₦airaland Forum

If you want your currency to be stable and be a reliable store of value then the majority of your government income must be in that currency and you must as a country have a high tax to GDP ratio. A high tax to GDP ratio means a higher revenue per Capita which means more money for government and less need for inflation. Inflation or money printing is a source of income for the government and if the government does not have revenue from tax then they will naturally resort to inflation.

There is no magic to making a currency a hard currency. It is simply not printing it anyhow

Putinofrussia:
Govt businesses are always at a loss because the leadership and staff are always in a race to steal them blind because it is govt pickin,nobody own am.
When people cry that Govt should start a firm or enterprise,I always laugh.Just consider those companies gone as soon as they are established.

That is not always true o. There are companies owned by Oodua group existing for over 70 years and they are thriving. The Chinese government made over 300 billion dollars from state owned enterprises in 2024.

Nigeria can not get more than twenty billion dollars from oil or thereabouts after all obligations met so it is not possible to lose a whole ten billion dollars when the price has not halved. Then Nigeria's oil is easier to refine because of low sulfur content and it is therefore in high demand.
Twenty billion dollars is about thirty trillion so the 58 trillion budget is much bigger than oil money. Then oil money is falling rapidly as a component of fg revenue

chariisGRACE:
It will skyrocket now that Tinubu has started taxing us.

It appears even without the tax law the non oil revenue has overshadowed oil revenue

Nigeria is free from oil dependence

I read earlier from a lady in government that oil revenue is now less than half of government revenue in Nigeria and I wrote it like that during a debate with someone online only for someone to oppose me then for me to find out via AI that as at first quarter 2025 that oil revenue was less than 25 percent of total federal government revenue in Nigeria. Nigeria is officially no longer majorly dependent on Niger delta oil but on incomes from avenues like VAT, CIT, customs and etc. This is a good news that should be celebrated by all Nigerians.
It explains why most states now have big budgets
The country is a country of over 200 million and it can be like western Europe if it is organized like western Europe. There is nothing they do in Europe than everybody pay tax to make life easier for everybody.
It is like what President Bola Tinubu did in Lagos he has successfully done it at Abuja.
The feat was achieved without any special law. I project that with the new law, oil and gas revenue will become less than ten percent of federal government revenue by December 2026 and maybe less than one percent in two years

kaltonga:
Audio reduction

You think the surge in states allocation happened without any reason?

tctrills:
Oga, what are you saying? As of 202,4 oil and gas contributed to 60-80% of Government revenue. We are waiting for the 2025 data. Stop spreading lies. Unless you are counting borrowing as part of the revenue,
https://businessday.ng/energy/article/fgs-revenue-from-oil-gas-royalties-soar-by-179-to-n6-99trn-in-2024/

I have read reports on 2025 data and oil is already less than 45 percent of federal government revenue and it will continue to go down

Sermwell:
This agbada kind of reasoning no go favor you oh

Don't you like a Nigeria where oil revenue is only five to ten percent of FG revenue that is being shared?

AqualinaXYZ:
A Rivers man wan parasite Yoruba?





Bro here we don’t eat Ewedu




Can you say same? Can u say in south west yall don’t use crude processed products?

Oil is now around 50 percent or less of FG revenue and it may reduce to twenty percent by year end as a result of FG revenue drive

ozo13:
hmmm. How many good road, electricity, good health care and good education can a yearly budget of 38billion dollar fit give 200M plus Nigerians. Countries like South Africa does a yearly budget of around $170 billion dollars for just less than 100M people. And they generate as much as $140 billion from their revenue.
The only way out of this is to increase the tax net(most rich people in Nigeria aren't paying tax) and also the other resources should be tapped into for more revenue and more importantly, Nigerians (paper thieves in offices and the political class) should allow the little been generated work for all the citizens.
I remember during Corona in 2019/2020 when people were asked to stay at home.more revenue was gotten because papers thieves in various offices didn't have the opportunity to steal.

South Africa is around 50 million people

Brendaniel:
Is the state or federal government someone?

We are talking about the government here, so what is your point?

When did the topic leave government and switch to individual?

If you are an average citizen, can you use 440 to plan your business? What you can use to plan is the true value of the naira not any phantom CBN rate

Brendaniel:
So why then are you making excuses for their official exchange rate given to them by them by the CBN for their planning, budgeting and allocation?

Does the black market affect them?

Are you saying Buhari was right by devaluing the naira and trying to fix the rate?

When you devalue a currency you let it rest at it's true value

Brendaniel:
Did the government ever tell you they were starved of dollars from the CBN?

In Japan the chief owners of forex are companies like Toyota and etc. In Nigeria it is the FG. How will it possible for them to be starved of dollars?.

Brendaniel:
Listen to yourself, Was the FG buying at 740?

Was the FG selling at 740?

Was the FG planning budgets at 740?

Was the FG selling crude oil per barrel using 740 as the exchange rate to a dollar?

Listen to yourself, we are talking solely about government here both state and federal not private individuals that got and spent dollars at the official CBN rate...

During Buhari time which one is the correct rate that someone in the economy without government connections must use? That one is the real rate than any other

Brendaniel:
Buhari never used dual exchange rate, he used only the CBN exchange rate and that is where he based all his plannings, revenue budgetings, allocations and expenditures from...

If he used 2 exchange rates the accounts may never balance and it would have caused serious problems for his entire government...

Is the CBN using the market rate? You flood the economy with naira and you refuse to sell your oil dollars at what people are asking for it. You also go ahead to confiscate people's dollars by not allowing people to freely use domiciliary accounts. You sell dollars only to your cronies at 40 percent of what people are ready to pay. It was a swindle. They are printing naira recklessly but want to prop up the value

Brendaniel:
Let me just state something clear here, government and its agencies whether federal or state do not use black market rates to base their exchange rate for budgeting, planning, allocation, purchase or payments, they use only the official CBN rate because that's where they source and deposit their dollars from both income and expenditure except when they want to steal....

So what excuse are you trying to give for them in my calculations here?

What is the real rate is what matters. Not what FG says. If one million people buys at 740 and ten thousand people bought at 350. What is the real rate?. What is the rate that matters to the average importer or exporter?

Brendaniel:
That was why I used 2022 for it before Tinbu came on board and did the damage to the exchange rate..., the exchange rate for 2022 was fully under Buhari and the budget was passed in 2022 using 2022 exchange rate...

Buhari was using dual exchange rate and Tinubu stopped it. People with privilege were buying millions of dollars at 440 even 350 and crossing the street to sell it at 750. The dual exchange rate was in place in 2022

Brendaniel:
You have not done calculation with AI, use AI to do your calculation based on verifiable exchange rates sourced by AI, that was what I did.

You can see all my calculations showed the references of the sources for the exchange rates it used to calculate, do the same....

You can't use 440 and be right in your calculation when maybe ninety percent of people were buying at 740. Let us leave it at that. You maybe right as I said because I don't know what agreement they had on how to share the funds saved from oil subsidy removal. In principle it is federal government money. I only used a few states to show that the dollar value of state budgets are rising. Then allocations to states will drop if the revenue drops and the revenue is like fifty percent oil money which can drop anytime. I don't know anything about how they agreed to share the money saved from oil subsidy removal

Brendaniel:
I said 2025, go back to my post and see for yourself...

Ok. I was not quoting 2025 figures for Osun that I quoted. I did 2023 and 2026. If we use 2025 then what is the valid exchange rate for 2023? It was a dual exchange rate at the beginning of the year and 900 by June. In early 2023 more than seventy percent of those who needed forex will get it at 740

Brendaniel:
Show me the screenshot like I am doing..... I didn't bother reading the rest of your comment...

Then I might be wrong because I don't actually know how they agreed to share the gains from oil subsidy removal. Federal government was borrowing money to pay the subsidy. It must also be realized that subsidy removal is not an increase in revenue but a reduction in government expenditure. The FG revenue is yet to increase but some expenditures has been removed. The revenue can sharply increase from the new tax law and that will automatically increase allocations to states. If there was no agreement on how to share the savings from subsidy removal then the FG will be right to keep the monies to itself since everybody is looking for money

Brendaniel:
Show me the screenshot like I am doing..... I didn't bother reading the rest of your comment...

Rivers budget in 2026 was not 1.4 trillion as you claimed but 1.8 trillion

https://punchng.com/rivers-approves-n1-8tn-2026-budget/

Brendaniel:
Show me the screenshot like I am doing..... I didn't bother reading the rest of your comment...

Dollar to naira in 2023. But this is something you can get yourself. Then there is no way the allocations would not have increased after the subsidy removal and if it does not increase can you blame anybody? Maybe the price of oil dropped. It is not something one person can do alone and the FG can not take more than it's percentage of revenue. It is a no brainier that allocations to states increased.

If the President is pocketing the money saved from the subsidy removal and not giving states and local governments their constitutionally approved share who is to blame? Or how is that possible?

Then the real exchange rate for 2023 was not 500 to one dollar. It was more like 700 on average. You can't even compare dollar value and be right because the forex market was not a free market as at early 2023.

Brendaniel:
I won't respond to you if you don't show me working calculations with verifiable exchange rates sources, you can't be throwing claims without evidence...

I am using AI too and market rate for dollar in 2023 was 700 while government rate was around 500. Did your AI tell you anything different?
Bottom line is there no state whose budget has not increased substantially in dollar value since 2023. That is the point I am making. Osun was 200 million dollars in 2023 and 500 million dollars in 2026 if we use 500 to one dollar in 2023 and 1500 to one dollar in 2026. If we used the market rate for dollar in 2023 then the gap will even be wider. That is the point.

Kano's budget 2023 350 billion which is around 700 million dollars if exchange rate is 500
Kano's 2026 budget is 1.47 trillion which is around one billion dollars today at exchange rate of 1500

Brendaniel:
Why not do your own calculation and show me prove your point?

Use verifiable calculations like I am doing to drive your point, stop using your own exchange rates that are not verifiable, I am using AI with verifiable links for my calculations, do the same...

Because I can equally stop using AI with verifiable links and start dishing out my own exchange rates to my favour...

If I use 700 that was the rate in the open market then Rivers budget will only be some hundreds of millions of dollars and not close to one billion dollars but I closed it at one billion dollars using 500. You were wrong about Rivers 2026 budget. It is 1.8 trillion and not 1.4 trillion and that is like 1.3 billion dollars. Then Rivers state is not a state that depends on allocations. They have always had IGR. Use a state with insignificant igr

Brendaniel:
I've decided to reply you so that you can see for yourself that your analysis is wrong if you stake it only on budget...

This is Rivers state budget for 2023 by Wike, 550 billion naira converted to dollars was 1.34 billion dollars, I used 2022 exchange rate because I didn't want the exchange rate to clash with Tinubu's exchange rate in 2023 and the budget was passed in 2022 for 2023.

Now in 2025 using Tinubu's exchange rate Rivers state passed a budget of 1.4 trillion and after conversion to dollar is 966 million dollars, you see why I told you that Tinubu's allocation did not increase in any value, infact it decreased....


And if you use state budgeting as a yardstick you would not get the actual value, because state governors differ in planning,

What you should be looking at is FAAC allocation value sent to the states in dollars which I have also shown you the calculations that it decreased in value due to the naira devaluation...

So what exactly has Tinubu improved?

550 billion was not more than 1 billion dollars back then. There was even a dual exchange rate and the economy was a mess because of that. In 2023 most people could change dollars for around 700. Only government connected people got around 500. If we use 700 exchange rate which was the market rate then the budget was much smaller
Rivers might be doing something wrong but they still moved from under one billion dollars to like 1.2 billion dollars or thereabout which is an increase. Show me one state that experienced a decrease in the dollar value of the budget. Let's even use 500 for 2023 despite that the market rate was 700


Rivers state budget in 2026 is 1.8 trillion and that is over 1.2 billion dollars. The figure you quoted is wrong.

Then Rivers is a bit like Lagos. Use a state for example that depends mainly on allocation but even at that Rivers state budget as substantially increased by dollar value

Sannisege:
Crap! Companies are the entities creating jobs. Why increase their taxes? Income taxes should be enforced for every salary earner.

The problem is FG have no stake in personal income tax. It is for states. Therefore the FG is pursuing only it's own taxes VAT and CIT and CIT is always very difficult to recover especially from private companies. I don't know if the tax law want to help states collect personal income tax

Brendaniel:
You cannot rule out different governors with different plannings and strategies for budgeting...

Can you point out any state in Nigeria that is not doing 250 percent of it's 2023 budget by dollar value in 2026? I doubt there is any. Different governors have different plans and that is why I mentioned the Enugu governor. Enugu maybe doing up to 500 percent if not more of the dollar value of it's 2023 budget

Brendaniel:
Governors differ when it comes to budget, do you know all the sources of the funding of the budget? do you know if loans will cover a lot?

same with presidents...

The 138 billion naira in Osun was also funded from different sources just like the 740 billion, so it cancels out. The main source of income for Osun is federal allocations. Leave Osun and research other states and it will be the same thing

Dalohad:
Wike cannot be president of this country at any time.

The best he can do is to kowtow to Northern candidate for a VP position, and that it is even a long shot. It will incense many Southerners who think he is too garullous for such responsibilities.

He is drowning man clutching at straws.

I expect the opposition to start firing letters to the White House and lobby them to actively monitor the 2027 elections that the APC and Wike are actively preparing to rig as they did in 2023..

Since Nigerian politicians have refused to let Nigerians choose their leaders willingly, the elections should now be supervised by a higher power. if Trump is that higher power, so be it.

Electoral freedom before sovereignty.

Elections are not that easy to rig but you can rig where you are already very popular or have strong men. Are you saying Buhari rigged for Tinubu?

mrvitalis:
Tax is good but the threshold is too poor

If I'm government I would go after company taxes.. Reduce the rate then increase punishment for none payments

Then luxury taxes

Then property taxes

Car taxes

Then invest in the poor

Tax threshold should be minimum 4 million yearly income

I agree with you but the approach should be fix minimum wage high enough for everybody to be able to pay and enforce it on all employers. That alone is a revenue boost trick

Brendaniel:
I have explained this here before, go back and read it, follow up with those who brought their arguments like you and and my responses back to them...

https://www.nairaland.com/8541817/faac-which-state-received-highest#137158921

I don't know what you are talking about
In 2023 Osun budget was like 138 billion naira which will be like say 200 million dollars then. I am not sure of the exchange rate. In 2026 the budget is like 740 billion naira which is like 500 million dollars now. Osun is not doing any significant igr. If you go to Enugu that does igr the difference will be far more pronounced

yemmit90:
Lolz, Tinubu only need a Governor of the state to win an election, and he has Fubars now who understands and well part of what Wike did the last election. The reality is that, Peter Obi won Rivers State by wide margins in 2023 General election, APC used state apparatus through Wike to rig him out.

There won't be any different this period, they don't even need to rig much because unlike in 2023, Fubara is also an APC leader in the state. What people don't understand is that, you can easily get more votes or rig election through state government than any political gladiator in the state.

All this rigging you are saying is not that easy. Why was the same Tinubu not able to rig and win his own Lagos state?