₦airaland Forum

citizenisb: We are talking of offshore accounts here to tax havens and co which is usually illegitimate money especially from Nigeria. Please don't play the devil's advocate as if we used most of our crude oil receipts to develop our infrastructure and diversify our economic base we will not be where we are today. We need to stand up against the THIEVES!!

I agree that most of the money would have been stolen money but your headline is misleading. You're not going to have a successful fight against corruption by playing fast and loose with the truth. Our problems are mainly two fold: corruption and inept policy making. You can have economic development with the former but not with the latter.

Effectively claiming, as your headline does, that all capital flight from Nigeria is due to theft can lead to bad policy - such as clumsy restrictions on the movement of capital - which is even worse than corruption. A case of the medicine being worse than the disease. In a poor policy environment, even people and businesses who earn their money legitimately will want to shield their wealth from risks such as inflation and currency risks by moving capital abroad. There's more to capital flight in Nigeria than just theft. In a good policy environment, a lot of the thieves would even keep the money in Nigeria.

Not all capital flight is as a result of stolen money. A lot of income earned in Nigeria is moved abroad for a variety of reasons some of which are perfectly legitimate.

Decryptor: BaBa Mike: What a bunch of horse pucky.

If you believe this story ,,, you are not paying attention to fact and logic.
The circumstances with the story seem unreal. How can N1 million recruit new men and also transport them to Yemen. How much does a plane ticket from ABUJA to YEMEN cost huh huh huh

This whole story is just simply BS.

http://www.wegotravel.co.uk/flights/results/abv/ade/2012-07-22/oneway/economy/1/0?id=52291177f8d7d9dd304ec8481190346f9485f0c5

According to the above site, Abuja to Yemen costs from £670.00 on Egypt Air & Yemen Air and £871.00 on Saudi Arabian Airlines to £1135.00 on Ethiopian Airlines. If you average all the prices quoted in that link, you have £836.50 (around 220,000 Naira) per person. 1 million Naira can easily cover the flights and ''pocket money'' of 2 or 3 persons and that's just being conservative. Once in Yemen, their sponsors can pay for their daily upkeep and flight back home.

Who's leg is that? I heard there were 2 bombers, hope the leg belongs to the first bomber

The irony! You would think they would at least hold him to extract info on who's involved in the bomb plot.

I wonder where this tale was copied from. Perhaps, this is to generate hits and spice the romance section up.

Nigeria has been gripped by the power of the street. In response to a government announcement ending the subsidy of petrol there has been a tidal wave of protest and disruption, forcing the government to negotiate with the unions. The new-found power of the Nigerian street is an instance of a global pattern, but the street can dance to many tunes. In north Africa it has faced down autocracy. In America its anti-government agenda was entirely different: a tax mutiny. Are the demonstrations on Nigeria’s streets a variant on the Arab spring or a variant on the Tea Party?

Nigeria is not a repetition of north Africa. Far from an unelected autocracy, the present Nigerian government emerged last April from the fairest elections in the country’s history. But the legacy of past gross abuses of power is that citizens are profoundly suspicious of government. And so a needed reform has ignited protests that resemble the sad folly of the Tea Party.

If ordinary people are sufficiently disbelieving of government, it is entirely possible for populist rhetoric to seduce people into fighting against their own true interest. In the US, despite an extraordinarily low tax burden, dramatically rising inequality and an unsustainable fiscal deficit, poor people demonstrated for tax cuts for the rich. In Nigeria, despite decades of elite plunder of oil revenues by means of scams such as the petrol subsidy, the poor and the young have turned out to demand its restoration. Convinced government is theft, they cling to the pitiful benefits of a petrol subsidy.

Should the poor have been on the streets? The petrol subsidy was costing $8bn a year; in other words the average Nigerian household was forfeiting more than N750 ($4.70) a week of public money. Much of this expenditure was captured wholesale and shipped out of the country. Even the petrol that was sold locally at its subsidised price disproportionately benefited the better off. There are a myriad of ways in which public money could benefit poor people more than the petrol scam – for example, children could be given bursaries for attending school. That is what poor people should have been urging on their government, and it should now be the focus of political compromise.

Should the young have been on the streets? The petrol subsidy was a classic instance of squandering the oil revenues on current consumption. As oil wealth is depleted, the government has a responsibility of custody to the next generation. Enough of the revenues from oil must be invested in infrastructure and other assets. This is a responsibility that previous Nigerian governments failed to meet. At last a Nigerian government is taking its responsibility to the next generation seriously. Nigeria’s youth should have taken to the streets to celebrate this change of policy, not to lobby for a return to the status quo.

In attempting to harness the present oil bonanza for development, reformers in the new Nigerian government are trying to avoid a repeat of the history of plunder. There are powerful interests in favour of plunder, including some prominent government officials, which is why repeating history is the default option. But societies can also learn from their history. Germany is the best-managed economy in Europe because it used to be the worst: from hyperinflation, Germans learnt “never again”. Germans are locked into sound decision-making by a combination of legal rules, dedicated institutions and a critical mass of ordinary citizens who understood why the rules and institutions mattered and so defended them.

Nigeria is fighting a more complex dragon than hyperinflation and so the rules and institutions will need to be different. But the current experience has demonstrated that Nigeria, like the US, has yet to build that critical mass of economic literacy among its citizens. The necessary foundation, a burning sense of “never again”, is most surely there. But if popular anger gets derailed into populism, whether about petrol subsidies or tax cuts, that potentially valuable social energy is wasted.

Yet while it is evidently possible to fool many people for some of the time, there does appear to be a ray of hope. In the US the Tea Party has fizzled: more recently, streets have been claimed by protesters from the other side of the political divide demanding tax increases for the rich, not tax cuts. ‘We are the 99 per cent’ would make as good a slogan in Nigeria as in America, for a protest demanding that oil revenues be spent wisely and transparently.

The writer is professor of economics and director of the Centre for the Study of African Economies at the University of Oxford

http://www.ft.com/cms/s/0/9d57c51e-3f87-11e1-8809-00144feab49a.html?ftcamp=rss#axzz1jwFWmUlA

Given that she was supposed to have demanded kickbacks to fund GEJ's presidential campaign, I doubt GEJ can sack her without her spilling the beans on him.

The biggest cost of the subsidy may be graft, which has worsened in the oil sector since Mr Jonathan became president in 2010, say insiders.

Methods of corruption include bribes, overcharging, presenting domestic fuel as imported, and smuggling to neighbouring countries where fuel prices are higher.

Once the petrol lands in Nigeria, well-connected oil marketers are paid the difference between the open market price of petrol and the official regulated price; with the subsidy typically amounting to 80 naira a litre last year.

The removal of the subsidy will not solve the problems in the short term, since fuel will still need to be imported.

But deregulation will encourage investment in refineries, which should eventually bring prices down, said Samir Gadio, emerging markets strategist at Standard Bank.

“It’s a very difficult social context, and you can understand the opposition from the public who are losing out financially,” he said. “But i[b]f the subsidy stays, Nigeria will be stuck in the same cycle of exporting oil and importing petrol.”
[/b]

There were the most interesting parts. On the one hand you have a corrupt Govt with no credibility, on the other you have the subsidy on fuel consumption which is economic suicide by stealth.

She says she did not buy the house and I would be very surprised if she made enough money from the World Bank to afford such a house.

tjadeba:
Please re-phrase the emboldened part so i can understand properly.I seem not to get your logic there

Nigeria's main source of revenue is oil. History tells us that oil prices can stay static or even crash. If either happens, we will go bankrupt. We demand that the Govt keeps spending money on salary increments and subsidies even though this is financially unsustainable.

tjadeba:
Means the time is not right to end subsidy on what affects us most (Petroleum) until corruption is at its barest minimum.That is the logic,if am right

That argument is borne out convenience and is mere procrastination. This subsidy issue first came up in the 80s and we have done nothing to fight corruption. I can't recall one single instance of workers downing tools in response to corruption.

As the fuel subsidy policy is in itself a conduit for corruption and wouldn't have lasted this long if people in power didn't enrich themselves through it, I see no reason why we should retain it as a bizarre price for the failure to end corruption.

Olodostein:
It all sounds good in theory. You may be logically analysing this from a positive economic(describing "what is" point of view. The IMF are doing so from a normative economic (advocating "what ought to be" point of view. Behind theirs, there is an ulterior motive that has been going on for years. In addition to that, their rules of engagement with developed countries is very different from developing and underdeveloped countries.  

Whey are they not telling western countries to remove farm subsidies? Don't you know that is gravely affecting African countries? Who owns the IMF? Where do their profits go? Why do they posit themselves as being for the success of particular countries, yet, they charge exorbitant interest on their loans coupled with very strict conditions?

Our leaders and policy makers are not honest with us, because they are also out to profit from whatever shitty is going on underneath. The average joe's will be the ones to suffer. You may be typing this and advocating from your "comfortable environment". If you come say these things to those in the streets of Lagos, Kano and so on, who are feeding from hand to mouth and contemplating where the next meal or transport fare will come from. Just be ready for Mob justice.  

Do you think the protesters that have been killed by police so far are not humans?

Millions of Nigerians have died and will die because our country is not economically successful. If you think subsidising  fuel consumption is the path to economic growth, best of luck. We will learn the hard way.

tjadeba:
Good analysis. Now in Nigeria;s case, what assurances do we have from the fools in power that money saved from the IMF policy will not be used to fund elections,pay elected officers and their retinue of aides fat salaries,embark on white elephant projects? Thereby going to same IMF to borrow because i know the IMF know our leaders to be corrupt

We need to be active in fighting corruption. For instance, I don't get why no strike actions are called when elections are obviously rigged or in response to embezzlement. I hear PENGASSAN is going on strike over subsidy removal, I can't fathom why they haven't gone on strike demanding that the thieving oil minister be investigated or at the very least resign.

The subsidy programme is in itself an avenue for embezzlement, which I feel is the only reason it's lasted this long. Money is stolen through spending programmes. Ending it does not in itself increase corruption. The energy used in demanding that we keep spending money at the risk of repeating our 1980s experience should be spent fighting corruption. That's where our focus should be.

tjadeba:
IMF lends money, thank you for the analysis! at what rate do those countries have to pay the debt?

It depends on each country but it is always at a rate lower than a country would otherwise get were it to find a private lender. The real problem  with the IMF is not the rate that they charge but the conditions they attach to compensate for the risks they have taken to give you loans which no other person will give you at all or at the rate they're charging.

The key point is that countries should manage their finances in a sustainable so as not to go bankrupt. The popular option for Govts is to spend money - salary increments, subsidies, airports, e.t.c. This is all well and good until, especially for a country like Nigeria that lives off oil, when your fortunes change and you can't afford these things.

Olodostein:
It is a known fact that IMF cripples a country. They start by advocating bad economic policies to a particular country just like they are doing Nigeria on this subsidy issue. Before the country knows it, they are bankrupt and will result to IMF for loans which will further enslave the country for years to come.

Where is your thought?

If it is a known fact, no one will listen to the IMF, never mind borrow from it and it's role will be redundant. It defies logic to claim that by asking that we cut spending, this will increase the possibility of us going bankrupt. Being miserly doesn't make you go broke. In the 70s, we spent to our hearts delight, was it not Gowon that said then that he did not know what to do with our oil revenues. We had the Udorji awards, FESTAC 77, e.t.c

By the 80s when oil prices crashed, we became bankrupt and had to resort to the IMF as we were shut out by other lenders. In an ironic twist, like someone who blames the fire service for fires, we blamed the IMF for our being bankrupt.

Try this thought experiment, if you lend money, is it in your interest that the people who borrow from you suffer hardship? You want your money back and that's only possible if your borrowers are successful.

Now, I know you're going say that a lender has a vested interest in keeping countries borrowing. Even using that line of reasoning, economically developed countries borrow more not less. The US, the king of all borrowers, owes 15 trillion dollars in sovereign debt. So even if the IMF wants us to keep borrowing, it is in their interest that we keep growing wealthier so that our lending needs will be more.

Nigeria is not Kuwait. Kuwait is a country of 3.5m people that produces 2.8m barrels a day. Nigeria is a country of 160m that produces about 2.2m barrels a day. We cannot by any stretch of the imagination afford the things Kuwait can. It is an apples to oranges comparison, same applies to many of the OPEC countries on that list.

dvee2:
Can anyone mention any country in the world were SAP/IMF/World bank policy work? Anywhere they go they leave the country impoverish and in hugh debt. A couple of years ago Argentina`s economy was bankrupt due to world bank policy. They have consistently tried to blackmail Malaysia to accept IMF policy by sponsoring former vice president Ahmed Ibrahim not until Malaysian Government under mahatir resisted them. Now ten years after Malaysian currency have been stable against the doller in ten years. 1 : 4.
If Malaysia have accepted their proposal their economy will have crumble by now.
Bottom line we must look inward and develop our economy base on our peculiarities not any world bank theorem. What IMF policy did china used? I believe in free market economy,but model from our own peculiarities. NO AMOUNT OF SUBSIDY OR DEREGULATION WILL SUCCEED IN NIGERIA IF WE DO NOT TACKLE CORRUPTION AND CUT ON GOVERNMENT EXCESSES.

This is nonsense. The IMF only lends money to countries who have so much debt that they are no longer able to raise money by any other means. The IMF is therefore a lender of last resort. Blaming the IMF for the state of its borrowers is like blaming the Fire Service for fires because every time you see a building on fire, you see the fire service close by.

More thinking and less of the blame game will help Nigerians.

Nigeria is not indebted to the IMF but is a shareholder of the IMF and is therefore a net creditor in its relationship with the IMF. As part of the IMF's role in ensuring global financial sustainability, it provides policy advice to all countries. See below advice provided to the US to cut spending.

"Directors [on the IMF board] highlighted the urgency of raising the federal debt ceiling and agreeing on the specifics of a comprehensive medium-term consolidation programme," the IMF said as part of its review of the US economy.

Clinton says she is sure Congress "will do the right thing"

It went on to call for specific actions to reduce spending - an area of intense debate between the Republicans and Democrats over how to cut the deficit.

http://www.bbc.co.uk/news/business-14282351

Same applies to Western countries. They have nothing to gain from subsidy removal. To the extent that deregulation will allow for market prices, we are more likely to have private investment in refineries which will cut our import bill. That's not going to be anytime soon until private investors are confident there will not be a reversal of the subsidy removal. No point in plonking close to a billion dollars building refineries only to be told you cannot recoup your investment as the price of your output will be fixed by Govt fiat.

It's funny, developed countries who have actually achieved economic development to first world status think our economic reforms are on the right path and Nigerians, a nation of peoples who have never achieved economic supremacy since human civilization claim the developed countries don't know anything.

I'm not a big fan of this Govt but if you have a clue about these issues, you will recognise that the economic reforms are necessary.

Why are there no strike actions when elections are stolen or against corruption but instead we have a strike called in response to the removal of an economically unjustifiable policy, fuel subsidy?

I have always noticed that the most boneheaded policy decisions - the Udorji awards, nationalisation of industries, fuel subsidy - elicit the most public support. It's almost evidence of Dr Lynn's work on IQ and the Wealth of Nations which shows that nations like Nigeria with relatively low IQs stay poor.

I have been on this forum for more than 5 years and seen thieving moguls like Peter Okocha, Adenuga and Otedola, who benefit from these Govt policies, praised to high heavens for their wealth yet as soon as there is a change of policy, it becomes a massive blow against the common man. And you wonder why this country is a hellhole.

Dr Know:
Taking deliverance too far!

What's that, the reverse cowboy position? Or is that a new interpretation of the missionary position, apt as it involves a missionary.

Presumably, Oyedepo travels to the UK and the US. He should try this public witch slapping abroad too. It's not only Nigerian based witches that deserve a beating.

It was not the slap that struck me, that Oyedepo is a charlatan and a shyster is obvious. It's the eruption in applause from the gullible congregation that I found telling about Nigerian society.

I remember a Catholic priest in Awka, Anambra State who was in the demon casting business. His MO was also 'beating' witches out of women. For some strange reason, it's mainly women who fall foul of this. Most of the congregation didn't seem to mind either.

Nigeria’s central bank devalued the naira and kept its benchmark interest rate unchanged for the first time this year to help support growth in Africa’s biggest oil producer.

The midpoint of the naira target band was lowered to 155 per dollar from 150, Governor Lamido Sanusi told reporters in the capital, Abuja, yesterday. The benchmark interest rate was left at a record 12 percent.

http://www.bloomberg.com/news/2011-11-21/nigeria-devalues-currency-holds-interest-rate-to-support-growth.html

Using foreign reserves to defend an overvalued currency is always a losing battle.

They are not building any refinery without deregulation. Please, don't raise your hopes.

This is old news, presumably dating back to 2008.

Jonathan, accompanied by his wife, Patience, and an official retinue ''of a cool 170 people!'' that wouldn't be out of place among the diamond-ear-studded homeboys who regularly surround rappers from, say, Harlem, fairly lit up Perth's Pan Pacific Hotel.
Gillard, who has been out of fortune in the polls of late, happily bathed in the infectious enthusiasm of Goodluck, Patience and their colleagues.

The above says 170!   All expenses met from the public purse I'm sure.

I agree with this thread. There's this myth that the military brought corruption to Nigeria. There has always been corruption in the old states that now make up modern Nigeria.

With modernisation, there is greater recognition of the menace of corruption and a desire, albeit hardly followed up with concrete action, to eradicate it. A classic example is corruption amongst political leaders. In the past, your average ruler operated with utter disregard of any idea of accountability to the general public. This is slightly changing. 

In some respect, the idea that a Governor or President should not enrich himself is alien to us as traditionally, such enrichment was taken as par for the course for a political leader.

Why are they holding a birthday party when they're supposed to be on an official engagement?

A delegation of 120! Are we launching a military invasion of Australia? Won't be surprised if this trip didn't cost less than half a billion Naira.

jmoore:
Subsidy works more for petrol, it is not even working for kerosene. The price of kerosene is still high.

The solution is to build more refineries, be it public or private. When we can satisfy our own demands without importing then we can get rid of the subsidies.

The private sector won't build refineries when they have no chance of recouping costs because fuel is sold below costs. Why do you think they haven't bothered?

The Govt could build refineries but this will be in addition to the 4 they already own and we know the Govt's record in respect of refineries.

kcjazz:
And who cut him down? By your posts, you are one of the Ghadaffi supporters and anti-west folks here. When you realize that Ghadaffi's protegee Blaise Compaore killed him then you will know about the harm the one you support has done to Africa.

You give him too much credit by expecting some coherence from him.