₦airaland Forum

Just30:
All the noise should just be directed to your various govt, they are the ones you elect and pay taxes to..

The sense of entitlement on US money is weird

Exactly. Africa beyond aid (in the voice of Akuffo Addo).

Just30:
Kenya and Nigeria, why are you guys crying so bad over Trump cancelling all medical aid supplies from you country?

We are crying? Hmm, I never knew. The world will simply adapt though.

COMPAQ:
There is no big deal to Dangote importing crude, especially since he also exports refined products.

If he imports $2bln worth of crude and exports $2.8bln of refined products, what then is the problem?

And it’s not a big deal that Nigeria cannot supply him 100%. Some countries have refinery and have zero crude! Same way some countries have zero cocoa and export chocolate! Didn't they import the cocoa!? Important thing is value addition.

You are spot on. Nigerians are very funny and emotional and hardly dig into some of these issues deeply.

Obaaderemi2:
What's the story?

They just invented an AI tool called deepseek that is so efficient and does the job of U.S tools like ChatGPT without spending even half of what the U.S put into their AI companies. To make matters worse for the U.S companies, it’s free. This is currently crashing U.S A.I stocks in the U.S stock market.

China just hit U.S so hard.

budaatum:
Nigerian Guinness is big in UK already, and a shortage of local Guinness increased demand of all available stouts in UK including Nigerian Guinness. And I wouldn't be surprised if that increase in demand was all over Europe and even worldwide.

That's not to say Tolaram didn't do "some good sales and marketing", though I doubt their increase was mostly from Nigerian sales.

The below is for 4 bottles. Tell what that would be in Naira.

But this was 11 months ago before Tolaram took over. Guinness were making losses 11 months ago.

iichidodo:
[color=#1986BC] As long as we are not importing fuel and other energy condensates...[/color]

We are still importing fuel for now just not like before.

iichidodo:
[color=#1986BC] The forecast of 15% reduction in inflation for 2025 by that Edun guy is on point...[/color]

Especially with the rebasing this month which would use base year as 2024, inflation in NBS books would reduce. So Government knew what they were saying. The only thing left is to ensure exchange rate stability.

greatiyk4u:
Too much noise over this tax reform bills

Why isn't the document made open self

It has been open for those interested enough to find it.

AfriqueDuZuid:
Do you know Inflation can erode any gains, and Nigeria's inflation is at over 30%

Much of the inflation is also caused by the devaluation. Once there is currency stability or appreciation for a full year, it would have a pass through effect on inflation.

rvp2018:
Ethiopia 230? Ethiopia GDP is like Nigeria before - lots of cooking of the exchange rate. Once Birr is truly freely floating and forex controls removed it will settle where it should

The thing about floating is that the resulting inflation would mean the local currency would catch up after some time. Yes volume of goods and services would reduce at the beginning due to lack of purchasing power from the inflation but in few years at most, everything would adjust to where they were before in dollar terms depending on how fast the economy grows.

AfriqueDuZuid:
On another note

What happened to Nigeria

Nigeria has not rebased for over 10 years now (Rebasing should be done every 5 years). When the rebasing is done it would capture the nominal GDP vis-a-vis the double devaluation of the naira that saw the official rate drop 3.5 times what it was in May 2023 (from 460 to 1530). But Nigeria’s GDP even in real terms has been growing.

rotadeco27:
Mr man , shut up, all crude oil transactions are done on naira and not dollars thus, dollar rate should not affect it. That is the reason for naira for crude for the locally refined oil. Once the price of PMS comes down most of the food items will respond, it is only the imported goods that will be dependent on dollars. By the time PBAT is done with what he has in mind, those of you with fear of God will come out to apologize to him and his supporters.

Naira for crude deal is not subsidized. The deal was made at the prevailing exchange rate so that FAAC would not suffer for it. So if Dangote buys crude today, he buys it at the market rate of 1500 in naira.

stunnert:
The price of petrol will definitely go down in the coming months

They are not producing petrol yet. Also, petrol prices are more dependent on exchange rate and global price of crude oil than the number of local refineries you have.

awesomeJ:
Tution? I'm sure if anyone has learned from the other here, you're the learner.

Is GDP a measure of the quantity of goods produced or a measure of the value?.

Get your points to be coherent na, you don't have to comment if you're not knowledgeable about something.


You yourself gave an analogy that shows the value has increased from N100m to N200m but you claim since the quantity didn't increase from 10,000 tonnes then no GDP growth.

Come on na, no be value be GDP again, have they changed the definition to quantity?


As long as you understand that the value should be showing N200m from the old N100m, you've gotten my point. What you should explain if you have an answer is why NBS is showing the value as N110m.

Real GDP growth removes the effect of inflation (usually caused by devaluation) on that growth. While nominal GDP growth would give you as it is. What you are focussed on as the only GDP growth is nominal gdp growth.

awesomeJ:
I understand, but I believe his priority shouldn't be to investors, rather it should be to the other 90%+ of the population who could certainly use more value for their little earnings vs consistent dilutions.


Also, I agree about the impact of FPIs in 2024, but I'm saying it's time to start winding down on the rates


Why keep borrowing dollars from FPIs at 30% when we were offered $9bn in eurobond at 10%.


Carrying $5bn at 10% would cost just $500m, so why should Cardoso prefer to carry it at 30% and expend $1.5bn, that extra $1bn can be used to reduce the debt stock of the country if nothing else.


I just feel the man is getting too comfortable with performance that seem quite mediocre in my opinion.


In 2017 too, Emefiele elevated yields to around 20% but by late 2018 when rates became stable, he started winding it down to a point where yields in Nigeria became as low as US yields (sub 1%) yet the stability stayed, black market was even doing 355 to official 362.

It took terrible COVID shock to the oil market where sellers were paying buyers to lift oil (oil selling for below $0) for the currency to start faltering again, but even then the fall wasn't as steep. It was under 40% yoy.

You have made my point. In 2018 after some Eurobonds and more stability in the economy, Emiefele began to reduce rates. I believe when things start getting more stable in the Nigerian economy, Cardoso would reduce rates drastically. He has said it himself.

We can’t be that bullish with Eurobonds now because we already have lots of it to service compared to 2018 and 2019, where Buhari could easily take close to $5 Billion. Remember that global rates were also more favourable then ( no global spillover effect of inflation caused by Russia Ukraine war and COVID).

Note that under no circumstance is a negative rate above 10% good for the naira. Even 5% is too much sometimes and we are at 6% currently. Ghana, during their crises in 2022, ensured they began to have positive rates and this has reduced inflation drastically. If we reduce rates from what it is now, people / investors would not be incentivised to hold naira that much and naira falls even quicker than what high money supply effect can do. Because with money supply, the CBN still have a way of sucking that out of the system.

awesomeJ:
Yes. I agree that 10% isn't realistic, which is why I'm proposing 20%

After all the 30% hasn't quite helped in curtailing inflation. If anything it's been probably contributing to it by creating more money.

Last year we had N100trn chasing our goods and services, this year, it could reach N130trn. If the quantity of goods and services don't increase at the same rate, Cardoso would effectively be rendering the currency worth less and pushing prices higher.

That’s why it’s a catch-22 situation. If Cardoso makes interest rate 20% today, that would be 14.6% negative for investors when looking at inflation of 34.6%.

In the absence of viable increase in major exports, Cardoso stabilised the exchange rate around 1500-1700 between June to December 2024 and it was mainly by FPI’s and remittances. The increase in FPI’s is due to the current 6% negative which is better than what we had in 2023.

In 2023, we had perhaps record low dollar inflows due to the fact that we took so long to increase rates to match inflation numbers. As a result, naira at the black market rate devalued fast from 750 to 1200 approximately between the corresponding period of June to December 2023.

awesomeJ:
Awesome.
Second issue:

If a CBN governor complained that the reason the currency has lost value was cos 30trn was spent on ways and means and intervention over a given period, but he himself is printing extra N10trn annually that could be avoided, isn't he towing a similar or worse path?

This is what I mean?
If N100 trn in money supply is priced at 30% interest rate rather than a more reasonable 20%, that extra 10% is diluting the money supply even more.

Emefiele kept NTB yields below 10%, baba has carried it to 30%, government debt service alone will go up by at least N3trn due to this elevated rates, then you think of CPs, OMO bills, bonds and even bank loans, the impact of these elevated rates is almost same with ways and means as far as money dilution us concerned.

Even without naira crash, money supply will soon reach N120trn cos the rate of money printing is just quite excessive at 30%

Well with inflation now at 34.6%, it would be difficult to maintain the 10% interest rate Emiefele left it at. In Emiefele’s time, inflation grew steadily to 22% at most. It was below 20% for the most part. The current CBN is in a catch-22 situation. The removal of subsidy and naira devaluation did not occur in Emiefele’s time, so he was able to maintain a more reasonable rate while printing over 6 trillion naira in 2022.

awesomeJ:
My point is not on what the exact figures are.
It's on the growth being a paltry 10% when all the constituent goods and services have had perhaps 150%+ increase.

For simplicity.

Take the GDP in 2022 to 2024 to be like this:

2022. ... ....... 2024
Agriculture. 60trn. 120trn
Telecoms. 10trn. ..... 15trn
Industrial goods. 10trn. 20trn
Manufacturing. 10trn. 20trn
Oil and gas. 20 trn 60trn
Services. 70trn. 100trn
Total 180 335trn


From cement to tiles to malt to noodles and from the top line of companies' results the estimate are conservative.


Why is the growth not closer to 80%+?

That's my point.

Well increase in prices alone would not automatically boost the GDP at thesame rate of depreciation of the naira. For instance, many businesses and sme’s may have closed down during the early stage of the reforms (Q1 and Q2 2024). Slower purchase of goods by customers would mean the businesses are not having thesame sales volume, making the growth slower. Till date, telcos are making losses and are yet to have competitive pricing to make the kind of profit they made in 2022.

So I agree the growth should probably be higher than what the NBS is reporting, but I believe in 2024, the economy was struggling to adapt to the shocks. If the fx rate doesn’t depreciate steeply in 2025 and the inflation declines even to just 28%, you would see that economic growth reflect again and we would be better than we were in 2022.

Looking at the stock market for instance, as at May 2023, it was approximately $40 Billion ( using black market rate of 750). Today, using 1650, it is also geared towards $40 Billion.

awesomeJ:
I certainly am my brother.

Who can help make sense of these NBS figures.

This is what I think:

In 2022, the country's GDP was around 180trn, then in 2024, it's being measured by NBS as 198trn.

It looks like they're aren't doing any real measurements. They just sit in their air conditioned offices and churn out figures that have almost zero correlation with reality.


Between 2022 and 2024, there's hardly any good or service that hasn't increased by at least 50%.

Start with garri: 2022 was #700 per paint, 2024 was #2800 per paint (300%)
Rice: 100%

Now to oil:2022: about 500m barrels produced at say $80 and #460 to the USD, that's roughly 20trn.
2024: about 550m barrels produced at say $75 dollars and #1500 to the USD, that's roughly 65trn.

So oil alone has added 45trn

Then check MTNN revenue in 2022 as a matter of fact, check NSE30 revenue in 2022 vs 2024 NSE30 alone added over 5trn if not close to N10trn.


I think whatever they're measuring that's placing the economy as the 4th or 5th largest on the continent needs a thorough inspection, cos the same devaluation that they think has forced down the GDP numbers in dollar terms has doubled or in some cases quadrupled the values of all the goods and services that make up the GDP.

Then inflation, at the height of the naira crash in February 2024 when dollar was touching 1900, there was no food item that had not doubled in price compared to February 2023 when USD was 730.

So why were they reporting food inflation at 35%? What kind of items make up their basket, abi which store were they making the purchases from?

It basically feels like NBS figures are not at all connected to the economy, they just churn out whatever they feel like, or perhaps whatever a thwarted computer algorithm spins out.


Maybe I'm missing something, someone WHO KNOWS better can enlighten.

Where did you get the 198 trillion naira data from? As at Q2 2024, it was 229 trillion naira on the NGX website from what I saw.

OkCornel:
Makes sense.

Can Calabar carnival be replicated in Lagos or Ogun every quarter of the year? E go make sense

No need for that if we compete the Lagos Calabar coastal highway. Foreigners would be thrilled to travel from Lagos to Calabar in 5 hours.

Sunrisepebble:
From now till the end of the year, I’m still looking for a good entry into Nahco, might buy some more Transcorp and if MTNN trades @ 190 or below again, I’ll look to add more.

These are my stocks for 2025 though:
UGAZ
Presco
MTNN
Seplat (on LSE)
Transcorp
Vitafoam
NAHCO
Nigerian Breweries
Aradel (@ attractive entry)

On the radar/ More research to be done on: Nipco, Okitipupa, Maybaker, UACN and Unilever

What of MRS which seems to be Dangote’s major retail outlet company?

HesInMe:
I was asking for metrics to track the success of economic policies, some of which I actually endorse (at least in principle, even though the execution has been lacking). Those policies have a direct impact on market performance. How is that politics? And who is this "you people" you are referring to?

Tell us how you know the policies are on the right track. Inflation and debt are rising (austerity typically reduces both). Long-term strategic investors, and Nigeria's young elite, are fleeing. The naira is still unstable. Views on corruption haven't changed. The disastrous suppression of the new Dangote Refinery was a body blow to sagging business confidence. What economic success metrics are you looking at?

What is this disastrous suppression to the new Dangote refinery you are talking about?

Willie2015:
Getting 4 refineries to work in a year ...
is not a rocket science... Bros
D political will is just lacking...
U dont kill your citizens with hunger and starvation...
in the name of scattering everywhere....
BAT is not ready to face the cabals...
but willing to trade the masses for the pain of reforms...

Nah getting 4 refineries to work in a year is rocket science especially if you are replacing old parts not just doing turn around maintenance. It would have been foolish for Tinubu to keep waiting on the refineries while the country continued to bleed via ways and means debt and other debts.

NJV:
I'll celebrate when it comes down to 285 naira.

Then your naira would have to be at least 600/$.

Lordofalmajiri:
well with time I'm sure it'll come down to 500-700 per litre.

Exchange rate movements would play a key role in that. Exchange rate is the key factor.

WantsandMore:
Why haven’t this chairman considered sales tax since the emphasis is on “Consumption “ removing taxes of items you never taxed to begin with is no brainer that you’ve got hidden agenda. Food and staples and other products you keep saying aren’t taxed were never taxed in the first place, The northern governors on the other hand have a valid argument but are not organized enough to put it on paper so that it can be debated and rational can be extracted from it and refined, instead they’ve quickly resorted to politics of calumny and religious intolerance and ethnic jingoism. This is not how to build an ideal egalitarian society with equal distribution of wealth. Of all weirdness in the word , Nigeria is a “weirdly” weird place tbh😪😭🤷🏾‍♂️🌚

Food and Staples are tax exempt at the moment. Oyedele is saying there should be zero percent VAT applied to them instead of them just being tax exempt. This means if you produce rice, in addition to you charging no tax for the rice to consumers, you would also file an application to get tax refunds for the taxes charged on costs of production.
The purpose of tax exempt laws are to remove taxes relayed to consumers thereby reducing costs. But Zero VAT goes beyond this to not only remove taxes for consumers but also provide incentives to producers.

Nigeria and Southafrica top future M&A decisions by KPMG in SSA by a mile. Kenya a distant 3rd. Other SSA countries not in picture.

smallsmall:
Aaah, here we go again! There is always something to blame it on.

Naira was #1800/$1 when T-Pain raise the Price to #1,250/Litre.
Now that the Naira has firmed-up a bit, l hear #1500, the Price of PMS has not been reduced.
The next lower bar, is now #1,300?

Then, the next excuse will be, it has to get down to the #450/$1 that it was, when this Govt took over power in May, 2023.
People like you are just incorrigible, always fashioning out some silly excuses to justify non-performance and criminality.

The official market was 1600/1650 when it was increased above 1000. It was finally deregulated. Now official rate is 1500 and give it a week or two it may go below 1000. However, if crude oil prices rally above 75 naira at 1500/$ it may still hover around 1000 naira but at 1300, we are sure to go sub 1000.

Nazgul:
Of what use is the refinery if we're still buying fuel over 1k per liter. Has the refinery benefitted the common in any way?

If fuel dropped to N500 I would have commended them, but since I'm still paying over 1k for it, the refinery is useless to me.

If your exchange rate gets to 1300 today, you would likely buy PMS below 1000.

Obiano13:
If this was 2022 I wonder how bad things are now

Four Nigerian men stowed away on a ship and were hiding in the space above the ship's rudder for 14 days before being found.

They were rescued by Brazilian federal Police after the ship had travelled 3,500 miles from their home country, Nigeria, to Brazil.

The men thought the ship was headed for Europe only for it to end up in Brazil.

They had exhausted their food and water supplies by day 10 and managed to survive the remaining four days solely on seawater.

Two were deported back to Nigeria immediately while the other two sought asylum in Brazil.

https://x.com/CrazyVibes_1/status/1865759673913422137

Okay, so what does this have to do with the post you quoted?

vaxx:
The mood of Ghanaian right now.


Messiah of infrastructure has come

Congrats.