kenny987:
Very good! Borrow the country to death! CHANGE is real..

I wonder where those idiots are that claim that Bubu is doing some magic to pay salaries and disburse funds and if not for his amazing magical wisdom, Nigerian debt profile would have hit the roof? In just 2 years they have incurred more than half of what was left in 2015 and they have not even started implementing and funding 2017 budget! Una well done o!

Pavarottii:

SHUT UP! At least fuel was sold for 87naira. Now that fuel is sold for 145naira. Tell me why u av to borrow almost 8 trillion in 2years. Na wa poop. U can support rubbish o.

felixomor:

I am not their fans but let me ask u,
Do you know how much oil was under Obasanjo and Yaradua?

Did they ever use it as excuse one day?
Do u know the promises these guys made before they were voted?

thestevens:
We are in recession debt is rising,where do we do from here?

Corden and Neary (1982) have demonstrated how Dutch disease occurs in an economy. According to them, in a country experiencing "boom" in the export of a commodity, the economy can be divided into three sectors: the "booming" export sector, the "lagging' traditional export sector and the non-export sector. The Dutch disease occurs when the traditional export (tradable goods) sector is crowded out by the booming export sector and the non-tradable goods sector. The lagging traditional tradable goods sector may include cocoa, palm produce, cotton, rubber, coal, copper, textiles and some manufactured goods while the booming export sector may be crude oil, coffee, gold, etc. The non-tradable (non-export) goods sector covers all those goods that are produced for domestic consumption only, e.g. staple food items, clothing, building materials, locally-assembled cars.

[b]Where crude oil (and gas) is the booming export sector, the non-oil export sector may be crowded out by the oil sector and the non-tradable goods sector of the economy. This can happen when the oil revenue windfall increases domestic demand for non-tradable goods and pushes up domestic prices leading to an appreciation of the real exchange rate which in turn reduces the competitiveness of the non-oil export sector. This will in turn lead to a reduction in non-oil exports in both quantum and value terms. The oil windfall may also lead to movement of the factors of production in the economy. For instance, capital and labor (and land) may shift from the non-oil export sector to the oil sector (in order to maintain or increase reserves and production) and the non-tradable goods sector (to take advantage of the growing domestic demand). This explains why the increase in oil prices and the subsequent oil revenue windfall in many oil-exporting countries have tended to depress their non-oil export sector while at the same time generating a boom in both the oil and the non-tradable goods sectors. With capital and labor shifting from the non-oil export sector to the oil sector and non-traded goods sector, firms in the non-oil export sector are forced to either close down or reduce their scale of operation. The boom in the oil and non-traded goods sector increases the demand for imported goods[/b]. This may not be a problem in the short-term so long as the country has enough foreign exchange to pay for the imports.

The depression in the non-oil export sector and the boom in the other two sectors have medium to long-term implications for the economy because the oil windfall will not be permanent given the volatility, unpredictability, and exhaustibility of crude oil. For instance, if there is a decline in oil prices and oil revenue, the lagging and collapsing non-oil export sector will not be able to compensate for the drop in oil revenue while domestic demand for the non-traded goods and imports remain sticky. [color=#000099]Consequently, the country will be forced to borrow from the international financial market to compensate for the decline in oil revenue. Over time, external debts will increase and so will the debt service obligations. Even when oil prices go up later and there is another round of oil windfall, it is difficult to correct the earlier damage or distortions created by the initial or previous oil windfall. In some cases, the oil exporting country may be forced to adopt some form of structural adjustment program (SAP) to correct such distortions or imbalances. Some of these SAPs are painful and may increase the prevalence, depth and severity of poverty.[/color]

In an extreme case, the Dutch Disease can lead to "Immiserizing Growth" syndrome - a situation where an increase in the output of exported commodity by a country leads to a deterioration of the country's welfare (Bhagwati, 1958). This happens when the effect of export-led growth on a country's terms of trade is strong enough to more than offset the direct benefits of growth. It is an extreme case of self-defeating growth. Although the theory of Immiserising Growth was not originally developed for oil-exporting countries, its tenets apply to many oil-exporting countries in the sense that despite the substantial increase in their export revenue, they have suffered a significant decline in general welfare due largely to mismanagement of their oil revenue. Thus, the Dutch Disease Syndrome confirms the assertion by a Spanish writer in the 16th Century that "the gratification of wealth is not found in mere possession or in lavish expenditure but in its wise application". Although the main manifestation of the Dutch disease syndrome in an oil exporting country is the decline or depression in the non-oil export sector, other "collateral" manifestations include appreciation of the real exchange rate at the onset, increase in corruption, increase in external debt and increase in poverty. However, an oil-exporting country must not suffer from the Dutch Disease. Furthermore, not all oil-exporting countries suffering from the disease have all "collateral" manifestations at the same time. Country experiences vary considerably depending on their political economy.

9jakohai:


1.You misunderstood my comment.

2.When I say we need to leave oil.....I mean we need to stop relying on earnings from oil to meet our daily needs.

3.Paris actually does not put too many restrictions on developing countries....plus green energy could be an alternative source of power for industrial development via 1) refuse to power 2) Nuclear energy (yes!)

4.All in all...government needs to get serious. My comment is actually a critique. I think our governments have one weakness...they think we need to earn money from selling resources...when it leaves you open to damage from price fluctuations. We had that problem when agric was our main earner. We have that problem now with oil.

5.I am criticizing this govt constructively. Not all criticism of govt begins and ends with abuse....solutions need to be proposed.

hucienda:
7100 billion naira debt increase in just two years!

wow! Just wow! Even states don turn 'borrow borrow make me rich' in two years. APC FG, APC SGs and PDP SGs I hail una.

TheLordIsGr8:


I wasn't actually attacking your comments.
I was just making an observation about our present CIC. Sorry for the misunderstanding.

But I still have to say it, Nigeria has no business being a part of anything related to climate brouhaha. These people can slip in anything through the backdoor.

KahlDrogo:
Despite the drastic fall in FG income due to the near total collapse of oil prices at the international market, the FG still managed to check her borrowing, maintaining it at 3trillion in two years! That is absolutely commendable if you ask me.

The question therefore is, how did we end up owing as much as 8trillion under years of surplus earnings? We had oil selling at over $110 pb yet our debt profile (FG) was still on the increase. What logical explanation can President NOI and her vice, Jonathan, give as to why we needed to borrow to pay salaries when oil sold at $75pb?

eee777:
Nigerians 99% of you folks deserve the kind of leadership bedeviling the cesspits called Nigeria. Instead of joining force together to fight the common enemy "politicians" that is not up to 500,000, you are there arguing about parties, ethnicity, If at 2017, you still do not know that all politicians in Nigeria are the same, you are the BIGGEST FOOL on planet earth

Make una dey there dey talk bubu-jona

They divide u fools on media & enjoy themselves in real life. Same stories of good road, education, health care, electricity, pip borne water. Let them be fooling you with fighting corruption

9jakohai:


Borrow to spend on power and transport, and education, remove subsidies, regulate the mining sector so that we get more revenue from there...and develop industrial development plans (like the National Development Plans of the 1970's)...so that we can eventually become a manufacturing-dependent nation.

It is our oil reliance that got us there. It has to stop

KahlDrogo:
Despite the drastic fall in FG income due to the near total collapse of oil prices at the international market, the FG still managed to check her borrowing, maintaining it at 3trillion in two years! That is absolutely commendable if you ask me.

The question therefore is, how did we end up owing as much as 8trillion under years of surplus earnings? We had oil selling at over $110 pb yet our debt profile (FG) was still on the increase. What logical explanation can President NOI and her vice, Jonathan, give as to why we needed to borrow to pay salaries when oil sold at $75pb?

KahlDrogo:
Despite the drastic fall in FG income due to the near total collapse of oil prices at the international market, the FG still managed to check her borrowing, maintaining it at 3trillion in two years! That is absolutely commendable if you ask me.

The question therefore is, how did we end up owing as much as 8trillion under years of surplus earnings? We had oil selling at over $110 pb yet our debt profile (FG) was still on the increase. What logical explanation can President NOI and her vice, Jonathan, give as to why we needed to borrow to pay salaries when oil sold at $75pb?

Edit:

For all those ignoramuses quoting me, here's what one of your favorite economists said yesterday :

Exactly what I was trying to explain. I'm not at all surprised at the responses I got. I know for a fact ignorant kids have overrun the forum and they are best as nothing but insults.

Eazybay:


Before you run all over the thread, trying to explain away incompetence, I also need to let u know that this govt has

Removed subsidies
Raised taxes
Plugged Leakages
Raised interest rates
Steady oil income
Eliminated corruption.

Still we have over borrowed for just 1 budget!!! We still need to borrow for the second budget! We have sold oil above the budgetary benchmark hence we have excess crude account increasing.

The painful thing is, there is NO commensurate infrastructural development.