Martins301:




Let me try and explain to you why there's recession. First, here are certain facts you need to know.

1. Nigeria is an import dependent country. We import anything importable because we most times don't have the capacity or capability to produce them. To import goods or purchase anything from other countries we need DOLLARS. This problem started since 1986 and has been getting worse.

2. Nigeria is a mono product economy. In other words, we depend on export of one main product to get DOLLARS. That product is crude oil. Over 70% of Government revenue comes from sale of crude oil. Without revenue from crude oil, the government has no choice but to borrow to fund it's budget.

With those two points in mind, here's why we are in recession.

Oil price crashed in 2015 from over $100 per barrel to less than $40 per barrel.

This crash was because there was supply glut of crude oil globally. Countries were producing too much crude oil and others started using alternate source of energy.

With the fall in crude oil price, the amount of DOLLARS Nigeria could get from sale of crude oil also crashed.

This problem was further compounded by the activities of some disgruntled sponsored group who started blowing up our crude oil export pipelines and facilities in the hope of crashing the economy.

So Nigeria was not getting enough revenue from crude oil sales because the price crashed and the little we were supposed to even get was further cut off by those blowing up oil facilities.

Remember that it is the DOLLARS we get from crude oil sales that we also use to IMPORT all the junks we need from other countries. This DOLLARS is held by CBN and CBN gives it to commercial banks to sell to ordinary Nigerians to import what they want or pay for services abroad.

The crash in government revenue (DOLLARS) meant that government could no longer support the importing needs of Nigerians. Also, there were lots of loopholes in our land borders through which corrupt public officials were enriching themselves and putting the health of Nigerians at risk. Most of the revenue they raised never got to government. Furthermore, there was need to encourage LOCAL production of the things we were OFTEN IMPORTING. With all these, the government decided to restrict the importation of some goods THROUGH LAND BORDERS.

Please note that the primary reason for the above is because of the CRASH in government revenue or Dollars.

Even with the scarcity of dollar, our desire for foreign goods has not abaited. Since the dollar is scarce, the price relative to Naira will rise. People who still manage to get the dollars at the high price and use it to import goods into the country will have to push the cost to the consumers. That is why you see that prices of goods have jumped to the roof.

The situation has been made worse by greedy Nigerian sellers who want to profit and make quick money from others. They have all joined unions were they agree to inflate prices of goods and services. With a simple call, they all agree and fix price at a certain amount. The result is us being forced to buy them at the artificial high price.

In addition, just before the previous government handed over power to the current one, a lot of politicians stole as much as they could from government purse. They didn't steal it in Naira. They stole it in DOLLARS. Some of them were able to move their loots abroad, some his the loots in their homes and some left it in Nigerian banks. Without this money with government or in circulation, the DOLLAR SCARCITY HAS BEEN MADE WORSE and so has its attendant consequences.

So some of the above is why we are in recession. The problems in this country is much and will not contain 100 books if we want to write about it. But I'm sure you will understand the whole picture if you read this epistle again and again.

If you have any questions, I'll be happy to answer them.

Thanks.

your illustrations/explanations cover everything. Gbam

Hamzyluv,those countries u mentioned had since fashioned out measures to address their challenges but Buhari and his economic team are in disarray,confused and in the habit of blaming everybody including God.They should get down to work.Period.

everozone:
Kabrud,ur APC is more corrupt than u can imagine.Is PMB fighting graft?The answer is capital NO.If he is,then let him probe and prosecute Amaechi who milked Rivers dry.What about the minister of interior who was indicted in the arms deal scandal?SMH.

everozone:
Kabrud,i forgot to add this glaring fact.And that is the money used to fund Buhari's campaign.What was the source of the fund?You talked about corruption as if you are in another plannet.Well,you are aware of the $500m given to Hillary by Buhari?SMH.

Hahahahahahahahaha, okay at least u are now informed on why we are in recession. .
But for the source of Buhari's campaign fund, most of u have been asking this question. This is a clear indication that despite the position he had held in this country, everyone knows buhari is not stupendously rich cos similar question wouldn't come up if the likes of Atiku were the president. Well, as for ur question, since u are a member of the campaign fund raising committee, u may let us know cos I'm not one. I think u got it wrong, the actual amount buhari gave Hillary Clinton was $500T not $500m, google it and see. A question for u pls, are the people being held by the anti-graft agencies guilty or not? Answer this, then we continue from there. Meanwhile, it is better u keep silent on what u know nothing about than to be spreading falsehood.

everozone:
Hamzyluv,those countries u mentioned had since fashioned out measures to address their challenges but Buhari and his economic team are in disarray,confused and in the habit of blaming everybody including God.They should get down to work.Period.

fashioned what? am not so sure whether u do listening or watching TV @ all .( am talking about sunday issues , u said they hav iron the situation out ) na 24 hours recession tey dey go? .... Country that borrowed money from G7 to solve their immediate problem, to you did something good ? funny guy ..... so what will now happened if the recession persist, they will continue borrowing till G7 refuse to pay again.....


nothing good come easily, this country is in her state of comatose.


if you are in doubt of what caused this our recession, read OKONJO IWEALA CABLE statement in LODON

sinero:
Oga u r blaming PMB for mismanaging $36B which was spent majorly on bailing out governors after ur PDP government left them with no choice than to owe their workers several months of salary.

The same PDP government that had the foresight to remove fuel subsidy in 2012 and you principals marched on the streets of lagos protesting.