₦airaland Forum

LukasPodolski:
Mr igboid The British made Lagos the capital of Nigeria after the amalgamation, Now:

Can you tell us why the British didn't find any of Onitsha, Port Harcourt Enugu e.t.c Worthy of being the capital?

Considering Lagos wasn't the only coaster State.

Lagos was not even in the centre of Nigeria.

Can you please tell us why the British made Lagos the capital going by the above.

I get the impression that for states with sea access, colonial authorities generally made port cities the capital and it was often the case that such port cities were in the western region of the relevant state as these are closer to Europe.

If we were colonized by the Chinese, they will probably make Calabar/Uyo capital; if by Arabs, perhaps Borno.

Osidazz19:
[s][/s]
Rubbish voodoo economic theory.

You are asking Buhari to do something that previous govts were not able to do even when oil was selling for more than 100 dollars per barrel.

So this Buhari government is indistinguishable from previous governments and cannot change course from what they did. Good to know. They say madness is doing the same thing repeatedly and expecting different results.

I also wonder if it's also previous governments that made this government oversee a nearly 200% rise in external debt in 5 years, a 96% fall in excess crude account, and $7bn fall in forex reserves within a few months.

helinues:
That was a twisted media talk.. That's not logically possible.

We came into this crisis with the excess crude account (ECA) at $70m from $2bn just 2 years ago, forex reserves falling to $38bn in January this year from $45bn in June last year, and a tripling of foreign-currency denominated debt from $9.5bn in 2015 to circa $27bn today. These have left us more vulnerable than we should have been as we ran down our 'savings' (ECA & forex reserves) at the same time we were tripling our outgoings (debt repayments).


Because Nigeria is dependent on oil exports for forex, any government, no matter how competent, will struggle. But Buhari's government increases the likelihood of financial distress due to its economic illiteracy.

It should have taken the opportunity of the 2015/16 forex shortage to float the exchange rate and abolish the implicit subsidy in maintaining multiple exchange rates, and abolish fuel and electricity subsidies. These would have preserved cash and ensure the scarce money available to the government is used in beefing up infrastructure, healthcare and education.

I understand the urge to borrow from abroad as it tends to carry lower interest but we shouldn't do this unless we have built up enough fiscal buffers in the form of savings and lower budget deficits.

Any person who follows the history of oil prices will realise that it is a volatile commodity prone to sudden crashes. Government spending and borrowing should always be managed with this in mind until we wean ourselves from dependence on oil.

grandstar:
Someone like Dangote probably pays his fair share of taxes. His companies are publicly listed so no hiding place.

Even in 2014 or so when Dangote Cement had an annual turnover of 248b and a profit after tax of 124.8b, it was published.

Import bans are very lucrative! How many companies can declare more than half their revenues as profits, talkless of P.A.T? Even online gaming companies will be eyeing the Nigerian cement market . Which business incubator did Dangote Cement spring from?

Is his income still a beneficiary of rentier capitalism as he makes is money largely through influencing the government to ban the import of goods?

You are right about Dangote paying tax but I wonder, apart from his publicly listed entities, if he does pay enough re his private companies, personal income, and capital gains.

And as you point out, his profit margins are stupendous for such a capital intensive industry which is usually a good indicator of market failure and rentier capitalism.

There are also claims he gets forex at preferential rates which is like a subsidy by the government:

LAGOS/LONDON (Reuters) - As Nigeria grapples with a foreign exchange crisis, one person stands out in the scramble to obtain hard currency: Aliko Dangote, Africa's richest man.

When the government restricted the supply of dollars in June 2015 to prop up the value of the Nigerian naira, firms owned by Dangote landed a healthy share of dollars available at the cheap official rate, a study by Reuters shows.

Reuters examined foreign currency transactions made during an 11-week period in March to May this year. Over that time, Dangote businesses were able to buy at least $161 million in hard currency from the central bank. That was around nine percent of all the hard currency the bank sold over the period. In a single week in March, one dollar in every eight went to Dangote companies. There is not enough data to see how that stacks up with the companies' share of foreign trade.

https://uk.reuters.com/article/uk-nigeria-forex-dangote-insight-idUKKCN0Z90PT

SLAP44:
The one sided corruption fight continues.

That may be true but it is surely in Nigeria's interest that we succeed in this appeal and if exposing the fraudulent dealings of the GEJ government assists, so be it.

You are failing to distinguish between anti-corruption efforts that are mere public relations exercises and efforts that have the substantive goal of recovering stolen funds or avoiding major financial loss.

donchris33:
So, does it mean Warren Buffet is loosing his special skills on picking the right stocks. I also have a feeling that getting into the airline industry now is the best for long term investment.
I watched warren Buffett Berkshire Hathaway annual meeting . He admitted that he has sold all his airline stocks and even said it was one of his biggest investment mistakes.

Anyway, I believe that the corona virus is going to forever change most industries. For the airline industry I think social distancing would take a bit of their profit and it would affect them. I may be wrong though. I actually think the cruise lines is better to invest in the transportation sector than the airlines. I may still be wrong though.

Warren Buffett is looking at airlines' prospects long term. In the short term, the stocks can go up and down. Personally, I am neutral on airlines (unlike last week before Buffett's comments) as I think even though airlines are at or near their lows, the negative news flow generated by Buffett's comments continues to weigh on them.

IlovePMB:
Illiterates. Quota system senators

According to this article, the Senator that proposed the motion is Uche Ekwunife showing that ignorance and stupidity is a national phenomenon.

I wonder what a Nigerian investigation into 5G will uncover when other more competent and capable societies have yet to uncover the imagined health implications of 5G.

vertueptime:
Its not even about the tax, if they pay it will be looted, same reason why sensible donors are not giving govmnt money but equipment, beds, machines, ambulances etc

If they paid more tax, they will have stronger incentives to use their influence to ensure it's utilized properly. Part of the reasons Nigerians are docile in the face of endless kleptocracy is that we don't pay much tax. If you hand over a huge chunk of your pay to the government regularly and you keep hearing of misuse/corruption of government funds, the anger it will unleash will be hard to control.

vertueptime:
I could imagine without Bua and dangotes contributions, its a shame buhari has never contributed personnally anything in his entire years in nigeria, he has never been poor just stingy, may God grant us wealth that will be benefitial to others

It also highlights that the rich tycoons pay little tax. If they paid their tax and were not the beneficiaries of rentier-captialism, the Nigerian government would have much better capacity to handle health crises.

There is a huge element of psychological projection - folks who can't bring themselves to help others regard with suspicion a person like Bill Gates who expends a lot of energy in charity work. All they can think of is, "what does he gain in this"? They assume their outlook on life - a dedication to selfishness - must be widely shared.

goldmatrix:
...that number has even been manipulated just to please APC and Buhari. Imagine that they do a good job..

How can any sane people leave the economy in the hands of illiterate who believe not in wealth creation but in wealth sharing to his poor people whose main handwork is violence, killing and marrying underage kids...

Although NBS claims it's due to a change in methodology, the headline figure of 40% flatters our political leaders as it is way lower than before:

The National Bureau of Statistics said 60.9% of Nigerians in 2010 were living in "absolute poverty" - this figure had risen from 54.7% in 2004.

https://www.bbc.com/news/world-africa-17015873

It seems more like face saving report.

adexpa:
President Buhari said the assistance includes extending concessional loans, technical support, lowering of tariff on medical equipment and consumables, sharing of expertise in case management, adopting open trade policies, as well as outright debt cancellation.

Many people reads headlines only and jump into reactions. Buhari never asked for Loan cancellations, he only plead with financial bodies to give light loans and supports

You just quoted a list including the term "outright debt cancellation" but claim there is no request for loan cancellation.

What you can argue is that he didn't say Nigeria specifically needs debt cancellation - he was referring to a group of countries that need assistance.

obowo69:
Thank you for noticing this.

It could be, as they say, a result of changes in methodology but the headline figure of 40% does serve to flatter our political leaders.

There is a more salient criticism that can be leveled against the NBS, ignoring the Igbo-Yoruba chest beating contest. According to the newly released data, recorded poverty in Nigeria is now 40% in contrast to 60.9% in 2009/10. Therefore, Nigerians are recorded as less poor now than they have in been a long time, possibly going back to 1983 when poverty was recorded at 39%.

It does look like the NBS is stretching the bounds of credibility in this Buhari era.

Edit: 2009/10 was 60.9% not 69%.

abuabdullah:
If I have spare money I will buy more of airlines stocks because they are cheap and the country will do all that is needed to ensure they survive. Without airlines, US is dead as a tourist destination. Though, it may take two or three years before the stocks reach there previous highs

The problem is that airlines face a long period of low customer demand and will have to take on more debt to offset the operational costs they still have. Share prices need to adjust to their lower value. I will stay away from investing in airlines as a long term play. I was looking at a short-term pop in prices which didn't materialize (I blame the timing of Berkshire Hathaway's meeting).

ijedeikorodu:
Stocks slide as Buffett dumps airlines
Coronavirus pushes Berkshire to sell entire stakes in US airlines: Buffett

https://www.foxbusiness.com/markets/berkshire-sells-us-airline-stakes-buffett
https://www.foxbusiness.com/markets/us-stocks-may-4-2020

(Reuters) - Berkshire Hathaway Inc sold its entire stakes in the four largest U.S. airlines in April, Chairman Warren Buffett said Saturday at the company's annual meeting, saying "the world has changed" for the aviation industry.

The conglomerate had held sizeable positions in the airlines, including an 11% stake in Delta Air Lines, 10% of American Airlines Co, 10% of Southwest Airlines Co and 9% of United Airlines at the end of 2019, according to its annual report and company filings.

The conglomerate was one of the largest individual holders in the four airlines and in 2016 disclosed it had begun investing in the four carriers after avoiding the sector for years.

U.S. equity markets fell Monday amid rising tensions between the U.S. and China and as Warren Buffett said Berkshire Hathaway unloaded its entire stake in airlines.

The Dow Jones Industrial Average slid 333 points, or 1.41 percent, in the opening minutes of trading while the S&P 500 and the Nasdaq Composite were lower by 1.08 percent and 0.73 percent, respectively.

I had a small speculative position in Southwest Airlines (LUV) which I had to bail out of today at market open. Warren Buffett's comments definitely weighing on sentiments.

Emedu:
The management of this virus will proves alot of things
Which region that is highly uncoordinated
Which region is backward in handling challenges
Which region has less value for life
Which region has been dragging this country backward
And alot more

This is moronic. Your first instinct is to bash Northerners but it's early days yet and I suspect it's only a matter of time before Kano's experience becomes a nationwide experience.

Nigeria prioritizes cheap fuel over health and education:

Africa’s largest oil producer spends four times more money subsidizing fuel than building new schools, health centers and equipping new science labs. Fuel subsidies swallowed 648 billion naira ($1.8b) last year as the country kept prices pegged at 145 naira ($0.40) a liter, figures from the Budget Office and state-owned oil company show. Cheap fuel in the West African nation has led to large-scale smuggling of the product to neighboring countries where it is twice more expensive.

https://www.bloomberg.com/news/articles/2019-09-26/nigeria-prioritizes-fuel-subsidy-over-health-education-chart

Nigeria is better off on those measures than the United Arab Emirates for instance. That was even more so in 2015 when those measures were a lot stronger, apart from forex reserves if I recall.

But if you have brain cells, you will recognize that concluding from this that Nigeria is financially stronger than South Africa, Qatar or the United Arab Emirates is unpardonably stupid. If you think the residents of Lagos live in a financially stronger country than the residents of Dubai, Cape Town or Abu Dhabi, you need a psychiatrist.

Nigeria has low debt to GDP for instance but it doesn't matter if you also have low tax revenues to GDP, which isn't included in this study. How can you pay debt if you can't collect tax?

But they still have a price 'range' of circa N125.00 so it's not a deregulated market. Fixing fuel prices and the subsidy scheme is too lucrative a scam to be abandoned. It does not help that many Nigerians think low fuel prices is a human right which creates an alliance between the middle class who want cheap fuel and the crooks who benefit from the subsidy regime.

BeautifulMind2:
What's available is 2013-2016 HDI by UNDP.

Any data that suggests that poverty rates are twice higher in Ondo compared to Osun or almost twice higher in Imo than Anambra should be treated with a heavy dose of scepticism. Rates of poverty are not particularly dissimilar within ethnic regions.

It's notoriously difficult to measure poverty rates, moreso in Nigeria where data is porous given absence of reliable public services infrastructure such as reliable income tax data, welfare schemes like the UK's DWP etc.

tot:
So how exactly do petty abuses change anything? How does calling someone mumu achieve any progress? Pray tell, explain.

It is perfectly POSSIBLE to criticise without being abusive.

Because it signals to a tone deaf leadership that things have to radically change and that people are frustrated. It compels them to look for ways to turn things around. A softly softly approach doesn't work with Nigerian leaders, whether the idiotic Jonathan or Buhari as they are all surrounded by sycophants and inhabit a bubble. However, the shriller the criticisms, the more likely the bubble is penetrated.

Europeans got to where they are today not by offering mellowed criticisms but by taking actions, sometimes including violent revolutions. Not recommending violent revolutions as Nigeria is different, but we need to signal to leaders and potential presidential candidates our dissatisfaction with their leadership qualities.

You wouldn't shirk from abusing a bus driver who kills 1 person from reckless driving but you recommend this when bad leadership leads to millions of death through extreme poverty induced mortality increases. You probably lose more lives in 1 presidential term through increased infant mortality than the entire loss of lives during the Biafran war.

tot:
It's very disrespectful to constantly be referring to the president of your country as Mumu. Disagree with his policies all you want but getting personal and petty like this reflects badly more on you than the person you are criticising.

Restraint in the face of extreme and deadly poverty ravaging your country due to the economically illiterate president is utter idiocy.

Boris Johnson and Donald Trump get worse from their citizens. You can't see people dying (extreme poverty causes higher mortality) and feel comfortable with genteel criticisms of political leadership. Unless like the typical Nigerian, you have lost sense of the value of human life.

IamCookie:
I think this is a good move ,but why wait till now? Meaning the presence of COVID-19 forced the country into embracing this report. Hmm...Nigeria and leadership !

Nigerian governments are not keen on streamlining the public sector as a bloated public sector allows for the distribution of political patronage.

Like an obese man who starts slimming down after developing AIDS, the government had no choice but to cut down now given its run out of money and is desperately seeking IMF bailout.

OakPearl:
Winnings is what we do on this forum.
More wins man.
Let me just chip in: Investors based in Nigeria using these Fintechs (Trove, Chaka and Bamboo) please do your permutations well before selling as each transaction is charged % fees.

So assuming charges are 10%, you buy a stock, you are charged and when you sell, you are charged 10% bringing your full cycle transaction charges to up to 20%!

This is part of the reason we need more patience unlike our US based counterparts who enjoy fairer brokerage charges.
#Safetyfirst.

Well said. Transaction costs are parasitic for frequent traders so people need to avoid frequent trading as much as possible. I think it's more like 1% of transaction value for the Nigerian apps trading US equities?

I managed to find this ETF that tracks Nigerian equities - NGE. https://www.globalxetfs.com/funds/nge/

The Global X MSCI Nigeria ETF (NGE) invests in among the largest and most liquid companies in Nigeria.

It seemed like one of the "easier" shorts one can find and I wondered why I hadn't been short this much earlier. The one problem with it is that the spreads can be ridiculous so opening and closing positions can be quite tricky.

With naira depreciation and oil prices crashing, I see this as a good short even though it's already dropped 82% since the ETF's inception.

I went long Southwest Airlines (LUV) at $31.35 yesterday - short-term trade as I expect it to pop higher in coming days. Stop loss is at $27. I think LUV isn't volatile
as it's well managed and you will get more excitement going long other airlines but the less volatility appeals to me. This is for my "gambling" trading account.

Another position I am looking at is buying a gold mining stock. I have Kirkland (KL) in mind as it's again well managed. Waiting for it to pull back below $40 before going long with $50 in mind. This is supposed to be my long-term investment trading account but I am obviously deceiving myself if I am looking for only a 25% upside before closing the position!

PS: Been short NGE ETF since $9.60 and looking for a low $8 exit, spread permitting.

Knowing Nigeria, they will be sitting in airconditioned offices not knowing reducing the temperature facilitates the spread of covid-19.

Whether APC or PDP, they are all just as bad as each other. The country is doomed because the political class can play divide and rule and the masses are willing tools to be manipulated.

The debts can be paid with a growing economy and better tax collection. Nigeria's debt stock is problematic because tax revenues are low even by African standards.

Merely bringing our tax collection up to the level of other African countries will improve debt sustainability:

According to some estimates, Nigeria has one of the world's lowest ratios of tax to GDP.

That is the total amount of tax collected as a proportion of GDP - the value of the country's goods and services.

In 2016, it was at 6%, going by figures from the Organisation for Economic Co-operation and Development (OECD), a grouping of the world's leading market economies.

That is the latest year for which data is available.

The tax-to-GDP ratio in South Africa was 29%, Ghana 18%, Egypt 15% and Kenya 18%, says the OECD.

The average for OECD members - which includes all the advanced economies - was 34%.

https://www.bbc.com/news/world-africa-49566927

That being said. It is crucial we learn the lesson of curtailing borrowing until we can improve non-oil tax revenues. A key imperative is avoiding external debt after we come out of the covid-19 crisis (we need foreign debt for this crisis). The exchange rate risk is not worth it as, for instance, $10bn debt which was N1.5 trillion in 2014 would be circa N4.6 trillion today. This example highlights how debt servicing costs triple in naira terms requiring a tripling of tax revenues.

buikem2:
The other day I was at a supermarket and there was queue. One Chinese man tried to enter and everyone started shouting at him to leave there before he would give them virus.

I went to defend the man and told them to be ashamed of themselves. The people left the man and faced me oh. Ahhh. But the Chinese man couldn't face the disgrace and left hastily.

Racism isn't good, whether done by Chinese or we Africans

That is the irony. Nigerians decry racism against Nigerians whilst meting it out to foreigners with reckless abandon, not to mention the nauseating tribalism we are notorious for.

Diiet:
Africans don't believe in themselves that's the major problem drawing back the continent

It's not about lacking belief in one's self. It's about adding expertise to yours. Doctors from different parts of the world have different knowledge and practices that you can exploit and there is no harm in this.

This is why I find the Nigerian Medical Association's reaction to the Chinese doctors arriving laughable. They interpreted it as a threat to their privileges and a lack of confidence in their expertise - a triumph of ego/pride, driven by insecurity, over scientific collaboration.

Many developed countries are utilizing medical assistance irrespective of how sophisticated their health systems are. Example:

Medical staff have arrived from China to help with the UK response to the coronavirus crisis.

https://metro.co.uk/2020/03/30/medical-team-arrive-china-help-uk-response-coronavirus-12479911/

A group of 300 Chinese intensive-care doctors began to arrive in Italy on Wednesday, one of several Chinese offers to support epidemic-stricken European countries, as China tries to rebrand itself internationally from source of the new coronavirus to a friendly helper.

https://www.wsj.com/articles/chinese-doctors-and-supplies-arrive-in-italy-11584564673