sleekymag:


I guess you're the one unable to address the facts and figures I quoted. My point on this thread is that the same excuses of low crude prices and NDA disruptions being the reason behind govt's inability to revive the economy as touted by most of you lots is pure fallacy and nonsensical.

No need to argue...

I will give u 100k.. U have 72hrs.. . Show me any nation in history that has less than 6months forex reserve and 60% drop in forex earnings that had it economy turned around in 2 years. ...

sleekymag:


Bro, they knew that perfectly that was why they put benchmark at $30, except you want me to believe they're even more clueless. Besides cost of production is less than $30 as Kachikwu said earlier on in the year.

The government is running a zero based budget.
If they find the money good, if not , no problem .
It is a living document.

sleekymag:


Your calculation is even wrong. Any price above the benchmark of $38 is meant to go to the excess crude account. From the $38, they have done their calculations already and accurate income to the budget is supposed to be N820 bn.

Did you see using the current price and Rough calculation
Just to show you that the excess make no difference on the zero based budget.

oduastates:


Did you see using the current price and Rough calculation
Just to show you that the excess make no difference on the zero based budget.

Lol, if they sell at above $38, any excess is an addition to the N820bn expected revenue contribution... stop confusing yourself.

mrvitalis:

No need to argue...

I will give u 100k.. U have 72hrs.. . Show me any nation in history that has less than 6months forex reserve and 60% drop in forex earnings that had it economy turned around in 2 years. ...

Stop giving lame excuses. Put your 100k to better use. It's needed in this current economic climate. PMB met $32billion in our foreign reserves, how much is it currently? We're simply paying the price for being reactionary.

sleekymag:


Lol, funny you. If you had gone through my post properly and without bias, you would have seen that the entire expected crude oil sales contribution to this year's budget is N820bn, which is just 13.5%. What happened to the remaining 86.5%? Why isn't government trying to ensure that is wholesomely intact? Did u see the second quarter drop of non-oil revenues of N134bn? Do you know how 3rd and 4th quarter figures would be?

Yes I had to use the term, budget of so-called change, because, why would they put N2.2trillion deficit in the budget? They want to borrow 36.6% of the budget to finance it? Who does that? It's deception in the first instance bro.

N820bn is from oil receipts in form of royalties, so where do you think the rest of the government's revenue comes from?... Cocoa?.. Groundnuts?... Besides the deficit amounts which are to be borrowed, the remaining government revenue is primarily from company tax. Guess the companies/industry whose tax still makes up more than 60% of this 'company tax' component?... I'm sure you should know the answer...

In summary, Nigeria is a rundown country which gets up to 90% of its revenue from oil (directly and indirectly).

mrvitalis:

No need to argue...

I will give u 100k.. U have 72hrs.. . Show me any nation in history that has less than 6months forex reserve and 60% drop in forex earnings that had it economy turned around in 2 years. ...

Let's me keep the money pending the 72hrz expiration. Am a good keeper. I even had PhD in keeping things.

I am. Enjoying the conversation especially there is no insult that makes it interesting tho

sleekymag:


Stop giving lame excuses. Put your 100k to better use. It's needed in this current economic climate. PMB met $32billion in our foreign reserves, how much is it currently? We're simply paying the price for being reactionary.

Civil servants who still have a job, why do they also complain of hardship even though they still get paid their 18k salary every month?

The above question I asked is exactly how your above statement of '$32bn in foreign reserves' sounds. $32bn reserves for 170 million people in an import dependent country at a perilous time when the primary source of forex income had crashed by 60%, probably it should have fallen to zero and we get the Venezuelan situation before you agree that there was something wrong with the amount?

obailala:
N820bn is from oil receipts in form of royalties, so where do you think the rest of the government's revenue comes from?... Cocoa?.. Groundnuts?... Besides the deficit amounts which are to be borrowed, the remaining government revenue is primarily from company tax. Guess the companies/industry whose tax still makes up more than 60% of this 'company tax' component?... I'm sure you should know the answer...

In summary, Nigeria is a rundown country which gets up to 90% of its revenue from oil (directly and indirectly).

Though I'm repeating myself I'll answer you. According to the budget signed by this government, N1.45 trillion (23.92%) is supposed to be from non-oil revenues. N1.51 trillion (24.92%) is supposed to be from projected independent revenue (whatever that means ),and N2.2 trillion is deficit. Bottom line, they called it a budget of change, which would depend less on oil proceeds,given the already low prices from last year, hence the low benchmark. Yet they're still using oil as an excuse.

I'll agree with your last paragraph,yea government relies more on oil than they admit (going by the budget). We however can't give up on our country,there's still hope,but PMB needs to be more proactive than ever.

obailala:
Civil servants who still have a job, why do they also complain of hardship even though they still get paid their 18k salary every month?

The above question I asked is exactly how your above statement of '$32bn in foreign reserves' sounds. $32bn reserves for 170 million people in an import dependent country at a perilous time when the primary source of forex income had crashed by 60%, probably it should have fallen to zero and we get the Venezuelan situation before you agree that there was something wrong with the amount?

The so-called amount of $32bn that PMB met is now about $25-26 billion today. So it's only getting worse. Bottom line, PMB should sit up,np more excuses. Obasanjo met far less reserves,and crude oil sold for way less, our population to GDP was also far less,yet the economy grew.

sleekymag:

The so-called amount of $32bn that PMB met is now about $25-26 billion today. So it's only getting worse. Bottom line, PMB should sit up,np more excuses. Obasanjo met far less reserves,and crude oil sold for way less, our population to GDP was also far less,yet the economy grew.

Yes of course it is getting worse because the ailment that caused it (oil price drop) is still much around and is even worse. The government is struggling to reduce the rate of this depletion even as they look for ways to stop it.

From Nov 2014 to May 2015 (6 months), $10bn was lost even though oil still sold above $65/barrel; that's an erosion rate of $1.67bn/month. Between May 2015 till date, reserves have dropped from $28.5bn to just over $25bn ($3.5bn lost in 15 months); that's an erosion rate of about $0.23bn/month even though we all know oil price dropped to less than $30/barrel and oil production dropped by up to 50%. Truth is that the govt is struggling to maintain the reserves to ensure we don't degenerate to Venezuela and with the figure i raised above, I'm sure this effort is clear enough.

Now these efforts made to reduce the rate of depletion is responsible for all the economic problems we've been having since this administration: - crash in value of naira (due to short supply of forex), closure of industries (due to lack/restrictions of forex), exit of foreign investors (because of the same forex restrictions) etc.

Regarding obasanjo meeting less oil price, Nigeria of 1999 was totally different from Nigeria of today; a man earning N10k may have been comfortable in 1999 but that's not enough for monthly phone bill today. Population has increased, minimum wage has more than tripled, Nigeria's demand for fuel has multiplied astronomically (I'm sure you know a bigger economy uses more energy), Nigeria wasn't spending up to a tenth of what it spends today in importing petroleum products, the demand for forex wasn't up to a tenth of what it is today when everybody now has an international mastercard/visacard and can easily buy things from around the globe (far more forex demand), I can go on and on but the bottom line is that Nigeria of 1999 is far different from Nigeria of today.

sleekymag:


Though I'm repeating myself I'll answer you. According to the budget signed by this government, N1.45 trillion (23.92%) is supposed to be from non-oil revenues. N1.51 trillion (24.92%) is supposed to be from projected independent revenue (whatever that means ),and N2.2 trillion is deficit. Bottom line, they called it a budget of change, which would depend less on oil proceeds,given the already low prices from last year, hence the low benchmark. Yet they're still using oil as an excuse.

I'll agree with your last paragraph,yea government relies more on oil than they admit (going by the budget). We however can't give up on our country,there's still hope,but PMB needs to be more proactive than ever.

Yeah it doesn't matter what it's called, oil revenue or tax receipts, the fact is that we still depend directly and indirectly on cash from oil for up to 90% of the nation's revenue; oil literally drives the engine of Nigeria and that's why the economy could crash so quickly upon the drop in oil revenues.

With all the revenue from multiple taxes which this government is getting, we have no business complaining about low oil prices.

We simply have thieves everywhere

sleekymag:


Stop giving lame excuses. Put your 100k to better use. It's needed in this current economic climate. PMB met $32billion in our foreign reserves, how much is it currently? We're simply paying the price for being reactionary.

What's our dollar demand per month??

obailala:
N820bn is from oil receipts in form of royalties, so where do you think the rest of the government's revenue comes from?... Cocoa?.. Groundnuts?... Besides the deficit amounts which are to be borrowed, the remaining government revenue is primarily from company tax. Guess the companies/industry whose tax still makes up more than 60% of this 'company tax' component?... I'm sure you should know the answer...

In summary, Nigeria is a rundown country which gets up to 90% of its revenue from oil (directly and indirectly).

and that has to change...the government was denge posing like they were not all about oil revenue..they lied and deceived many and now buhari has no choice but to invade the Niger delta with the army..

Lying is what is killing this present administration...