₦airaland Forum

Folks pray and pray hard coz our economy is about to get worse.

Our banks are seriously exposed to the oil and gas sector and are currently sitting on a heavy debt and bad loans that are dollar denominated. Most of our banking liabilities are in dollars. We already know of first banks issue with SeaWolf oil and Atlantic energy. TSA has taken easy government money off the table.

On the flip side, our banks have most assets denominated in naira and the only saving grace is the fake official exchange rate that pegs naira at an artificial value. If CBN devalues naira, to track with the market, i see bank balance sheets going into the toilet. Net liabilities will go high and not a lot of room to write off. AMCON is already in the red with so many debt write offs and it will take a very long time for inflation to catch up. We are headed for a tail spin crisis. Major Murphy's law.

Already, most banks are in distress and it's been a hush hush affair. But the impending devaluation will crash everything.

Am I missing anything?

This is not a PDP vs APC post. Just facts on ground.

GworoChewinMaga:
That Confrence was to convince Tajus like you why fuel subsidy must go.

It takes on average 4yrs for a Taju like you to catch up.

Hopefully in 2019, you will see what we warned you in 2015.

Yeye

Zombie like you assumes everybody supported the subsidy when we all knew who the winners were. Hint hint, they flew private jets from nothing.

Now get your low level ethnic head out of your ass. Not everyone is low level like you.

drss:
see how u dey lie shamelessly for broad daylight u tink say ur edited video go fool everybody say NOI never talk in 2012 for ur information na NOI first raised d alarm about coming economic crisis before sanusi.

Bumbling buffoon.

HiddenShadow:
There is a way out and that way is to diversify
There are 2 ways to achieve diversification
1) FG led diversification
2) True Federalism where all federating units are involved
Which is the fastest.?
To mean it is True federalism
If your useless president starts the journey to diversification now through True federalism before the year ends, we would go far beyond this stage

Diversification takes time and requires serious dollars. It's a long term effort. As long as your ports are still open to cheap imports, it will take the hand of God to diversify except Government actively protects local production. Only thing we can easily diversify to is solid minerals, those are also raw commodities. We need thriving processing industries.

7lives:
The funny thing is that Ngozi as an economist knows that there is a danger lurking in the corner just like Sanusi, but we have to understand that Sanusi want to protect Nigeria while Ngozi wants to protect her interest at the world bank.
Imagine this efulefu woman ignoring Sanusi in 2012 only to start yernning opata in 2014, when all that she needed to do in 2012 was invest in capital projects and save enough for the rainy days.
A woman that should probably have gone ahead to be the first female president of Nigeria because she can see into the future is now grouped with hardened criminals just because she choose to ignore the lurking danger, to the detriment of the overall interest of Nigeria.

Thank you. Ngozi knew all along, but as per world bank drone, she had to favor her employer that pays her bonus. Who doesn't understand the reverse colonization in global trade?

They encourage African countries to free up their entire market for trade while they protect theirs. The foolish Africans will get all their industries dead since they can't compete with the products coming cheaply from developed countries and we end up exporting only raw commodities. Shortly before the economy tanks and the price of your commodities starts going south, they pull out their profits and walkway and tell you to devalue knowing fully well devaluation favors you when you have an export based economy. Your industries are dead and your commodities are dead cheap. Who does it favor when you devalue yet again?

But you have no choice since you need their forex, so they buy everything cheap and continue with the unfettered dumping of cheap imports and you never develop nor grow your local industry. Rinse and repeat. A vicious cycle.

Fighting that cycle is almost suicidal, but India successfully did. Same for South Korea, South Africa was isolated so forced to develop on its own, China did it, Brazil is doing it and Argentina just started. It takes balls to get out of the leash of the dependency on western monetary institutions.

rhymesnoni:
like our Economics Father Adam Smith wld always say, Da government shld jst allow da market forces Of Demand nd supply determine da xchange rate, Leissez Fairre, though Da president has good intentions, he Laks Economics knowledge.

Ol boy Leissez Fairre is economic theory, it works but you have to game the system to your advantage. Every developed country has the hidden arms of government intervening by some form of protectionism. It's the Leissez Fairre that made us lose all our industries and got us to be the dumping ground of the world with all a manner of cheap imports coming in. Let the market take care of itself indeed. Serious governments subsize production activities when their local industry is weak to keep jobs afloat, they sign trade agreements with their eyes open and use tools such as quotas and tariffs to protect their economy. When they gain advantage in production, then they devalue their currency to make their exports cheap. Hello China. Hello USA quantitative easing.

Abeg make you no spill any free market practices if the country isn't negotiating trade agreements to our advantage.

coolscott:
What makes it nonsense because she spoke it in 2014?
If it was nonsense being said in 2014, then the same
thing being said in 2012 was also nonesense
Achuwa1

Coz she said it when the economy was already in the toilet. Why didn't she do something when the writing was on the world in 2012. Oh yeah, oil was like $120 a barrel so enjoyment galore.

I'll b.itch slap anybody that calls this woman competent.

coolscott:
What makes it nonsense because she spoke it in 2014?
If it was nonsense being said in 2014, then the same
thing being said in 2012 was also nonesense
Achuwa1

Coz it was obvious enough by late 2014 and already too late to act. Oil crash started early to mid 2014. It was a captain obvious b.itch move.

Sanusi warned us earlier when things were rosy and could have been prevented unlike auntie elete kpomo.

Achuwa1:
If pmb really want to succeed he will really need to set up a sound ECONOMIC TEAM from nigeria to help look into the challenges befalling us as a country & not just naira..
when i mean economic team,i dont mean bankers

He doesn't appear he is taking it seriously.

Achuwa1:
But there is no harm in trial since we all want a stop to the free fall of the naira,,& moreover,pmb is not even helping matters by inaugurating ECONOMIC TEAM from the country to see what they could do or siggestion they could bring in to help issues..
so we should just try wat ifeanyi ubah have in stock

To take Ubah seriously, he needs to present his ideas in an open forum for it to be scrutinized and analyzed. We don't have much time or resources to fool around.

Achuwa1:
Amaechi,oshiomole & those apc governors during the last regime should be 80% held responsible for what we are facing today,,,
had tht ECA fund was still intact,maybe b4 the end of GEJ tenure,it would have gulped to a huge amount,,
but amaechi,oshiomole & co..did what they did,,thankGod they are still all in the system to see things unfold in the negative direction

I agree. They deserve part of the blame, even though PDP from what we now know could have used that same ECA funds for elections.

Time for NASS to act and get us back to regional governments and get rid of these beggar states with their gimme mentality.

Achuwa1:
Ifeanyi uba said he has solution to the crashing naira & tht feg. should give him the job of a consultant to saddlw the naira back to #200= $1..
the earlier u ppl try this option out the better coz economic theories wount solve the present condition naira finds itself..
ifeanyi ubah is a renowned businessman & he could just be listened to

Unless he has hard drugs to export to fix our balance of trade issue, he is only making a mockery of himself by the useless claims. I'd like to entertain his thoughts though.

fallout87:
Sanusi had also spoken against Buhari's economic plan and his handling of monetary issues.

I see you don't support him there.

For all the hate you have for GEJ, you guys gladly ignore he didn't want to give the Governors the reserve funds, because he knew they would steal it all through "security vote".

It was Ameachi who led the support from Governors to demand the funds which GEJ had to release. All that clown and the other Governors thieves where the money is today?

Buhari doesn't have an economic plan. Saying I won't devalue the naira is not a plan, it's just grand standing.

I am apolitical so don't expect any APC or PDP bullshit from me. I look after my family and that's all. GEJ was a major eff up and Buhari is in over his head.

Achuwa1:
You have acknowledged the fact tht she said it.,,,
& do u want sanusi to leave his emirship post & cum saddle the affairs of cbn for u in place of emefiele

Sacking the CBN governor is a very delicate issue. The market will tumble and the low investor confidence will get worse. In as much as I don't respect Emefiele, I won't approve his termination.

There is really very little we can do on the short run to turn things around aside from the government selling it's assets. All our solutions are mid to long term.

Achuwa1:
ThankGod u are aware NOI said it aswel..
The most important thing is tht they were passing same information,so dont get hbp over tht

It was already too late when she said it in late 2014. The oil crash started mid 2014, so it was obvious to everybody that a crash was looking. The last time OPEC had this sort of action was when the offshore technology got developed and OPEC was prepared to fight it tooth and nail. It took 20 years for that war to be over. Now OPEC is fighting shale oil and it's a lose lose for both OPEC and the US shale producers.

Who is going to blink? We need some form of revenue to even diversify our economy. Our reserves won't last for long.

Ngozi even borrowed 850 billion naira to pay subsidy as far back as 2012 when we had money. WTF!!! What kind of useless finance minister is that?

Achuwa1:
She even told nigeria to be prepared for the austerity measures tht will come

This is a 2012 video, Ngozi only spoke late 2014. Spare me the Ngozi nonsense.

Achuwa1:
It was NOI tht predicted it

Watch the damned video would you!!!

Start from 16:00 minute mark if you can't afford to watch everything.

In retrospect, Sanusi warned us about the coming crisis. His prediction was just too close and look at the looters surrounding him laughing knowing that some of them were about to steal funds meant for Boko Haram. This makes me really mad

Video was shot in 2011.

Start from 16.00


https://www.youtube.com/watch?v=t7QDjzTTrag

Chisos

As long as you have the following thriving and unabated:

1. Boko Haram
2. Niger Delta thugs
3. Cult Boys
4. Biafra Agitators
5. Area boys and Agberos
6. Kidnappers in every region
7. Fulani herders

Tourism will not take off.

So how is this working out?

TonyeBarcanista:
1. Shagari lost power through coup and even won re-election. It has nothing to do with oil slump.

2. IBB lost power through demand for democracy. In fact, after devaluating the Naira through SAP, he squandered whatever came of it. It has nothing to do with oil slump.

3. GEJ lost power because people were fed up with his handling of the economy. However, his government Deliberately devaluated Naira from 155 to 167 in 2014, and later to 199 in early 2015. However, the Open market rate didn't exceed 230/$. It has nothing to do with oil slump.

For the record, oil price crashed in 2008 December and 2009 February to $30pb without killing the Naira.


This astronomic fall has nothing to do with dollar...

That's coz we had $62 billion dollars in our reserves which got depleted to $45 billion to survive the slump. That slump was shorter than what we've been experiencing since 2014.

This is what Venezuela is dealing with. Naija is still in decent shape IMO


"Venezuela's economy is in dire straits. Adding to failing economic policy by the government, the country gets nearly all of its export revenue from oil, of which the price has declined roughly 70% since 2014. Venezuela's foreign exchange reserves are dwindling fast, from $24.2 billion in February 2015 to $14.8 billion in November 2015, while inflation is said to be triple-digit and Credit Default Swap (CDS) data shows that traders see a 78% chance on default, according Reuters. In an effort to avoid catastrophes, the BCV has a very strong motive to employ its official gold reserves."

http://seekingalpha.com/article/3914536-venezuela-exported-36-tonnes-official-gold-reserves-switzerland-january

Rays123:
Advocates and critics of capitalism (Free market economy) agree that its main contribution in history has been the encouragement of economic growth. My question is how was this achieved?



TonyeBarcanista, seun, jarus,

Please everyone view is honestly appreciated

Capitalism is driven by greed. Greed creates drive and competition. Competition creates innovation, efficiencies and productivity. The economy grows based on increased production.

LRNZH:
The one that's gets at me the most is to see imported palm oil.

Even that popular packaged burger (ground) nuts is made in Ghana as at the last time I checked.

There is nothing wrong with foreigners doing business in Nigeria but the preponderance of import even for coming products is a no no.

We even import Garri from Benin republic and we are the biggest producer of cassava.

Yyeske:
Please try educate the OP better, so amazed at the nonsense he wrote up there. He never said anything about the increase in imports and reduction of our exports, not saying anything about our not having any buffers to cushion this melt down, increase in our population and reduction in income was not addressed by him. Educate him more.

Thank God for people like you and the other dude. You didn't put your education to waste.

We spent over $20 billion dollars defending the last oil slump (great recession), this was money saved by OBJ and Yaradua. With the windfall, the President Jonathan went on a looting spree and Nigerians joined him in the merriment by consuming every imported good imaginable. China essentially turned our country into a refuse dump. Dumping all sorts of substandard imports and making importers rich in the process. Balance of trade is now in the tank, we have absolutely nothing of value to export unless we take drastic steps with mid to long term results.

We lost every trace of nascent industries and now have to get back to our farms.

Comparing someone defending the national budget for the first time versus someone that has done it several times since OBJ days is asinine.

The OP has some loose screws.

Even as bad as those contraptions look, they are not aba made. Why do Nigerians like to lie? What's the point?

Crude oil was the best price ever under Jonathan. What did he do with all that money we earned?

More debt and lower reserves. Now we have no tools to fight low oil prices. Even under OBJ we had corruption, but he somehow managed to pay our debt and grow our reserves.

Jonathan was the worst mistake we ever made.

Sorry to be the lone dissenter. But they look like crap that I won't want in my dining room or basement.

We have a long way to go to compete internationally.