₦airaland Forum

Rossikk:
You've completely misread and misunderstood what the guy is saying.

What else is he saying other than that loot stimulated economic activity through spending on champagne, parties, donation, e.t.c.? That view is nonsensical as loot may lead to those activities but most of the loot is exported out of the country. Keeping money in Nigeria that would otherwise be looted and taken out of the country would boost growth and not slow growth.

In reality, the view that there is a genuine anti-corruption war going on today which is plugging leakages is not actually backed up by evidence. If you look at FG reported revenue, excluding oil revenue, it is not significantly any different from that of the previous regime which everyone knows was extremely corrupt.

lanregbade:
The reason why the entire country is groaning about the present hardship is that before now we operated a criminal economy. An economy that was sustained by corruption. You can imagine all the revenue generating MDAs not remitting the money they made. This created a semblance of progress and economic activity. Corrupt money translates to more champagnes ,more cars, more construction , more parties,more donation to churches,more girl
friends,etc Corruption was booming and the money
was there. All of a sudden TSA. All the leakages
blocked. The shock is what we are going through now until the budget is passed. The criminal and corrupt economy has been sustaining us for so long,until now that change has come. No free money to throw around. This has created a lot of disruption and dislocation. The old order of corruption is being degraded and destroyed so that a just and equitable society will emerge. A society where work will once more be cherished. It will come with some pain but on the long run we will be on the path of greatness

This is an audacious piece of illogic and brazen ignorance. In sum, you are saying that tackling corruption is bad for the economy because it reduces spending. In reality, most of the money stolen by government officials are spirited out of the country and the impact of these thieves on aggregate demand - total spending by the entire populace - is miniscule. The lootocrats also have a lower marginal propensity to consume so loot, much of which is sent abroad anyway, again has less impact on overall domestic consumption. It's almost as if you are saying that allowing a phenomenon, corruption, which encourages capital flight boosts the economy more than if that money was kept in Nigeria in the first place. The lenghts you people go to rationalise away the hardship you are experiencing is mind-boggling.

Remii:
anyway unless you have load of dollar kept somewhere, devaluation is not in your interest. once Naira is devalued without salary increase, populace become poorer, simple.

Naira is already devalued, what people are asking for is for the CBN to stop the pretence which the official rate embodies as having an official rate which does not reflect the market value of the naira damages the economy and makes currency depreciation worse.

tuale4u:
Nigeria is not maintaining a fixed forex regime. what Nigeria is actually doing currently is what I will call dual forex regime. The govt is providing strong naira for raw materials and essential import, and devalued naira for non essential and luxury imports. This promote local manufacturing as long as the govt can ensure local manufacturers don't divert the cheap dollar given to them for import to round tripping in parallel market.

The parallel market does not exist by choice but is the unavoidable consequence of a fixed regime as price control usually leads to black markets. Again, living in hope that dollar sourced at the official rate would not be sold at the parallel market is the sort of fantasy-based analysis which pervades discourse in Nigeria.

The fixed regime creates an incentive for round-tripping as it provides arbitrage opportunities for the highly connected. This is inherent to the regime as its whole raison d'être is to maintain the Naira at a higher fiat value than the market value. Therefore, a fixed regime will see more round-tripping, this is our actual historical experience, and lead to a self-reinforcing acceleration of the loss of the Naira's value.

Curlieweed:
Great post! However, this is totally lost on the morons you're debating. Mumuharri pretends he is resisting devaluation, fake economists and assorted zombies pretend they can decipher some intelligent reasoning to his mumuness, meanwhile the economy is actually crashing and burning all around them.

It's not like we didn't predict all this.

It is that uncanny ability of Buharists to ignore the actual economic consequences of their favoured policies, both today and in the past, which distinguishes them from normal humans beings in full possession of their mental faculties.

1freshdude:
Your write-up is not devoid of sense but like a market, there are lots of road leading to one economic end.
Following your suggestion in the first paragraph of your writeup above is the reason lots of countries have failed to develop. It does not matter how you feel about it but no two countries share exactly the same characteristics and what works in country one may mess up country two.
Your position that tailoring policies that are suitable to the demographics, culture and behavioral attitudes of a target country is same as advocating economic illiterate policies, shows a lack of depth in development economics. Empiric evidence litters everywhere on the uniqueness of countries and why policies perform differently in different climes.
To your second point about the need for devaluation of the Naira, if only you had taken time to read from the genesis of this thread rather jump in half way like a puma, you would have noted my position on this issue. I reiterate that my only issue with this write up is that the government has to effectively regulate the Bureau De change...because they selfishly make the Naira much weaker than it really is in a bid to maximize profit. Or, they have to devalue the Naira to be reflective of the true price of the dollar. The FDI argument is on every ones lips and rightly so.
Your solution to seeking alternative sources of FX, FDI as the panacea to our problems is short lived. For how long will the temperaments of others determine our fate as a country? Why do we need so much FX if not for our ability to produce NOTHING. Shouldn't the solution be making industrial, Agricultural, Educational and Health sector a priority so that our FX demand would drastically fall as Naira would suffice to get services and consumption locally?
You are correct about the Nigerian exporters been discouraged from repatriating income to Nigeria but tell me please what does the Nigerian private sector export and how significant is the proportion of Nigerians that fall into this category that warrants formulating a policy with them in mind because for every policy made there is a corresponding trade off.

Sorry, you don't make any sense. The argument that a fixed exchange regime without adequate forex reserves is unviable applies to Nigeria without exception. There is nothing unique about Nigeria that makes it possible to have a fixed currency without sufficient forex reserves. You live in a country that cannot provide electricity, pipe-borne water, security or health care to its citizenry but somehow believe that our government is sufficiently cunning and competent to escape fundamental laws of economics. This is why this vague and vacuous call to "regulate BDCs" reflects the triumph of wishful thinking over reality.

Saying that BDCs purposefully weaken Naira to make profit reflects the penchant of Nigerians to view adverse economic developments as attributable to moral iniquity. BDCs exist to match buyers and sellers of currencies and make money from the Naira rising just as well as from its falling. If there is sufficient forex inflow, the Naira will rise irrespective of the supposed evil wishes of BDC operators.

In a rare moment of lucidity, you admit that the Naira may need to be devalued but quickly revert to promoting long discredited autarkic solutions which would supposedly cure our "sinful" thirst for forex. However, you fail to realise that economic growth cannot be accomplised without productivity growth and productivity growth cannot be realised without foreign investment. Heck, the absence of forex demand in pre-colonial Nigeria should have made it an industrial giant by your reasoning. A cursory glance at all the recent transformative economic success stories like the Asian Tigers and China would reveal the crucial role foreign investment and trade played.

You concede that a fixed exchange regime is bad for Nigeria's export income but take the view that our export industry does not matter because its small. It's hardly in Nigeria's interest for our export industry to remain small as the path to industrialisation requires that local industry seeks new markets abroad, instead of relying on a limited domestic market.

tuale4u:
It is more complex than you make it look. You ignore the impact of increase in local manufacturing. You are only focussing on foreign investment. Even with that, china fixed and manipulated their currency during their pursuit of growth, it did not stop foreign investment from going to china.

For me, the current policy is okay as long as the government aggressively promote local manufacturing.
For now, the govt is not showing enough aggression. that is my only worry. Without that aggression, this sacrifice will be a waste.

I am not ignoring the impact on local manufacturing, my point is that a fixed exchange regime makes forex scarce and accelerates the rate of Naira's decline. The accelerated decline of the Naira makes inflation unbearable and damages local manufacturing, which in any case needs to import some manufacturing components. Further, local manufacturing requires foreign investment to develop and this is not achievable with a fixed exchange regime. The damage to local manufacturing in the last few months, as well as during the Abacha regime when we last tried this policy, is a patent reality that should prompt a reassessment from supporters of this economically illiterate policy.

Further, you people keep citing China forgetting that China is not seeking to maintain a fixed exchange regime with inadequate forex reserves. A fixed exchange regime can be maintained with sufficient reserves but not without. You also forget that even China required foreign investment to fuel its rapid growth:

According to the United Nations, annual FDI flows to China grew from $2 billion in 1985 to $128 billion in 2014

https://www.fas.org/sgp/crs/row/RL33534.pdf. Any attempt to boost local manufacturing without fixing the forex issue would be an exercise in futility.

1freshdude:
Your first paragraph should hold Rational! But events in Nigeria defies ration becuase the continue fall in the value of naira relative to the dollar shows thag consumers still demand imported goods.
Your second paragraph is correct and that's the writers point.

This case for economically illiterate policies on the basis of Nigerian exceptionalism needs to stop. The Naira continues to fall rapidly precisely because of the fixed exchange regime. Abacha fixed the Naira at 22 to the dollar, it fell in the parallel market to 85 Naira to the dollar.

The answer goes back to the initial catalyst for the Naira's fall, reduction in forex inflow due to the fall in oil prices. To remedy this, you need to find alternative sources of forex inflow such as foreign investment. Nigeria had $21bn of FDI investment in 2014 alone. However, foreign investment will reduce significantly if the official exchange rate, which is foreign investors sole recourse, does not reflect the market value. If you wanted to build a factory in Nigeria at estimated value of 200bn Naira, why invest $1bn at the official rate when the real value should be circa $600m at market rates? Therefore, the fixed exchange rate perpetuates a rapid and self-reinforcing fall in Naira as forex inflow is discouraged. This is all what I predicted in previous posts months ago and is actually borne out of the experience of many countries, including Nigeria, who try to maintain a fixed exchange regime without adequate forex reserves.

From the point of view Nigerian exporters, why repatriate forex income to Nigeria when your forex purchasing power will not reflect in the Nigerian market the real purchasing power of your forex? Hence, a fixed exchange rate regime also reduces export revenue as seen in the dramatic collapse in non-oil export revenue.

We need to ground our reasoning in sound economic principles and not the deceptively pleasing arguments of the Nigerian political class which Senator Olowoporoku represents.

trillville:
It seems there are two economies within nigeria, one for the rich and the other for poor.

the rich need the fg to devalue the naira to entice foreign investments into the country. this will make the naira stronger than it currently is in the black market, enabling the rich to purchase dollar denominated goods at cheaper prices.

the poor need the fg to maintain the current official value of the naira. any increase in the official rate would lead to increases in the price of fuel and electricity within nigeria, and in turn, increases in the cost of locally produced food, thereby making life harder for the poor.

the rich can afford to pay for increases in food cost, but the poor can not.

do we devalue or not?

Your post is incredibly confused. The reason you gave for the rich wanting devaluation is actually a reason why the rich, particularly the highly connected political class, would not want devaluation.

A rich Nigerian earns money largely in Naira. Nigerian tax revenue is in Naira so preserving the purchasing power of the Naira allows the rich to buy up houses in choice locations in London for instance using stolen Naira tax revenues. This explains why corrupt governments prefer a fixed exchange regime. A fixed exchange regime also facilitates round tripping for the connected.

As for the poor, most live in rural areas and consume relatively few imported goods. Making imports pricier through devaluation shifts consumption away from imported goods towards locally produced goods.

1freshdude:
You guys are talking crap! And you know nobody is talking about banning importation of capital goods.And incase you dont know, FX is available at the official rate to the sector of the economy that imports capital products and not your usual tooth pick and designers group.
You two keep talking like you dont know that finished goods account for over 70% of importation into Nigeria. Nigeria is in crisis because of over importation of finished goods and this must be curtailed. This is the point that the writer and every development economist is trying to project.

What better way to curtail imports than through the price mechanism - if imports are more expensive, they will become less affordable and the imports of finished goods will reduce.

The problem with a fixed exchange rate regime, not backed by adequate forex reserves, is that it preserves the purchasing power of the Naira for the highly connected and dissuades forex inflow which would have slowed down the rate of currency depreciation.

Nigerians are strange people. Those mounting a defence of Kemi Adeosun point to her stint as Ogun commisioner of finance as evidence of her practical experience qualifying her to be Nigeria's finance minister. In her 4 years as state commisioner, she oversaw Ogun's finances culminating in the state being practically bankrupt and requiring a bailout due to unrepayable debt, much of it accumulated under her tenure. Somehow the experience of assisting in bankrupting Ogun state by excess borrowing is proof that she is qualified to manage Nigeria's finances.

She has continued where she left off by proposing to borrow in her first federal budget $15bn to fund a $30bn budget. That level of borrowing is unsustainable for Nigeria and would do to the federal govertnment's finances what has been done to Ogun state.

Adminisher:
This article needs an intellectual to understand. You are a tape recorder programmed to type those six words.
" the bureaucracy lacks depth". Do you understand what that means?. GEJ stripped the civil service of ability to function as the FG was completely privatised. I know for instance that Okonjo was working with only international consultancy companies throughout -like Mckinsey whilst turning the bureaucracy to mere file pushers. Jonathan's government also stripped the ministries of files and key information. Buhari is actually building a government from the scratch.

The irony is that you make an accusation - poor comprehension - which you are guilty of. It is not Reuters that concluded the chaos this government is embroiled in is as a result of GEJ, it is a member of this government who made that claim. The full quote from the article is as follows:

"Of course it's chaos. We're rebuilding a whole system. There is no depth in the bureaucracy," said a senior government source who asked not to be named.

It's hardly news that the government blames its failings on GEJ but the article made the point that there are various other explanations - including Buhari's management style -whilst giving government sources an opportunity to give their own rebuttal as to the reasons for the mayhem.

greaterlove:
The man who rode on the mantra of anti corruption is turning out to be the most corrupt ruler this country will ever have. What a budget of shame.

I don't think he's corrupt. He's just a man of Olympian incompetence. I remember at the height of certificate-gate seeing his school report, possibly from the National War College, which described him as a man of mediocre intelligence.

In advanced countries, people of mediocre intelligence are not placed in charge of the lives of millions of people. Whatever you may think of Barack Obama, David Cameron or Francoise Hollande, they are not men of mediocre intellect.

Buhari is a symptom of the dysfunctional society and culture we have. A culture where; hope, blind faith and ethno-religious considerations triumph over evidence and reason.

PS: It was the Defence Services Staff College that described Buhari as of average intelligence not National War College.

This is such a stupid attitude to adopt. In businesses where the barriers to entry are low, greed cannot explain price inflation because any excess profit will be out-competed by other businesses.

Supposing pure water sachet can be sold at N5 but "greedy" businesses decide to sell at N10, any enterprising business person can gain market share by selling at N5. This is not like telecoms, cement or power where it is difficult to compete with MTN or Dangote as the barriers to entry - government regulations/licensing, cost of capital investment - are prohibitively high so that the incumbent businesses can keep prices high with little repercussion. There is no power of incumbency in the pure water business.

What this thread represents is the penchant Nigerians have to interpret complex issues using the moral framework familiar to religious people. Every setback is a conspiracy or due to malign forces and things will all get better if we seek repentance. In reality, things are more complex: Nigeria's problems are down to a poor choice of policies with the fixed exchange regime being a major bulwark against growth. This is not a morality issue, it's Economics 101.

Holyfield1:
Some Nigerians are just too greedy, That was how the pure water agencies increased the price of water like they don't have enough packaging materials that would last for even 2 years in stock, Everybody lying on dollars....Greed, greed you heard me right, yes greed Is the ultimate problem of this nation

Nigerians and their penchant for glib moralising. If you think pure water sellers are simply being greedy, start your own pure water business and sell at the "correct" price. Imagine the market share and customer patronage you will gain if you sell pure water sachets at below current prices.

It's a somewhat illiquid market, so these price spikes are inevitable but the general trend, the fall in Naira's value, will resume in due course.

Asset prices don't move in a straight line. At one point in early April 2015, the Naira appreciated to 150/160 to the dollar due to relief over the peaceful resolution of the presidential elections. Something similar happened in early August. It's bizarre just watching how Nigerians seem to refuse to learn from history, even very recent history.

This depraved creature no dey learn. In August 2015, he opened a thread to celebrate the rise of the Naira to 209 Naira to $1

https://www.nairaland.com/2499823/n209-1-appetite-dollars-falls

theMEGAman:
some said that GEJ is the worst president, I agree but during his regime we never had about non payment or delay payment of allowances of security, mass sacking of workers, hardship in high level, economy dawn fall, devaluation of naira to dollar every day not even weeks or month gap, most corrupted budget presentation since nigerian history and business crumbling. All this is happening under APC government within 8 to 9 month of their leadership, I believe that no matter the condition of nigeria ppl must survive.

It's because you were not paying attention. Soldiers have been deprived of due payments for years now in pretty much every regime, GEJ's era was no exception.

oduastates:
All the dollars will immediately fly out.

That's actually true. In a hypothetical scenario where the CBN somehow manages to flood the economy with dollars, it will cause a short term rally in the Naira but not for long as the dollars will make its way out of the country.

This was such a well written post, was so surprised to see it in Premium Times that I had to look up the author. He's a history professor at Vanderbilt university - http://as.vanderbilt.edu/history/bio/moses-ochonu

I have noted in previous posts that political support in Nigeria has a strong ethnic/religious element and so an attack on a President, for instance, is deemed an attack on his ethnic and religious groups and their allies by their enemies. This is why attacks on GEJ were often dismissed as attacks by the Janja-weed, a subtle hint at the Muslim faith of many of his opponents. In the same vein, you will notice that many passionate Buhari supporters on Nairaland make copious references to his critics being IPOB supporters, a sort of rallying cry for support for Buhari under an anti-Igbo banner.

Beyond that, there is an additional element I have alluded to in past posts - that people who make an emotional investment in an outcome lash out as the possibility of achieving that outcome fades. Hence, if you spent oodles of energy advocating the candidacy of Buhari as a facilitator of positive change in Nigeria, it is deeply discomfiting and humiliating to acknowledge that you might have been wrong all along. This post by Paul Krugman, relating to a different subject, is nevertheless apt:

Bear in mind that embarrassment, and the desire to avoid it, are enormously important sources of motivation. Consider, as a weird, self-aggrandizing, but I think relevant observation, what has happened to supposedly smart guys who predicted soaring interest rates and runaway inflation 6 or 7 years ago. Almost none of them have conceded that they were wrong, and should have done more homework. Instead, many of them — especially the academics — have become ever more obsessed with claiming that they were somehow right, and/or trying to tear down the reputations of those of us who were in fact right. Nobody likes looking like a chump, and most people will go to great lengths to convince themselves that they weren’t.

[url]
http://mobile.nytimes.com/blogs/krugman/2015/12/15/the-donald-and-the-chump-factor/?referer=[/url]

omohayek:
I think this is too pessimistic. The very willingness to stick with the tariff increase, even in the face of vociferous protests against it, would send a strong signal to investors that the Nigerian government does have the will and capacity to protect their interests when necessary.

It's a strong signal but it is insufficient. Take the problem of the fixed currency regime. Suppose ESKOM wants to invest in a domestic project with an estimated cost of circa 200bn Naira. If they wanted to finance this using external financing, despite the actual or market value of the project being $550m (assuming 360 Naira to $1 exchange rate), they face the prospect of having to raise $1bn to meet the official exchange rate. It's difficult to successfully deregulate a sector when the macro-framework has a command economy policy bias. Raising prices in one sector without addressing some major structural defects like the currency regime is a fast route to a rentier industry beneficial for the incumbents but which does not generate sufficient investment to offset the additional costs increased prices impose on consumers.

Omotolu:
Free fall! It's heading to #500 before 29th May,2016. No Nigerian leader can solve Nigeria's economic woes. Anyway,the official rate is $1 = #198:50.

They can stop this collapse. They need to do things that encourage the inflow of foreign currency into the country -

Privatisation
Remove the fixed currency regime
Reform the CBN by appointing accomplished technocrats and strenghtening its independence (A contradiction I acknowledge but Emefiele needs to go)
Deregulate key sectors like petroleum and electricity to attract foreign capital
Cut the budget deficit

The above is not an exhaustive list but it will go a long way in attracting foreign investment into the country and demonstrating committment to sound economic policies.

I have 2 intuitions about this debate. In principle, the present pricing regime impedes having a viable electricity sector that attracts needed investment. You need higher and more flexible pricing to encourage investors to make the necessary investments in the sector.

My second intution is that higher prices, in a deteriorating macro environment marked by Buharionmics, will expose Nigerians to the downsides of reforms but none of the upsides. International investors are loath to make major investment in Nigeria given the present policy environment. Therefore, the Nigeria consumer might face higher electricity prices without the offseting benefits of higher investment.

OGOg:
Where is 4play when u need him most

These debates are akin to flogging a dead horse. Most reasonable people can see that the present policy framework is not working. Many months ago I noted that a fixed exchange rate may be retained long after the market rate has substantially diverged as to render the official rate meaningless. During the Abacha regime, the fixed rate remained at 22 Naira to the dollar whilst the market rate got to 85 Naira to the dollar. This created an excellent opportunity for "round-tripping", i.e., buying dollar at the official rate and selling at the market rate.

This being Nigeria, corrupt interests are formed and converge to exploit these opportunities and to denounce those who criticise the exchange rate policy as exploiters of the masses and the representatives of malicious foreign interests. Because political loyalty in Nigeria is based mainly on ethnic and religious affiliation, bad policies will subsist for long notwithstanding the compelling arguments offered by real world experiences.

TeOwl:
This is what happens when a currency is 90% dependent on a commodity item like crude oil.

This is part of the story but not the full story. At the heart of the problem is dollar inflow into Nigeria. Oil exports are a major source of dollar inflow and so a fall in oil prices reduces dollar inflow. However, dollar inflow may also come from foreign investors attracted by an improved business climate or even corrupt loot being repatriated.

The pace of Naira's collapse is not simply an oil story but it is a reflection of souring investor confidence in Nigeria both in terms of the policy direction, or more aptly the lack of policies,and a rapidly deteriorating business environment. I have also noticed from speaking to Nigerians that many are looking for a way to get money out of the country to hedge their Naira savings in a foreign currency. So not only are fewer dollars coming in but we are experiencing capital flight.

For years I used to try to drum it into people's heads that Nigeria's economic underdevelopment is not simply a corruption issue. Our poor choice of policies is a more significant factor than corruption. If you have a regime that reduces corruption by $2bn but causes capital flight of $10bn you have not gained anything. The reason why Nigerians like to reduce our problems to the single issue of corruption is that we are a people with a religious mindset and an affinity for simplified moral narratives. Economics is a very complex subject and Nigerians struggle with complexity. Better to construct simplistic narratives based on a foundation of ethnic/religious loyalties and hatreds - Hausa/Fulani Muslim oligarchy v IPOB/Ibo conspiracy - than to tackle the headache inducing complexities of the modern world.

The Bow Group is a discredited think-tank. To call them a think-tank is a bit of a misnomer as not much thinking goes on there.

@OP

It's not as bad an idea as many think. It will remove currency risk for investors and curtail inflation in Nigeria. This was how Zimbabwe overcame its legendary hyperinflation problem which turned everyone into a billionaire.

However, the downside is the loss of monetary independence as US monetary conditions are imported into Nigeria in circumstances that might not be appropriate. For instance, higher interest rates may be required to curtail risky bank lending in Nigeria so using the US's interest rates, circa 0.5%, will lead to excess lending.

Further, you can wave goodbye to the development of a domestic manufacturing industry as you might as well import given the easier availability of the US dollar.

To be honest and given Nigeria's suicidal currency management, dollarisation is a better option at present. However, in a better managed economy it is far better to have your own currency than to adopt someone else's. I view Buharinomics as a transient detour away from sound economics. Things have a way of correcting themselves eventually as the reality of pain and suffering caused by bad policies become incapable of being explained away via propaganda. The sad part is that it might take a lot of pain and suffering, much of it avoidable, to get to that point.

A lot of these ardent Buhari supporters reason in a way that suggests some sort of mental pathology. Every little bit of news is a chance to extol the virtues of their great messiah.

Take this news for instance. If budget padding was against Buhari's wishes, what actual steps have been taken to remove all those items from the budget? Nothing stops Buhari from redoing that budget to expunge the unjustifiable expenses.

Instead what you get is an avalanche of hand wringing and finger pointing. This is a man who is supposedly able to restore electricity by the sheer force of his "body language" suddenly rendered incapable of stopping the FG from paying rent on Aso Rock.

poiZon:
r u saying it was bad for yaradua n gej to increase minimum wage from that paltry 5000 to 18000 naira even when inflation was on the increase then n the paltry 5000 was not even enuf to tek care of their transport money to work?
must we always blame becos we hate them?
why dont u blame the govrs n those whor in charge of salary payment for the political class that includes all sort of rubbish as allowance to dem when the main people doing the work aint benefittng feom any allowance?

Let's get away from the emotional points. We all know that our politicians are thieves and that Nigerians are underpaid. However, neither problem can be solved by giving a few select Nigerians - public sector workers who make up less than 1% of the population - huge wage increases which are unsustainable.

When people wonder why the era of high oil prices were not accompanied by larger fiscal buffers to guard against an oil price slump later, it is largely because most of the oil revenue bonanza was eaten up by higher public sector costs. This is why recurrent expenditure, made up largely of personnel costs, became a laughably large proportion of our budget.

The key to tackling poverty is by generating strong economic growth. You cannot tackle poverty by simply increasing government workers pay, less than 1% of the population, whilst the rest of the population subsists on peanuts. With most of the budget going on public sector pay, where is the money for public infrastructure which will enable stronger economic growth and boost the income level of the general population?

This is kicking the can down the road and was inevitable. States cannot survive with their over-bloated public sector wages.

The more than tripling of public sector wages by GEJ and Yar'Adua was unsustainable and this was effectively imposed on states with minimum wage going from 5000 Naira to 18,000 Naira. This is fine if oil prices remained at record highs but that was unlikely.

Added to that, many states borrowed with reckless abandon. This is why a state like Anambra is coping but Osun is reeling financially. Bail them out today without addressing the underlying problems - unsustainable public sector wages and debt - and you are merely papering over the cracks.

harmless011:
All this APC and PDP twitter warriors are just clowns, politicians are playing ludo with their destinies while they are busy fighting on social media.

It's a bit like the Hunger Games but played out on Twitter as groups of impecunious young men, pauperised by the dire economy, battle each other for food from the political class.

Having said that, it's not the paid posters I pity - there is a certain "rationality" to making a living from being a paid propagandist. Life is hard enough so if APC/PDP are prepared to pay you to spout dross on their behalf, so be it. The ones I pity are the true believers, those who actually believe that GEJ was a good president or that Buhari knows what he's doing. These ones are grotesquely moronic. It takes a toxic mix of ignorance and imbecility to believe that either of these presidents represented anything other than gratuitous incompetence.

This is the Governor in October 2015 debunking the claim that Boko Haram does not control any territory:

Borno State Governor Kashim Shettima,has revealed that Boko Haram militants are occupying two local governments in his state, contrary to the impression that the militants are not in control of any Nigerian territory.

http://saharareporters.com/2015/10/26/boko-haram-controls-2-local-councils-borno-shettima-reveals