₦airaland Forum

WaffenSS:
This article's title is misleading.

The prof made his comments before PMB even presented the budget, and all he "slammed" was the entire historical budgeting process and implementation in Nigeria, not PMB's budget.

Sensationalist OP.

And the OP cleverly puts 2016 in the title to achieve his mischievous objective.

OZAOEKPE:
SEE THIS MU MU TALKING, HIS VISION IS TO MILK OUR OIL TO REPAIR HIS VILLAGE(NORTH EAST) BUT MY GOD IS NOT ASLEEP, HE HAS CRASHED THE PRICE OF OIL. LET THEM BRING COCOA AND GROUNDNUT MONEY

No offense pal, but where exactly are you from - SS or Biafra?

In case you've not noticed, next year's budget is around N6tn with total revenue expected to be N3.8tn. Of the total revenue, oil is expected to contribute N820bn.

If you do some basic calculations, you will observe that oil revenue is less than 22% of total revenue and even less than 14% of total budget.

Get a life son, Oil is paling into insignificance.

wirinet:
I am also not an economist, so i am a bit confused about the whole forex policy. First, we have to admit that the naira had never been left to market forces, it has always been propped up by the CBN for political expediency. Under previous governments, the CBN had enough dollars to artificially prop up the naira due to crude selling at record prices, the CBN even permitted oil companies to sell dollars in the open market. But as we are aware the Jonathan administration did not make any savings and he also spent a large chunk of previous savings ( both foreign reserves and excess crude account), with oil prices now in the $30's. There is just no dollars to prop up the naira. The only option left is to either to bow to market forces or restrict the demand for dollars. Now, that is putting Nigeria's economy between the devil and the deep blue sea, how can we allow the naira to float on the open market when we have nothing to stop or control it. We import over 90% of what we consume including fuel, and we export only one control commodity - crude oil, which is presently just above $30 per barrel. If allowed to float, where will it stop?, N400 to the dollar, N500 or even N1,000? It is anybody's guess. On the other hand, controlling the naira would hurt importers and stifle business, leading to further economic problems.

If only we start producing instead of only consuming, then things would be more manageable.

Excellent analysis. I am not sure you don't have an Economics background.

@ the bolded. There is another option which is controlled devaluation. I must admit that there is no silver bullet solution to the problem. Every option will have its own unique consequences.

My major concern is that the CBN should be talking to Nigerians about the choice they have taken and they hope things will evolve in months ahead - it's called "forward guidance". That is the only way to have buy-in from citizens and build can plan their personal and business expenditures around the policies.

Silence breeds uncertainty which scares investors to death.

TonyeBarcanista:
I think you are sounding like the Greeks. You know they sounded same way and got their country into mess.

While we need the country to be stimulated with cash, we can't lean towards more loan that will further force us to spend more to finance the loan as well as place more burden on the country. If you look at 2015 Budget, proposed loan was pegged at about N800 billion but the government had to borrow more and even dipped their hands into the ECA to withdraw $2.2 billion. Have you asked yourself "what happens in 2017" after borrowing about N3trillion to finance 2016 budget? Are we also going to borrow more to finance 2017 budget? What happens if crude oil price drop to $25 per barrel with the coming of the USA, Russia and Iran into the market and Saudi Arabia not planning to stop pumping anytime soon? Does that mean we'll borrow 4trillion naira?

How do we sustain this loan in say 2, 3 or 5 years time? This isn't about politics. Remember that what was sustaining us over the years was interventions from ECA. At present that luxury is gone (no thanks to former administration and governors between 2007 and 2015)

Tonye, whether you choose Austerity or you choose Stimulus, the end result will largely depend on the sincerity and commitment of managers of the economy.

I am telling you that it is standard fiscal policy every where in the world for deficit to increase during recessions. In fact, in developed countries, they increase deficit just to pay unemployment & social security benefits. I expect you to tell me an alternative policy/strategy that the government should be deploying.

Go to the US, UK, Europe, Japan, etc and see how much government deficits and Central Bank balance sheets increased in the wake of the GFC. Companies leverage (borrow) all the time to finance projects for future cash flow

The key is not in the borrowing, but in what government intends to do with it and their commitment to getting it done. The govt has made it clear that all borrowing will be deployed to developing infrastructure, which should promote economic growth and subsequently lead to increased Tax Revenue for government. But we'll have to wait and see how it is implemented.

We are not over-leveraged. The US has a debt to GDP ratio of around 100%, Japan has a ratio of around 200%, South Africa has a of around 38%. Nigeria will have a ratio of around 13%. The government has made it clear that they will have a Sinking Fund as forward planning towards eventual retirement of the debt.

*. Igbo have nothing in Common with Yoruba, Edo, And Hausa : According to Him (Kalu) , They (Igbo) can't stay in the same country with people they have nothing in common with, As such they want to opt. out of Nigeria, Seeing statement like this one begins to wonder if the said proposed Biafra map is all made up of Igbo speaking territory, But Hell No, He Keeps lumping SS minorities who don't share anything in common with the said Igbo into his Biafra , So who is fooling Who ?.. Am from Delta and I still can't figure anything I have in common with Igbo , Be it food, language, Ways of life, Culture, We are totally different , Don't you think He his doing what he accused lord Lugard of doing? … Still can't figure out the connection between Itsekiri & Igbo, Urhobo & Igbo, Ijo & Igbo, ogoni & Igbo..e.t.c If they Don't have anything in common with those tribe why are they so bent in having them In there Biafra ?.. #Greed

I listened to Nnamdi Kanu's speech during the 2015 World Igbo Congress held at Washington and he said that any tribe where their women tie 2-piece wrapper is Biafra. That, according to him, makes Urhobo, Ibibio, Idoma, etc all Biafra.

Now, that is the most desperate & idiotic thing I've heard since the whole Biafra ish started. Trying to use warped logic to create a sense of common identity clearly shows how fraudulent & mischievous the rogue leader is.

Unfortunately for them, when sons & daughters of SS come out to reject Biafra, all the IPOB bots do is hide from the truth by calling them Yorubas & Fulanis.

So much partisanship in the comments, with very little intellectual input.
---
Nigeria is on the brink of a recession. During times like this, it is standard economic practice to STIMULATE the economy through expansionary fiscal/monetary policies. Any attempt to do the contrary will lead to what is called the AUSTERITY TRAP - i.e. cutting spending during recessions simply deepen the recession. It is standard fiscal policy for deficit to increase during recessions.

So much concerns has been raised - rightly so - about the benchmark oil price used in the budget. But a look at the proposed N6.08tn budget puts oil revenue at N820bn out of a total revenue expectation of N3.8tn. This means that oil revenue is expected to account for only 22% of total revenue and 14% of total budget. A further drop in oil price by 20% will only have a 5% & 3% impact on revenue and total budget respectively. Of course, this is a simplistic analysis, as the FX shortfall from lower oil prices may have other consequences.
---
In summary, what Nigeria needs right now is STIMULUS - which is exactly what the budget seeks to achieve (as long as the funds don't go the Dasuki way). The Oil price is fair at the moment; the government might adjust its MTEF if the realities change - the budget is not sacrosanct or cast-in-stone.

Tequilah:
Nonsense and ingredients, as Chief Zebrudaya would say. What da heck do they need another unique identification number for?? Most Nigerians already have a National Identity Card, a BVN and a Voter's card. Some also have the new Drivers' License, to boot. Each of these forms of identification, carry a unique set of numbers peculiar to an individual. All they need to do is link all these numbers directly to each individual, using that individual's National ID Card number, as a unique marker! So what dirty set of certain benefits are they going to provide, that they cannot use the National ID Card number to do?

They do not need another set of numbers to identify anybody. Why can't people think properly in this country? Sheesh!

Isn't that exactly what the government has directed all these agencies to do? My understanding of the article is that these agencies are to aggregate these numbers into a single Identity.

Demdem2:
Please tell me one action or comment of Rivers APC that suggest desperation, win at all cost mentality in contrast to the call of blood from the Governor?

Maybe you can start by going through some of the earlier comments on this thread. You may want to take time to ponder more on your own comments. I also have friends in Rivers and Akwa Ibom States who tell me all manner of things about how APC will maneuver and conquer those states. So yes, there is SAVAGE MENTALITY in the land. Nairaland breeds them in abundance.

If APC tows that path, then I'm done with the country. I supported that party because I was tired of the antics of the PDP. I have absolutely zero interest in the selfish ambition of any politician. I'm more interested in a better society - where justice and fairness thrives.

I initially supported the actions of the CBN governor because I thought the measures were temporary and stop-gap until the president sets up his cabinet. However, it now looks as it's going to be something more permanent.

This would be the most ridiculous form of capital control in the 21st century. CBN has effectively unplugged Nigeria from the international payment system by trying desperately to artificially prop up the value of the Naira.

While there may be some benefits to this, I do strongly think that there will be long term unintended consequences from these actions. There are many ways of protecting the foreign reserves. Just allow the damn currency to float and the market will sort itself based on demand and supply! We are a completely import-dependent economy, where even business and manufacturers have foreign currency inputs in their value chain. If these group cannot find FX to support their businesses, then job losses will just increase. If the FX restrictions are to encourage local consumption, then we want to hear clear policy issues and plans on how to make that happen.

At the very minimum, the CBN should tell Nigerians what exactly they are trying to achieve with their policy position and what REALISTIC options are on the table for Nigerians pending when things normalize. Their deafening silence is either a sign of disrespect to the citizens or crass ineptitude on modern monetary policies.

I'm not a big fan of bankers running the Central Banks, anyway. Just get a proper economist to do the job!

Babacele:
so are u pretentious pro- Wikes saying Ibim semenitari is not qualified for the post of MD NDDC or what? or are you folks saying Ibim or Amaechi should not eat the legitimate fruit of their labours? Has Ibim been found incompetent at the job she hasn't even started? because I don't know where this una beef n reasoning is coming from rather than the veiled fear that Nyesom Wike is being dislodged. make una explain to me o!

You are getting it all wrong pal. For the records I am pro-APC and nothing would gladden my heart more than seeing Wike booted out of Rivers State Government House.

But that was not the point raised by the earlier comment. It's the narrative that politicians should win at all cost - even if it means through the most hideous means. Now, we might like it because it suits us in the moment, but we are clearly destroying the very fabric of a cultured society. And just like our parents bequeathed us an ill-cultured society due to their actions, we are likely to bequeath to our children even a much worse country.

Politicians should learn to mobilize, campaign and win elections like we are in an organized society - irrespective of party. We can't keep behaving like people in the caves with savage mentality. If we want the rest of world to take us serious, then we need to start behaving like humans and not animals.

LadyExcellency:
What a hell of foolishness is being discussed on this thread?

Is like this is a congregation of cavemen whose interest is only vengeance, retribution and subversion of justice and the will of Rivers State citizens at all cost just to massage their wounded egos.

It is a pity that this what low Nigeria under APC is driving to after much ado with shouts of change and change to all and sundry

How are people able to find solace and showcase pride with savage mentality in 21st century? I am dumbfounded.

Thank you for taking the words out of my mouth. I, probably, wouldn't have articulated my self better.

But I completely disagree with you that it is an APC thing. It is more a thing of Nigerian politicians. When PDP had Federal Might, they deployed it with reckless abandon, and now APC is about to tow the same path - despite their CHANGE mantra. There is obviously a savage and conquering mentality pervading the land, with very little regard to the desires and wishes of the people. When you come to a forum like this and hear young people proudly expressing such tendencies, then every shred of hope disappears.

And then we'll wake up a couple of years down the road and ask ourselves "How did we get here?", not knowing that those little acts of desperation were sowing the seeds of backwardness.

The OP had hoped that this thread be devoid of too much political discourse but rather focus on pure economics. But no, we can't hold ourselves back. Is it that our hearts is filled with so much hatred about PDP and APC or is it that we lack intellectual depth to discourse issues objectively?
---
Back to the subject. I completely agree with the OP that the silence on matters of the Economy from this government is deafening! The CBN comes up with draconian policies, without even bothering to explain to everyone what that policy is intended to achieve and what options are available to citizens. Kemi, with all due respect, seems completely clueless or overwhelmed.

The point is that managers of our economy needs to start engaging more with citizens to explain the realities on ground and the policies government are putting in place to ameliorate such. I do not want to hear anymore blaming of the PDP or GEJ, that has already been settled and citizens now know how culpable they are. What we want to hear right now are solutions - that's why you were voted.

I hope this is not another Itse Sagay impersonation?...Will come back to comment once I confirm it is true.
---
GEJ's concession of defeat has been overplayed by his supporters as a heroic act - in a desperate bid to cover up his crass incompetence and improbity in managing the country's resources. Out of respect for the office of "Ex President", The man should just quietly go and see PMB and confess his sins. He should return every penny he looted from the treasury and help recover same from his fellow bandits.

IF THIS IS TRUE, let's see how the president will handle this. The success of his whole anti-corruption agenda could depend on this.

---

This one is really going to be tricky. I would like, in the first instance, for the EFCC to visit the ex president in his home to engage with him. If after that his explanation is not satisfactory, then he can be invited to the commission. The revelations of graft under GEJ's watch is so mind-boggling that you cannot feel pity for the man.

His invitation to the EFCC would be the loudest statement to those still doubting the anti-corruption cruade.

#NoMoreSacredCows

christopher123:
That model won't work in power because there is no competition there just monopoly and price fixing

Strictly speaking, you are right. But there is also an economic model for regulating monopolies to ensure efficiency and fair pricing. Some sectors like Power, Rail, etc usually require huge initial investment and a reasonable time horizon to recover investment before throwing it open, else most investors will not commit such huge funds and then worry about cut-throat price competition.

boujaye:
my friend close mouth, politicians are only using us. why is there such hardship every where and they do not hv answer to any and you are here forming sermon. in d advanced country, how is their economy and the sincerity in service of their politicians?

I like the way you took a subtle jab at me. I feel your pain bro, and I strongly hope that the folks at the top find a solution for everyone. Times are hard, indeed.

ayindejimmy:
whats d rite price 4 a service dat fluntuates?
Who determimes it?
What wil happen to those wit no meter dat get estimated bills, estimated increase?
The telecom sector is a wrong example cos their charges reduces overtime as their service r upgraded, but what we av
here is increases- twice this yr.
Who told u Nigerians dnt want to pay 4 wat they use?
When we pay Dstv, Gotv, Startimes and Internet Bundle bills? Hw do we enjoy al these if we dnt pay electrity bills?
Wat we dnt want to pay 4 is wat we didnt use

And I completely agree with you that Nigerians should only pay for what they use. That is why I asked for prepaid meters.

sweatlana:
What remains for u zombies is for Buhari to open nyash for u people to lick

I was hoping you were going to offer a different perspective to my comment. But, typical of low self esteem people, you throw abuses instead of sound argument - in the hope to feel better with yourself.

agog:
the rates of increase is high and what we end up paying is higher than when there's fixed charges.

Correct. But the reality is that we've been paying subsidized prices all along. The current pricing represents market realities.

Anybody who knows Prof Itse Sagay would have had reservations about that interview.

Even, if he wanted to criticize the president, his policies or his party, he wouldn't have been so brazen. He would have been somewhat circumspect or diplomatic - especially as a current "Employee" of the president. That is why I had strong reservations about the interview.

If this was a desperate attempt by the opposition to discredit the president, then they must be very debased. They have just cost somebody his job.

YerYer:
Since this topic made front page twice, lemme repost what I posted the last time...

You would think "Boko Haram" would be the most searched or trending topic, instead you have people searching about the Charlie Hebdo killings. This just shows that we don't value Nigerian lives. The day after the Paris attacks I saw Nigerians on social media doing #wearewithparis or #parisstrong etc meanwhile many innocent Nigerians are losing their lives, limbs and arms to boko haram everyday and no one cares.

Seems like we love to join the band wagon just to look cool. I noticed the same thing during the Ice Bucket challenge in 2014, Nigerians on social media were doing the whole ice bucket thing to create awareness for ALS which is a neurodegenerative disease very common in Caucasians meanwhile millions are dying of malaria in Nigeria. Not sure if this is a case of misplaced priorities or just attention seeking behavior. Even our celebs were part of the short lived craze.

Value yourself or no one else will give a rat about you.

Very sober introspection. Well said pal.

That's fine by me, as long as prepaid meters are available. Scrapping the fixed charges is also a welcome development.

As long as people only pay for what they actually consume, Nigerians should learn to pay the right price for a service. That is the only incentive for investors to commit their funds for long term improvement of the sector.

The telecoms model is a good example of how appropriate pricing stimulates service, competition, jobs - and ultimately - lower prices.

OPCNAIRALAND:
Okonjo Iweala is a classic and practical example to use in demonstrating how Ibos suffer from self destructive syndromes.

Judging from her various high level appointments in Obasanjo Administration as well at world bank, she ought to be the even keel, the one who, as Minister of Finance and Economic Management, leads against malpractices and subventions of order and propriety in the Jonathan Administration....instead she is the gang leader for shunting orders and the go-to- person for those needing endorsement to steal from the Federal Vault.

Okonjo Iweala is a bad poster child for Ibo. She highlights very convincingly why it is a risk to position Ibos with unsupervised responsibility, no matter the level of education or professional credits.

Easy son. That was below the belt.

---

obasiken:
Jagaban is a lizard that thinks he is a crocodile.

No, it you who thinks so. You are so intimidated and obsessed with him, that you think he has a hand in every political maneuver right now.

Her swag, though, on the first picture.

One thing with technocrats (non-politicians) is that they are very cost conscious. Look at her with very minimal entourage. Most of those in the picture might even be from the host and not her ministry.

But, according to statistics from NBS, the PDP handed over a $550 billion economy (largest in Africa and 26th in the world), with 7.5% unemployment rate (better than European Union, France, Sweden, Belgium, etc although the underemployment figure is much higher)

The bolded statement is most ridiculous. Even the unemployed in those countries get benefits that are way above what the supposed employed in Nigeria gets.

Those countries are 1st world countries and way above our league. Their per capita income is $40k+ while that of Nigeria is $2k+. We should be comparing ourselves with Kenya, South Africa, Angola, etc - who by the way have much better living standards than us.

Warlord3000:
Shift of mandate between 3 people in a week...

Only In the Appeal court...

What happened was that both APC & LP petitioned the Court of Appeal over the election of the PDP candidate.

The Appeal Court looked at the case of the APC petitioner and dismissed it. 4 days latter, it reviewed the petition of the LP candidate and upheld it. So, it's really not a case of flip-flopping. The article just didn't make it clear enough.

Oh really?! FFK now the Conscience of the society. He talks about decency, empathy, justice, responsibility, etc. Can someone please ask FFK where these qualities were when he and his ilk practically raped our National Treasury.

I repeat...FFK is debased and chronically deficient in character!

drss:
go n do more research.

Go to the link below, it will help cure your arrogance and ignorance. Sometimes, half knowledge is worse than no knowledge.

http://www.premiumtimesng.com/business/177493-nigeria-senate-approves-52-crude-oil-benchmark-for-2015-budget.html