This is what happens when we put all our proverbial revenue eggs in one basket.

And so it begins. As predicted. The Federal Government has begun to say that any lift out of recession is due to its policies.

Kemi “the village bean counter” Adeosun, Minister of Finance, claimed yesterday to CNBC that the policies of this administration were beginning to bear fruit and show signs of lifting Nigeria out of recession.

It would take monumental stupidity to believe this.

She also stated that the Government was still trying hard to diversify the economy and eradicate corruption.

These things, in addition to an improved tax net would mean the country continues on an upward trajectory.

This is patently rubbish. At worst lies and at best inept and misguided beliefs.

The simple facts are that any up tick in the economy is purely driven by oil price and how much can be exported.

The only policy here has been shamelessly cow-towing to the hijackers of the Delta to ensure export potential.

The foreign reserves coffer (the only factor that allows our import dependent country to have any policy) has been growing purely due to over $50 per barrel oil prices.

The correlation is plain for even Kemi to see.

In addition, there are no discernible Government policies that have lead to diversification.

A couple of the connected elite have moved on the rice and tomato market.

This will not help the public funds as the usual exemptions and tax manipulations will apply to these folk.

The simple answer can be found in the fact that agriculture (an area where due to our God given climate and geological gifts, we have a global competitive advantage) has seen lending fall whilst in the oil and gas sector lending is again on the rise.

There has been, and continues to be no diversification.

There are so many things that could have been implemented. So many simple policies for diversification and growth but these would tread on the toes of the elite.

To be fair to Kemi, if she had tried to implement policies that trod on the toes of the elite, she would have been out of government in an instant.

She is doing what she can.

Lying low, trying to hide her lack of capability and popping up for a sound bite now and again.

http://nairainsider.com/business-insider/kemi-village-bean-counter-adeosun/

Potential international investors in Nigeria will be wary to deal with Nigerian authorities.

Any investor googling and searching the press in London, New York, Paris, Johannesburg will be more wary of putting their capital to work in Nigeria today more than ever before.

The reasons can be seen in today’s Financial Times, the UKs world respected business newspaper. It carries two stories about Nigeria.

The first is a continuation of Shell, Eni and Malabu debacle.

Whilst the story offers nothing new in terms of information on the deal, it gives oxygen in the form of column inches, to grand stories of Nigerian corruption.

This goes right down to the level of the details of Dutch investigators phone tapping executives of Shell to gather evidence of corruption.

Although both Shell and Eni paid funds only to the Nigerian government, they are being held accountable for how those funds were then disbursed among the corrupt officials and cronies.

This is the significant element.

The second story in the FT covers President Buhari’s announced investigation into alleged corruption in the disbursement of aid funds to the North East.

This also gives prime column inches to allegations of corruption and misuse of public funds, this time in the use of monies collected straight into the public coffers.

These stories put together feed the jaundiced view that international businessmen have of conducting business in Nigeria.

Not only are they scared of being ripped off in any deal, now they are scared of being phone tapped in order to be criminally prosecuted and sent to prison for aiding corruption.

This is more worrying when reading the comments of The World Banks chief Nigerian economist who stated yesterday that Nigeria needs to source more International debt at low interest as local debt at high interest was unsustainable.

Not much to disagree with in the comments - a statement of the blindingly obvious perhaps.

She lauded the recent Federal Government issue of Euro bonds as an excellent method of achieving this more advantageous borrowing.

If all these factors are put together, how long will it be before international bond investors are criminally prosecuted in their own countries for funding corruption through the buying of bonds in a known corrupt regime?

It’s not much of a leap and would be the death knell of money coming into the country.

At the very least, this additional coverage and prosecution concern among investors and their financiers must make it harder to attract money into Nigeria.

After all, if casting around for places to invest, why not go for Cote D’Ivoire instead?

http://nairainsider.com/the-secret-investor/international-news-coverage-scaring-international-investors-away/

Let us take a minute to applaud Ecobank.

Admittedly they are not wholly Nigerian (only 40% of their business is in Nigeria and one of the largest shareholders is South Africa’s Nedbank), but they appear to be the only bank connected with Nigeria telling something like the truth.

All accounting is creative. It is an art not a science.

However, Ecobank's announcement of poor performance appears to have the ring of truth about it.

This rings out like a bell in the sea of other Nigerian Banking sector participants i.e. Zombie Banks, silently ignoring non-performing loans and performing conjuring tricks with their Profit and Loss Statements.

Ecobank have openly decided to take a Loan Impairment charge and establish their own bad bank to hold the non-performing loans.

No other bank has been so open as to declare a loss like Ecobank.

Instead they appear to cooking up financial magic to make a profit in a terrible economy where every loan is continuously restructured to avoid taking an impairment charge.

Of course, Nedbank are not sitting on a golden egg and have had the value of their investment in Ecobank halved since investing in 2012.

Having had their fingers burnt, there is an Ecobank rights issue announced in which Nedbank will not be participating.

Honesty is the best policy.

Take note that Ecobank is the only declarable non-commissioned operating in the Nigerian sector.

We can only hope other banks follow suit to try and restore credibility to the Nigerian banking sector.

http://nairainsider.com/business-insider/please-applaud-ecobank/

The Federal Government of Nigeria (FG) has announced plans to escrow revenue accounts of the Electricity distribution companies whilst simultaneously seeking funding from the World Bank for investment in stabilisation of the sector.

This seems like little more than stealth re-nationalisation of the industry - a foul cried by industry figures themselves.

Once, when discussing with a large institutional international investor the prospect of investing in Nigeria, he said “I will not be putting our money there. At the first sign of trouble they will nationalise any successful business to provide government revenue”.

This may not be the case in this instance but the latest positioning from the FG does raise the prospect.

The FG proposes that all revenue from the privately owned distribution companies should be placed in escrow.

The conditions for extraction from escrow are not entirely clear, but it would not matter if they were.

The threat of nationalisation and strangling state control is clear.

Meanwhile, we also hear the FG leak information that they are in final discussions with the World Bank on securing funding for investment into the Electricity sector.

The World Bank are not necessarily the brightest sparks and so may or may not have suitable conditions precedent for the lending to materialise.

Their bleeding heart liberalness meaning they may dole out the cash anyway, allowing themselves knowingly to be duped...after all its not their money.

If we put these two elements together i.e. funding sources controlled by the FG and control over revenue accounts by the FG, we are left with a Marxist state control of the means of electricity production.

There is clearly not room for private investment.

No right minded private investors would step in.

Current ownership of Discos will be cancelled and the FG will step in with their cronies to take over the sector.

The juicy fruit is too low hanging and too sweet to ignore.

It matters not what the FG now says, no investors (foreign or domestic) will touch the sector.

At least, not anyone without friends in the right places.

Watch the movements of the connected elite around this sector. Their actions will be telling.

http://nairainsider.com/business-insider/electricity-is-the-federal-government-planning-to-re-nationalize-the-sector/

Readers of Naira Insider know of the shake, grin, grab methods used by governors to generate cash.

Governor Obiano of Anambra has announced something that might arouse suspicions in an election year no less. We pray that there is nothing untoward.

He announced a $2bn investment in an airport and industrial complex in Anambra.

This is being done in a joint venture between the state, an oil company and a Chinese company.

These factors alone should raise eyebrows.

Firstly, $2bn in Anambra at this stage of its economic development - it seems unlikely that that sum will ever be invested.

Experience shows many of our state airports with grandiose plans are little more than a dilapidated airstrip and a shed for waiting passengers.

Anambra is in need of an airport (flying to Asaba and then driving to Awka is hardly optimal) but at what cost?

Secondly, the partners.

Chinese funding sources are flowing like water at the minute as the Chinese government ensures everyone is endeared to them.

One has to assume that the Chinese investors are sourcing Chinese funds.

If the funding even comes close to $1bn, that is a lot of full trouser pockets with even some spare to build an airstrip and a few buildings.

Thirdly, the tried and tested joint venture model.

The money can be shared around with some degree of impunity.

Let’s hope this is a bona fide project but the optics are not good currently.

Let’s see what is there on the ground in 3 years.

What undoubtedly will be there in 3 years is the indebtedness of the fine citizens of Anambra to the Chinese to the tune of hundreds of millions of dollars.

http://nairainsider.com/commentary/governor-obiano-shake-grin-grab-airport-joint-investment-method/

The much publicised leaks of internal emails and investigations of Shell and ENI over the Malabu oil deal are problematic for further foreign investment in Nigeria from serious players.

Western European and US authorities are keen to crack down on participation by their citizens and companies in corrupt practices in foreign countries.

The penalties for being proven to participate in such illegality go beyond damages to corporate image and regulatory issues for the companies.

Individuals can now face criminal prosecutions and jail terms if they are proven to be complicit in corruption and bribery.

The full details of the Malabu scandal are yet to emerge.

But the fact that Shell and Eni executives knew that Dan Etete was involved as a broker of the deal is enough to raise suspicion that they knew of bribery and were complicit, at least through inaction.

This presents a problem for Nigeria in attracting serious foreign investment.

All authorities and individuals know that to get a workable deal in Nigeria normally involves some level of shady payments – be that in cash, property, shares, contracts etc.

Given that Shell and Eni executives are now being publicly vilified for little more than knowing that Dan Etete was involved, who else will come into Nigeria?

Most will think twice and opt for another, say less problematic country for their African investments.

We are our own worst enemy.

Malabu will cast a long shadow over Nigerian investment for many years to come.

The only countries that will invest will be India and China, the neo-colonialists who look to pillage other countries for commodities to feed their ever growing nations.

These countries are corrupt to the core and so we are attracting what we deserve.

http://nairainsider.com/business-insider/malabu-deal-end-serious-international-investment-nigeria/

Occasionally, just occasionally, the mainstream media completes acceptable analysis on a topic or ongoing story.

With all the resources at their disposal, Business Day yesterday published a story containing decent analysis rarely seen amongst the puff pieces and paid for photographs.

We at Naira Insider extend a job offer to the writer of the piece.

This truth telling deserves a home at an organisation dedicated to publishing the true stories of our economy, not brown nosing the Nigerian oligarchs.

The truth appears to be that lending to the Agricultural sector has decreased and has increased to Oil and Gas.

This is truly shocking and a disaster for the average Nigerian.

Many business and voices from academia had said that when the oil price initially crashed, they wished it crashed further, harder and for longer.

It was the view of such people that it was the only way to clear out the ruling oligarchs and start the re-balancing of the economy and wealth distribution in the country.

I now believe them.

The sickness is far too ingrained and the oligarchs far too powerful that even a halving of the Oil price does not help drain the swamp of these thieves.

The real story behind the Business Day headline will only be told by nairainsider.com.

Visit nairainsider.com for the real, whistle blowing story behind the shocking abandonment of the agricultural sector by financiers and government so that they can fill their pockets with Oil money during the remaining years of the Buhari regime.

http://nairainsider.com/business-insider/disaster-nigerian-agriculture-abandoned-favour-elite-oligarchs-oil/

There will likely be several controversial statements made here. One statement that isn't is that, there is an ongoing battle between the Central Bank of Nigeria (CBN) and foreign currency speculators for the heart and soul of the Nigerian Naira.

To be explicit, the heart and soul of Naira refers to its value.

If you're Nigerian or have any interest in Nigeria, your question is, who wins?

This battle has always been waged in the background but lately given the ongoing recession and the seesaw of the value of the naira, this battle in on the forefront of all or minds.

Before we speculate (pun intended) on the answer to the question about who wins, let us first understand the tools in each contender's arsenal or war chest if you will.

Central Bank's Arsenal

1. Foreign Reserve

Six months ago, this weapon was seen more like a liability as the value plunged daily.

The reasons the value plunged have seemingly abated over the past several months.

Since the beginning of the year, the value has risen by approximately $6B. Advantage CBN.

2. Sustained OPEC Agreement

A couple of months ago, after many weeks of negotiations, OPEC reached a landmark agreement cutting output.

In case you missed it, the agreement spared Nigeria from any production cuts because the Niger Delta Avengers (NDA) had done enough damage to production.

It didn't hurt to have a Nigerian, Mohammed Barkindo, the head of OPEC at the helm of those negotiations likely advocating on our behalf.

The effect is the growing coffers of CBN due to increased oil prices as a result of production cuts.

3. Increased Oil Production

There's no doubt in my mind that someone (or someones) was settled financially leading to NDA ceasing hostile activities to the Nation's oil infrastructure.

More production at higher oil prices mean that CBN can continues its own end to sustain sales of foreign currency.

Speculator's War Chest

1. Time

You'll see that the running theme of the speculator's arsenal are more conceptual in nature.

In the speculator's mind, it's only a matter of time before CBN gets tired of trying to influence the value of the naira and let it float.

2. Demand and supply

Speculators believe that due to the nature of Nigeria's consumption, the demand for both foreign goods and foreign services will always exceed supply and the corresponding foreign currency to acquire those goods and services.

80% of Nigeria's consumption is imported goods.

We send our kids to school overseas at an alarming rate in spite of on going recession.

We spend millions of dollars paying for visas, plane tickets, BTA in our unquenchable thirst for overseas travel while many of our local tourist attraction languish in perpetual disrepair due to lack of patronage.

And despite the cry of "Buy naija to grow the naira," by our leaders, their inability to lead by example means this won't likely change anytime soon.

3. The recession

The recession is killing consumer spending across the board - except from entertainers and the politicians that we elected to serve us.

The recession has also killed government revenues from taxes so our smart government has actually increased tax enforcement further deepening the current crises.

When the recession ends and spending picks up, it'll no doubt drive up already demand for forex even higher straining the already beleaguered supply lines.

One could argue that last arsenal by claiming foreign investment would increase post recession.

However, the counter argument could be made that if foreign investment isn't occurring while capital goods are cheap and excess supply of everything exists, why would they spend when prices go up.

Even if they do, it won't be until there is a significant confidence in the long term stability in the economy.

Who Wins?

Any answer to this question would be pure speculation.

Truth be told, anyone who could answer this question with more than 60% confidence will and should invest accordingly.

Many analysts will claim they know and that you should listen to them but many if not most have personal interests and are agenda driver depending on what side of the coin they are vested in.

No one truly knows and this sort of situation can change on a dime.

Look no further at what happened to oil prices on Thursday after the United States reacted to Syria's alleged chemical attack by sending 59 scud missiles.

We may not be able to tell who ultimately wins. But you and I, the average Nigerian are the biggest losers as usual.

As the saying goes, when two elephants fight, it's the ground that suffers.

http://nairainsider.com/commentary/cbn-vs-currency-speculators-battle-soul-naira/

Times should have been tough for banks and so why are they able to announce higher year on year profits?

It seems a couple of reasons.

Firstly, non-performing loans are not being declared.

The banks huge loan books mainly comprised of lending to oil industry companies, is massively impaired.

These companies have for two years been struggling to make their repayments based upon the drop in oil price and collapse in volume and exploration.

Instead of declaring the issues and taking loan impairment charges, the banks are kicking the can down the road with continuous restructuring of the debt.

This means that technically they do not have to declare the loan as nonperforming.

This also means that not only are their books unaffected by taking an impairment charge, but their risk weighted asset position remains manageable and the regulators so not require their capital ratio to be improved.

Add to this that AMCON alleged insolvency makes them unable to take on more non performing debt at inflated values.

Furthermore without proper oversight, the situation makes it is an easy decision by banks to hide the problem and defer the issues by simply waiting for sunnier days.

Secondly, the opportunity to make money from the dollar scarcity and arbitrage between the official and unofficial exchange rates has been enormous and allowed the banks to profiteer.

If you add the banks long standing techniques of applying questionable revenue recognition rules then, just like magic, you have a paper profit.

Personally, I don’t believe it.

Once there is some relief from the recession, expect massive consolidation amongst the zombie banks as the wealthy eat the insolvent in order to survive and take on their assets to bolster poor balance sheets.

Foreign lenders will not touch the Nigerian Banking sector with a long pole at the minute, so this problem is hurting us all by affecting the health of the economy (cost of credit is high, exchange rate etc).

Technical insolvency stalks the sector. Beware.

http://nairainsider.com/commentary/zombie-banks/

Investing in Rail is back in vogue.

Everyone is doing it - well, everyone in Africa sharing corrupt funding sources and willing to offer an outlet to steel manufacturers looking to dump excess supply amid depressed steel demand and prices.

China’s one belt one road policy, got it all kicked off.

The Sino strategy of investing in infrastructure in countries in order to revive the old silk road and secure commodities is stretched to cover Nigeria.

Perhaps implausibly stretched.

Kenya has announced a significant enhancement and upgrade to its rail infrastructure and rolling stock.

This will be completed by Chinese companies and funded by the Chinese government with a favourable loan to the Kenyan government.

This deal is eyebrows raising.

It has one of the highest per kilometre prices of recent times (more than Morocco recent project for instance) causing observers to consider that perhaps senior figures have siphoned significant amounts off to their trousers.

The deal is a dream for Chinese steel manufacturers who have been swimming in excess supply and have been dumping the steel at lower than cost prices on any market they can find.

The Kenyan railway deal means there is a large market to off load at cost plus extra - a rarity in recent years.

Kenya is on the edge of the one belt one road geographic target area.

To some degree it is consistent with it's country's policy but one also senses opportunism - a chance to rehabilitate the Chinese domestic steel industry while give rolling stock manufacturers a boost and secure long term return on investment in Kenyan interests.

All this whilst recouping the principal almost immediately by Kenya sourcing all requirements from China.

So far so simple.

It looks like a bad deal for Kenya.

The argument has been made that road infrastructure improvement would benefit the whole population, cost less and be completed much faster.

The benefit of moving freight quickly by rail does not matter as much because freight can move slowly while not having a great effect on the market, the seller or the buyer.

Nigeria

Now we move to Nigeria.

Much has been made of Chinese investment in rail in our nation.

Now the news comes that global giant GE has struck a deal with the Federal Government for a $5bn investment in our nations rail infrastructure and rolling stock.

Simply huge figures should attract huge scrutiny.

This will undoubtedly not happen.

What counts for Kenya counts for us too.

The opportunity for siphoning funds is huge and we all know that any self respecting official or the Minister for Transport himself would ensure that their foreign bank accounts get full to the brim.

However, the mainstream media looks like it will clap like seals as the FG announces a huge foreign investment in the country instead of scrutinising the government’s actions and assessing the value of the deal for our fellow citizens.

So far the details of the deal are not clear.

But true to form the photo opportunity has been taken (see Naira Insider article grin, Shake, grab).

Regardless of the obvious flaws and the opportunity GE has seen to earn interest on its investment and utilise it’s surplus steel, it appears to this writer, that the case for railways in Nigeria is currently flawed.

Rail was successful in the European Industrial revolution as a method of transporting people and goods along set routes when there was no motor engine that could move people and goods more specifically from point A to point B.

Bulk goods and commodities are still moved along established rail lines slowly but relatively cheaply as the network is established.

In Nigeria, the context is different.

We have no operable or extensive existing network, so the cost per mile of moving freight must include a 20 to 30 year payback of the network construction .

This business case could never be made to stack up.

In addition, there are not sufficient goods or commodities produced to keep the rail network busy.

It might be argued that Rail is an enabler to industrial growth by supporting movement of goods and raw materials, but in reality there are many bigger blocks to efficient production and markets, that have to be removed before a rail network would become a material benefit.

Finally, according to all state governors, as all states wish to be multi industrial production centres, the rail network would have to cris-cross the country to support this, something that will never be financially viable.

Given the choice of road, air or rail, consumers in most countries choose a combination of road and air.

So if the movement of consumers, raw materials and goods could be efficiently and more flexibly supported by a road and air network and supporting logistics industry, why is the FG hell bent on rail?

The answer must lie in the gaping depths of the trouser pockets of officials.

$5bn of investment would go a very long way when applied to roads.

But rail is less transparent and can attract a huge opaque lump sum financing deal.

Lack of transparency and opacity are the friends of hungry officials.

When you add to this the shear size of the chop it appears that rail is impossible to resist.

http://nairainsider.com/commentary/railway-robbery/

In many ways, pure communism is laudable.

In the view of this writer, Che Guevara fought a noble fight.

Unfortunately for communism, human nature gets in the way and corrupts it to the Orwellian version where “all animals are equal, but some are more equal than others”.

For the sake of clarity amongst those political scientists of my readers, Marxism was created from middle class angst and cannot be equated with communism in its purest format.

It is safe to say there are no true communist states in existence today.

Just a ragtag bunch of dictatorships, one party controlled states, repressive regimes run by a plundering elite and run down countries where there is not enough collective will to overthrow a precarious regime as the expectations of the people have sunk so low.

Russia, Venezuela, North Korea, China, Cuba and others all fit the bill.

Add to this list our beloved but oppressed country of Nigeria.

I can feel your surprise….Nigeria Communist

Given that we just stated that there are no true communist states, only “some are more equal than others” states. Then face the facts…..

Criteria 1: One party state

The same Nigerian jokers swap between political parties at will and for personal gain.

No party has a discernible manifesto different from another.

So ostensibly not one party, but one group of people badging themselves as they see fit to stay in power.

There are no changes in power, just twilight putches as in the Chinese regime where factions vie in the same party.

So for all intents and purposes we live in a one party state where no matter where you place your mark on the ballot paper, the same policy-less individuals are returned to power.

Criteria 2: State controlled means of production

This is admittedly a cornerstone of Marxism, but also true in most communist countries, even the liberalising ones.

In Nigeria can anyone seriously argue that the one party state does not control production?

Dangote and members of the one party elite combined have control over most sectors.

Heavy regulation allows the one party state to sanction it’s enemies and promote the business of the elite to the point that there is total domination and control of most sectors.

If you doubt, investigate the use of import tariffs and how waivers have been granted over many years to those connected to the one party state.

There are so many oligopolies in Nigeria currently, it feels like late 1990s Russia.

Criteria 3: Dictatorship

Sai Baba, need I say more.

The cult of personality, serfdom and control is a common thread amongst our presidents.

The only variables appear to be how many times in a month you are seemingly drunk on the job or receive Obasanjo at Aso Rock.

Was there not state organised and supported hero worship of Stalin, Mao and Castro?

Is our lazy and bought off mainstream media not the propaganda mouthpiece of the one party state?

The reporting of Buhari’s health issues has been a rare exception that perhaps proves the rule.

Criteria 4: Oppression of opposition

No need for violence in Nigeria.

Just make sure you give military heads the opportunity to make enough money, bribe the judiciary and point EFCC and/or DSS against opponents and more obvious oppression is unnecessary.

Years of poverty and disenfranchisement mean the expectations of the masses are so low they are more likely to turn on each other than their oppressors.

Ongoing attempts to censor our social media prove the fear in the one party state of allowing an informed and uncontrolled population.

Like many countries that wish to suppress information flow amongst their people, Nigeria is reported to have purchased (under the one party era figurehead of Jonathan) software to block and control the Internet.

Conclusion

So tell me Nigeria is not a communist country.

Oh, actually it’s not.

I am wrong.

No self respecting modern communist country would allow it’s name to be besmirched by mass starvation.

Nigerian communists don’t care about world reputation – let them die.

So perhaps I was wrong.

The disgraceful disaster in the north east would not happen in a communist state.

They couldn’t stand the shame.

The Nigerian one party state has no shame. No drive to protect its image. So perhaps it is not communist after all.

http://nairainsider.com/commentary/nigeria-pseudo-communist-state/

In other lesser business publications, every day there are placed “puff pieces” describing how a state government is single-handedly solving the national problem by facilitating a foreign company investing in their state and thereby bolstering the economy, providing employment for state indigenes and filling state coffers with anticipated tax revenues.

Sadly, the much flaunted deals are usually not what they appear or, to use paramedic parlance, are “dead on arrival”.

Some have expired even before the article with inevitable grin and shake photograph have even appeared.

There are clear reasons for most of these demises which we will explore.

However, it is important to know that most of this news is driven by the apparatus of the state to prove how well they are doing.

It is this writers experience that the volume that these news pieces appear is in reverse correlation to the actual performance of the state administration.

What it usual indicates is an impending election, political strife or need to cement a powerful position.

Here are the categories of these “deals”.

The Photo opportunity Deals

This writer has had an initial meeting with a state governor concerning an investment in the state. Much to our delegations surprise the official photographer was there and whilst we were corralled in the governors office the grin and shake photo was taken.

This then appeared in the national press the following week announcing the approximate size of the planned investment as a completed deal and celebrating the governors successful approach to attracting investment.

Unfortunately, the lack of integrity of the process made the foreign investors pull out and it died a death just after the press piece.

The Governor received some much needed positive press, but the people of the state lost employment opportunities.

The “death by a thousand cuts” deals

State governments control land title, in this way they hold investors who need land by the testicles.

The investor who needs land (an international agricultural company for instance) naively approaches the state government to announce their intention of buying land to start their enterprise.

The state government having enticed this investor, or just having the opportunity land in their lap, welcomes them with open arms.

What an amazing opportunity to make personal short term cash and ensure that the poor rural folk remain in abject poverty.

It works like this:

State government declares a “market price” for land in their state
After a ego massaging amount of negotiation the investor agrees in principle and memoranda are signed.

Area of land is identified by the state (dollar signs whirling in the eyes of all the members of the state apparatus).

Locals are engaged by the state and surveys arranged

Suitable land is agreed upon

Further agreements signed

Money handed over from the investor to the state to cover all fees, taxes and purchase price of the land. This is made to look like a good deal by giving huge discounts on the inflated official levy of taxes and fees required to secure the Certificate of Occupation.

Flash bang – what a picture, what a photograph. The press release is created and published in several national and local publications, maybe even a piece in Channels News.

Now the thousand cuts starts. Everyone takes their personal piece. Governor, surveyor general, commissioners of finance and agriculture and investment. Then the senator for the district, the local government chairman. By the time the purchase price has been chopped so many times there is little left for the villages that have given up their birth right for the hope of low wage employment
Deal dies as villagers realise the scale of their rip off and how the enormous paid sum has been chopped so much that by the time it gets to them it is hardly enough for a bag of rice each, refuse to allow the security of personnel of the investing company to enter the land

The Joint Venture (JV)

A favourite of governors.

This allows money making immediately but also provides a pension scheme for the governor and one or two other officers of the state (a governors power in his own state can be measured by how many people he has to drag into share the chop, the fewer people, the more powerful the governor).

This method has the best chance of (medium term) success.

This species of deal is easy to spot as it is identified by its extravagant press coverage and lauding of the Governors “business acumen”. Usually covered in multiple state newspapers and Channels TV.

The Joint Investment

A tried and tested money spinner for governors, their family and anyone with a corrupt heart and a couple of brain cells.

The remnants of this lie across all states in abandoned “state of the art”, ‘ultra modern” industrial facilities.

The government secures funding for a joint investment in an industrial processing unit. After the money has been taken from the federal or state sources an initial portion of the investment is created (for instance a sub standard building).

After this is completed and a draw down of all available funds finalised (the private sector portoon of the investment having mysteriously never appeared) the project is abandoned with the partners in crime making of with usually 30% to 65% of the loaned investment funds in their trousers.

These are now harder to make work given the end higher degree of public scrutiny and reluctance to write off bad debt. So have been replaced by…..

Rehabilitation of state industrial assets

Paint factories, ceramics, textiles, agriculture.

Look at your state and you will see press examples of these rehabilitation being lauded with many back slapping pictures. Often with co-investors from India, Israel, Latin America, Asia and (inexplicably) Belgium.

These schemes are less lucrative than original investments but yield trouser cash in tricky times for scamming.

The mechanism is simple.

A foreign investor indicates interest in a state asset, the state government secures money to rehabilitate and the partners share the cash through shell companies.

Often part of the cash is secured against the industrial asset in question.

Doesn’t generate enough cash for Ghana must go bags to be stuffed in car boots, but enough to keep a commissioner in hotel rooms and prostitutes for a year or so (depending on their proclivities).

Due to its nature these are deals that someone lower down the structure focuses on and so is a favourites of investment commissioners and their honorable friends in agriculture and finance.

These have to be allowed by a Governor, even though His Excellency may not have a slice, to ensure their the commissioners and/or their God fathers do not mutiny.

These are especially necessary in the first 2 years of a governors term or if there is political turmoil in a state.

You may find Governors brothers and cousins also involved as it is an easy way to keep the loud and hungry mouths around the Governors nest silent but without giving away the juiciest worms

Genuine investments run for the benefit of the citizens

I can’t talk about these, as I have not yet seen one

Conclusion

Folks, it’s a murky and swampy world out there.

Just be skeptical of any and all investment announcements especially those with the photos of the largest grins.

If the photo is large enough check the clothing of those grinning for bulging pockets.

Don’t read the puff pieces in the press written by journalists who have substituted their meager salary with paid for lies.

Large international investment is another thing altogether. Still murky and filthy, but needs another article to cover…..more to come from this secret investor.

http://nairainsider.com/commentary/inside-story-foreign-direct-investment-nigerian-states-shake-grin-grab/

One of the major societal benefits of a free press is to hold power to account and expose hypocrisy and wrong doing.

Unfortunately, evidence has been provided that our national mainstream media is either lazy or complicit in wrong doing.

Either is unforgivable.

The report of the sale of Keystone Bank by Asset Management Company of Nigeria (AMCON) is extremely depressing.

Making matters worse is the abject failure of the mainstream media to investigate the sale or even raise a journalistic eyebrow.

Whistle-blowers within AMCON itself raised alarm last year concerning their suspicion that the MD of AMCON had bypassed the bidding process where there were approximately 13 bids, in order to effect the sale of Keystone to a group of cronies.

The implication was that there was a “Northern cabal” in operation to ensure the sale of the rescued bank to a select group of investors.

To be clear, this writer cares not whether the cronies were from the North, East, West or South, but more that there is the whiff of cronyism.

This was widely reported from the 20th March 2017 onward, when the story of the sale was released.

The sale has been effected (dependent on “conditions precedent” in the sales contract) to a consortium.

Strangely, for a successful consortium buying a bank that Nigerian taxpayers have paid to rescue and support, the investors are unknown, there is no banking track record and the beneficial owners of the companies involved in the consortium are not transparent.

Nothing recently coming out of AMCOM Towers has smelt so badly as this deal.

Well, not since various big men’s oil company assets were taken on for hugely inflated values above market price.

(By the way, sources within AMCON said that a certain mega yacht that dominates the Lagos Lagoon owned by a certain oil man was not touched as it was tied up in so many Caymen Island companies that it required forensic analysis and overseas prosecution to try and seize it).

There is no transparency on the sales process, no transparency on the contract and no transparency on the buyers.

The nearest closest bidder, bid less than 50% of this consortium but the successful consortium appears to have not paid a kobo yet as conditions precedent have to be met.

Who knows? They may end up paying a quarter of the announced price depending on how the conditions are met or not met.

No mainstream media outlets in Nigeria have picked this up very skeptically.

No one has investigated or sufficiently questioned the deal.

Are they too lazy or too afraid of power or have they been bought off.

One of these explanations has to be correct.

Naira Insider will not stand by.

We offer cash to any whistle-blower who can provide verifiable and incontrovertible evidence of wrong doing.

We stand for transparency and the advancement of the citizens of this great nation, we will not stand idle when faced with such possible cronyism and thievery.

http://nairainsider.com/commentary/amcons-keystone-sale-failure-of-a-lazy-or-complicit-media/

LAGOS Mar 2 (FxMallam) - Nigeria's foreign exchange reserves climbed to $29. 65 Billion as of Feb. 28, their highest level in 19 months, data showed on Thursday showed as the central bank continues to rebuild currency buffers beleaguered by low oil prices.

According to data from the Central Bank of Nigeria (CBN), the nations foreign reserves stood at $29.28 billion as at February 20th when CBN issued it latest foreign exchange policy memo allowing individuals access to foreign exchange for travel, school fees and other personal needs.

Nigeria's reserves are up 14.7 percent from this year and are close to hitting a largely psychological yet noticeable balance of $30 Billion, a level not seen since November 2015.

However, the reserves are are still far off their peak of $64 billion hit in August 2008.

The rise also coincides with a recent rise in the price of crude, which account for most of Nigeria's foreign currency earnings.

Traders expect the recent gain at the parallel market to be sustainable only if CBN's plans to defend the naira can also occur simultaneously with continual and sustainable rise in the nation's foreign currency coffers.

http://www.fxmallam.com/news/nigerias-foreign-exchange-reserves-0-6-since-new-cbn-forex-directive/

LAGOS Dec 14 (FxMallam) The Nigerian Naira on Wednesday closed flat against the dollar at the parallel market ending at N485 where it had traded since last week.

The local currency appears to have found equilibrium even as oil prices rise following OPEC output cuts and the nation's reserves continue to inch up.

According to President Muhammadu Buhari, Nigeria will be expecting its 2017 deficit to rise to 2.36 trillion naira ($7.75 billion), as the government tries to drag Africa's biggest economy out of recession with a budget that plans record spending.

Buhari also said the budget was based on an exchange rate of N305 to the dollar and a projected oil output of 2.2 million barrels per day at an assumed price of $42.5 dollars per barrel.

At last check, oil was trading in the mid $50s.

The Naira also maintained its previous day's values against the Euro and the British Pound closing at N515 and N605 respectively.

The year 2016 has seen the local currency depreciated the most in its 43-year history, opening at 197 in January at the official market and 265 at the parallel market.

Read more at http://www.fxmallam.com/news/naira-firm-485-buhari-presents-record-budget/

7 Ways for Nigerians to make Extra Income in 2017

The recession is still going strong and on top of that, there will expenses to be made during this December period leaving you feeling high and dry...your bank account anyway.

Family members will need you to “do them Christmas” especially if you go to your village or have anyone who depends on you i.e. family, domestic staff, that one coworker who always needs you to spot him N5K till the end of the month.

Come January 2017, it will be soaking garri and eating Indomie. Fear not, FxMallam’s knowledge base is beyond just forex matter. Here are 7 ways to earn extra Income in 2017.



Ask your Oga at the top for a Raise – I acknowledge that this one has K leg i.e. goes against conventional wisdom during a recession. However if you know your worth and have any bargaining power, nothing says you can’t use it even right now. But as the ancient Greeks said, “KNOW THYSELF”, if you are a terrible employee or your job has a lot of competition, this is a no go area. There are several other options on the list.


Sell your used stuff – Due to classified websites like OLX or even Facebook, there’s never been an easier time to sell things direct to other consumers. We all have clothes, shoes, bags, old phones, old tablets or iPads that we can sell for a bit more cash. No need hoarding it because well, you can get cash for it. One man’s junk is another man’s treasure…or woman’s.


Create or Develop Online Content for Others – These days blogging isn’t limited to just professional blogs. Now companies are getting in on the action as a way to drive traffic to their websites. Banks, Insurance companies, clothing companies both home and abroad use freelance bloggers as part of their repertoire. Hone in your writing skills and do some research. You just might make yourself some forex as well.


Blog – Don’t want blog for others? Then blog for yourself. Find content in demand but also content you are passionate about. The goal may not be to become the next Linda Ikeji. But we are talking about a little extra income. Any good at it and you’ll earn from Google AdSense. Become great? Then selling ads on your blog might give you more than just extra income.


Become a Lesson Teacher – I had lesson teachers. Many of them were current University students. This is an excellent option to earn a little more scratch. I can assure you that there are parents in your neighborhood with kids who are looking for lesson teachers. And if there’s one industry that is recession proof in Nigeria, it is education. If you consider yourself book smart and can help a child get ahead, well, this might be the place to cash in.


Drive for Uber – This might be out of the reach of some people because you need to own a car. However, if this is within your ability, Uber is an excellent option to make money on the weekends especially in Lagos. So rather than blow your hard earned income every weekend, consider making more.


Rent out a room in your house or flat – Airbnb has made doing this very easy. In fact, there’s competition from other websites such as Homeaway.com and VRBO.com. Airbnb stands out because they try their best to vet both the home owners and renters. This is a way to make tens of thousands of naira every month.

Bonus: Make money on Fiverr – Last but certainly not the least is Fiverr. If you have a service to offer — from graphic design, editing, copywriting, blogging or writing CVs — you can sell it on Fiverr.com. The site was launched on the premise of offering to do tasks for $5, but now, sellers can now charge much more. It’s free to sign up, and sellers keep 80 percent of the purchase amount for services they sell. Do a great job and rank up quickly. Might I add, they pay in dollars!

http://www.fxmallam.com/lifestyle/7-ways-nigerians-make-extra-income-2017/

LAGOS Dec 9 (FxMallam) The Nigeria Naira on Friday closed flat against the dollar at the parallel mark ending at N485 where it had traded all week.

The local currency had opened the week at N485 as against N480 last week.

The Naira also maintained stable outlook in both the interbank and BDC markets closing at N305 and N400 respectively.

The Naira however had positive movements against the Euro and the British Pound.

The Naira gained N1 against the Euro rising from N516 it traded on Thursday to close at N515 on Friday while gaining N6 to close at N602 from N608 against the British Pound.

A combination of lower demand for foreign exchange and anticipation of dollar flows from Nigerians living abroad who are expected to visit home during the December holidays are proposed as reasons for the slight movement of the beleaguered currency.

Trading will be closed on Monday as the Federal Government has declared the 12th of December as a public holiday to mark the Eid-El Maulud ( or the birth of Prophet Muhammad).

http://www.fxmallam.com/news/naira-steady-against-dollar-rebounds-slight-against-euro-and-pounds/

LAGOS Dec 8 (FxMallam) The Nigeria Naira on Thursday, held steady against the United States Dollar in the Parallel Market due to signs of dollars inflow from the Diaspora.

The local currency fell week-on-week on Thursday to 485 to the dollar on the parallel market from 480 a dollar last week but has remained steady all week.

The Naira was was quoted by commercial lenders at 315 a dollar on the official interbank market.

However, the story was different from the Naira against the Euro and the British pound.

The Naira crashed against the Euro falling from 510 it traded on Wednesday to close at 516 on Thursday while also falling from 600 to 608 against the British Pound

According to Reuters, "the naira is expected to hold steady around its present level against the greenback in the parallel and official interbank market as dollar flows from Nigerians living abroad who are expected to visit home during the December holidays."

"Demand for the dollar is seen dropping ahead of the Christmas as businesses gradually wind down, while dollar flows from Nigerians in Diaspora visiting home on holiday is expected to increase supply in the market," one dealer said.

http://www.fxmallam.com/news/diaspora-dollars-help-steady-nigerian-naira/

iPhone 8 to have Iris Scanning Technology

A new report from the Chinese-Based publication MoneyDJ also known as DigiTimes suggests that Apple may debut iris scanning technology in the iPhone 8.
 
The publication cites multiple supply chain sources as the origin of it’s information.
 
“Xintec is expected to enter mass production for iris-recognition chips in 2017, which will boost the backend house’s revenues for the year, the report cited market watchers as saying. New orders for iris-recognition sensors include those for the chips that will be embedded in the 2017 series of iPhone, the watchers were also quoted in the report,” reports DigiTimes.
 
This information appears to confirm information earlier in the year from the very reliable KGI Securities analyst Ming-Chi Kuo. Kuo wrote in March that he was expecting both iris scanning and facial recognition features to make it onto the iPhone 8.

http://www.iphone8blog.com/iphone-8-iris-scanner/

http://www.iphone8blog.com/iphone-8-rumor-curved-oled-model/ for picture...

Several supply chain leaks and reports released over the past few months point to the iPhone 8 having one version similar to Samsung’s Galaxy Note 7. That is one version will have a curved OLED screen.

As long as it doesn’t come with the same exploding battery.

Another report out of Asia reveals that Apple will launch three versions of iPhone 8, but just one of them will have a curved OLED screen.

Supply chain sources told the Nikkei Asian Review that the 4.7-inch and 5.5-inch models will have flat LCD screens similar to the just released iPhone 7.

However, a premium cell phone will have a 5.5-inch or larger OLED display bent on both sides similar to Samsung’s flagship phone.

An OLED display offers sharper color contrast, better power efficiency, and better viewing angles compared to the LCD technology.

Earlier this year, it was widely reported that Apple had awarded a $2.59 billion contract to Samsung for the supply of OLED displays starting sometime next year.

Foxconn seems to believe that Samsung may struggle to supply both Apple and itself, so it has started working on its own glass casings and OLED displays to secure an order from Apple.

So far, there’s no slowing down Apple or the iPhone series.

Several analysts from South Korea see only upsides for iPhone 7 component suppliers as a result of the Samsung Galaxy Note 7 recall, with one expecting to see over 100 million sales of Apple's new phone before the end of 2016.

id911:


Do u actually understand what an opposition leader is at all? The hypocritical and integrity challenged Femi Falana u mentioned is a card carrying member of the rulling party the APC. So how do u now called a member of the ruling party an opposition leader? Maybe u need to go back to school.

May God bless the great and courageous warrior Ayo Fayose who is the only opposition voice in the country today

The only problem with Fayose is widespread credibility. In the end, people will remember the words he has spoken. But PDP needs to give him a bigger platform if he is truly to be effective or successful.

abuayman:
Just Fayose alone. Wike his brother had back down.

So Fayose is the Opposition Party.

You are right. At this point, Fayose quite possibly might be the face of the opposition. I am not sure that it will be enough to influence this government.

kolaish:
NONE YET. BUT FOR THE YORUBAS, I THINK FALANA IS IN A BETTER POSITION, ONLY THAT HE HAS NOT WOKEN UP FROM THE SLUMBER OF NOT GETTING APPOINTMENT FROM BUBU. SO, FALANA SHOULD WHEREVER HE IS READING THIS STATEMENT, STAND UP AND DISCOVER HIS DESTINY. I SEE HIM AS ONE THAT YORUBAS WILL RESPECT IN THE NEXT GENERATION POLITICS. IBOS AND HAUSAS IN THE HOUSE SHOULD NOMINATE THEIR PERSON.

I don't think this should be limited to tribes in my opinion. I agree that it appears the Igbos so far have chosen to remain quiet. But that silence could come at a steep price

Who is Nigeria’s Opposition Leader?

The opposition leader is traditionally the leader of the primary party in opposition to any current government.

Occasionally, it might even be an individual not occupying an official leadership role in that party.

Prior to the election of President Muhammadu Buhari, former Lagos Governor, Bola Tinubu was seen as the leader of the opposing party, All People’s Congress (APC) and its preceding party, Action Congress of Nigeria (ACN).

Yet Tinubu wasn’t the chairman of the party nor did he plan to run for office.

The formation of APC via mergers with two other political parties could not have been possible without Tinubu’s leadership.

While not as outspoken as other members of the party, the pragmatic former governor engineered the first change of government since Nigeria returned to civilian rule in 1999.

It could also be argued that the threat of the first credible opposition party since 1999 under Tinubu’s leadership forced the government of then President Goodluck Jonathan to sit up particularly in the run up to the election.

Dearth of Credible Opposition

Nigeria as a country today is facing its biggest challenges of the past two decades. They are but not limited to
- Boko Haram Insurgency and IDP Relocation
- Corruption
- Lack of Economic Diversification
- Deepening Recession
- Declination of the value of the Naira
- Niger Delta Militancy
- Infrastructure

Many of problems precede the current administration. However a year has gone by since a change in government. Yet most Nigerians feel like things are getting far worse.

So much so that the opposition Party, the People Democratic Party (PDP) have a campaign slogan of “Change the Change”.

Ignore for a second that the slogan is at best juvenile. It could also be argued that the opposition party is lacking serious leadership and its current state of affairs can’t be described as anything resembling credible.

As an example, the latest news story featuring PDP is that it has disowned it official twitter handle and reopened a new one. They have also disavowed Prince Deji Adeyanju who was apparently their director of New Media.

Yet as of September 6, 2016, the now former PDP twitter feed continues to be live almost in direct mockery of the entire party.
Needless to say, leadership of PDP is effectively non-existent.

Will Nigeria’s Opposition Leader Stand up

So who is or who should stand up as Nigeria’s opposition leader? Who can the average Nigerian stand behind and ask to speak for them or organize a party, group, front that will ensure that someone is holding the current government accountable?
I don’t know who should. But here are the most outspoken critics of the current government and as such may be in line to carry that mantle.

Ben Murray Bruce – Senator Bruce who represents Bayelsa is perhaps the most outspoken critic of the current administration. His tag line, “I am Ben Murray Bruce and I just want to make common sense,” ends his occasional videos on various social media platform. While he has his detractors like all on this list do, his supporters will point to the attempt of purveying solutions as his biggest strength.

Governor Ayodele Fayose – To say that the current Governor of Ekiti state is controversial is an understatement. He has assailed President Buhari consistently since he got into office on everything including his age, capacity, calling hypocrisy on the president’s corruption fight and even going after the President’s wife. Whether Governor Fayose can be accepted as a national voice of the opposition is yet to be seen as his tactics are often seen as not-so-classy.

Femi Fani Kayode – The former aviation minister was a vocal critic of the party in power. That was until his arrest by the Economic and Financial Crimes Commission earlier this year alleging fraud and financial misconduct in connection with his time in office. Supporters have called it a witch hunt due to his vocal criticisms. Needless to say, FFK as he is fondly called has been comparably quieter recently.

Remo Omokiri – A former special advisor and assistant to the former President, Goodluck Jonathan, Omokiri quite possible could be the least controversial and political of the lot. A broadcaster and notable Christian minister, Omokiri has the most international appeal and his methods of speaking out are regarded as very sensitive without being too disrespectful. Omokiri is well learned holding multiple university degrees from both home and abroad. He is the founder of a multimedia project, Build Up Nigeria which as the title suggest aims to build up Nigeria.

Without a credible opposition leader, Nigerians might wake up in 2019 clamoring for change but ending up with more of the same. Even if Nigeria decides to “change the change”, if the only other option is going back to party in PDP that is clearly broken at the helm, then we fulfil as a country the definition of insanity, “doing the same thing over and over again and expecting a different result.”

http://www.fxmallam.com/opinion/nigerias-opposition-leader/

Profit margin shrink? I am willing that bet that over 50% of manufacturers are not even making any profit. Massive layoffs going on everywhere and 6 months plus of owed salaries. Staff can't even quit because there's no place to go to. These are trying times folks.

If your content is really good, the most lucrative option is to sell ads directly to companies that your readers would be interested in. It takes more work but pays best.

LAGOS Aug 12 (FxMallam) - The Nigeria's naira hit an all-time low of 353.75 to the dollar on Friday in one interbank market trade worth $1 million according to a report by Reuters.

Earlier the naira had hit a new all time low of 350.91 prompting another intervention by the Central Bank of Nigeria (CBN). The currency has been hitting new lows since this week.

The currency started the trading day at 317.50 naira to the dollar from about 320/$1 on Thursday. The naira finally settled up to end the trading day at 319.05.

After CBN authorized the sale of of foreign exchange (forex) to bureau de change operators by banks, the naira firmed on Wednesday and Thursday on the parallel market, trading around 392 to the dollar. Reports however show that the Naira closed lower Friday to end the trading week on a slightly sour note.

The CBN authorization allows BDCs to purchase $30,000 per week, to sell on the parallel market at a margin of two percent only.

The $30,000 bought through the interbank window is to be sold to customers need to fund medical travels, personal travel allowance, and tuition for Nigerians schooling abroad with a maximum purchase of just $5000 according to restrictions placed by CBN

http://www.fxmallam.com/news/naira-hits-new-time-low-353-75-dollar/

One step you can't skip is to have the money in the first place

At the end of the day, unless he can magically turn the economic situation around, we might be looking at a one term president here folks.

Houston, TX June 29 (FxMallam) - As United Airlines prepares for its last scheduled flight from Houston to Lagos, Nigeria on June 29, 2016, rumors reaching Fxmallam.com from internal sources suggest that the Houston based carrier may be reconsidering it's decision to pull out of the West African Country.

Both Houston and Lagos are key centers for the oil and energy markets.

United Airlines had cited the route's financial performance as the basis of their decision to exit Africa's largest market.

However, internal sources revealed the Naira peg has restricted the ability for the company to access it's funds within the country weighed heavily on the decision to end it's only African route.

In a memo to employees back on May 27, 2016, United cited poor financial performance and weakness in the energy sector for ending the route.

“After careful analysis, we have decided to exit the IAH-LOS (Houston to Lagos) route and redeploy the Boeing 787 aircraft where it can capture more profitable demand," United said in its Wednesday memo. “Our last flights will be June 29 (eastbound) and June 30 (westbound); after that, customers can travel to LOS via our Star Alliance partners.”

“The IAH-LOS (Houston to Lagos) route has been under performing financially for several years,” United added. “Because of its importance to key Houston-based customers, we continued to invest in it; however, the recent downturn in the energy sector has caused these customers to spend less on travel.”

Now that the Naira has been floated and the Central Bank of Nigeria (CBN) has indicated through action and words to ensure ample foreign exchange availability, a move that United Airlines management didn't anticipate, the feeling within the company is that a return to Lagos would be in their best interest.

Timeline

"There is no set timeline. UA was not expecting the Nigerian FG to fix the FX policy so quickly and have committed the 787-8 to TLV (Tel Aviv) so there are no available planes," the United Source told FxMallam.com.

"Fleet Management and Route planning is working together to find a plane they can use. Maybe a 767-300 or one of the many 787-9s they're taking delivery of. The problem is that those have too much capacity," the source continued.

No solution is expected in the near term but look for United Airlines to be back in Lagos, Nigeria within 6 - 18 months.

http://www.fxmallam.com/news/united-airlines-reconsidering-decision-pull-lagos-following-naira-float/

They shouldn't stop there. They should also prioritize Nigerian contractors when it comes to Capital Expenditures as long as those contractor have a solid reputation doing business here. Otherwise, how much really is consumption of FG agencies compared to capital projects?