President ignores pleas for devaluation amid slowing growth
Investors giving up on policy change soon, forecasts show
History is repeating itself in Nigeria, where the more President Muhammadu Buhari is urged to devalue Nigeria’s naira, the more he is digging in his heels. Investors are beginning to surmise that politics — rather than economics — will determine the currency’s immediate future.

Even as growth slows, inflation rises and foreign investors flee, analysts in a Bloomberg survey are backing away from estimates a devaluation will take place before the third quarter. Buhari, 73, has made it clear that he, not the central bank, has the final say on currency policy — and that he is against taking that step, just as he was during his first stint in power in the 1980s. He is is loath to be seen by voters as capitulating to foreign investors and the International Monetary Fund, both vocal critics of his stance, according to New York-based Teneo Intelligence.


“Changing his position would make him seem like a spineless leader,” said Manji Cheto, an analyst at Teneo, a global advisory firm, who predicts there won’t be a change of currency policy until at least the second half of this year. “Buhari is seen as the man who will stand up to foreigners. He ran a campaign as a strongman, someone who would put Nigerian interests ahead of foreign ones.”

Central bank Governor Godwin Emefiele has pegged the naira’s official rate at 197-199 against the dollar since March 2015. Buhari has backed that policy since he became president in May, confounding analysts who thought he would have caved in by now and let the naira fall, as other oil exporters from Russia to Kazakhstan and Colombia have done with their currencies. Foreign-exchange trading restrictions and import curbs have led to shortages of goods from gasoline to milk and sent the naira plunging to 320 on the black market.

Buhari and Emefiele, who meet at least weekly, say that the naira is fairly valued on the official market and that letting it drop would only harm poor Nigerians by pushing up prices. That’s already happening, with inflation accelerating to an almost four-year high of 12.8 percent in March as manufacturers struggled to pay for imports. Growth slumped to 2.8 percent last year, the slowest pace in 17 years. It will slow further to 2.3 percent in 2016, according to the IMF, which called for a “speedy unwinding” of the currency controls to help revive growth.


It’s not the first time Buhari has resisted the IMF. When he last ruled Nigeria from 1983 to 1985, a time when, like today, oil prices had just crashed, he ignored advice to depreciate the naira and refused financial assistance from the Washington-based lender.

After Buhari was ousted in a coup amid a worsening financial crisis, his successor Ibrahim Babangida started an IMF-led structural adjustment program, which included a devaluation. It was the first of many that saw the currency’s value drop from roughly parity with the dollar to today’s rate of near 200. Politicians still say the IMF program failed the country.

“I’ve lived through several rounds of naira devaluation and I have seen very little benefit to the Nigerian economy and people,” Nasir el-Rufai, the 56-year-old governor of Kaduna, a northern state of about 7 million people and a senior figure in Buhari’s All Progressives Congress party, said in an interview in Lagos. “I supported each of them as a solution to the challenges we faced at the time. I regret that support because I have seen very clearly it brought nothing to Nigeria.”

‘Already Devalued’

For investors, such thinking makes little economic sense. Most businesses are already trading at the black-market rate since the central bank’s policies are choking off dollars in the official market, according to Exotix Partners LLP, a London-based investment bank focusing on frontier markets. PZ Cussons Plc, the Manchester, U.K.-based soap maker, said last week its Nigerian unit is forced to pay a 50-70 percent premium on the official rate to source foreign-exchange.

With foreign investors avoiding the country until there’s a devaluation, Nigeria’s local bonds are the only ones to have made losses this year among 31 emerging markets tracked by Bloomberg. Nigerian average yields have risen 161 basis points to 12.31 percent since the end of 2015, whereas Russia’s have fallen 26 basis points to 9.29 percent and Colombia’s 28 basis points to 7.77 percent.

Buhari “just doesn’t get it,” Kato Mukuru, the London-based head of equity research at Exotix Partners LLP, said in an interview. “When he was last in power in the ’80s he was also told to devalue the currency. He refused until he was sent out in a coup. Clearly he didn’t do the same economics as I did. There comes a point where you need to understand that the whole country has already devalued.”

Source:http://www.bloomberg.com/news/articles/2016-04-20/nigeria-economics-loses-to-politics-as-buhari-takes-naira-stand


Having observed the issue of SAP and the IMF coming up repeatedly here on nairaland, I will be doing a thread with the true history of events that diacusses the SAP so some Nigerians can let go off the paranoia assoiciated with the IMF or western governments. If course they look out for their best interests and yours too. Because every time you run into problems you still come to bother them with your issues like Aid moneys and hangouts, immigration issues etc.

omonnakoda:
You are empty

And you are very full. Argument should be back and forth, not sticking to a single spot.

omonnakoda:
What exactly should government do. What could they have done differently that would have kept Iberia here

Answer the question about Maduro please

Hehehe at this point I will refuse to speak further if you deliberately feign ignorance about Maduro or the outcry within our economy in terms of approaches or policies to be enacted.

omonnakoda:
Stop changing the subject. What is the Maduro Line. What should he do differently.What should we do differently? Those are the questions I asked. Where do we get the dollars to give Iberia? Those questions need answers.

It is easy to criticize. What are your suggestions. On this particular Iberia issue.What could have been done differently?

You keep sticking to the same spot, If you read my previous posts you will see that I have been arguing on the part of the numerous experts advice this government has been receiving sinxe they got in. I really hope you it see now.

omonnakoda:

IMF Real experts?
Don't be ridiculous. What is this advice exactly ? can you articulate it or you do not know?
IMF has been advising Nigeria since 1984 when dollar was 1:1 .

Maybe we need new advisers

The truth is you have nothing to offer just empty grandstanding.

We have not got the dollars to give Iberia and that is just too bad. If they cannot make a profit buying at parallel market rates then it is rational for them to quit.That is in their best interest.WE TOO must act in our best interest. The supply of dollars is limited so there must be priorities and in such a situation there will be some LOSERS. That is unavoidable
Retaining Iberia in Nigeria is not a priority. A sensible individual would ask "How well is Iberia doing as a business generally outside Nigeria?? What you do not know is Iberia and BA are part of the same company IAG so they have clearly decided to remove Iberia and leave BA ,WHY?

Anyways keep living in dreamland why the rug is pulled off under our feet. I don't have to tell you about IMF's recommendations and your reference to 1984 have you bothered to find out why it didn't work or like every other African you are displaying paranoia at every thing west.

SAP failed because of the corruption orchestrated by IBB and so, who weren't exactly interested in any structural adjustments and saw it all as opportunity to enrich themselves. Without implementing recommendations to the latter. More than 34 countries went through the process then only Ghana is referred to as having followed through. The outcome, by the 1990's until recently everyone commends Ghana and Ghanaian institutions.

omonnakoda:
Is that an answer?
I do not know whether he is doing well or not. YOU do you are the expert so answer the question.What should he do.What should he stop doing. It is easy to sit in front of a computer and throw tantrums.The real world is very different.

If the currency control in Nigeria is wrong can you proffer an alternative. What do you mean by "GOOD" is it now about good and bad. Please offer concrete alternatives and some ranting

First of all calling me an expert would be a hype the real experts (IMF) plus other finance guys have long ago advised this government in all they need to do to manage this situation but then our Petroleum/Finance/Foreign Affairs minister cum CBN governor has deliberately decided to go on with personal sentiments rather than expert opinion. What is the need of making suggestions that will not be implemented. This government already had all it takes to succeed unfortunately stubbornness may make them drag us all like a fly that follows the corpse into the ground. A lot of mistakes have been made already with the needless delays, cluelessness, confusionist policies and intransigence of this government.
My teachers said a stitch in time saves 9 but they acted otherwise.

.

Experts at futuristic talks, specialists in shifting the goalpost.

omonnakoda:
What is "maduro's Line" That is not an argument that is just Lazy pseudo intellectualism
What is Maduro not doing that you suggest he do I ask once again. What is he doing that he should stop.Rather than spout dogmatic heuristics have you got any suggested alternatives

If you feel Maduro is doing very well with Venezuela then it's a pity, or that the currency control in place in Nigeria is equally good. Then I really would not have much to say then.

omonnakoda:
Not sure why you choose to direct a rant about mediocrity at ME
Is there a strategy to push out airlines? What are you on about? The reality is we have an economic crisis and we do not have the dollars to give them. That is the starting point so they can either whether the storm or leave and return when things improve.
Given the limited foreign reserves( not enough for 6 months imports) do you have any constructive suggestions about where to get dollars rather than indulge in unjustified ranting. What is a "Maduro" What should Maduro have done that he did not do. The Venezuelan economy has long term problems based on a failure to diversify and dependence on imports. No one can solve that in 2 or 3 years so spare me the tantrums and offer concrete suggestions that we can debate

Sorry about your thoughts. Talking about mediocrity it was never directed at you. Sorry if it came across that way . Thing is the policies are stifling many businesses. The government has been advised on what to do, but they have chose to remain headstrong that's the thing. They are towing Maduro's line step by step, and we shouldn't expect to do the same thing and expect a different result.

Reference:


When you are haemorraging investment and cannot attract replacements the last thing you need is to accentuate uncertainty. This anti-corruption thing is destroying the economy for scant benefits. If the government has no money to fund the budget and is just running down the clock it should say so and not leave the rest of us in uncertainty. We have a couple of Indians out there waiting on the stable exchange rate. The delayed budget doesn't help.

You are right brother, people seem to forget that the benchmark was $38 per barrel at 2.2million barrelsperday. Now we have had oil prices below $38 a barrel for January plus February, and production has been less than 1.9 million barrels a day this year, even averaging 1.6+million barrels a day. NNPC is with holding cash in dollars, plus a large chunk of the TSA which is their money and they need for their operations, Customs is recording shortfalls from targeted revenues due to the currency issues and at the same time FIRS will be recording reduced taxes due to reduced business activities. So the government had against our wailing,made over ambitious plans and projections last year, reality has set in and now they are trying to use delay tactics and blame games even abandoning the 2016 budget to work on 2017 budget according to this article.

Production or exploration @OP

chebeoc:
olapluto post=44897970]Until there is a nationalistic pride in all Nigerians, we will be stagnant. Iberia is leaving us because they are not able to remit their profits back to Spain. Profits made from Nigerians. Tough luck.
Its like a rapist vexing for the victim after she refuses to help him unzip his trousers. Sorry.

And you're very happy to take your salary home every month end.

Do you mind people like him, they work in port harcourt, Abuja and build or make investments in Lagos. They work abroad and send money back home but require these companies to come and do business here with no expectations of profits. Those corporations are not humanitarian organisations and so have a right to make profits and take it to even mars or Pluto or where ever they so chose.

musicwriter:


The Naira would naturally gravitate back to about N180 to $1 when local manufacturing pick up, through all the ''looking inward'' policies that are being made now.

Oil price fall is not our fundamental problem. The root cause of our problem is we don't manufacture any other thing to export to the world except oil.

We can do without oil!!. That's what Buhari is trying to figure out, but of course it would be difficult to transition from oil to other source of income for the country.

Nothing could be better than that when it comes to fruition.

Does this government strike you as one with mindset of diversifying it encouraging local production. They say one thing and do another, the flood gates will soon be open for Chinese goods to come in and don't forget the arbitrage that will begin to take place with currency change or swap whatever the foreign affairs minister meant. People will convert their money's to yuan at (30 something naira to the yuan, 199 naira to the dollar) take it abroad to convert to dollars and bring it back here to sell at 320.

Farmers are being discouraged everyday with the fulani herdsmen menace. Uhmmmm even stops to think, where are we diversifying towards.

omonnakoda:

I am not a spokesman for the president or government
Where does "fear competition" come from? who fears competition and how is that part of the conversation. No one is making policies to send anyone packing .HAS EVERY AIRLINE LEFT
How relevant is IBERIA?

The fact is ALL countries use PROTECTIONIST policies for their airlines. Go to Heathrow and see where Arik is situated compared to BA for flights to Lagos

In fact when we have a national carrier they should only be allowed to fly to Abuja and not Lagos.

Once again the issue is our lack of a National carrier .A well run carrier cannot fear competition because it will be the only carrier offering DIRECT flights to every international destination

Exactly what I stated that our airline be given preferences. It's same with every country you visit, whether Heathrow, Charles De gaulle, Frankfurt, schiphol, JFK, malpensa everywhere.

Mediocrity fears competition, the very reason we will want to push out every airline even before we plan to site ours.

Saying only IBERIA has left, i would say something, someone has to make the first move, Venezuela is on screen for us to see. You need to understand that others have been preparing to leave as well, some are Having to make difficult decisions, like using smaller aircrafts, downsizing plus issues with their operations and having to deal with not being able to repatriate their profits back home.

My God we have a Maduro on our hands, I have been saying this here for months.

musicwriter:


I don't know anything about APC's change mantra, I don't even believe in the party or politicians as a whole.

What I'm interested here is: did Buhari make the right decision by not devaluing the Naira according to IMF request?''.

And my answer is ''yes''. That's all I care for about Buhari.

But that the oil price has already floored, you should have only watched the devaluation take place with another round of drops in prices.

That we didn't devalue and prices are rising wasn't because of any proper sound decision making by the government.it was purely dumb luck.

You need to find out what happened to African countries In the 80's and the structural adjustment by the IMF, plus the outcome. It's purely where Africans base their arguments against the IMF on, but truly no country implemented their recommendations completely, corruption are into the reforms in all 35 African countries at the time, but Ghana, imagine a programme that was implemented by IBB the Prince of thieves what do you expect as it's outcome?

By the 90's only Ghana was on a way to good recovery which we saw lasted until recently ( reason everyone was talking about Ghana as an example of a good place with a good system ).

Ghana also went through structural adjustment on the IMFs recommendation like Nigeria bu Ghana got the better for it, and the corrupt Nigeria got the worse off for it.

The problem wasn't the IMF it was the romance of the leadership with corruption plus ITK not following through with the recommendations of the experts.

omonnakoda:
The converse is equally true. The real issue is why we do not have a National Carrier.That is the core of the issue ,in fact this indicates how such a carrier trading in Naira will be in a strong position. Iberia acts in Iberia's interest and from that perspective no one can fault them. We too must act in our interest too! Many foreign airlines love Nigeria because it is their most profitable route due to high business class and first class occupancy rates. Still Nigerians do not get fair deal and even subsidizes other routes when you compare cost per mile or quality of service. They tend not no employ Nigerians and are often contemptuous. Rather than indulging in hand wringing we should redouble our efforts to establish a National carrier

Yea a certain president said he would convert the presidential fleet to a national carrier, btw why do we fear competition, we should set up our national carrier alongside then give them some leverage of advantage over their competitors with time those foreign airliners will fall off and we will be in a good position to take their share of the market. Not that we will make policies to send them all packing and with no provision for our own airline. Or will the citizens start trekking abroad. This government is truly silly and are never able to see the big picture.

musicwriter:


The decision by Buhari is in your best interest in the LONG RUN. Of course, they'll be initial hardship.

But, whether we go the IMF way or not, there'll be hardship.

Change with hardship that breeds anarchy, is not progress.

A wise philosopher already told us that: "the art of progress is preserving order amidst change and change amidst order". What we are witnessing is change no doubt but not progressive change.

musicwriter:


Well, you're free to remain a western stooge, individually. Fortunately, you're not in a position to make decision that would affect me or the entire nation.

I see how those with your mindset are running the country aground.

It's high time Africans understand that the world does not revolve around them. People do things that are best for themselves and for the group. So better to stop being cynical and all paranoia.

musicwriter:


Of course, you take everything at face value, because you don't know what's going on underground. But, we've gone beyond that and actually researched how they operate.

Someone is bent on controlling YOU my friend.

See the Capitalist Network That Control The World's economy www.africason.com/2015/05/the-capitalist-network-that-control.html

See disadvantages of the IMF at http://www.africason.com/2016/04/disadvantages-of-imf-international.html

And there you get it all wrong...

blackprowler:


How old are you? You know how many of the vomit you spewed here your father and mother heard from when they were kids? Your child will say same when you're old and you will personally slap him. You have no idea

This "change" is an invitation to anarchy, but some of these kids will come here talking nonsense in defense of their god.
the great philosopher, Alfred North Whitehead had rightly said that"the art of progress is preserving order amidst change and change amidst order" from this it is evident that we are changing without making progress.

A good look all around us and you see anarchy brewing, police kidnapping citizens for ransom , robbery, cultism, vandalism, insecurities, brazen insensitivity displayed from the presidency downwards etc

We really need to redefine our democracy in my own opinion, giving weights to certain people, how can a learned professor of economics and a local agbero be entitled to one vote each.

Damn.

Checked86:
Even people that do not know where the economy is being headed will come here and say trash. With time you will not have anything to defend. We go around the world seeking for foreign investors but the foreign investors operating already in our country are fleeing. I am just watching. I enjoin the CBN and other agencies that handle monetary policies to check other ways of helping Naira without making it so rigid. For any country, especially developing country to do well, foreign investment is very important. You can't just ignore that. No foreign investors are coming to help you, they come when they see they have something to gain but no matter their intention, the host country always gain more.

Tell them brother, as if investors are humanitarian organisations. The aim of investment is to make profits so the citizens can keep encouraging this government with their useless policies until they fully reset us back to pre independence.

musicwriter:
We know how the IMF and world bank works, so you all shouldn't be scared.

If you investigate that Iberia airline, you'll discover it belongs to a network of companies controlled by the IMF and world bank. So, their game is usually to make coordinated withdrawal of investments to evoke panic.

I said all these before.

Their next move would be to tighten the noose on Nigeria, until the masses go on to the street to protest against the government. Then, they'll say ''I told you so''. And they'll start funding a stooge political party to over-throw the head of state of their target prey-this time it's Nigeria, unfortunately.

They'll never rest until they worsen the economic crisis in Nigeria.

Buhari have to be strong and never show any sign of surrender, when they get the message they'll back out.

My friend, no body (IMF) is worsening anything, all your predictions are things that will be bound to happen at the rate this government is going, no one is inviting the populace against the government rather her policies biting hard into the skin of the people will be returned with a backlash.

This came as the government also stated that there was no currency deal swap with the Chinese government

what do they mean by that?
I pity all those who pay attention to the deluge of propaganda and misinformation emanating from this government.

I for one have given my friends convincing arguments why this while China deal is a poorly thought out one for our dear nation.

May this administration serve out her time quickly so reasonable people can get on board.

No to simpletons in government, if the oil companies can afford to get the very best in terms of personnel and captains (leadership) then why can't our country's leadership cum highest office in the land be occupied by the very very very best.

Fedayeen:
Timi Frank is giving APC the right dose for their sycophancy.



Who is the drummer beating this drum for Timi Frank fine dance step

Timi Frank is Atiku's most loyal boy from the south. A fine and intelligent young gentleman you could have a good political discourse with, anyday.

There is a reason the London stock exchange is the largest outside the USA, it affords traders an opportunity to react in the shortest possible time, based on happenings east or west.

I state this to show that when it comes to finance and economics decisions ought to be made in real time. A day' s delay could be hugely significant, then imagine at least 5 months of downtime in cabinets selection. What we have on our hands is a catastrophy, but strangely Mr president seems to think he lives in Olympus with the god's, having the luxury of time.

Buhari's trip to China increases oil prices.
Seriously speaking this man is always gallivanting so every event worth mentioning will coincide with his trips.

drss:
dem hypocricy stinks to high heavens! deziani was attacked left right n center for using private jet, but now dat kachukwu n emefiele ar using d same jet used by deziani, they ar yarning dust say she spend N10billion for jet. d same ridiculous figure dem zombie party APC dished to d media to smear deziani. tufiakwa!!!

Kachikwus explanation doesn't hold water in any way.

Ask them which company in particular entered this agreement with vistajet and have an open cheque to the minister to travel at his own will and pleasure.

Kachikwu can not tell us that after each trip he decides to send the bill to any of the oil companies, rather the companies are forced to pay and NNPC refunds them upon sale of crude.

Imagine a scenario of all oil companies in Nigeria lets say
Shell
Agip
Total
Exxon
Etc

Is kachikwu trying to tell us that they all operate 1 single acct by simultaneously finding each trip he makes whether to shell, or to the presidency or to a conference.
Secondly NNPC 's stake in most of these companies is not the same, 60% in some, and 55% in the case of shell.

So do they all contribute on trips that do not concern them?
Did they all enter a single agreement with vistajet for sake of the oil minister?
Did only one company enter the agreement, and if so why them?

In summary there is no cost the oil companies don't recover In a JV. Every item they spend on they make clims and the NNPC pays back.
So technically the NNPC is coercing somebody to pay for the luxurious living of her bosses.

If diezani had spent so much, it must have been because some of the oil companies will be very happy to inflate the costs as they will surely reclaim their money from the NNPC. Imagine someone handing you a blank cheque.

Mixty:

Nonsense response from the guy. He was deflecting from the question. I work in one of the JV companies and I can categorically tell you that is not how it works. NNPC owns 60% of the JV so they dictate what is included in the annual JV budget. Don't let them deceive you by hiding under the JV agreement. How many of the JV partners use luxury jets? the answer is none. The NNPC is simply forcing the JV partners to contribute 40% to the excesses of the NNPC boss.

cc fulanimafia .....for your learning too

Don't mind those people, these their supporters here know this but try to be economical with the truth to deceive less knowledgeable folks. Is there any expense item that JV partners do not recover? Funny enough our crooked NNPC still collects their money and withhold JV cashcall obligations to the IOCs.

Hiding under pretext of JV agreement to live luxuriously.
Let's ask a question, which company in particular gives him this right to flyi as part of her JVagreement, or he flies on each trip and charges to any company he pleases? Then which company entered the agreement with vistajet.

Crooks in government.

Nigeria is Africa’s top oil exporter but a shortage of dollars has provoked a fuel crisis that is testing an already struggling economy and challenging the government to find a solution.

The west African nation has long suffered fuel shortages because it lacks the infrastructure to refine its crude at home. As a result, it imports almost all of its petrol and other refined products — paying in dollars.

People have been experiencing frustration at the pumps since early March because neither NNPC, the state-owned oil company, nor private competitors have the dollars needed — about $10m per day in total — to pay for imports. While fuel shortages are usually resolved in one or two weeks, the current crisis has been prolonged and could drag on.
“Things are really getting out of hand,” shouted an irate driver in Lagos, the commercial capital, this week as he attempted to squeeze his sedan past a queue of vehicles stretching several kilometres to a petrol station. The queue had blocked traffic in all directions around the NNPC-owned station in Ikoyi, one of the wealthiest neighbourhoods in Nigeria.

Another driver, who gave his name as Mr Ayo, said he had been waiting seven hours since 3am to fill up. “I voted for change and all I am seeing is frustration day and night,” he said.

President Muhammadu Buhari, who took office in May last year, has vowed to change the way the state buys refined petroleum products and improve the poor performance of state refineries to lessen dependence on imports. But such reforms could take months, if not years.

Nigeria’s foreign reserves have been falling since the price of oil, which provides 90 per cent of export earnings, began to plummet in mid-2014. The central bank imposed currency controls last year to conserve reserves, but they have had a limited impact as the bank has also continued to spend dollars defending an official peg for the naira.

The dollar crunch has forced multinationals such as Unilever and Guinness to raise prices and even prompted Truworths, the South African retailer, to leave Nigeria in February. It is now also damaging Nigeria’s ability to import fuel.


Fuel importers and marketers say they cannot access dollars at the official exchange rate because of the currency controls. This forces them to buy dollars at a higher rate on the black market, which then makes it uneconomic to sell their imported fuel at a pump price fixed by the government.

Emmanuel Ibe Kachikwu, NNPC’s managing director, provoked public anger when he said last month that he was “not a magician” and that the long queues at petrol stations were likely to persist until May.

Mr Kachikwu has since changed course, promising fuel supplies would improve by the end of this week. However, energy industry executives say Mr Kachikwu was simply being honest about the complexity and scale of the problem in his initial comments.

“The government is trying but the problems on the ground are colossal and I think they underestimated them,” said the head of a Nigerian oil and gas company, who wished to remain anonymous. He noted that when Mr Buhari took office he promised to get Nigeria’s state refineries working within just two months.


[b]All four state refineries are shut. One had been running in January [/b]but a pipeline attack by suspected militants in the oil-rich Niger Delta forced the government to cut supplies and halt operations.

The fuel crisis is further hitting productivity during the worst economic slowdown in 15 years. “Many people cannot get to work on time or at all, because either they cannot get fuel for their cars or they cannot afford higher transport costs,” said Muda Yusuf, head of the Lagos Chamber of Commerce.

The fuel saga — fuel wahala in Nigerian slang — is a reminder for some impoverished citizens of their country’s stark inequalities.

“We have oil but we don’t succeed to have fuel. We suffer for this oil,” said Adeshino Gbengba, a minibus driver queueing at another Lagos petrol station, while he watched a police officer allow people to jump the line in exchange for money and soft drinks.


Nigerians queueing at petrol pumps and shelling out extra cash for black market fuel have another gripe: electricity blackouts that are even worse than usual.
For more than a week, some neighbourhoods in Lagos have been running almost entirely on residents’ generators because the official grid’s power production has slumped. But many people cannot afford or even find fuel for their generators and are sweating through humid nights without fans to cool them.

Nigeria is home to about 180m people but its national grid typically produces far less power than most European cities. Generation had begun to improve under Mr Buhari’s administration — it crossed the 5,000-megawatt mark daily in February, a record high.

But in mid-February, armed men in the Niger Delta attacked a pipeline that also supplied about 25 per cent of the grid’s gas supply, said a senior official in the ministry of power, works and housing. Generation is now around 3,300 megawatts, experts say.

The government hopes repairs by Shell, the pipeline’s operator, will be completed in May. In a moment of exasperation, Femi Adesina, the presidential spokesman, said in a television interview that Nigerians “crying that they are in darkness” should blame the pipeline vandals and not the government.

Source:
https://next.ft.com/content/b0f9739a-fb3c-11e5-b3f6-11d5706b613b

.

tanimola22:


Actually, this isn't necessarily a lie... The reserves also depend on the outflows from other parts of the payment balance (BOP)...

Yes,it is true that remittances are inflows on the current account section of the BOP and this should improve BOP and, by extension, the reserves..However, if the overall outflows are more than the inflows, despite the increased inflows, the reserves must still deplete..I suspect that is the case here, although I haven't looked at the numbers as of yet.

Your point that they are liars would be very true if we could establish that the inflows for the period exceeded the outflows, yet reserves depleted! Another area where you could identify a hole is in the area of data integrity..But until someone could actually prove that the BOP data provided only signify lies, it would be difficult to negate the submission in this report.

I am happy to provide more light into the above explanation in case someone still disagrees.

T22

quite some explanation. Well I put up that statement to draw attention to the fact that I believe there is a relatively huge amount of forex within the system. Only in august the complaint was that the economy was saturated with dollars and then they implemented some measures and we are again told that there was too little dollars in the system. if the right policies are in place, we both know that issue of "idle dollars" will be unheard of and well utilized within the system.
Thanks a lot for your explanation, took something out of it.