Sanchase:
Borrowing money to the Fed govt. at this point is a huge risk. The govt has increased its borrowings and Nigeria is gradually falling into huge debts that we don't even know who can implement a favourable policy to wipe these debts.

The economy is still very productive, the government officials are constantly feeding us with news of bankruptcy, there is an irony here as we know the economy is productive but still being told its not therefore the government has a hidden agenda.

Worse case scenario, these officials upon embezzling huge funds, they will declare themselves bankrupt. The federal govt will seek international bailout, it will get it on strict conditions. Investors in T-bills will be greatly affected.

I beg to disagree with you. In every budget, there is a set amount for "debt-service". 1.36trillion has been earmarked for Debt service this 2016 budget. Why are you faint hearted? Moreover the govt will always seek out means to source for funds . One way is by taxing the populace (Increase electricity tarrif, toll gate implementation, soon implementation of Speed limits in cars etc) . So I don't see the risk you speak about! Coz Govt always have a way to pay back Local debts

Gurus in the house....Hope the NTB will rise by February 2016?
My NTB will expire on 2nd week of February 2016

As much as it sounds faint hearted, you dont want ur hard earned income to perish due to weak economic policies.

Yes the government is finding new ways of increasing revenues through taxes on the other hand the same government claims it cant pay minimum wages of 18k.

Nigeria don't need to borrow kobo to sustain the economy, the revenues generated are embezzled through loop holes in the system.

Apart from the risk I foresee in T-bills, the current inflation in naija kills tbills investment faster than a bullet for example if you had N50k naira which was $318 as of 18 months ago, today ur N50k is worth $187, thats 42% loss in which ever amount you invest with the fed govt, devaluation of naira will murder t-bills further if the fed govt dont get a grip.

Chukzyfcb:


I beg to disagree with you. In every budget, there is a set amount for "debt-service". 1.36trillion has been earmarked for Debt service this 2016 budget. Why are you faint hearted? Moreover the govt will always seek out means to source for funds . One way is by taxing the populace (Increase electricity tarrif, toll gate implementation, soon implementation of Speed limits in cars etc) . So I don't see the risk you speak about! Coz Govt always have a way to pay back Local debts

Sanchase:
Borrowing money to the Fed govt. at this point is a huge risk. The govt has increased its borrowings and Nigeria is gradually falling into huge debts that we don't even know who can implement a favourable policy to wipe these debts.

The economy is still very productive, the government officials are constantly feeding us with news of bankruptcy, there is an irony here as we know the economy is productive but still being told its not therefore the government has a hidden agenda.

Worse case scenario, these officials upon embezzling huge funds, they will declare themselves bankrupt. The federal govt will seek international bailout, it will get it on strict conditions. Investors in T-bills will be greatly affected.

If only you know that you are wrong about the methodology of government redeeming the Tbills /bonds payment. Have u ever wondered why payment of government instruments owed investors are done simultaneously with the sale of fresh instruments? Matured bills and bonds are settled after government has sold new bills and bonds. If investors refuse to buy due to low interest rates, you will find government increasing the rates to attract buyers. Unfortunately, even when we have observed low interest rates recently , the instruments have been over subscribed. Which means money will be available for government to redeem such debt.

See it like borrowing money from Peter to pay Paul. Borrow from James to pay Peter. And so on.

So no one should be afraid that government budgets will affect redemption of coupons for bonds and payment of bills at maturity

unite4real:


If only you know that you are wrong about the methodology of government redeeming the Tbills /bonds payment. Have u ever wondered why payment of government instruments owed investors are done simultaneously with the sale of fresh instruments? Matured bills and bonds are settled after government has sold new bills and bonds. If investors refuse to buy due to low interest rates, you will find government increasing the rates to attract buyers. Unfortunately, even when we have observed low interest rates recently , the instruments have been over subscribed. Which means money will be available for government to redeem such debt.

So no one should be afraid that government budgets will affect redemption of coupons for bonds and payment of bills at maturity

i hope to see ur answers to my question

Sanchase:
As much as it sounds faint hearted, you dont want ur hard earned income to perish due to weak economic policies.

Yes the government is finding new ways of increasing revenues through taxes on the other hand the same government claims it cant pay minimum wages of 18k.

Nigeria don't need to borrow kobo to sustain the economy, the revenues generated are embezzled through loop holes in the system.

Apart from the risk I foresee in T-bills, the current inflation in naija kills tbills investment faster than a bullet for example if you had N50k naira which was $318 as of 18 months ago, today ur N50k is worth $187, thats 42% loss in which ever amount you invest with the fed govt, devaluation of naira will murder t-bills further if the fed govt dont get a grip.

TB returns used to be above inflation until the introduction of TSA. Its just the likelihood of devaluation and currency controls that has dollar investors holding back

Does anybody know the effects, if any, of a naira devaluation on TB for naira holders?

Luckystar220:
I know believe me i knw but you know where the money will be deposited is in your bank account if it matures, so can you like change the bank and receive your investment in another bank if the main bank you used for the investment shutdowns..... please i don't know if u get wat im tryin to say....

Of course you can change your bank. All that will be required is to present your investment advice with a letter to the new bank and they will transmit your request to cbn which is the settlement bank. There are processes to follow but now that we have BVN, I supposed it will be simplified

Luckystar220:
I know believe me i knw but you know where the money will be deposited is in your bank account if it matures, so can you like change the bank and receive your investment in another bank if the main bank you used for the investment shutdowns..... please i don't know if u get wat im tryin to say....

Remember also that your money is with a custodian and not the bank

[quote author=Sanchase post=41336255]As much as it sounds faint hearted, you dont want ur hard earned income to perish due to weak economic policies.

Yes the government is finding new ways of increasing revenues through taxes on the other hand the same government claims it cant pay minimum wages of 18k.

Nigeria don't need to borrow kobo to sustain the economy, the revenues generated are embezzled through loop holes in the system.

Apart from the risk I foresee in T-bills, the current inflation in naija kills tbills investment faster than a bullet for example if you had N50k naira which was $318 as of 18 months ago, today ur N50k is worth $187, thats 42% loss in which ever amount you invest with the fed govt, devaluation of naira will murder t-bills further if the fed govt dont get a grip.




[/quote I don't rily know y u are quite sure this will happen very soon but if u consider the previous years has anything relating to this prevent investors earning from t.bills?

unite4real:


Of course you can change your bank. All that will be required is to present your investment advice with a letter to the new bank and they will transmit your request to cbn which is the settlement bank. There are processes to follow but now that we have BVN, I supposed it will be simplified

tankz i got dat...

yomi007k:


Olee

ITs good to dream naa!!

olujaidi:
Does anybody know the effects, if any, of a naira devaluation on TB for naira holders?

Are you talking about the rate?

Who are those saying that NTB returns are better than real estate investment

How market...

PMB is saying you should take your money to do real business... Am not interested in borrowing your money...

If you force PMB to borrow your money, you will give him at 3%(90days)or 5%(@365 days)

Nawaooo for this PMB govt...guys are not smilling

ukay2:
Who are those saying that NTB returns are better than real estate investment

How market...

PMB is saying you should take your money to do real business... Am not interested in borrowing your money...

If you force PMB to borrow your money, you will give him at 3%(90days)or 5%(@365 days)

Nawaooo for this PMB govt...guys are not smilling

o boy is not easy

ukay2:
Who are those saying that NTB returns are better than real estate investment

How market...

PMB is saying you should take your money to do real business... Am not interested in borrowing your money...

If you force PMB to borrow your money, you will give him at 3%(90days)or 5%(@365 days)

Nawaooo for this PMB govt...guys are not smilling

when did he say that?

According to the budget, about NGN1T will come from domestic borrowing. And just how will they get the money if not increasing the TB rate? Is he going to point a gun at our heads and force us to lend?

plendil:


when did he say that?

According to the budget, about NGN1T will come from domestic borrowing. And just how will they get the money if not increasing the TB rate? Is he going to point a gun at our heads and force us to lend?

This FGN is discouraging high interest rate for NTB and FGNBOND...

Despite the low rate now, people are still investing in this NTB/FGNBOND today....that is how FGN will still raise the 1Trillion naira from domestic borrowing...

When I listened to VICE PRESIDENT on channels TV 4weeks ago.... I understood what this govt is up to....discouraging people from investing in this govt financial securities, rather people should invest their money in the real business sector ,thereby stimulating the economy and employing more citizens...

plendil:


Are you talking about the rate?

no he's not talking about the rates rather the value of physical cash. Meaning if you have 1.5m in NTB maturing in April 2016 and naira was devalued in February 2016, how useless or useful has it made the cash?

ukay2:



This FGN is discouraging high interest rate for NTB and FGNBOND...

Despite the low rate now, people are still investing in this NTB/FGNBOND today....that is how FGN will still raise the 1Trillion naira from domestic borrowing...

When I listened to VICE PRESIDENT on channels TV 4weeks ago.... I understood what this govt is up to....discouraging people from investing in this govt financial securities, rather people should invest their money in the real business sector ,thereby stimulating the economy and employing more citizens...

Bro Not everybody can invest in real businesses. If u work in a bank with very little time n u have spare cash, will u go and start a business that u cannot manage?

This is some peoples way of stimulating the economy, and if d govt throws it away then we wish dem d best.

ukay2:



This FGN is discouraging high interest rate for NTB and FGNBOND...

Despite the low rate now, people are still investing in this NTB/FGNBOND today....that is how FGN will still raise the 1Trillion naira from domestic borrowing...

When I listened to VICE PRESIDENT on channels TV 4weeks ago.... I understood what this govt is up to....discouraging people from investing in this govt financial securities, rather people should invest their money in the real business sector ,thereby stimulating the economy and employing more citizens...

How will u invest in real business when there is no clear economic policy. You go into importing of an item the next morning govt bans it.

You wake up and you can use your card to make payment abroad.

You can't place your finger on the price of the dollar.

You don't even know what the price of the item your selling will be when you want to purchase again. You don't know if your making profit or loss.

You don't even know if Naira will be devalued.

mekaboy:


How will u invest in real business when there is no clear economic policy. You go into importing of an item the next morning govt bans it.

You wake up and you can use your card to make payment abroad.

You can't place your finger on the price of the dollar.

You don't even know what the price of the item your selling will be when you want to purchase again. You don't know if your making profit or loss.

You don't even know if Naira will be devalued.

You hit the nail on the head.

mekaboy:


How will u invest in real business when there is no clear economic policy. You go into importing of an item the next morning govt bans it.

You wake up and you can use your card to make payment abroad.

You can't place your finger on the price of the dollar.

You don't even know what the price of the item your selling will be when you want to purchase again. You don't know if your making profit or loss.

You don't even know if Naira will be devalued.

This is the unfortunate state of affairs in Nigeria at this moment. It is difficult to divorce our current predicament from the massive looting which took place during the last administration. The damage done will take a few years to rectify.

Having said that, it is very clear that this is not a season for Import business in Nigeria. Wise businessmen are diversifying and focusing on exports because the naira has become very cheap, rendering exports very cheap to buyers overseas. The government also plans to encourage investments in manufacturing and producing local products for exports in addition to boosting economic activities within the country by providing stimulus funds as contained in the current budget.

The bitter truth is that, it will get a bit worse before it gets better, but many of us are optimistic about the outlook.

plendil:


Are you talking about the rate?

Rate and Purchasing power (using devalued naira to buy TB or the effect of a devaluation on a yet-to-mature TB)

nduchucks:


This is the unfortunate state of affairs in Nigeria at this moment. It is difficult to divorce our current predicament from the massive looting which took place during the last administration. The damage done will take a few years to rectify.

Having said that, it is very clear that this is not a season for Import business in Nigeria. Wise businessmen are diversifying and focusing on exports because the naira has become very cheap, rendering exports very cheap to buyers overseas. The government also plans to encourage investments in manufacturing and producing local products for exports in addition to boosting economic activities within the country by providing stimulus funds as contained in the current budget.

The bitter truth is that, it will get a bit worse before it gets better, but many of us are optimistic about the outlook.

If only export was as easy as it sounds. Most Nigerian agro products have been banned abroad.

Well the govt is yet to encourage production, because before the intervention of the budget, electricity tariff and taxes will be increased making production more expensive.

mekaboy:


How will u invest in real business when there is no clear economic policy. You go into importing of an item the next morning govt bans it.

You wake up and you can use your card to make payment abroad.

You can't place your finger on the price of the dollar.

You don't even know what the price of the item your selling will be when you want to purchase again. You don't know if your making profit or loss.

You don't even know if Naira will be devalued.

I am sorry to say but you are part of the problem. Importing useless goods is not the type of business the poster meant. He said REAL BUSINESS SECTOR. How does your importing toothpick, toothpaste or the million other useless items help stimulate the economy or create jobs?

We must wean ourselves from this dependence of dollars to purchase useless goods from abroad.

I have lost money in real terms investing in Tbills but I aint mad. Our current system where we import every bloody item isnt sustainable.

pappilo:


I am sorry to say but you are part of the problem. Importing useless goods is not the type of business the poster meant. He said REAL BUSINESS SECTOR. How does your importing toothpick, toothpaste or the million other useless items help stimulate the economy or create jobs?

We must wean ourselves from this dependence of dollars to purchase useless goods from abroad.

I have lost money in real terms investing in Tbills but I aint mad. Our current system where we import every bloody item isnt sustainable.

My friend stop airing your ignorance. Does Nigeria import more than other countries in the west ? It's all about what you import. Even when you are into production you still import some equipments and raw material.

There is nothing wrong with importing if you have items for export as well to balance it. Your talking about how import stimulates the economy. You are using an imported phone and laptop and criticising import.

Who do you blame for the collapse of factories ? With high cost of setup and high interest rates, why will anyone want to risk large scale production?

Is it our fault that government abandoned every other natural resource we have and went for oil alone?

Who goes into production in an unstable country? Don't blame importers for the failure of govt.

What have u produced so far?

mekaboy:


My friend stop airing your ignorance. Does Nigeria import more than other countries in the west ? It's all about what you import. Even when you are into production you still import some equipments and raw material.

There is nothing wrong with importing if you have items for export as well to balance it. Your talking about how import stimulates the economy. You are using an imported phone and laptop and criticising import.

Who do you blame for the collapse of factories ? With high cost of setup and high interest rates, why will anyone want to risk large scale production?

Is it our fault that government abandoned every other natural resource we have and went for oil alone?

Who goes into production in an unstable country? Don't blame importers for the failure of govt.

What have u produced so far?

Thanks for enlightening the 'over sabi' guy.

mekaboy:


My friend stop airing your ignorance. Does Nigeria import more than other countries in the west ? It's all about what you import. Even when you are into production you still import some equipments and raw material.

There is nothing wrong with importing if you have items for export as well to balance it. Your talking about how import stimulates the economy. You are using an imported phone and laptop and criticising import.

Who do you blame for the collapse of factories ? With high cost of setup and high interest rates, why will anyone want to risk large scale production?

Is it our fault that government abandoned every other natural resource we have and went for oil alone?

Who goes into production in an unstable country? Don't blame importers for the failure of govt.

What have u produced so far?

You are a grade 1 slowpoke. It is not the government's responsibility to help source dollars to fund the ostentatious lifestyles of entitled new middle class clowns like yourself.

Why should the government source forex to help import all kinds of useless items that do not stimulate the economy. There is already an avenue for legitimate business people who need forex to import legitimate and approved items.

If you need dollars go and source it from the open market and pay the going rate dictated by demand and supply. Dont wait for government to source dollars for you.

The government's priority is the economy and the ordinary man on the street.

pappilo:


You are a grade 1 slowpoke. It is not the government's responsibility to help source dollars to fund the ostentatious lifestyles of entitled new middle class clowns like yourself.

Why should the government source forex to help import all kinds of useless items that do not stimulate the economy. There is already an avenue for legitimate business people who need forex to import legitimate and approved items.

If you need dollars go and source it from the open market and pay the going rate dictated by demand and supply. Dont wait for government to source dollars for you.

The government's priority is the economy and the ordinary man on the street.

u guys can be more civil i guess