₦airaland Forum

^-- Err, if Lagos-Kano (or even Lagos-Ibadan) is functional, then it will cost much less to link up. . . I won't have to eat the entire cost. So this 750 million is not the relevant #.

[quote author=edo.girl link=topic=666128.msg8312651#msg8312651 date=1305285833]There are prob less than 100 containers (prob half of that) being transported between Lagos and Ekiti per month. You will create a railway cos of that? Just out of a dogged desire to have rail, irrespective of cost, practicality, & economic reality. And what will be your Opportunity Cost for spending that scarce capital on railway - education, health, agriculture?[/quote]1. Well, to be clear. . . there is already an existing railway. Just not in the best state right now. So you won't have to build from scratch, but instead upgrade what exists.
2. Rail and transport in general is something I'm willing to subsizize. Shrinking the distances between Ekiti and Lagos (and thus the rest of the world) is absolutely critical.
3. I don't have firm #s yet (haven't had yet time to meet face to face with someone who knows this stuff very well), but from what I've read a bit, it should be under $5 million/mile.
4. The existing rail, if it connects major cities and Ekiti is simply along the way, then it doesn't cost me much (if anything). There is a Lagos-Kano line that supposedly will resume soon, for example: http://allafrica.com/stories/201105060590.html

Not good enough to simply say rail is better. On what basis, in this particular case?
And, no, am not confusing anything. Ordinary rail is still very expensive. If you earn USD2,000 per month, a condo costing USD1,000 will be too expensive for you while someone earning 5K per month might consider it ok. It's all relative. If you cant afford it, they dont buy it! Some of these states can barely cover their recurring expenses! The most basic rail line from Lagos to Ado EkitI, via Akure & the other state capitals, will cost USD billions to put in place & millions more to maintain per year. Public projects are hugely inflated in Nigeria and there is no current need for this one

Huge overestimate of the cost

No, this particular debt is not worth it. It will bring pain, not value add. No one is suggesting that a state turns its back on other forms of industry. What I suggest is that the immediate and medium term priority should be agriculture, from where complimentary indutries can also develop - food processing etc Agriculture will employ plenty of people directly or indirectly.

It is far more important for the states to open up and fix rural roads so agric produce can be easily transported to municipal markets than wating billions on fancy rail projects which will bastardise state finances for decades to come.

Again, you overestimate the costs.

[quote author=edo.girl link=topic=666128.msg8312339#msg8312339 date=1305282907]I still dont see the point of Inter state rail in the SW - just going to be another white elephant.

I travel frequently between Lagos and a number of SW states, and believe me, rail is not required at all - at least not for now. What's needed is for the interstate roads to be fixed. After the first 60km or so away from Lagos, there's actually not much traffic on these roads - compared to say, the M1 or M25 in the UK.[/quote]I'd prefer if the roads are fixed. But rail is still needed for freight. If I want to transport a container of goods, better to use rail than road.

Rail is an expensive business, and even in countries where they are used at full capacity, they still require heavy govt subsidies. Think Nigeria & subsidies, not again pls!

I think you are confusing high-speed European rail with ordinary rail. Ordinary rail isn't that expensive.

Note also that some of these states live from hand to mouth. They are barely viable entities.For eg, Osun states annual revenue is about USD 750 million. Ondo state, an oil producing state, and one of the wealthiest outside of Lagos, earned just under USD1billion last year. Their revenue barely cover their RECURRING expenditure, so why embark on hugely expensive capital projects that brings little added value and cripple the states  under the weight of massive debts which could take decades to clear?

Some debts are worth it. It isn't the East Coast and West Coast states alone in the US that have industry; even Alabama does.

Industrialisation is not the only way to create wealth. That can be left for Lagos, and perhaps Ogun.

We shall see. If the FG can come through with electricity (by privatizing it) and freight rail can be made functional Ekiti State will industrialize. Doesn't need to be anything fancy. . . rice mill, sugar processing plant, textile factories, whatever. But agric alone will not employ enough people. Agric is a rich man's game, at least if you want to be competitive with the Western world.

playmode:
You are right about that ,so wind energy it is then.I don't know if ondo is windy though 

One could mix it up though,maybe use solar panels to power the Geysers while the windmills will be used to power other farm machinery as well as sockets and bulbs.

The only way i will be to know how much power the farm requires on a daily basis is if i know much machinery will be installed on the farm.Who know maybe will supply "gas" to the Ondo area soon.It will lovely to have constant power.I used to hate farming until i what modern farms look and the type of income mechanized farms take in Australia ,The USA and SA. Who knows maybe i will be able to get a big loan from a bank in Ondo to finance the farm.


Thanks bro , investing in SW is suddenly becoming more attractive to me and i don't want to miss out 

Yeah we had that convo about gas the other day. Perhaps call Shell and see if they supply in Ondo. Though I doubt it'd be anywhere near your grandpa's farmland

@playmode: We have this International Institute of Tropical Agriculture in Ibadan: http://www.iita.org/

FUTA also has an agric department that might be helpful to you.

There is also the "business" section of this forum.

I also have an uncle who is into agriculture in Nigeria. He might be a good person to email questions.

Hopefully some sort of expert here chimes in though.

playmode:
I have seen some very affordable solar solutions in SA designed and built by small companies.I am also thinking of using wind power because there are some SA windmill companies who build very affordable windmills for farms here.One can import these solar or wind solutions to Nigeria and use it to power a farm.The initial set up cost maybe a little bit high but the long time benefits makes it worth it.

Affordable Solar Power Equipment:

http://www.sinetech.co.za/solar.htm?gclid=COTOz57W5KgCFYYOfAodO3xFEA

Windmills for Sale:

http://www.greenlifestore.co.za/online-store-renewable-energy-wind-turbine.php?orderID=185e6993c27f894560fac302d30bfb34

I mean in a $/kW sense. See the rightmost column of this chart:
[img]http://upload.wikimedia.org/wikipedia/commons/a/ad/Levelized_energy_cost_chart_1%2C_2011_DOE_report.gif
[/img]
http://en.wikipedia.org/wiki/Cost_of_electricity_by_source

Wind might be OK if you are somewhere very windy, though.

@edo.girl: High tech agric BTW doesn't employ much labor. The crude way we do it in Nigeria, yes. But that isn't very efficient or competitive. You might like this article on agric in Nigeria btw: http://www.businessdayonline.com/NG/index.php/analysis/features/21070-addressing-the-nations-fertiliser-challenge

If we want to employ people, the path to that is manufacturing. Not agriculture.

[quote author=edo.girl link=topic=666128.msg8312141#msg8312141 date=1305280533]I said it before & will repeat again, people who come to the internet and set agendas of  'massive industrialisation,' extensive inter-state rail construction etc for SW governors are theorists who know little about the real life situation in Nigeria.

People need to understand this - states like Ondo, Osun, Ekiti have almost zero likelihood of becoming 'industrialised' (depending on one's definition of course) in this generation. It just wont happen.

From a policy perspective, the path to wealth creation and poverty eradication (reduction?) must start with agriculture. No more, no less.[/quote]To an extent you are correct. But if the following things fall into place:
1) Interstate rail
2) Good power supply in Nigeria

Then I don't see why someone won't be able to open up businesses in Ondo, Osun and Ekiti.

Yorubaland is not that big. . . all of it (SW + Kwara + western Kogi) about the size of New York State.

Not all industry must be located in Lagos if transportation and electricity are functional.

Petrol from N65/liter to N68.25/liter will really result in +50% increment in cost and will cause a huge burden? 

^-- Even if I cut down the subsidy by 5% a year for say 20 years?

or 10% a year over 10? Etc, etc?

There are many ways to approach this while making the change gradual and less abrupt

^-- I don't think the FG would do anything but plunder it. But I think if it were distributed to the states/LGs, there is a good chance something good can come of it (at least for those of us who live in states where we trust our governors.)

playmode:
I want to set up a solar powered farm

Not an expert on agriculture, by why solar? It isn't cost effective in many cases to get electricity from solar.

Lagosboy:
Esho Jinadu is from Benin repbulic and Buruju Kashamu from Ogun state      

Lol

Man, then nobody should cause problems for me if I get involved in politics in Yorubaland outside of my state of origin if you all will let a man from Benin Republic be prominent too 

@ola olabiy: I pay a lot of money in taxes, fees, etc here. This has always been the case. Same with my parents when they lived here. . . they paid a lot more out in taxes/fees/etc than they got in return.

I don't think most Americans on average are subsidized. . . probably your middle class person has a net outflow of money from him to the government, not vice versa. I could be wrong though; you should look it up and find out.

Anyway, not advocating removing the subsidy immediately or even necessarily at all. Just saying that it'd be nice if we didn't have to have it.

And certainly, this is not something that is sustainable in the long run. At some point in the future, as average wealth increases and petrol consumption increases, current subsidy level will not be possible

By Bassey Udo
May 12, 2011 11:18PM

The thirty-six states of the federation yesterday, renewed their demand for a complete review of the formula in the sharing of revenue between the three tiers of government on the basis of equity and fairness.

Chairman of Finance Commissioners Forum, Rebo Usman, told reporters at the end of the Federation Accounts Allocation Committee (FAAC) meeting in Abuja that it is unfair for the federal government to continue taking the lion’s share; 52.68 percent from all revenues accruing in the federation account, leaving the states and local governments with 26.72 percent and 20.6 percent allocation respectively.

Usman, who spoke on behalf of the finance commissioners from all the states of the federation, described the existing allocation formula as not only unfair and archaic, but a creation of the military that should be done away with.

“Our position has always been very clear. We have made a submission to the federal government through our governors that there is the need for us to change this archaic revenue sharing formula. What we are using now is a creation of the military regime, with little modifications. It is very unfair to the states and local governments that up to date, we are still making use of this formula, which is a creation of the military,” he said.

Overhaul

He said the personnel cost of all the states and local governments far outweigh that of the federal government, pointing out that in the interest of equity, it is fair for the revenue formula to be completely overhauled in favour of the states and local governments to enable them deliver their responsibilities to the people at grassroots where the bulk of Nigerians reside.

“The revenue formula needs to be completely overhauled, not just amendments here and there,” he maintained.

On the controversial N450 billion debt by the Nigerian National Petroleum Corporation (NNPC) to the federation account, Mr Usman said that for the first time, the corporation has accepted its obligation, and is making efforts to repay, saying that high-level meetings were going on to finally lay the issue to rest.

“One good thing that happened today was that at least, for the first time, NNPC was remorseful about the whole issue and categorically stated that they were aware of the indebtedness to the Federation, and that already high-level meetings were going on to try to resolve the issue. This was captured in the minutes. So, with that statement we were comforted that by the next meeting, the corporation will fulfil its promise to pay up,” he noted.

Meanwhile, Minister of State for Finance, Hajiya Yabawa Wabi, said a total of N455.596 billion shared among the three tiers of government. “Total amount distributed was N455.596 billion, made up of statutory of N309.944 billion; VAT N42.564 billion, and augmentation figure of N103.018 billion,” she said.

Details of the distribution, the minister said showed the federal government getting N147.681 billion, or 52.68 percent, states shared N74.806 billion, or 26.72 percent and local governments N57.749 billion, or 20.6 percent, while derivation payment to oil producing states was N29.608 billion.

Reduced revenue

Acting Accountant General of the Federation (AGF), Aderemi Ogunsanya, said gross revenue for the month of April declined by N32 billion, or 5.2 percent, from N615.06 billion generated in March to N582.97 billion, owing to reduced oil production. The reduction was attributed to the complete shutdown of the Bonga oil terminals for maintenance work as well as the on-going repairs at the Qua-Iboe, Akpo and Amenam terminals. To this end, the AGF said the committee decided to withdraw N103.09 billion from the excess crude account to augment the shortfall in distributable revenue.

Though the distributable revenue increased by N31.01 billion, or 7.31 percent compared to the figure in March, there was additional N1.35 billion in exchange gain from the differential between the prevailing exchange rate of N152.18 per dollar and the budgeted rate of N150 per dollar set as benchmark. The exchange rate difference has been escrowed pending the approval of the budget.


http://234next.com/csp/cms/sites/Next/Home/5699860-146/states_demand_equity_fairness_in_revenue.csp

zstranger:
What does subsiding petroleum have to do with the size of the Government?

Well, the FG spends $4 billion+/ year on petrol subsidies. Out of a $40 billion budget or so. So if one removes the subsidy, the frees up that $4 billion. If you then redistribute that money to the states, then the FGs budget has shrunken to $36 billion. So the FGs size has shrunken by 10%.

I am not an economist, but the way I look at it is that, take for instance, we have N100 for 200 people. If we spent the N100 to procure foodstuff in bulk, we would prolly feed everyone to satisfaction. However, if we should go with your idea, and divide the money equally among the people, with each person taking home 50k, it would be impossible for each person to buy enough food to satisfy him/her.

Right, so that is an economy of scale sort of thing. That it is usually cheaper to buy in bulk.

But in general, governments spend money less efficiently than people do. If a man wants to build a house and it costs him $500,000, then that same house built by the government might cost twice the same amount. Governments generally just aren't efficient. Isn't even a naija phenomenon, same is true in the US.

This is part of the reason I believe in small government. Certain things DO benefit from economies of scale. Or that are public goods that nobody in the private sector would want to spend money on (e.g., military defense.) But many governments spend money far beyond the basics.

zstranger:
Just to add to what Katsumoto said, removing government subsidy would bring untoward hardship on the masses.

I'm aware of that.

The moral is that, removing subsidy isnt the best thing for the country at this point.

When did I say it was the thing to do tomorrow? That I'm anti-subsidy doesn't mean I want it scrapped today. That 10 year phaseout, or variants of it might would be more practical.

You are beating a strawman, to a large extent. . .

I sense some aloofness, on your part, from reality in Nigeria.

Aloof if one chooses to misread what I wrote, yes. Or ignores critical parts of it, yes.

[quote author=Chyz* link=topic=666210.msg8310630#msg8310630 date=1305253985]Others include the Ogun State Chairman of the Jonathan/ Sambo Campaign Organisation, Joju Fadairo; Director General, Segun Sowunmi; Chairman of Omo Ilu Foundation, Buruji Kashamu; former Lagos Deputy Governor, Rafiu Jafojo; Titilayo Ajanaku; and Dr. Femi Majekodunmi, among others.[/quote]Isn't Buriji Kashamu from the Benin Republic? 

Heh. We shall see. If they want to play this game, then the SE will never have anything of note in this country every again.

Two can play at this game.

@EzeUche_ : So you've been to those three LGAs? And you are claiming that the majority ethnic group there is Igbo? Rather than say Idoma?

It looks like the Idoma claim differently: http://www.spiritofapa.com/adolg.html

I can address this "5 miles from sea" business later.

htajz:
you confuse the old rivers which consisted of both river and bayelsa with new rivers which is now majority igbo ,besides what makes you think ijaws will want to be in the same country with yorubas and hausas

You are right, truth be told. If Nigeria splits, everyone gets to go their own way. Likely SE will get most of Rivers.

[quote author=EzeUche_ link=topic=263214.msg8310270#msg8310270 date=1305249301]Sorry but since we Igbos make up 80% of Rivers state, this means we have access to the sea.  [/quote]Nah, you are landlocked. The coastal parts of Rivers are non-Igbo

Bayelsa can stay in Nigeria. Rivers state, parts of Delta and Benue and even parts of Cross River have INDIGENOUS Igbo populations and will be coming with us.

Which LGAs in Benue are Igbo a majority? Lmao

Anyway, whether Rivers is Igbo or not, if you want to form Biafra, Rivers will not be permitted to go 

80% of rivers is Igbo?

^-- I think you are being hasty. Let's wait a couple years before we say that the ACN is the answer. For all we know, these guys (minus Fashola) might flop.

Fayemi looks like he is a performer, though

Hrm, this article has a table listing fuel prices:

http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_pricing

Good goal.

ola olabiy:
So, your argument isn't about the subsidy but the size of it, abi?

I don't think subsidies of this sort are a good idea. So I'd prefer their size to be as close to zero as possible.

But that isn't really the point of what you quoted. Katsumoto is comparing corruption levels in Nigeria to that of other countries that subsidize oil. We cannot be sure the comparison is a fair one until we know how big the subsidy is in each country (among many other factors.)

Katsumoto:
In the Nigerian context, higher oil revenues means more money to be embezzled. It doesn't go towards govt spending. If you remove the subsidy, prices of everything in Nigeria goes up. People will have less to spend on industries that began to boom in the OBJ era such as telecomms, music, entertainment, restaurants, etc

You are correct, there is a good chance that this $4.2 billion a year they spend on subsidizing petrol, at least a bit of it would be stolen. I wouldn't just remove/reduce the subsidy and leave the cash in the hand of the FG; if I had my way that would be distributed out to states/LGAs. I'd shrink the size of the FG, basically.

Anyway, this is more of a long-term thing. In the short term, it'd cause too much of a shock to let the price of petrol float freely say tomorrow. But over the course of 10 years or so, it'd make sense (coupled with shrinking the size of the FG).

How can it be apples and oranges; they are all oil producers, which is a major similarity.
The debate is not about the size of the subsidy but about whether there are subsidies. There are subsidies in all the countries I mentioned and they don't grapple with fuel scarcity.

Well, that they are all oil producers isn't the most relevant similarity; it is that they all subsidizers.

For one, a 1% subsidy is different from a 50% subsidy. So until you tell us the rate at which oil is subsidized in each country, we don't know if your comparison of corruption levels makes sense.

There are other factors too of course, but that is just the immediate one that jumps out at me.

ola olabiy:
Eku, are you kidding? Locally, it doesn't

Nigeria produces 2.5 million barrels of crude oil per day.

How many does it consume the equivalent of (adding up crude and refined)?

Quite a bit less than this 2.5 million.

So since we are a net exporter of oil, then increasing oil prices help us.

ola olabiy:
Regulated, I said.

I dunno how things are done in the UK. Anyway, I'm not against "regulation" (whatever that means), but I don't think subsidies are a good idea, if one can avoid it.

ola olabiy:
Electricity/gas prices are still being regulated in the UK.

I dunno about the UK, but here in the US, neither of those items is subsidized. They largely float freely on the market (minus the heavy taxes on petrol we have, I guess).