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Politics › Re: Sit At Home Takes Place In Aba, Onitsha, Asaba, Port Harcourt (pics) by 4Play(m): 9:08am On May 30, 2017

How will depriving yourself of income by not working help the Biafra cause? If this energy was channelled towards holding local governors' feet to the fire (ensuring they provided good governance), it would be a worthwhile cause.

Most likely, people may not open for business due to fear of IPOB thuggery. This is how it starts, eventually IPOB could turn into a kidnapping and extortion racket enriching the rogues behind it without coming anywhere near actualising Biafra.

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Politics › Re: Atiku - Nigerians Should Be Patient With Buhari, Elect Better Leaders Next Time by 4Play(m): 10:11am On May 29, 2017

eyeview:
Buhari is officially two years in office and the only capital project his govt fully initiated and completed is the helipad he built for the landing of his helicopter whenever he is in his village in Daura.

It's very difficult to initiate and complete a major infrastructural project within 2 years: how many had GEJ initiated and completed by 2012?

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Politics › Re: Minimum Wage: Our Patience Running Out, Nlc Tells Fg by 4Play(m): 7:57am On May 28, 2017

The government should not under any circumstances increase the minimum wage. Here is a counterintuitive argument: increases of the minimum wage fuel poverty.

In a country with mass unemployment, high inflation and low productivity growth, an increase in the minimum wage: reduces demand for labour increasing unemployment; fuels consumption/import growth increasing pressure on the Naira and spurring higher inflation; and diverts scarce resources away from capital investment to recurrent expenditure in the form of higher personnel/wage costs leading to low productivity growth.

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Education › Re: 7 Not 10,000 Candidates Were Arrested In Anambra During Exams – JAMB by 4Play(m): 7:42pm On May 27, 2017

Kondomatic:
Only someone with the brain of an ostrich will believe the first report

Think of the logistical nightmare involved in arresting 10 thousand people during a one day exam (I'm assuming JAMB is still a one day exam).

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Politics › Re: IPOB Members Kneel As Nnamdi Kanu Prays For Them (Photos) by 4Play(m): 5:44pm On May 24, 2017

This IPOB business is a symptom of the cognitive challenges facing us. Igbos mock Yorubas for supporting Buhari & APC but the ease with which many are following charlatans like Kanu show we are as susceptible to vacuous ill-thought political movements.

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Politics › Re: Looted Funds: FG Seeks Extradition Of 311 Powerful Nigerians by 4Play(m): 5:39pm On May 24, 2017

lilytender:
Your looting brothers have bribed all the Judges.

So what good is the extradition if you cannot secure a conviction because all judges are corrupt?

BTW, these corrupt judges are the same ones that often decide in favour of APC in electoral disputes. Somehow their corruption stops when it comes to deciding who who should get political power.

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Business › Re: Nigeria’s Debt To Climb To 24.1% Of GDP By 2018 by 4Play(m): 8:52am On May 24, 2017

ephi123:
Very soon it will climb to 100% of GDP. Nonsense

Nigerians underestimate how government debt can spiral out of control. From 12% to GDP in 2015 to 24% to GDP in such short order is a sign of out of control spending.

Yes, I know some folks will be quick to draw parallels with industrialised countries with higher debt to GDP ratios - Japan has 240% public debt to GDP ratio - but we are not an industrialised country. The interest rate our debt attracts should make this clear.

If we borrow in our domestic currency, we might retain some control over our debt but we risk increasing the market interest rate and crippling the domestic economy. This is because higher government borrowing leads to banks focusing their lending on the government at the expense of businesses.

If we borrow in a foreign currency, we incur exchange rate risk. A billion dollars today may mean N380bn today but N1 trillion in 5 years time as the Naira depreciates.

The reality is that we need to keep spending in control as Okonjo Iweala said in 2015. You cannot spend your way out of a currency crisis. I understand the need for infrastructure but the hurdle rate of return (particularly for a Nigerian government project) is insurmountable to make borrowing worthwhile: These infrastructure projects will not generate sufficient economic growth to produce enough tax revenues to cover the costs of the debt used to finance them. Reality is different from theory.

We need to rely on structural reforms to do the heavy lifting to get our economy on a faster growth path: deregulation, tax reforms and a genuine crack down on corruption. The fixed exchange rate regime needs to go and the government should look to selling/privatizing assets.

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Business › Re: Nigeria’s Debt To Climb To 24.1% Of GDP By 2018 by 4Play(m): 8:30am On May 24, 2017

Amoto94:
The money can't be used without the backing of the law and there's a bill to that effect but NASS have failed to pass it talk more of signing into law.

This is nonsense. On a certain level, no money can be spent without appropriation by the legislature but just as the government spend its tax revenue to meet its spending needs, it can spend the recouped money in the same manner. There is no requirement for a special appropriation process .

The reality is that the recovered loot is grossly exaggerated and does not amount to much. Hence the government has to resort to borrowing.

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Politics › Re: Ambode Cancels N844b Lagos 4th Mainland Bridge, Terminates concessionaire by 4Play(m): 8:43am On May 23, 2017

Jaideyone:
and you ended up giving yourself away as a PDP agent. pls go to Lagos state government website and bring out where money was allocated for it in the budget last year. Advanced Engineering Consult around Town planning in Lagos did the consultancy work on that bridge and not a kobo has been paid to them since last year. stop saying what you don't know. stop exhibiting your ignorance

Isn't it likely though that state governments are announcing major projects that they know will never see the light of the day? This is the oldest trick in the book and PDP governors are as guilty of it as APC governors.

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Politics › Re: Ambode Cancels N844b Lagos 4th Mainland Bridge, Terminates concessionaire by 4Play(m): 8:39am On May 23, 2017

There isn't much money available for major government infrastructure projects (even if co-financed by private sector), particularly at the state level. Expect to see many of these projects shelved.

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Education › Re: 500-Level UNIUYO Student’s School Fees Raised By Nigerians On Twitter In 5 Hours by 4Play(m): 11:23am On May 20, 2017

You call it begging, we call it crowdfunding in the west and it has become increasingly a major source of funding for desperate students:

Shameless e-begging, or a justified act of desperation? The ethics of crowdfunding university fees seem bound to divide opinion. But raising money on sites such as Hubbub, GoFundMe, and Indiegogo is becoming a go-to strategy for thousands of students.

Faced with unregulated and increasing tuition fees, postgraduate students are among the most desperate of these self-fundraisers.

https://www.google.co.uk/amp/s/amp.theguardian.com/education/2016/apr/25/meet-the-students-crowdfunding-their-university-tuition-fees

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Politics › Re: Why Does Naira Appreciate Whenever Buhari Travels? by 4Play(m): 8:53am On May 20, 2017

To the extent that this notion has any credibility, a likely explanation may be speculators reacting to the possible end of the fixed exchange regime if Buhari dies or resigns.

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Car Talk › Re: Mercedes Benz Self Driving Bus Unveiled (photos) by 4Play(m): 12:18pm On May 16, 2017

So how will a self-driving bus navigate pot holes that look like bomb craters on Nigerian roads? What about police checkpoints - what are the police supposed to do, collect money from passengers?

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Politics › Re: Aides Help Shehu Shagari To Board A Plane (Photo) by 4Play(m): 9:01am On May 15, 2017

DjAndroid:
The Democratically elected president whom Buhari overthrew to give Nigeria the first edition of recession in 1984.

Good bless him.

Nigeria went into recession under Shagari and Buhari took over during a recession. The Shagari recession was brutal: today's recession is a walk in the park by comparison.

The reasons for the severity of the Shagari recession probably lay in the scale of consumption/import growth and dollar-denominated credit expansion prior to the oil price collapse that triggered the recession. In the GEJ era: we had a lot of consumption growth but government borrowing was mainly Naira denominated

Buhari didn't help matters, just as now, but blaming him for starting the recession is an insult to history.

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Politics › Re: Princess Pako Talks About Chibok Girls On Twitter, Reveals What She Found Out by 4Play(m): 1:38pm On May 14, 2017

It's sad that people are still trying to see the Chibok tragedy through the prism of the embarrassment it caused GEJ. Given the international focus on the matter, with the U.S. government's involvement, it's highly improbable that APC concoted the kidnap. To suggest, as the writer claims, that Boko Haram engaging in mass kidnap was a novelty is hogwash.

I dislike Buhari but folks need to get off the whole Chibok conspiracy bandwagon. GEJ was an impotent leader and the Chibok debacle exemplified his inadequacies.

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Politics › Re: Internally Generated Revenue At State Level (2016) by 4Play(m): 6:41pm On May 13, 2017

omohayek:
I agree that simply looking at IGR says nothing about a state's financial health: where I disagree is in assuming that looking at outstanding debt is also sufficient to pass judgement either. Having large debts doesn't mean they need be unsustainable, especially if the economy is growing. Conversely, having low debts isn't an indicator of sustainability if an economy is shrinking, and the debt service is taking up an ever greater share of the state's income.

Yet more straw men. No, debt stock isn't sufficient to assess the health of a state's finances. My argument is that a state's finances ought to be assessed by looking at its income and debt - not either in isolation. There's no point in celebrating IGR in isolation without looking at a state's debt profile and its capacity to service its debt.

omohayek:
With regards to the requirement of a bailout as an indicator of a state's economic condition, here I'll have to make reference to yet more historical economic data. I'm sure that there are sub-Saharan African states with much better borrowing records than Argentina, Mexico or Greece, yet who would say that any of these 3 countries is economically worse off than such "responsible" African nations?

A bailout is an indicator of a state government's financial health because it illustrates the impotence of high IGR in itself in the face of unsustainable debt. If a state with high IGR requires external intervention to function, it is immaterial that its IGR is growing. The whole point of the IGR debate is to wean states off the FG: where a state cannot pay wages without FG bailout intervention, then suggesting that such a state might be in better financial health than a state which pays wages without such assistance is preposterous.

Again, the Argentina-Mexico-Greece analogy is off kilter. Comparing the finances of 2 state governments in Nigeria is not similar to comparing a sub-Saharan nation's finance to Greece. The likes of Greece have Western partners/allies prepared to funnel huge sums of money at them (no matter how testy negotiations might get). State governments in Nigeria essentially have the same lender of last resort: if State A borrows more money than it can pay without FG bailout assistance, then it is in worse financial condition than State B which is able to function without such assistance. It is immaterial that State A has higher IGR than State B if State B is able to function without FG intervention. This goes to the root of the debate: the capacity of states to function independently of the FG.

omohayek:
I'm disappointed to see this level of argumentation from you. What's wrong with citing examples from economic history elsewhere to elucidate an argument? Is there something fundamentally different about Nigeria preventing such examples from applying? Besides, in what way was 18th century Britain so "advanced" compared to Nigeria today?

The comparison is ridiculous as the faith of the credit markets - as reflected in the low yields it charged superpowers like British Empire - and the flexibility afforded the sovereign debt issuer makes putting the British Empire's borrowing ability in the same category as Ogun state, for instance, naive to put it mildly. This is not about furiously typing posts on Nairaland - if Ogun state and the British Empire are in an analogous position when accessing the credit markets, then the yield on Ogun debt will be lower than it has been. The high yields, indeed inability presently to further issue bonds, is reflective of the reality that the IGR is insufficient to dispel creditors' worries.

omohayek:
Finally, I should point out that in those days, there was no such thing as fiat currency, with the gold standard being universal in Europe, so your point about locally-denominated debt is irrelevant. Thanks to the gold standard, British inflation before the 20th century was negligible, and the British government couldn't just inflate away its debts. In addition, Britain never experienced a rate of annualized economic growth in that era comparable to even a "laggard" like Nigeria today, with per-capita growth rates creeping up from ~0.3% until 1850, and accelerating to ~1% p.a. after 1870 or so. The British vs. French example is therefore not just perfectly relevant, but even understated.

I am lost here: Britain came off the gold standards during the Napoleonic Wars to finance its participation by exploiting its position as a sovereign issuer of debt. It exploited its position as a credible sovereign, being the world's reigning superpower, to finance its debt. Comparisons, therefore, between its position and that of state governments in Nigeria are a bit naive.

As for growth rates: of course, countries at the frontiers of economic development tend to grow much more slowly than developing countries like Nigeria. That Sierra Leone or Liberia can have fast economic growth rates would not mean their capacity to borrow can be compared to the British Empire.

omohayek:
And my point is that this needn't be a problem if the debt is being used for the right purposes. Taking on huge amounts of debt isn't a bad thing if it is done to foster growth, and the economy grows fast enough to shrink the debt ratio over time. The fact that high IGR correlates with high debt isn't particularly shocking either, as it is precisely those states which can grow their IGR that are best positioned to tap into credit markets. Low debt and low IGR could just as credibly be explained as being due to cautious and unimaginative administration of an economic backwater (e.g Fayose's Ekiti).

In principle, I agree but not when it comes to "high IGR" states that cannot pay wages without FG assistance.

omohayek:
By the way, if you go back all the way to 1999 and look at the debt profile of Lagos from then till date, you'll see that it too has experienced a substantial increase in the total debt outstanding, so by your reasoning, Lagos would be flagged up as one more candidate for financial mismanagement - a position I'm doubtful anyone would buy.

Another straw man. No, if you read my posts carefully you will see I am concerned about states touting high IGR but with demonstrable inability to pay their debt. My view about such states is that their financial health is weaker than the picture painted by looking at IGR in isolation. Again, this is a fairly uncontroversial and common sense view which the emotive environment of Nairaland debates seems to be obfuscating. A state with high IGR but requiring FG assistance to meet its debt obligations is as dependent on the FG as a state with low IGR but which does not need the FG's assistance for such.

omohayek:
Yes, but not all states are "typical", and the question is the extent to which the states with the fastest growing IGR comply with this template, and the states with stagnant IGR do not; this isn't something to be settled through rhetoric, but by an examination of the numbers pertaining to each individual state. In any case, is the alternative of owing ever greater amounts in terms of outstanding salaries really any healthier? All I see there is a crude form of off-balance sheet financing, as unpaid salaries and pensions are still debts which must eventually be paid.

I am not sure there are actually states with stagnant IGRs (from a longer term perspective). Some states with low IGR are probably the fastest growing as they are starting from a low base. To your point about wages, some high IGR states have notoriously unsettled salary arrears whilst some states with low IGR don't. Unsettled wages are a form of debt, I agree. It reinforces my argument that IGR in isolation is a small part of the picture in assessing Nigerian states.

omohayek:
I don't have any fundamental disagreement with you on the bloated and unsustainable nature of the payrolls of most Nigerian states. What I don't endorse is the position that rapid growth in IGR is a useful indicator of how rapidly such obligations are growing. Even if it were true that most of the IGR growth were being diverted to recurrent expenditure, states with higher IGR are still better positioned to devote large sums to capex by retrenching their bloated workforces, an option unavailable to low-IGR states with weak tax-collecting capabilities and small economies.

This is all good in theory, but the reality is that both low and high IGR states can reduce their workforce but they cannot reduce their debt burden (without a bailout package) if unsustainable. My intervention in this thread is borne out of my concern that people are using the IGR metric in isolation when we have seen a lot of high IGR states tap the FG for assistance and left their workers unpaid.

omohayek:
To the extent that such debts are dollar-denominated, then yes, there is indeed cause for concern. But again, what are the hard numbers for each of these states? Maybe you're right, and the states with fastest IGR growth have indeed been on a dangerous dollar borrowing binge, but without hard numbers it's just an assertion on your part. I certainly haven't had any luck finding such data, so please go ahead and share what data you might have to hand.

The DMO maintains data on the debt stock. See here: https://www.dmo.gov.ng/debt-profile/sub-national-debts. Looking at the data, I suspect (indeed we know with the recent FG bailout) with the exception of Lagos, states with external debt larger than $100m have strained finances which, even in cases of high IGR, puts them in a precarious position.

omohayek:
The bottom line for me is that while you've noted real problems in how the various states are managing their financial affairs, your position that those states which are growing their IGR aren't to be lauded is one that I see no hard evidence for, and which is contradicted both by historical economic data from many other countries, and economic advice from both the IMF and World Bank today. The tax burden in Nigeria is extremely low, well below the level required for sustainable, non-oil driven economic development, and for the country's units of governance to be accountable and effective, they need to raise most of their revenues internally from their own locals - and yes, their stock of outstanding debt will indeed rise as this process takes place. States that are either unable or unwilling to raise their revenue-generating powers are not therefore to be regarded as somehow "responsible", but as being led by complacent and ineffective leaders - nothing stops a "responsible" state government from devoting all IGR increases to capital investment, after all.

You insist on using straw men. My point isn't that high IGR growth isn't commendable but that one ought to weigh both the growth in IGR and the debt stock. State budgets are somewhat like household budgets. I will not gauge a household's financial health simply by looking at their income: I will also consider their outgoings (particularly in relation to debt).

I think in the Nigerian context, looking at IGR in isolation is misleading. If a state has relatively high IGR but fails to pay its workers and taps the FG's assistance in securing a bailout, it's arguably in worse shape than a state with lower IGR but which pays its workers and does not require a bailout. This is why I cited the Anambra state example: a state I often mock for its MOU propaganda loving Governor. It has relatively low IGR but a domestic debt stock of N4bn and sizeable foreign currency reserves (the latter increases in value with Naira depreciation). To me, this puts Anambra state in a better financial health than Edo, Kaduna or Ogun state who have both substantially larger debt (domestic and external). Unlike Lagos, the difference in IGR fails to compensate for the difference in debt burdens.

So my conclusion remains the same: IGR is a small part of a bigger picture. For instance, that Bauchi has higher IGR than Bayelsa doesn't tell us much in itself. I think this is an obvious point which doesn't require much explanation.

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Politics › Re: Internally Generated Revenue At State Level (2016) by 4Play(m): 12:39pm On May 13, 2017

omohayek:
Not necessarily. Britain accumulated gigantic debts during the course of its 18th century wars with France, which necessitated much higher taxes on the British than the French, but that didn't lead the British into bankruptcy; to the contrary, it was the low-taxing French government's inability to finance its much lower debt that led to the convening of the Estates General in 1789, which led in the end to the French Revolution. High-tax, high-debt Britain, on the other hand, went on to become the world's dominant economic and military power in the following decades.

Your example refutes a straw man. Of course, a government can sustain high debt if it has the tax revenues and most, importantly, if the debt is denominated in its own currency. I have addressed this in previous posts. But in judging the financial health of a state government in Nigeria, simply looking at its IGR tells you only very little without looking at the debt stock/obligations. This is a common sense proposition. Between Anambra and Oyo & Ogun states, which required FG's assistance in arranging a bailout?

Anytime it's pointed out that debt sustainability is a problem in Nigeria, there are always people who cite the debt of sovereign advanced powers like the US, Japan or in your case, the British Empire. The capacity of the British Empire to issue debt (using their own currency) sustainably is different to the capacity of Benue state (or any state in Nigeria). If much of your IGR barely covers interest payments, touting the IGR as a sign of robust financial health is misleading.

omohayek:
But nearly all of the states have recurrent expenditures well above their IGR, and this hasn't led to any consistent growth of IGR across the debtor states. The fact is that only a few states have both the tax-gathering capability and internal economies big enough to sustain such revenue drives, with the rest simply refusing to pay their workers for months on end.

My worry is IGR growth driven primarily by the need to service debt. There seems to be a strong correlation between high IGR and high debt. With the exception of Lagos, all states with major tax revenue growth have experienced an explosion in debt, in some cases requiring FG intervention to meet basic obligations like salary payments.

A typical Nigerian state spends most of its money on recurrent expenditure of which public sector wages are the main component. If debt is increased dramatically, higher interest payments add to the problem of high recurrent expenditure.

omohayek:
Are you talking real or nominal rates here? Because a nominal 14% per year is hardly onerous in an economy with 18% annual inflation. In any case, I am doubtful that all states will need to pay anything near the same rate of interest on their borrowings: who would buy Zamfara or Ekiti bonds with the same coupons offered by Lagos State? We need to take individual states' credit-ratings and budgets into account when passing judgement.

Not onerous you say? Have you not been following the news on the dire state of state government finances in the last few years? High inflation is no protection against high nominal yields if the former is caused by economic collapse arising from a currency crisis. High inflation is as a result of economic stress which has strained state's finances more than any offsetting benefits arising from negative real yields. Woe betide those states when they try to rollover their debt (solely paying the principal upon maturity is probably out of the question) as the yields they will be subjected to will be a sight to behold.

What is also lost in this debate is that a lot of those states with high IGR also have debt denominated in dollars, so their debt obligations (IGR is denominated in Naira) is rising faster than their IGR growth. Another reason why IGR only paints a small picture of a state's overall financial health.

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Politics › Re: Internally Generated Revenue At State Level (2016) by 4Play(m): 10:32am On May 13, 2017

IGR is only a small part of the picture in analysing a state's financial sustainability. A high IGR matched with a high debt stock, the latter requiring huge debt repayment expenses, is unsustainable.

In many respects, it's the debt burden that is driving "high" IGR as states increase the tax burden on their residents to meet interest payments on their debts. Ultimately, states expenses are dominated by recurrent expenditure so this increased tax burden goes to pay public sector workers and interest payments.

States pay yields (interest) of circa 14% per year on their debt. A billion naira in debt will cost them circa N140m each year.

The only viable solution is to reduce the number of states to about 12. The current number is unsustainable and a drain on resources.

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Politics › Re: Lady And Baby In IDP Camp Vs Lady Rescued From Boko Haram In Sambisa Forest by 4Play(m): 12:41pm On May 08, 2017

It's well known that people in the camps are not well looked after. There is nothing conspiratorial about this.

Boko Haram remains fairly well resourced and a formidable fighting unit - they can afford to feed themselves and their female captives.

It is a damning indictment of our government and illustrates the limits of government propaganda.

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Politics › Re: President Issoufou's Visit To Buhari Postponed Indefinitely by 4Play(m): 9:13am On May 05, 2017

nero2face:
God, wetin these guys think say we be?, they don't even give a dam what will be going on in our mind, or do they think we don't reason at all?, these ASOCABAL really get liver sha...

They got into power by lying so it should not surprise that they govern by lying.

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Business › Re: Customs Revenue Fell By N216.5bn In 2016 – Ali by 4Play(m): 8:48am On May 04, 2017

2n2k:
No sir.

In 2016, the custom generated a total of N898b if vat is included

In 2015, the custom generated a total of N904b if vat is included

In 2014, the custom generated a total of N977b if vat is included

They don't care. All they know is that GEJ stole all our money and Buhari is fighting corruption.

Remember that the exchange rate was N155 to $1 before and is N305 in the 2nd half of 2016. If you adjust the 2016 figure for the exchange rate difference, the 2016 figure is even more alarming.

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Business › Re: Customs Revenue Fell By N216.5bn In 2016 – Ali by 4Play(m): 8:41am On May 04, 2017

Basfaq:
You these gullible people don't even know any thing about this country ,all you know is to antagonize. That was the target being given to him,and make your research about his predecessors of what the made is not even close to his achievement. I think the last CG made around #93b.Be apologetic.

The last DG made N93bn? I don't think we have produced figures lower than N100bn since the Abacha days. See my post below which I have excerpted below:

The Nigeria Customs Service (NCS) raked in about N977.09 billion revenues in 2014 from its target of N1.2 trillion for the year.

https://www.google.co.uk/amp/leadership.ng/business/400503/customs-rakes-n977-09bn-revenue-2014/amp

This information is freely available on the net, though I doubt that Buhari fans are moved by evidence.

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Business › Re: Customs Revenue Fell By N216.5bn In 2016 – Ali by 4Play(m): 8:34am On May 04, 2017*

News like this is very disturbing and should provoke serious contemplation amongst Nigerians. The primary rationale for the Buhari regime is the belief in its ability to tackle corruption in sharp contrast to the GEJ regime: but what if the new regime is causing more economic damage than any improved gains in the reduction of corruption?

Contrast this 2016 revenue of N898bn with the 2014 revenue of N977bn under the famed corrupt buffoon:

The Nigeria Customs Service (NCS) raked in about N977.09 billion revenues in 2014 from its target of N1.2 trillion for the year.

https://www.google.co.uk/amp/leadership.ng/business/400503/customs-rakes-n977-09bn-revenue-2014/amp

I know what Buhari apologists will claim: that Nigeria was in the midst of an oil boom in 2014 and its therefore an unfair comparison. But we forget that the exchange rate in 2016 was lower than in 2014 (N305 in the 2nd half of 2016) and that the GEJ was supposed to be "chopping all our money." Has anyone forgotten the scandal regarding the import waiver?

This is the dilemma I have posed to some of Nairaland's Buhari apologists: why is there no discernible difference in revenue collection given we have moved from a supposedly hopelessly corrupt regime to an honest regime?

Data do not lie and apart from the desire to sate some ethnically motivated ambitions/animosity or a naive investment of hope, the data suggests that supporting the Buhari regime represents a case of choosing medicine whose effects are worse than the disease one is seeking to cure.

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Politics › Re: Dogara Urges FG To Increase Workers Salary by 4Play(m): 10:00pm On Apr 30, 2017

If you want to know why the oil "boom" of the GEJ era failed to produce more buoyant forex reserves, look no further than the rise in consumption driven by public sector wage increases. The minimum wage rose 260% from N5k under OBJ to N18k under GEJ. This fuelled import growth, like the Udorji awards of the 1970s, without a commensurate rise in export growth.

Yes, I totally understand the appeal of such "pro-people" policies like increasing the minimum wage. Who doesn't want to help the poor? But the road to hell is paved with good intentions. A rise in wages not underpinned by productivity growth will strain government finances and fuel an unsustainable rise in imports driven by consumption. We need to be careful not to be seduced by fanciful talk that you can solve/reduce poverty in Nigeria by government-mandated wage rises.

This is why the GEJ stole all our money narrative winds me up. Whilst his regime was obscenely corrupt, it is a less important explanatory variable for the fragility of the economy.

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Politics › Re: Will Nigeria Ever Have A President That Tackles Corruption Holistically? by 4Play(m): 3:54pm On Apr 30, 2017

psucc:
It still remains an illusion. We will NOT have one. My reason for this assertion is because the process that will produce the said president itself is corrupt so will the President.

A typical example is Buhari. He would have made that history if not that he enjoyed a 'corrupt process to power and also twist or supressed fact to emerge President, he must reward all contributors.

Exactly. It is impossible for an uncorrupt person to emerge as president when the political system itself is inherently corrupt.

How are you going to finance your candidacy, avoid impeachment, judicial sanction or gain the support/loyalty of the public service if you are not compromised? You will not be able to get through INEC elections or electoral tribunals without greasing a few palms.

In effect, the hyper-corruption phenomenon in Nigeria has lots of gatekeepers ensuring its survival/perpetuation. The most plausible scenario an optimist can hope for is the development of institutions/policies influenced by public activism that erode the opportunities for corruption. It is why reducing government intervention in markets is crucial in Nigeria: things like government management of NNPC, fuel subsidy and a fixed exchange regime ought to be removed as they provide an opportunity for insiders to loot at the public's expense.

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Politics › Re: Governor Ikpeazu In Arm Wrestling With A Chinese Investor In Abia (Photos) by 4Play(m): 3:22pm On Apr 30, 2017

Nothing tangible comes out of these photo ops. Just an opportunity for their media activists to convey the impression of a public official hard at work.

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Politics › Re: VIDEO: Truly, There Was 'A Foreign Conspiracy' To Oust Jonathan - Reno Omokri by 4Play(m): 3:14pm On Apr 30, 2017

He lost because he displayed remarkable insouciance to the insecurity and corruption going on in Nigeria. Of course, he lost to someone who was even more inept but his inadequacies as a leader provided the opening for this to happen.

Blaming foreign conspiracies is a diversion and reflects a man and his supporters unwilling to confront the shortcomings of GEJ.

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Politics › Re: Jonathan’s Pathetic Apologetics - Punch Editorial Board by 4Play(m): 9:01am On Apr 29, 2017

texazzpete:
This thread is a succinct representation of the travails of Nigeria under the terribly mediocre GEJ.
Only compromised sycophants, imbeciles, tax-dodgers and ethnic bigots can have any issue with it.

Unfortunately, some worms here only see the world through a 'GEJ vs Buhari' or 'APC vs PDP' lens, so they seem to think this article is exonerating Buhari by damning GEJ.

If you're a responsible taxpayer and you don't understand that GEJ did a shabby job as President, you need to get your head checked. And if you don't realize that this statement does not simultaneously say Buhari is a good President, your village is missing its local idiot.

I am one of the "worms" who thinks the article is indulgent of a narrative that seeks to exonerate Buhari by damning GEJ. The article repeats the falsehood that today's economic travails are down to GEJ (it is there in the third paragraph). This line of reasoning is an oft-repeated trope of every Buhari apologist (including you) who tries to rationalise their miscalculation.

I am placed in the ignoble position of having to defend GEJ who I think was feckless, inept and in saner climes should be serving multiple life sentences. For all GEJ's faults however, he is not to blame for the state of the economy in April 2017. My gripe with articles like these is that in their deployment of yellow journalistic devices*(mistruths and exaggeration), they mis-attribute causality and help perpetuate Nigeria's multi-decade history of misrule. By claiming that GEJ was an "unmitigated disaster" who "ran the economy aground" and "despoiled all fiscal buffers", language they would never use to describe the present regime, they perpetuate the BMC narrative that Buhari is merely an unfortunate heir to today's economic travails. It is why all the BMC activists on this thread, see Jesuslovesyou's post before mine, applaud the article's contents for its "objectivity".

I have tackled the recession-causality point in previous posts so no need to rehash but it is worth pointing out the glaring incoherence of the GEJ is largely at fault argument. Think of the GEJ regime as providing contractionary pressures on GDP through its gargantuan corruption: has no one wondered why the end of that regime has not provided a stimulatory effect on the economy? It cannot be merely the oil price collapse as this was already baked into GDP figures, most of the collapse having already happened by the end of the regime.

Moving from a regime that steals aplenty to a regime that steals far less should offset some of the adverse effects of the oil price collapse- this has not happened. The article points to the import waiver as a specific example: Now that the waiver has been removed and the currency devalued officially from N155 to N305 (which, coupled with the end of the GEJ's era corruption should boost the reported Naira value of the levies paid on imports), we have learned that Customs revenue is still lower than when the "unmitigated disaster" was in charge. There is no discernible effect (not on non-oil taxes or reported oil production pre or post militants truce) which suggests that we have moved from an era of extreme corruption to an era of less corruption. The data fails to support the narrative which leads me to believe that 2 things are happening: GEJ era corruption was "sexed up" (any news on the $49/20bn Sanusi claim?) and corruption remains fairly in place.

The corruption narrative has become a red herring to excuse today's inexcusable incompetence. True, corruption impoverishes Nigerians, but bad economics also impoverish Nigerians, the latter arguably to a far greater degree. Why is the North-East of Nigeria poorer (worse in any measure of human development) than the South-East? It's certainly not because the latter are more honest/less corrupt than the former, it's bad economics exemplified by a failure to invest in human capital.

*References to GEJ's failure to diversify an already diversified economy, inaccurate claims of $2.1bn arms fund ending in private hands or forex reserves being depleted represent quintessential yellow journalism.

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Business › Re: Today's Naira Rate Against The Dollar, Pounds And Euro by 4Play(m): 7:01pm On Apr 28, 2017

manitoba:
CBN efforts to keep throwing our scarce dollar resources to defend the naira is an effort in futility as it has clearly shown.. It is just a way to enrich few.. The CBN governor and it's management should have reviewed this method after spending a whooping $4Billion with little or no result defending the ' doomed' naira.

The irony is compelling. A country where the "recovery" of $43m grabbed public attention has failed to bat an eyelid as over a $1bn is flushed down the toilet.

All this defence of the naira could have been avoided with a float. Yes, a float at this point would accelerate inflation (the longer it's avoided, the more painful the eventual float becomes). But it would also increase incentives for forex inflow from exporters and investors, reducing the dependence on oil exports.

2 Likes

Politics › Re: Nigeria Can Fund 2017 Budget With Recovered Loot — Reps, NLC by 4Play(m): 8:54am On Apr 27, 2017

seunmsg:
2016 budget had a deficit of over N2trillion and the 2017 budget has a deficit around the same figure. Only extremely ignorant people would think recoveries from corruption can cover such a huge amount. The NLC president and the chairman, house of reps committee on EFCC are supposed to be more knowledgeable than ordinary folks that get carried away by news headlines.

I agree, only the extremely ignorant believe the government's outlandish claims about money recovered.

Shame you spend most of your time on Nairaland defending the government instead of condemning it for fostering the impression that it has recovered billions of dollars. You act like as if the source of those media headlines is not the government (look at the recent claim to have "recovered" N7trillion via the TSA).

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Politics › Re: Nigeria Can Fund 2017 Budget With Recovered Loot — Reps, NLC by 4Play(m): 7:19am On Apr 27, 2017

seunmsg:
We are talking about funding a budget of over N6trillion here and I don't think we have recovered up to N1trillion in total from corruption proceeds since the current administration took over. The Rep members and NLC president don't know what they are saying.

Government propaganda has created this dilemma. By making extraordinary claims about recovering loot, it gives the impression that it must have recovered enough to fund the budget deficit. It is, therefore, difficult to justify its borrowing spree given the outlandish claims the government has been making.

Remember, the loot doesn't have to fund the entire budget. It simply needs to cover the deficit (the difference between spending and revenue).

3 Likes

Politics › Re: Court Grants Patience Jonathan Unfettered Access To $5.9m by 4Play(m): 7:10pm On Apr 25, 2017

4Play:
To me this is irrational. That corruption investigations are deployed to hound political adversaries is no basis for supporting corruption.

It's usually better to tackle corruption in a politically biased way than not to tackle it all. There is no innocent reason explaining Patience Jonathan's wealth.

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