When the people of Alaska discovered that their politicians were not managing the oil revenues according to their interests, they decided to create a government-managed corporation that would invest the oil revenues from the state in the capital market and then pay yearly dividends to every citizen of the country, rich or poor!

The political crisis in the Niger Delta area would not exist if we had such an arrangement. Instead of foolishly trusting our corrupt politicians to manage our oil revenue for "us" (i.e. themselves), we should organize something like that in Nigeria. If the oil belongs to Nigerians, then the money that the oil is generating should be paid to us!

When that dividend is paid, then it will be the duty of every Nigerian to spend it wisely. How do you see this?

Simply put. . . we have Public _treasury Depleting Party members in power!

I think its good for such a thing to be done in Nigeria.but who will take this idea to the goverment.But one funny thing is as long as the government is with the PDP it will not be accepted.quot me!

That's why niger delta promblem most go on, the people of niger delta and nigerians aswell wants fair play

Good idea.

what dividend is the $40billion paying to Nigerian Citizen?

we should start with that physical cash.

Simple.

You have to change the Nigerian constitution first to be able to achieve that which comes back to the issue of resource control. The income regimes in the 2 countries are different, as such a direct comparison cannot be made. You first of all have to remove the concept of a central purse from our constitution and allow each state pursue it's destiny. It's only then that such an idea would be practicable.

I tend to like the idea of decentralizing revenue. I feel it will bring the best out of us as a country as any state that is not making money now will be forced to THINK AND ACT. Political office will not be so juicy except for starters in the Niger Delta states which will all be very rich initially and such anybody seeking office will know that he's got real work on his hands and not just going there to "chop" federal allocation. With time other states will catch up by using whatever capital they have, whether human or material and we will become a prosperous nation in the long run.

Before I forget, it will also ensure  that distractive issues like sharia etc will not be on the front burner as those states will be busy thinking of how to make money rather than disturbing us with religious issues which should never be mixed with state issus.

Before anybody accuses me, let me state that I'm not from the Niger Delta. I'm from the south-west and while I think we might have it rough at first, I believe there are potentials which can be tapped but are being suppressed right now due to the oil craze.

The One's suggestion is the only answer to Nigeria's myriad of self-inflicted problems.

We need to change the constitution, expunge the parasitic idea of a central purse where even those who do not sow can reap while those who sow are cheated! With a decentralized fisal system, more effort will be put into developing the country than running for political office. The stranglehold of one party on the nation will be broken and Yar' Adua wont have to spend unearned cash to treat cattarh in Germany.

Not sure what part of Alaska you get this story from but I used to live in ALASKA and don't recalled ever getting any such dividend from any oil funds. please anyone from the state that got paid let me know because i want my share too.

what dividend is the $40billion paying to Nigerian Citizen?

Every man, woman and child in Nigeria will get about 36000 naira out of that $40 billion. For children, the dividends can be accumulated and then paid to them when they turn 18 or 21. Poor villagers would appreciate it!

Political office will not be so juicy except for starters in the Niger Delta states which will all be very rich initially

Their state governments won't be particularly rich, but the citizens would be much richer than they are now.

Not sure what part of Alaska you get this story from but I used to live in ALASKA and don't recalled ever getting any such dividend from any oil funds.

Are you a citizen of Alaska? Read this page: en.wikipedia.org/wiki/Alaska_Permanent_Fund

wikipedia: The Permanent Fund Dividend is a program benefiting Alaskans without a felony conviction who have resided in the state for at least one calendar year. The amount of each payment is based upon a five year average of the Permanent Fund's performance and varies widely depending on the stock market and many other factors. Though the payouts have varied from the smallest ($331.29 per person in 1984) and the largest ($1963.86 per person in 2000), they usually vary between $600 and $1500 ($900 and $1800 when adjusted for 2005 dollars).

this is an unwise proposition - if each person is given 36,000 per year (it will be even less since $40b is not made in 1 yr) will you build roads with that? or provide electricity? or fund the hospitals? it is simply ridiculous, granted that the people in power are not doing the best with it, but simply 'sharing' out the money will never be the solution.

i

If the oil money is not enough to enable Nigerians to directly purchase the services that they need, such as private food, healthcare, and education, then it cannot be enough to enable government to provide the same services. It will be up to every Nigerian to prioritize his needs and spend the money on what he/she feels is more important.

The daftest idea I ever heard .As harebrained as they come

babasin:

Good idea.

what dividend is the $40billion paying to Nigerian Citizen?

we should start with that physical cash.

If we pay off to everyone our reserves,we will have no reserves!We will have hyperinflation and a loss of confidence in the economy

PS:Alaska is not a country

We will have hyperinflation and a loss of confidence in the economy

<sarcasm>You are right. Alaska is currently being ravaged by hyper-inflation</sarcasm>

On a more serious note, the effect of $40 billion in foreign exchange on inflation is the same regardless of the spender. The net effect of $40 billion in foreign exchange is that we'll be able to import more stuff for a while.

I just verified this information Seun yes as a matter of fact someone got in trouble couple years ago for deleting the people information off the server. Alaska is a state on its own. lol

@Seun

Are you talking about redistrubution of just the reserves or oil revenues as well

If we pay off to everyone our reserves,we will have no reserves!

Good! That is less money for corrupt politicians to steal! Our 'reserves' will be in our pockets, as they should be.

Are you talking about redistribution of just the reserves or oil revenues as well

Yes, I'm talking about a portion of the current reserves as well as any future revenue 'Nigeria' gets from oil.

I know you think this is a socialist plan, but it's not. Capitalism is about choice. I am suggesting is that, since the government is claiming that the oil belongs to the people, then the revenues obtained from this oil should be given to us. I'm saying we should give Nigerians the freedom to choose how to spend 'their' oil money.

Seun:

<sarcasm>You are right.  Alaska is currently being ravaged by hyper-inflation</sarcasm>

On a more serious note, the effect of $40 billion in foreign exchange on inflation is the same regardless of the spender.  The net effect of $40 billion in foreign exchange is that we'll be able to import more stuff for a while.

The idea of the reserves is that money is reserved.Spending $40 billion is not the same as reserving it.Would an injection of $40 billion into a $100 billion Nigerian economy cause inflation?You bet it would.That is the same as injecting an extra $5 trillon into the US economy.

Alaska is ony a state in the US amongst many so the issue of infaltion won't arise.If you replicate such a project across the country it would cause hyper-inflation.If the Rivers Govt alone,started paying out money,that won't be  damaging to the economy,if the Nigerian Govt does same,the consequences will be catastrophic.Does the name Udoji sound familiar?

There would be pressure on our currency rates as dollars is converted to Naira.Our foreign reserves will disappear in one breadth damaging international confidence in the economy.

Interest rates will have to go up to deal with the infusion of funds further slowing down the economy and after all the reserves have been squandered,we will be left with inflation and recession.We will end up regurgitating all that money in lost output-There is nothing like free lunch

Alaska is not Nigeria

The idea of the reserves is that money is reserved.Spending $40 billion is not the same as reserving it.Would an injection of $40 billion into a $100 billion Nigerian economy cause inflation? You bet it would.

Won't it be spent eventually? When it's eventually spent, won't it cause the same amount of inflation?
Having said that, there's no reason why the money can't be released gradually to spread the effect over time.
(What does your $100 billion figure for the Nigerian economy imply? Much of Nigeria's economy isn't accounted for.)

When we get foreign aid to the tune of billions to fight "malaria" why don't we complain about inflation?
If Nigerians start getting billions of dollars from IT outsourcing, won't it cause inflation? So should we oppose that?

Supposing the money is not paid gradually, and the $40 billion reserve is paid out at once, what will happen?

- There will be dollars everywhere, so the dollar will become very cheap. As people try to convert their dollars into Naira, the exchange rate of the dollar will keep crashing, until it reaches maybe 70 naira.

- Because of the cheap dollar, importation will become less expensive. We'll be able to import cheaper computers, generating sets, spare parts for manufacturing equipment, up-to-date textbooks, et cetera.

- If the central bank attempts to prevent the naira from appreciating by increasing supply, there will be inflation. If they do nothing, I expect deflation, because the demand for the naira would be much higher.

Hmmm, 4 Play, I think our initial analysis was wrong. I think it will tend to cause deflation and not inflation. Of course I don't know the exact amount of deflation it will cause, or the exact exchange rate that will result.

Seun:

If the oil money is not enough to enable Nigerians to directly purchase the services that they need, such as private food, healthcare, and education, then it cannot be enough to enable government to provide the same services. It will be up to every Nigerian to prioritize his needs and spend the money on what he/she feels is more important.

That is a highly flawed statement if a bus costs 1million naira and you gave 1,000 people 1,000 naira each, would any of the individuals ever be able to purchase a car? NO, but when the money is used as a single unit, a bus can be obtained that can be used by the people in groups, its the same principle by which we pool resources in banks so as to use them for large developmental purposes through savings, etc. It will be virtually impossible on the other hand to convince each and every one of those 1,00 to agree to buy one bus, some people would want to buy chicken, or watch movies or do something else with theirs. result? no progress.

It is unreasonable and very unrealistic that you will get $40billion cash to distribute - who would release that volume of currency to you? dollars may become cheap, but only for the 2 days or so it will take for everyone to get rid of the few notes each person will get, then it will rise back to its former level because of the basic economic situation guiding the currency value.

A whole lot of Money spent at once causes inflation, but if spent gradually, the shocks to the economy will not be the same. By the way, how many generators can you import for 36,000?

Reserves are not supposed to be in your pocket - if they give each person a piece of metal from the CBN building, it does not amount to having a single building, there is great power in pooling resources together and using them well, the issue here is that we should ensure that whomsoever has custody of those resources for us use them appropriately

Hmmm, I don't want to respond to that yet. Are there any other points of view? How do you see this plan?

That is a highly flawed statement if a bus costs 1million naira and you gave 1,000 people 1,000 naira each, would any of the individuals ever be able to purchase a carbus?

If you give 1000 people 1000 naira each, and they need a bus, the bus manufacturer will just have to hire a driver and operate a transport service that costs maybe 100 naira per journey. He'll eventually get his 1 million naira.

However, your example is an extreme and unrealistic case. Most things we need in this country can be provided by a a distributed community of entrepreneurs working independently:

- For example, education is provided when thousands of small businessmen from all over the country scrape a little money together to start their own private schools. This collective becomes an educational system.

- Food is provided when thousands of farmers all over the country do their normal jobs at the farm.

- Health is provided when business-savvy medical doctors figure out ways to provide affordable healtcare to their small communities in order not to go out of business.

- Refineries are provided when businessmen are allowed to buy crude oil at the free market price, without having to bribe any government officials, and they refine the crude oil with chemistry 102 technology

- Beautiful roads can be provided when communities living next to the roads are allowed to erect toll booths and charge road users for the use of the road, so they can use the money to keep the roads in top shape.

NO, but when the money is used as a single unit, a bus can be obtained that can be used by the people in groups

Most of the money will end up in the pocket of the lucky bastard who is chosen to manage the money.

its the same principle by which we pool resources in banks so as to use them for large developmental purposes through savings, etc.

It will be virtually impossible on the other hand to convince each and every one of those 1,000 to agree to buy one bus, some people would want to buy chicken, or watch movies or do something else with theirs.

So what? Why should Mamaput be forced to pay for a bus if all she needs in her own life is chicken? What good does the bus do her if she never travels out of her town? If the bus is truly important, people will contribute. If people do not contribute, then maybe the bus is not so important. Without free choice, we are but slaves.

It is unreasonable and very unrealistic that you will get $40 billion cash to distribute

It doesn't have to be distributed in cash. It can be distributed through banks. It can be distributed gradually.

but if spent gradually, the shocks to the economy will not be the same.

Good. I repeat, this plan allows for gradual distribution. The corporation managing the funds can pay interest to those who are willing to wait for a few years before withdrawing the money. There will be no shocks.

Reserves are not supposed to be in your pocket

This is not a moral issue. Oil revenue can be wherever we want it to be. They can be in bank accounts, too.

Seun:

Won't it be spent eventually?  When it's eventually spent, won't it cause the same amount of inflation?  

Not neccesarily.The idea of reserves is that you store money for the worst case scenario-war,emergency,economic crisis,e.t.c.

Seun:

Won't it be spent eventually?  When it's eventually spent, won't it cause the same amount of inflation?  
Having said that, there's no reason why the money can't be released gradually to spread the effect over time.
(What does your $100 billion figure for the Nigerian economy imply? Much of Nigeria's economy isn't accounted for.)

How gradually?$8 billion a year?That works out at 7,200 Naira ,according to your calculation,over a year.What is the point?

$100 billion dollars is the CBN's generous estimate of Nigeria's GDP

Seun:

When we get foreign aid to the tune of billions to fight "malaria" why don't we complain about inflation?
If Nigerians start getting billions of dollars from IT outsourcing, won't it cause inflation? So should we oppose that?

We don't get aid that is commensurate to an infusion of $40 billion.We get aid in the hundreds of millions of dollars.As for IT outsourcing,we won't suddenly start getting billions of dollars in revenue,it will be gradual as was the case in India

Seun:

Supposing the money is not paid gradually, and the $40 billion reserve is paid out at once, what will happen?

- There will be dollars everywhere, so the dollar will become very cheap.  As people try to convert their dollars into Naira, the exchange rate of the dollar will keep crashing, until it reaches maybe 70 naira.

Due to inflation the Naira won't strenghten that much but why would we want a sudden strenghtening of Naira?A nation seeking growth,like China, won't want to strenghten their currency too much.A dollar buys you 140 Naira worth of goods.If a dollar exchanges for 70 Naira,you will effectively need to double your dollar income

Seun:

aira.

- Because of the cheap dollar, importation will become less expensive.  We'll be able to import cheaper computers, generating sets, spare parts for manufacturing equipment, up-to-date textbooks, et cetera.

I fail to see how cheaper importation is the way to economic growth when the goal should be greater exportation as every Asian economic Tiger did-Taiwan,S.Korea,Singapore,e.t.c

There would be no need for spare parts for manufacturing when the product to be manufactured can be cheaply imported.Like I said,this won't happen anyway because we will be far too busy dealing with hyper-inflation

Seun:

- If the central bank attempts to prevent the naira from appreciating by increasing supply, there will be inflation.  If they do nothing, I expect deflation, because the demand for the naira would be much higher.

Hmmm, 4 Play, I think our initial analysis was wrong.  I think it will tend to cause deflation and not inflation.  Of course I don't know the exact amount of deflation it will cause, or the exact exchange rate that will result.

If its going to cause deflation,why do you think its a good idea in the first place Who told you that deflation is good for the economy?It won't cause that but if it did,it would be disastrous.Your proposed policy will give us a stark choice-inflation or deflation-that is what they call between the devil and the deep blue sea.

Releasing it gradually means not paying every citizen at the same time. It doesn't mean paying them a fraction.

I have always said lets make SEUN president.

The Idea is good but with a lot of buts, This is NIGERIA and we NIGERIANS not matter where we may reside.
For starters, the ideaology and the thinking of the Nigerian people would have to be worked. We d have to do a lot
revolutionar work ie get lock up or hide everybody in a position of power.

The mentality of the average Nigerian is quite different when money is involved.

@Seun

You know you have a bad idea when the Socialists start to applaud you,while free marketers knock your idea

We have to expunge this idea of oil belonging to every Nigerian. Yeah right, Northern states are feeding the nation and nobody is asking for their money.  I believe that a trust fund could be established for Niger Delta states. Government should advertise for interested money managers. Application fees could generate millions of dollars.  Let's say $5 billion for diversified investment in foreign and local markets. Local banks will be given concession, but they would have to swap that with heavy investment in Niger Delta states. They will be required to build more businesses in Niger Delta in order to qualify for tax exempt status.

Foreign Fund Managing companies will also be required to have business presence in Niger Delta in conjunction with Nigerian Banks. This joint venture will establish skill acquisition centers and start up capital for entrepreneurs. They would have to also establish education/scholarship fund for people who want to go university.  This partnership will also provide soft loans and macro credit financing to Niger Delta dwellers. This whole arrangement could be taken care of by yearly dividend from Niger Delta Development Trust.  The maturity of this investment could be from 5-10 yrs

You know you have a bad idea when the Socialists start to applaud you,while free marketers knock your idea

Any idea that leaves politicians with less money to steal and boosts our self-esteem as Nigerians can't be bad.
There's nothing anti-capitalist about the idea of letting Nigerians manage 'their' own money. You guys are wrong.
My idea is not anti-capitalist, but perhaps anti-conservative. Most 'capitalists' are not really free marketers.

Perhaps you guys don't like the idea because deep down, you believe that most Nigerians can't be trusted to make good financial decisions by themselves. You believe that the government should make decisions for them.

@4play

You have done a yo mans job. as the suggestion from Seun is very dangerous. I used to think along this line before also and later I have seen the evil in this.

The Sovereignty of a state is Good enough to Get Goods and service for free or lease. I have learned in business that you must Bargain from a Higher Ground. The Americans will tell you this " never talk from a point of weakness " Check out the battle of Alamo

The two things that we have Collectively is one THE SOVEREIGNTY AND THE TREASURY

1 The Sovereignty is the collection of

a) The honesty of the people
b) The Patriotism of the people
c) The hard work of the people
d) The Confidence of the people
e) The Education and professionals (Wisdom Technique and knowledge)
f) The bravery of the People( Ability to take risk)
g) The love that they have for each other
h) The religious morals of the people
i) The family that makes up the states
j) The tribes and dialect with their languages

All this are assets not Liabilty They are more than money Ten million times.

You must appreciate that the government that does not know bring out this is a failure in the making.

2 Treasury

a) Taxation
b) Land
c) Water Resources
d) Vegetation
e) Mineral resources
f) Air space ( remember you made close to a billion dollars by selling licenses for GSM people to use) some gave it out free and are angry that they did so i reside in a country that is an example.
g) Cash Which include monies of the reserve that we get from every thing do from IT to Gas


Money is not everything all leaders when voted have all these but it depends on how you use them.

It gots nothing to do with race or nationality if you can see it and you know how to use to your advantage. But the citizen must be task to see their potential the problem will now be if the leaders show Good example.

The media can play games with our minds but the some will see through them if the leadership maintain the Integrity in the face of media bashing.

Their must be in Nigeria the Good pool of Junior leadership that will be based on integrity and hard work. Baba works very hard just as the past leaders of Japan. A leader must have less sleep because he must be on top of things.

Most leaders that take their people from poverty to riches have very bad image. Imagery is very little in leadership people may tend to want to worship you but you must resist this. They will want to play tribalism you must resist this also. I know that you cant play tribal card with Obasanjo you will loose Big time that is why he has so much trouble in his own tribes.

You will see that he has problem with some members of his family.

Nigeria doesn't have enough Oil money to do that.
The Kuwait government gives each newly we couple a free house and a lon to build another one if they wish.
Nigeria cannot do that. Nigeria's population is too big and it doesn't even have as much oil as kuwait. Even kuwait cannot afford to give it's citizens oil money just like that. Even IBB has more money in his foriegn accounts than the money that Naja makes anually from crude oil and Gas.

Even if Nigeria had a good government, Oil wouldn't be enough to sustain the economy. The government would have to invest in the Non-Oil sector, and consider revenue earners such as Tourism etc. To divide the external reserves by the population would be suicidal. We should not be deluded by poverty.

@dblock

Very Good Point Sir.