juman:


Try to check the countries external debt.
Borrowing is not bad.
Our problem is those greedy generals borrowed and stole everything. That became the culture in the country.

I think it is only children that reason in Good or Bad binaries

No one is saying borrowing is bad

What we are saying is let us debate Nigeria's situation

HOW MUCH can we afford to borrow

Or is there no limit ?


This is not about good or bad but analysis




If I earn 1000 naira a month how much can I afford to spend on debt servicing?
If I am already using 530 naira a month to service debt how much more can I afford?

A lot of people who are commenting here have no clue how debt financing works

It does not work in the same way as when you borrow from your friends and then you pay when you have money

NO

Once you borrow you have to start paying back almost immediately in instalments

e.g if you borrow 1000000 @ 9% over 10 years then every year you have to pay 158440 and 1584400 in total by completion

https://www.calculator.net/loan-calculator.html?cloanamount=1000000&cloanterm=10&cloantermmonth=0&cinterestrate=9&ccompound=monthly&cpayback=year&x=49&y=13#amortized-result


Therefore if your income LESS expenses is less that 158440 you CANNOT AFFORD the loan


It is a very simple actuarial operation to calculate what you can or cannot afford

The argument about what you think YOU NEED in terms of infrastructure is irrelevant what matters is what you can afford


This is called servicing

If you do not service your debt when due there are penalties and interest on the penalties

We have been there before in the 80s when we became clients of the IMF

some may be too young to know
It is not about whether borrowing is good or bad but can we service the debt and continue to meet other obligations

If government is transparent let them put all the facts in the public domain so we can all debate objectively

banio:
30 billion dollars !!!!.

What is our foreign reserve ?.

We should not take loan higher than 10% of our foreign reserve.

Guess we have taken loans already, which should amount to above 10% of our foreign reserve.

So Senate should think it well, because we are all in this shit together.

I think you are mixing things here

Foreign reserve is totally irrelevant

A lot of people make this mistake, too often quite understandably

Foreign reserves are NOT government funds rather they are CBN funds and so once again TOTALLY irrelevant to the loan decisio.

That is not to say that I agree with the loan but let us not mix things

The CBN is a Bank it has liabilities(debt) and assets. Among the liabilities of the CBN are ALL the Naira notes in circulation while foreign reserves are its assets. It is those assets that make the Naira to have value . Without assets then the Naira is just PAPER

so foreign reserves do not have any role in government spending They belong proportionately to all the creditors of the CBN which everyone holding naira in their pocket is

What is more relevant to the loan decision is Government revenue, existing government debt and expenditure

I have no clue where you get the 10% of foreign reserve as a relevant variable driving borrowing decision

0monnak0da:

I think you are mixing things here

Foreign reserve is totally irrelevant

A lot of people make this mistake, too often quite understandably

Foreign reserves are NOT government funds rather they are CBN funds and so once again TOTALLY irrelevant to the loan decisio.

That is not to say that I agree with the loan but let us not mix things

The CBN is a Bank it has liabilities(debt) and assets. Among the liabilities of the CBN are ALL the Naira notes in circulation while foreign reserves are its assets. It is those assets that make the Naira to have value . Without assets then the Naira is just PAPER

so foreign reserves do not have any role in government spending They belong proportionately to all the creditors of the CBN which everyone holding naira in their pocket is

What is more relevant to the loan decision is Government revenue, existing government debt and expenditure

I have no clue where you get the 10% of foreign reserve as a relevant variable driving borrowing decision

Where are foreign reserves stored in ?

urahara:


Where are foreign reserves stored in ?

Warehouse
Guy leave matter

stick to what you know let us not derail the thread

Foreign reserves are not government money that is all that matters ,they have no role in fiscal activities

0monnak0da:

Warehouse
Guy leave matter

stick to what you know let us not derail the thread

Foreign reserves are not government money that is all that matters ,they have no role in fiscal activities

I'm only trying to learn , not to start an argument

Good analysis, but it still boils down on my point.
If we disagree to implement as posited, what the hell are we then talking about?

grandstar:


You will be recolonized by the IMF by giving you a bitter pill to swallow. The pill is good for you. It will help you tackle the outcome of your excesses such as borrowing $30b senselessly.

End petrol subsidies and deregulate the price, you no gree. This would have saved the country over 500b a year. It would also have led to an investment boom in the downstream sector with investors rushing to build refineries.

Reduce the size of the bloated civil service to cut recurrent spending and waste, you no gree. Now you're saddled with paying 30,000 minimum wage to those you refuse to sack. I'm sure if he had sacked workers, paying this new minimum wage wouldn't be as costly as it is now for the government.

Sell the refineries and not waste money repairing them. You no gree. Instead, you pumped 100's of millions of dollars or even over $1b with nothing to show for it. Kachikwu was simply saying nonsense to you so you ignored the stupid man.

End the disparity in exchange rates in the forex market where a group of guys buy at N305 in a certain market and others buy at the exporters' forex window at 360. Lamido Sanusi has been screaming the house down that you are simply encouraging corruption where well-connected people can buy at 305 and sell at 360 or what is known as roundtripping. That N55 difference if multiplied by $15bn will give you about 750billion loss that the country, more especially the 3 tiers of government is losing each year from this nonsense.

If Buhari had just listened to sound advice from day one, it could have improved federal government finances by about a N1.5trillion a year. That is over $4billion yearly, close to 1% of GDP.

It is not enough to just type shit when you do not have a debate to support your inadequacies else, you are more foolish

stormborn28:
foolish talk

urahara:


I'm only trying to learn , not to start an argument

Learning is not cheap, it costs money.


you need a paradigm shift from the idea that money can be "stored" and about what money really is.
When you do a transfer with your phone or a POS transaction where is the money stored?

Money nowadays is essentially a binary i.e a debt and a credit (two side which cancel each other out

which is enforceable by law, treaty etc. Very soon all money may be electronic with no paper at all . I think you really need to grasp that concept properly.#
The bank notes we carry around in our pockets create the illusion that money is a physical thing .
It is not. Those notes are simply a contract and they only have value if the issuer has Assets that back them up

Those assets in the case of the CBN may include similar notes or PAPER from other issuers, foreigh reserves

SO IF GOVERNMENT SPENDS FOREIGN RESERVES IT IS EFFECTIVELY PUTTING ITS HANDS INTO THE POCKETS OF ANYONE HOLDING NAIRA THE REAL OWNERS OF THE RESERVES

If you buy Treasury bills of the CBN that is money. In the same way the CBN may buy similar instruments from other jurisdictions and so that is one way of "STORING" foreign reserves

The key issue is that there is confidence in the instrument and it is legally enforceable so the question of "storing " it should not arise it is not rice or cement

Kuginzi:

A bad tree does not yield good fruits, you're from a bad lineage that's why u behave like a miscreant

You literally have no lineage, best is you can trace your lineage to a who.re house where your mother worked.

sulaak:


First, ask the wise man how Nigeria has utilised the $88 billion debt that they now own.

Wouldn't it be wise to cut outgoing costs like ex-governors pension, consumption import bills such as fuel and food imports and increase export productivity than take more loans that Nigeria can't manage?


If Nigeria is to take any loan it should be directed at the power industry only.

Mr Wailer, your $88b debt is fake. Go to the Debt Management Office website and stop misleading yourself and others.

General0847:

You literally have no lineage, best is you can trace your lineage to a who.re house where your mother worked.

I'm sorry, you've wasted your time writing meaningless comment. Pls try & improve on your comments for easy assimilation

Kuginzi:

I'm sorry, you've wasted your time writing meaningless comment. Pls try & improve on your comments for easy assimilation

The thing is your pea-sized brain cannot generate enough power for you to assimilate anything meaningful. You're mentally disabled.

General0847:

The thing is your pea-sized brain cannot generate enough power for you to assimilate anything meaningful. You're mentally disabled.

You're diagnosed with brain cancer plus severe mental disorder. Pls visit your psychiatrist

Pusyiter:
It is not enough to just type shit when you do not have a debate to support your inadequacies else, you are more foolish

the loan ($1billion) that was taken to fight Boko Haram by this government, how far was it used? I believe private pockets... How do you trust a government that can not guarantee judicious use of our common wealth... So I don't see any reason why that loan should be granted by Senate.... The useless government should rely on what it could generate simple

Sirjamo:
No power, no rail, no clean water, inefficient housing, miserable health care, roads are death trap, social service is non - existent, education in comatose, industries are dead, security is in limbo.... If we do not borrow, where are we suppose to find the money to fix all these?

What I think the Senate should do is to make sure that the loans are used to execute developmental projects that have the capacity to impact our lives and also have the potential to raise revenue so that we can be able to quickly pay back.

How many years do you need to live in nigeria to know that less that less than 40% of that amount will actually be utilized in the real sense of the word?

what the government needs to do if they are truly willing to upgrade the infrastructure level is to get the lenders to build the infrastructures themselves. That way, no nigerian will have access to the funds. We shall only supervise to ensure that all the projects meet the specifications. Anything other than that is just wickedness on the part of the buhari and his henchmen.

See, support get levels. This buhari you people are supporting up and down the whole place has lived long enough, and if he dies today, he wouldn't have been shortchanged by God. If he continues on this path, you and i that will be here long after he has gone will be suffering needlessly for it.

That is my point also.....

stormborn28:
the loan ($1billion) that was taken to fight Boko Haram by this government, how far was it used? I believe private pockets... How do you trust a government that can not guarantee judicious use of our common wealth... So I don't see any reason why that loan should be granted by Senate.... The useless government should rely on what it could generate simple

Kuginzi:

You're diagnosed with brain cancer plus severe mental disorder. Pls visit your psychiatrist

Child fiddler, your days as a paedophile are numbered.

"Nigeria's debt to GDP ratio is one of the lowest in the world at 30.05%."

This metric is meant for developed countries and developing countries with the right economic and political foundation - not Nigeria with no political or economic direction.

Eteka1:
The loan is meant for major infrastructural development like roads, power, rail, bridges etc. There is nothing wrong in that. Nigeria's debt to GDP ratio is one of the lowest in the world at 30.05%.

dante0147:


Honestly to say you are the most foolish person is an understatement in fact you are the most stupid, gullible, myopic, brainless, nonentity individual in this whole wide world ! Yes You!!! I am not talking to the handle I am talking to the person behind this nairaland handle which is YOU !!! For you to type this rubbish shows you are not only mad but also suffering from Naegleria fowleri that’s if you even know what it means! So you are comparing a company to a country ! Even at that if a
Company keeps on borrowing without paying back how do you think it would grow... besides an administration that met $10.2 Billion in debt from the past administration which were in power for 16years and now debt has doubled within a period of 4 years and still they wanna borrow more with nothing to show for it... I don’t think you know anything about managing finances... You haven’t seen it all !

your father is a fool, all developed countries borrow for infrastructure

Formularcr7:
your father is a fool, all developed countries borrow for infrastructure

From 2019 till now you never still get sense… You foolish hungry waif… Your father should have saved him self the embarrassment of having a destitute like you with only one condom all this unnecessary stress won’t arise…