During an interview with Arise TV, the IMF rep for Nigeria said that "a lot of the focus" on ending the free fall of the naira "should also happen on the supply of naira, not only on the supply of foreign exchange". He said that there is a need to "tighten monetary policy; to take liquidity out of the system."
He said, "there are too many nairas chasing yet too few dollars. As I have alluded before, in previous conversations. It is very important to reduce the amount of nairas, reduce the growth rate of money supply domestically in Nigeria."
"In parallel also, fiscal policies should cease to rely on the Ways & Means."
"All the operations of the central bank that are not conducive to reigning in liquidity, phasing out financing of the fiscal deficit of the government, focusing on price stability, tightening monetary policy is going to be needed."
"It's costly - it doesn't come without a price, but it's a price worth paying."
Recall that Sanusi said the same thing and Bismarck Rewane has been calling for monetary tightening for years.
This is precisely what I have been saying on here for years now - it's absurd to expect the Naira to be "strong" against the US Dollar while turning a blind eye to runaway domestic inflation. Ignorant people look at the nominal CBN interest rate and claim that it's already too high, even though in real terms it is actually highly negative, and then they act surprised that holders of foreign currency would rather park their savings in low-risk countries where the real interest rate is much closer to zero than it is in Nigeria.
The first thing a truly competent and independent CBN governor would do on assuming office would be to end this nonsense, by hiking rates high enough to make them positive in real terms. This would both help to reign in domestic consumption while drawing in the foreign money needed to make up the shortfall in domestic taxation. The downside is that the economic pain would be intense initially, but better that than allowing Nigeria to turn into the new Argentina, which has consistently slid down the economic rankings over the decades because government after government has sought short-cuts and "palliatives" to shield the populace from economic reality.
FireUpNow: Some have piles of naira in bullion vans in their homes
Exactly. Someone was rumored to have warehoused 150b, another 100b, 75b etc. All for the elections. That was the reason Emefiele reacted with the new notes. They went to court screaming blue murder, not for the populace, but for selfish interest. After they entered office, what do you think will happen to all those naira notes in the warehouse? They now control the central bank. Of course all that money will be changed to dollars for easy handling, storage and movement overseas! Trillions of warehouse naira will definately crash the value of naira as there will be plenty naira chasing limited dollars!
Seun: Because the official market cannot serve all the people who want dollars.
Actually, it could serve all of them. The real issue is that, given Nigeria's galloping inflation with no end in sight, the rate at which supply would meet demand would be so high that it would be deeply politically embarassing.
An aspect of uncontrolled inflation that Nigerians tend to overlook is that rational market participants will bake inflation expectations for the future into their forward contracts, which means that if the spot price for $USD is, say N1000, while inflation has been running at 20% for the last year, anyone with sense will plan on the basis of next year's rate being 1 $USD to N1,200 (and N1,440 two years on), and today's prices will be adjusted accordingly to account for this. Exchange rates are therefore not just about how much USD the CBN currently holds in reserves as against the amount of Naira in current circulation.
Talking to daft people you don't need a degree in economics to know basic supply and demand because it is stupidity to make terrible policies and increase minimum wage but no everybody wants to be a leader how can you have an influx of naira domestically it will damage the integrity of naira but citizens can't be penniless hence watch your policies think you are making decision for millions of people
Exactly. Someone was rumored to have warehoused 150b, another 100b, 75b etc. All for the elections. That was the reason Emefiele reacted with the new notes. They went to court screaming blue murder, not for the populace, but for selfish interest. After they entered office, what do you think will happen to all those naira notes in the warehouse? They now control the central bank. Of course all that money will be changed to dollars for easy handling, storage and movement overseas! Trillions of warehouse naira will definately crash the value of naira as there will be plenty naira chasing limited dollars!
RepoMan007: simple, CBN can not meet all forex needs and wish the rates were lower for Naira. Private individuals who have it in limited quantity offer to sell at higher prices than CBN's artificially low rates, as times goes and demand surges, the selling rates rises according the dictates of demand-prices-supply forces. You don't fix the price of what you do not own. In the case of petrol, they could fix prices, because they bought from importers then resold to masses at lower rates.
Then why don’t we just ban the black market and force everyone to sell and buy via the banks?
Lol. Indeed You seem to have forgotten your claim of selling NNPC assets for capital to run the economy
No I did not. I also did not forget the asset based capitalization of the MoF either. All will happen. Let's wait for the political hoopla to die down as it will in a month or so.
No I did not. I also did not forget the asset based capitalization of the MoF either. All will happen. Let's wait for the political hoopla to die down as it will in a month or so.
Ok. We wait But policy somersault does not inspire confidence
iCauseTrouble: I am so happy that I am lucky to be earning in dollars. I have been supporting a project annually with 1 million naira since 2021. In 2021, I exchanged $1,820 for 1 million naira at the rate of N550. In 2022, I exchanged $1,388 for 1 million naira at the rate of N720. In 2023 (Just yesterday), I exchanged $1,000 for 1 million naira at the rate of N1000. These people are happy that I am a loyal funder of the project by giving 1 million naira yearly but they do not know that the value of the money has really dropped due to the Naira / Dollar exchange rate. I just smile each year when I am about to donate
It's not importation that's making us lazy, it's government policies, lack of a manufacturing base, lack of critical infrastructure and lack of benign fiscal and monetary policy that making us lazy. You cannot be hard working with an official interest rate of 19% (actual interest rate is about 28%). And to make matters worse the banks will start demanding repayment the very month you took the loan, and the longest term you for repayment is 24 months. In 24 months most legitimate businesses have not started turning up a profit. If a bank borrows you N10 million and expects you to pay back with interest within one year, the best option is trading - trading imported goods.
Also corruption by government agencies and multiple taxation is a huge disincentive to manufacturing.
Then there is the almighty NEPA (power), you cannot manufacture profitably (in comparison to importation) when petrol is N600, diesel is N850.
You could have some points. Even if government hands down to us all those you mentioned, Nigerians still won’t patronize home made products. You don’t know the level of degeneration things have gone.
I beige we can still tame and reverse the ills of we look inward.
Go and read about how Japan was able to conquer something similar to this and became world power today. Also read how Cuba has able to survive through all sanctions meted to her by western powers. Today, Cuba is majorly self-reliant.
I repeat: Nigerians are getting lazy by the day. The earlier we sit up and start managing the little we have to produce little by little, the earlier we will get out of this mess.
Go towards Apapa and fly drone from there through Iganmu, Ijora, Costain, Eric Moore, Alaba Festac, Isolo, Oshodi, Tradefair towards Agbara etc Everywhere is filled with shipping containers. 95% of things in those containers are junks that’s we can manufacture locally here even with the little electricity we have and the high interest rates you mentioned.
But when Emefiele implemented cashless policy we all hurled insults at him. He was right after all.
How was he right? Did he consider the timing? He was there for 8 years + but decided to go full out cashless Few weeks/months to General elections and gave a non realistic timeline. Don't forget, cashless infrastructure was tested during the period and it was obvious we were not ready.
printing trillions of naira out of thin air with no backing production to distribute to APC party faithful, constituency fund, trader money, cbn agric intervention, abuja budget for useless parastatals, security vote, subsidy palliative, COVID palliative monkeys
impoverishing people and answering central bank
Look at the evil criminals in power, APC and thiefiniubui
naira should trade closer to 2000/$ in 2024
Nigeria should go back to parliamentary system of government and become a productive economy.
Let the Naira Crash. Nigerians say they are mad, they must eat foreign food, wear foreign clothes, must use foreign hair.... The market is the ultimate tool for behavioral change, as the Naira continues to crash and imports become more exspensive, people will be FORCED to change their consumption pattens.
Datedoboy: I had mentioned it in my previous post that it will get to NGN1,000 per Usd if drastic measures are not taken.
Again, I am saying it here that it will get to 2,000 before 2025 if we don't take these drastic measures.
These measures will make the Naira appreciate to at most NGN500 to a dollar in the short term and in the long term, NGN100
What are these measures? I will explain further but note that this is not about Exports. Even if we export more than China today, the NGN will still decline further. How do i know this?
If you do your research, you will discover that Nigeria as at 2023, exported and earned more FX more than several countries and yet the currencies of these countries are stronger than the Naira.
So don't let anyone sell the idea that our economy is import dependent that is why our currency is falling. Even if we ban all imports and continue with (or increase) our current export, the Naira won't appreciate
A simple question you can answer is, when we banned rice importation, did our currency stop falling? No !!! So sit back as we take a dive to 4 policies which WILL make the Naira appreciate.
1. All domiciliary accounts must be closed. Can a Canadian or US bank open Naira account for you? No! So why do we open Dom. Accounts for our citizens ? Now you may say what of imports? How do we pay for our goods in foreign currencies?
The answer is simple. Credit your account in Naira while your bank pays the USD or GBP equivalent on your behalf at official rate determined by CBN
2. Ban deposits and withdrawals in foreign currencies and convert all inflows including export proceeds in foreign currencies to Naira (again at official rate determined by CBN).
You don't need to stop people who sell at black market or hoard the USD. Let those who hoard the dollar keep it but once they know that after a said date, you can't deposit or hold your physical dollar, they will be forced to go to the bank to deposit it. Anyone found with physical hard currencies after the deadline, must be arrested
This policy alone will make the NGN appreciate to maximum of NGN600 after first two weeks of implementation and will mop up hidden/excess dollar in the system.
This policy will also discourage buying usd from the black market because there won't be any physical dollar to buy.
3. Increase interest rate for fixed Naira deposits to a minimum of 10%. This will encourage saving in Nigeria. Let a Naira 4 Naira scheme, replace the previous Naira 4 dollar scheme.
4. Increase interest rates on foreign currency deposits to 40% of principal amount if option 1 is not possible and convert all inflows to NGN without the option of collecting foreign currencies at the counter. You can't spend USD or GBP in Nigeria so why do you want to collect your inflows in foreign currencies? This policy indirectly stops the black market arbitrage.
As the Government has floated the Naira, if these measures are not put in place, NGN2,000 to a dollar won't be surprising to me.
I am just a concerned Nigerian and i am open to constructive criticism.
I get your point but when i said Dom account, i had the USD , GBP, CAD in mind because we don't trade in cedis.
Second, we don't need to earn dollars for a trade to occur in usd. Countries that earn less than Nigeria in FX still trade in USD
There is a global FX market where banks can purchase usd with NGN at official rate. All we need is have a stable official rate
There is a currency market different from the local black market and in fact virtual dollar is what we need not physical USD and the banks will reconcile their nostro and vostro accounts.
If the NGN is stable, foreign investors will come. For instance, imagine a foreigner invest 1usd in Nigeria when usd was 700, he converts this usd to NGN to run the business and he makes 100NGN as profit. Only for him to convert his 800NGN(capital+profit) back to USD when he wants to repatriate his funds and his 800NGN is currently not up to his initial investment of 1usd how will he come again.
Only people that send and receive diaspora remittance or people who save their monies in USD will be happy with this constant increase in Naira.
Real foreign investors who have industries to set up, will be pissed off.
Let me answer your first question. The bank don't need to get any physical dollar. There is an international OTC FX market. The banks collect your Naira and buy dollar at that international rate and create an escrow account for your trade. Why do we have 2 rates?
Floating the Naira with a parallel market more active than before and allowing deposit and withdrawals of hard currencies is a recipe for disaster. We will head to NGN1500 per dollar soon
Let me tell you even if we stop importing fuel and all refineries are working, Naira won't go back to NGN 100 per dollar as long as we don't close these loopholes and do away with the parallel(black) market .
If u want to buy a product from china why will our banks convert to usd first ? Isn't it madness ? So many loopholes but some are dangerous due to neo colonialism to avoid sanctions but let's deal with these issues internally first. In summary, the purchase and sales of USD and all foreign currencies must be unattractive internally first if we want the Naira to appreciate
The politicians are semi-slaves so they will continue to do what I:m:f and wo:rld b:ank says.
It doesn't matter what Nigeria does..
What you need know is money ( currency ) is the new form of slavery so the exchange rate cannot get better in Nigeria's favor.
Datedoboy: I had mentioned it in my previous post that it will get to NGN1,000 per Usd if drastic measures are not taken.
Again, I am saying it here that it will get to 2,000 before 2025 if we don't take these drastic measures.
I have been saying this for the past 20 years, as long as we're persist in following IMF already discredited policies of floating our currency, removal of subsidies and opening of our ports, the naira will continue to fall ad-infinitum.
These measures will make the Naira appreciate to at most NGN500 to a dollar in the short term and in the long term, NGN100
The Naira can never fall back to N100, even N500 is a difficult task, unless we take the Ghanaian route of re-denomination.
What are these measures? I will explain further but note that this is not about Exports. Even if we export more than China today, the NGN will still decline further. How do i know this?
It's about the balance between exports imports. Either we reduce imports or increase exports. That's the only way to stabilise the Naira.
If you do your research, you will discover that Nigeria as at 2023, exported and earned more FX more than several countries and yet the currencies of these countries are stronger than the Naira.
Giving our ballooning population, we also imported more and earned less in real terms more than all those countries put together.
So don't let anyone sell the idea that our economy is import dependent that is why our currency is falling. Even if we ban all imports and continue with (or increase) our current export, the Naira won't appreciate
If we manufacture all or most of our goods and rely less on imported goods like we did throughout the 1970s, what will we dollars for? Who will buy dollars even at N100 to $1?
A simple question you can answer is, when we banned rice importation, did our currency stop falling? No !!! So sit back as we take a dive to 4 policies which WILL make the Naira appreciate.
That was because rice consumes a tiny part of dollar demand. Fuels - Petrol, diesel and aviation fuel consumes a substantial part of our dollar demand. Other food items like dairy, flour, fish, etc consumes more dollars than rice. Besides, rice was still bring smuggled through the land borders using CFA franc.
1. All domiciliary accounts must be closed. Can a Canadian or US bank open Naira account for you? No! So why do we open Dom. Accounts for our citizens ? Now you may say what of imports? How do we pay for our goods in foreign currencies?
The answer is simple. Credit your account in Naira while your bank pays the USD or GBP equivalent on your behalf at official rate determined by CBN
2. Ban deposits and withdrawals in foreign currencies and convert all inflows including export proceeds in foreign currencies to Naira (again at official rate determined by CBN).
You don't need to stop people who sell at black market or hoard the USD. Let those who hoard the dollar keep it but once they know that after a said date, you can't deposit or hold your physical dollar, they will be forced to go to the bank to deposit it. Anyone found with physical hard currencies after the deadline, must be arrested
This policy alone will make the NGN appreciate to maximum of NGN600 after first two weeks of implementation and will mop up hidden/excess dollar in the system.
This policy will also discourage buying usd from the black market because there won't be any physical dollar to buy.
3. Increase interest rate for fixed Naira deposits to a minimum of 10%. This will encourage saving in Nigeria. Let a Naira 4 Naira scheme, replace the previous Naira 4 dollar scheme.
4. Increase interest rates on foreign currency deposits to 40% of principal amount if option 1 is not possible and convert all inflows to NGN without the option of collecting foreign currencies at the counter. You can't spend USD or GBP in Nigeria so why do you want to collect your inflows in foreign currencies? This policy indirectly stops the black market arbitrage.
As the Government has floated the Naira, if these measures are not put in place, NGN2,000 to a dollar won't be surprising to me.
I am just a concerned Nigerian and i am open to constructive criticism.
All these are just palliative, ointment to treat a gangrene infection. The only remedy is manufacturing. Need to building a manufacturing base fast. We need to start learning to converting primary agricultural goods to manufactured items for local consumption. We need to start converting our raw materials and natural resources to finished goods. We need to start turning cotton to fabrics, ponmo to shoes, cocoa to chocolate. That was how the industrialised world was able to defeat poverty. That was how Asian countries like China, Taiwan, Malaysia and even Vietnam were able to banish poverty. Not through juju, not through fasting and prayers, not even through portfolio investments, but through industrialisation.
This is precisely what I have been saying on here for years now - it's absurd to expect the Naira to be "strong" against the US Dollar while turning a blind eye to runaway domestic inflation. Ignorant people look at the nominal CBN interest rate and claim that it's already too high, even though in real terms it is actually highly negative, and then they act surprised that holders of foreign currency would rather park their savings in low-risk countries where the real interest rate is much closer to zero than it is in Nigeria.
The first thing a truly competent and independent CBN governor would do on assuming office would be to end this nonsense, by hiking rates high enough to make them positive in real terms. This would both help to reign in domestic consumption while drawing in the foreign money needed to make up the shortfall in domestic taxation. The downside is that the economic pain would be intense initially, but better that than allowing Nigeria to turn into the new Argentina, which has consistently slid down the economic rankings over the decades because government after government has sought short-cuts and "palliatives" to shield the populace from economic reality.
What made the second largest rice cultivator in Nigeria stop cultivating and thereby increased the need to import rice with scarce forex?
Go and be productive and stop rationalizing inconsequential textbook concepts. Fact doesn't always connote sense being made. Wisdom is the better application of knowledge oga Festus.
I have been saying this for the past 20 years, as long as we're persist in following IMF already discredited policies of floating our currency, removal of subsidies and opening of our ports, the naira will continue to fall ad-infinitum.
The Naira can never fall back to N100, even N500 is a difficult task, unless we take the Ghanaian route of re-denomination.
It's about the balance between exports imports. Either we reduce imports or increase exports. That's the only way to stabilise the Naira.
Giving our ballooning population, we also imported more and earned less in real terms more than all those countries put together.
If we manufacture all or most of our goods and rely less on imported goods like we did throughout the 1970s, what will we dollars for? Who will buy dollars even at N100 to $1?
That was because rice consumes a tiny part of dollar demand. Fuels - Petrol, diesel and aviation fuel consumes a substantial part of our dollar demand. Other food items like dairy, flour, fish, etc consumes more dollars than rice. Besides, rice was still bring smuggled through the land borders using CFA franc.
All these are just palliative, ointment to treat a gangrene infection. The only remedy is manufacturing. Need to building a manufacturing base fast. We need to start learning to converting primary agricultural goods to manufactured items for local consumption. We need to start converting our raw materials and natural resources to finished goods. We need to start turning cotton to fabrics, ponmo to shoes, cocoa to chocolate. That was how the industrialised world was able to defeat poverty. That was how Asian countries like China, Taiwan, Malaysia and even Vietnam were able to banish poverty. Not through juju, not through fasting and prayers, not even through portfolio investments, but through industrialisation.
You referred to IMF policies as discredited, yet it is rejection of many of these policies that has left the country bankrupt and its foreign reserves empty. That means you fully support Buhari's policies.
Buhari's first act upon becoming president was to fix the Naira exchange rate. He ended the flexible exchange rate policy he met. By August 2015, Nigerian Letters of Credit were no longer honoured internationally as they could not be backed by foreign exchange. Severe fx scarcity had begun.
Buhari's refusal to end petrol subsidies very early in his tenure (January 2016) was one of the biggest reasons for the huge debt the country has today. I won't be surprised if 30-50% of the debt hanging over the nation today is due to the fuel subsidies. Buhari was also subsidizing FX by selling it below its market value and short-changing itself.
So, let's assume in May 2023, $1-440 at the official rate while the parallel market was 750.
So, if government earned $1bn in revenue, it would get only N440B rather than N750BN, short-changing itself of N310b in just one month or over 3.6tr in a year! And yet you praise these subsidies?
Government borrows money to pay for these subsidies. It even went as far as compelling the CBN to print money to finance these subsidies through Ways and Means.
When government is borrowing excessively, do you realise it crowds outs the private sector? Banks will prefer to lend to the government than to the private sector. Next, you'll be complaining that banks don't like giving loans.
The truth about the IMF is that if you really implement their policies, they lose you as their candidate.
IMF is run by technocrats. They aren't politicians who tell you what you want to hear. For your information, even developed nations have been its candidate- UK and Ireland. Both paid back their loans as soon as possible so that they could get the IMF off their necks.
What the IMF will tell you is the same thing Okonjo Iweala and Charles Soludo will tell you. There's no difference
1. Float your currency and make the value market reflective at all times. 2. Cut or end subsidies. (they are wasteful, corrupt and very inefficient, create distortions in the economy and many times, discourage investment.) 3. Slash a bloated civil service, cut it too size. 4. Maintain a balanced budget or low budget deficits. 5. Increase taxes if necessary in order to balance the budget or to keep the deficit small. 6. Privatize all public companies or close them down (this will save money) 7. And many more
No country with these policies will ever approach the IMF, and even if they did, they'll not be there for too long.
Now that the world is entering a recession, how many African countries have approached the IMF for a bailout? I can't think of one.
If I have any grouse against the IMF, is that they should focus less on austerity measures more on rapid economic growth. That is where national governments can come in. Appoint competent economist to steer their economies into fast economic growth.
You referred to IMF policies as discredited, yet it is rejection of many of these policies that has left the country bankrupt and its foreign reserves empty. That means you fully support Buhari's policies.
Buhari's first act upon becoming president was to fix the Naira exchange rate. He ended the flexible exchange rate policy he met. By August 2015, Nigerian Letters of Credit were no longer honoured internationally as they could not be backed by foreign exchange. Severe fx scarcity had begun.
Buhari's refusal to end petrol subsidies very early in his tenure (January 2016) was one of the biggest reasons for the huge debt the country has today. I won't be surprised if 30-50% of the debt hanging over the nation today is due to the fuel subsidies. Buhari was also subsidizing FX by selling it below its market value and short-changing itself.
So, let's assume in May 2023, $1-440 at the official rate while the parallel market was 750.
So, if government earned $1bn in revenue, it would get only N440B rather than N750BN, short-changing itself of N310b in just one month or over 3.6tr in a year! And yet you praise these subsidies?
Government borrows money to pay for these subsidies. It even went as far as compelling the CBN to print money to finance these subsidies through Ways and Means.
When government is borrowing excessively, do you realise it crowds outs the private sector? Banks will prefer to lend to the government than to the private sector. Next, you'll be complaining that banks don't like giving loans.
The truth about the IMF is that if you really implement their policies, they lose you as their candidate.
IMF is run by technocrats. They aren't politicians who tell you what you want to hear. For your information, even developed nations have been its candidate- UK and Ireland. Both paid back their loans as soon as possible so that they could get the IMF off their necks.
What the IMF will tell you is the same thing Okonjo Iweala and Charles Soludo will tell you. There's no difference
1. Float your currency and make the value market reflective at all times. 2. Cut or end subsidies. (they are wasteful, corrupt and very inefficient, create distortions in the economy and many times, discourage investment.) 3. Slash a bloated civil service, cut it too size. 4. Maintain a balanced budget or low budget deficits. 5. Increase taxes if necessary in order to balance the budget or to keep the deficit small. 6. Privatize all public companies or close them down (this will save money) 7. And many more
No country with these policies will ever approach the IMF, and even if they did, they'll not be there for too long.
Now that the world is entering a recession, how many African countries have approached the IMF for a bailout? I can't think of one.
If I have any grouse against the IMF, is that they focus more on austerity than on rapid economic growth. That is where national governments can come in. Appoint competent economist to steer your economy into fast economic growth.
I like reading anything you post. That's because I see truths in your posts.
My only problem with your posts is when you talk about tax. It's as if you're not on ground in the country.
The government itself won't even want any clear tax system. It's illegally collected.
Do you know how much those like us whose businesses requires the transportation of goods pay just to get our wares to their destination.?
I was forced to follow my driver to Apapa to get my goods one day. For i thought the man was playing me. Could you imagine, as early as 4-5am that we left my place, these Tinubu boys and some soldiers are already on road for collections. While returning, we paid for various tickets and NPF later collected their own. Now, I pay a uniformed man to regularly escort the vehicle but hey, that one no concern Tinubu boys, their money is their money. So the uniformed man only saves us from NPF, VIO or FRSC and their unending wahala..
Even in places where there's a toll gate, after paying at the toll gate, before a km, Tinubu boys will be there to collect again.
How can you like the government continue saying lies that we don't pay tax? Even the hawkers of gala and pure water pay something. The road side market woman pays too.
Stop this tax talk brother. The government should have a clear tax system and combat all the corrupt practices they started.
With the extent it has gotten to, it'll take serious work to do that. Not with how powerful these illegal tax collectors have become.
Na my own I talk so. We pay tax, but it's illegally collected by our government, hence the revenues gotten from those collections are pocketed. Else, how do you explain the abysmal condition of our roads plus all the collections everywhere in the country?
That's why I'm even against Obi too as he was once a governor. He took his share from such collections and nothing as usual was done with it.
I don too talk. My goods dey road and I dey house dey drink..
I like reading anything you post. That's because I see truths in your posts.
My only problem with your posts is when you talk about tax. It's as if you're not on ground in the country.
The government itself won't even want any clear tax system. It's illegally collected.
Do you know how much those like us whose businesses requires the transportation of goods pay just to get our wares to their destination.?
I was forced to follow my driver to Apapa to get my goods one day. For i thought the man was playing me. Could you imagine, as early as 4-5am that we left my place, these Tinubu boys and some soldiers are already on road for collections. While returning, we paid for various tickets and NPF later collected their own. Now, I pay a uniformed man to regularly escort the vehicle but hey, that one no concern Tinubu boys, their money is their money. So the uniformed man only saves us from NPF, VIO or FRSC and their unending wahala..
Even in places where there's a toll gate, after paying at the toll gate, before a km, Tinubu boys will be there to collect again.
How can you like the government continue saying lies that we don't pay tax? Even the hawkers of gala and pure water pay something. The road side market woman pays too.
Stop this tax talk brother. The government should have a clear tax system and combat all the corrupt practices they started.
With the extent it has gotten to, it'll take serious work to do that. Not with how powerful these illegal tax collectors have become.
Na my own I talk so. We pay tax, but it's illegally collected by our government, hence the revenues gotten from those collections are pocketed. Else, how do you explain the abysmal condition of our roads plus all the collections everywhere in the country?
That's why I'm even against Obi too as he was once a governor. He took his share from such collections and nothing as usual was done with it.
I don too talk. My goods dey road and I dey house dey drink..
Smh
The new tax Czar has recommended the slashing of Nigeria's myriad of taxes from 52 to 10 or so. So, there's positive light in that direction.
Also, I am a fan of low taxation. Low corporate taxes can turbocharge growth. Company tax in Nigeria should not be more than 15% max. It was such low taxes that transformed Ireland and Hong Kong into the rich principalities they are today. It is also working its magic in Central Europe where corporate tax can be as low as 9% (Hungary)
Lower corporate taxes does not mean less revenue. In India, it was discovered anytime taxes were reduced, higher revenues were collected. This was because tax payment compliance increased. Presently, I doubt up to 1% of companies in Nigeria pay the 32% (2% education tax inclusive). If reduced to 15% or less, it would lead to massive compliance and boost revenues.
You referred to IMF policies as discredited, yet it is rejection of many of these policies that has left the country bankrupt and its foreign reserves empty. That means you fully support Buhari's policies.
Buhari's first act upon becoming president was to fix the Naira exchange rate. He ended the flexible exchange rate policy he met. By August 2015, Nigerian Letters of Credit were no longer honoured internationally as they could not be backed by foreign exchange. Severe fx scarcity had begun.
Buhari's refusal to end petrol subsidies very early in his tenure (January 2016) was one of the biggest reasons for the huge debt the country has today. I won't be surprised if 30-50% of the debt hanging over the nation today is due to the fuel subsidies. Buhari was also subsidizing FX by selling it below its market value and short-changing itself.
So, let's assume in May 2023, $1-440 at the official rate while the parallel market was 750.
So, if government earned $1bn in revenue, it would get only N440B rather than N750BN, short-changing itself of N310b in just one month or over 3.6tr in a year! And yet you praise these subsidies?
Government borrows money to pay for these subsidies. It even went as far as compelling the CBN to print money to finance these subsidies through Ways and Means.
When government is borrowing excessively, do you realise it crowds outs the private sector? Banks will prefer to lend to the government than to the private sector. Next, you'll be complaining that banks don't like giving loans.
The truth about the IMF is that if you really implement their policies, they lose you as their candidate.
IMF is run by technocrats. They aren't politicians who tell you what you want to hear. For your information, even developed nations have been its candidate- UK and Ireland. Both paid back their loans as soon as possible so that they could get the IMF off their necks.
What the IMF will tell you is the same thing Okonjo Iweala and Charles Soludo will tell you. There's no difference
1. Float your currency and make the value market reflective at all times. 2. Cut or end subsidies. (they are wasteful, corrupt and very inefficient, create distortions in the economy and many times, discourage investment.) 3. Slash a bloated civil service, cut it too size. 4. Maintain a balanced budget or low budget deficits. 5. Increase taxes if necessary in order to balance the budget or to keep the deficit small. 6. Privatize all public companies or close them down (this will save money) 7. And many more
No country with these policies will ever approach the IMF, and even if they did, they'll not be there for too long.
Now that the world is entering a recession, how many African countries have approached the IMF for a bailout? I can't think of one.
If I have any grouse against the IMF, is that they focus more on austerity than on rapid economic growth. That is where national governments can come in. Appoint competent economist to steer your economy into fast economic growth.
The naira floated for just a couple of days. That was when the parallel market rate and the official market were the same. After that, they started intervening both by selling dollars at ridiculous prices and also later, by restricting the bids on the market. So it was just a devaluation in the end.
I need to be made a mod on this site.
Na me and you dey here from the start.
Also, your FP is not getting properly updated.
Give me a chance and monitor the FP. No boring moments again.
