okok0bioko:
This is a blunt and unbiased analysis that really questions the transformation claimed by this current government.
Trust me on this one, you don't want to miss this devastating and unsympathetic disection of the problems facing Nigeria.
The central theme is how Nigeria has wasted its oil revenues. Our undiversified economy is at the mercy of international markets and fluctuations in the oil price.
Enjoy! or ponder whether you really want to continue with a very corrupt government.
You can’t find a blunter assessment of the underlying problems facing Nigeria and the naira than that from BCA Research this week:
Nigeria has basically squandered away its oil bonanza of the past decade. It has failed to channel its oil windfall into infrastructure and productive capacities. As a result, the economy remains extremely dependent on swings in global oil markets.
On the surface, Nigeria’s oil sector has dropped in significance to a mere 13% of real GDP, while the services sector has climbed to 40% in real terms. Yet, the reality is that it is the country’s oil revenues that have supported growth and, to a large extent, maintained social order. Without oil, both would fall apart; government spending would be much smaller, interest rates much higher, and the currency’s valuation much lower.
In one phrase: a massively squandered opportunity.
One of the issues the BCA analysts, headed by Rajeeb Pramanik, hone in on is the country’s domestic savings rate, at a measly 20 per cent of GDP, is extremely low for a developing economy at this stage. A key reason being the government’s inability to tame chronically high inflation, meaning bank deposits have earned negative real interest rates for most of the past decade:
This low savings rate has in turn hindered infrastructure investment and limited productive capacity. So, even despite Nigeria’s much trumpeted GDP rebasement last year, the country’s gross capital formation is among the lowest in the developing world, lagging even that of South Africa and Brazil.
That’s a problem for a country whose vital public infrastructure is beginning to decay:
Low capital investment, in turn, has eroded the country’s competitiveness. Basic infrastructure is severely lacking. In particular, already deficient electricity generation is shrinking (Chart 4).
Rampant use of diesel generator sets for electricity is driving up the cost of doing business. Finally, chronically high inflation has made the currency overvalued in real terms, further denting competitiveness.
It gets worse:
In the case of soft infrastructure, the country is also falling behind. The quality of institutions is poor, as is the quality of health and education. The World Economic Forum’s latest Global Competitiveness Index ranks Nigeria’s basic requirements (such as institutions, infrastructure, macroeconomic environment, health and primary education) at a lowly 140th out of 144 countries, down from 130 two years back.
There is not only a scarcity of qualified engineers and technicians, but also a lack of skill training for the lesser educated. Foreign investors often have to bring in their own workers to execute projects. As a result, the unemployment rate has remained high at 26%, even during the period of robust economic growth. Cumbersome regulations and rent-seeking officials make Nigeria an unfriendly place to do business. The World Bank’s Doing Business Report ranks Nigeria at 170th out of 189 countries in the “Ease of Doing Business” category. Other costs of doing business have also been rising, as terrorism lingers in certain parts of the country.
BCA Research argue that all of the above totally undermines the popular notion that Nigeria’s burgeoning middle class will be able to turn the country into a consumer powerhouse. That’s because the mere presence of a huge consumer pool does not atomically, they say, translate into prosperity.
The sad truth is Nigeria has used oil revenues to drive income and consumption over the past decade or so. But since the global market determines oil prices and Nigeria has little influence on their direction, the country cannot escape a negative income shock. As BCA research note:
It will have to curtail its domestic demand (both consumption and investments) substantially. This in turn will likely develop into a negative feedback loop of contracting fiscal spending, credit retrenchment, lower demand and lower income.
When it comes to the naira, the analysts add that while foreign reserves stand at a healthy $44bn and can be used to defend the currency for a while, if they’re completely deployed in foreign exchange markets, this will come at the cost of domestic liquidity and a credit contraction.
If the Central bank opts to raise interest rates instead, that too would only magnify the domestic liquidity problem. On which note:
There are already signs that liquidity is drying up in the inter-bank market. Inter-bank call rates spiked to an average of 24% in December and narrow money is already beginning to shrink (Chart 9). Such a squeeze in inter-bank liquidity means credit flows to the economy are set to contract going forward, which will knock down economic activity further and weigh on the stock market. Bottom Line: Nigeria is still all about oil. Therefore, swings in oil prices have a high correlation with Nigerian assets.
Small surprise then that Nigerian currency dealers are resorting to cryptocurrency strategies — (if we just refuse to sell naira the price can’t go down!) — to stave off further collapse. As Reuters reported this week regarding the blank quotes coming through screens for three hours last week:
Rather than a computer glitch or power outage — common hiccups in any frontier market — the lack of prices was deliberate: all Nigeria’s banks were refusing to trade while their top dealers met behind closed doors to chew over Emefiele’s pronouncements, according to those involved.
Among the decisions reached by the Financial Markets Dealers Association (FMDA), as the club of 40 banks, discount houses and brokerages is known, was an unofficial ‘circuit-break’ agreement to halt trade if the naira fell more than 2 percent in a day.
FMDA chief executive Wale Abe insisted no central bank officials were present at Wednesday’s meeting and said it was an entirely voluntary measure to curb volatility, in line with the body’s support for financial market stability and maturity.
Here’s what they’ve achieved thus far:
[b]Last and not least, there’s the political risk associated with this year’s national election, which falls on Valentine’s Day (February 14) and features incumbent president Goodluck Jonathan, a southern Christian, breaking with established convention and running for what is technically his third term in office. As the BCA analysts explain, that’s already causing a lot of resentment in the Muslim north, whilst hiking expectations of violence if and when the Muslim candidate wins.
The oil revenue factor, meanwhile, is only exacerbating the political divisions:
The influx of oil wealth had benefited primarily the Christian south (who were marginalized in the early years of independence), and not the Muslim north. The oil money has flipped the power relationship between the two groups. That said, steadily increasing oil revenues had helped assuage regional and sectarian tensions in the country.
Oil revenue is the political currency in Nigeria, greasing the wheels of politics and unifying the country’s political elite. As much as 10% of the country’s oil revenues disappear into the pockets of regional strongmen. Western commentators call it corruption; Nigerian elites call it stability. The loss of oil revenue will threaten that stability, as regional leaders will look to keep their own constituents happy.
In that sense, for as long as there was oil revenue, there was also a common interest bringing the politically divided elite together.[/b]

VoteWisely:
http:///1JNu1ZJ #VoteWisely

jars9:
You not been fair making comparison between an under developed third world country to a developed 1st world or advance country you are not doing justice to my assertion, if I may also ask you how big is Japan? now take a look at China and you would see same multinationals there and at the same time they are the highest consumer of luxury goods all them Gucci, prada, luxury cars too so tell me it's as a result of corruption, I know the truth is bitter to swallow but the truth is the numbers favours us from all indices we have the population all that's needed now is a peaceful atmosphere and we would blossom.

jars9:
More #UNDUSPUTED.BENINI ORE-BADAGRY IKORODU EXPRESS

mikeansy:
Why swear an affidavit when you can go to WASC to obtain a certified true copy of your WASC?
Why go to court when you can go to WASC?
Why refer INEC to Military board when you can obtain a copy from WASC and attach it to your INEC form?

Why travel from Port Harcourt to Kaduna via Dubai when you have Abuja?

It just does not make sense! Buhari is hiding something!

Ikengawo:

Nigeria: Jigawa Polio Free for 2 Years - Emir


http://allafrica.com/stories/201501270511.html

APContherun:

Yes Lagos- Ibadan rd is on paper, Benin-Ore, Kano-Maiduguri, Ogoja-Abakilki, Enugu-Abakiliki, Vom-Manchok, Sokoto-Tambuwal, Katsina-Daura, Abuja-Abaji-Lokoja roads and many more are on paper.
Yes the PH-Enugu rail line flagged off in December is on paper, Enugu-Makurdi flagged off last week is also on paper.
It's also on paper that dry season farming which has been seriously boosted by the govt and which has led to a year round farming is also on paper. A bag of maize now sells for just #3000 naira as against over #7000 last year. Yeaa thats on paper too.
Mehn that paper must be very rich, may I take a look?

mikeansy:
On the economy various international institutions and media agree that our economy has made progress and Nigeria is the number 1 investment destination in Africa, CNN recently recognised Nigeria as the 3rd fastest growing economy in the world

On employment I am sure this administration can defend their records as all the road construction, railway, power facilities, airport renovations, boost in local agriculture will all gainfully employ labour

On corruption the government's institutionalisation of the fight against corruption or more like preventing corruption in agric sector using e-wallet and getting rid of ghost workers is one the Government is also proud of. Arresting political enemies and locking them up for 100years does not rid the Nation of corruption otherwise Buhari's attempts in the 80s and OBJ's Presidency would have eradicated all corruption in the country!.

On security I agree that Jonathan needs to do more. But I also reject the use of terrorism as an election weapon for judging the President on that point alone might just amount to falling into the hands of terrorists. There are allegations that people are undermining the efforts to tackle Boko Haram because of perceived political benefits and the last thing we want is to reward that clandestine move by purnishing the President. This moment calls for rallying round the President and telling the terrorists and their agents. "You simply are in on a long thing! You can not outlast us!"

APContherun:

It would be better you don't misinform those who do not know. Buhari hasn't presented any certificate, what we saw was a hurriedly prepared statement of result from a school in Katsina when all buhari needed do was write WASC or Cambridge for authentication of his certificate. You don't expect Cambridge to wade into the matter as no formal request has been made to it by the only man whose duty it is. Cambridge is surely waiting to disgrace him as it can't cover his lies like you do here.

About this issue being a distraction, I know you wouldn't want this issue to be discussed because it exposes the lack of integrity of a self acclaimed man of integrity. I don't know what is distracting in Nigerians asking their presidential candidate to submit to the law of the law. How would your man uphold the constitution when he can't obey a requirement as simple what we want him to do?

Yeaa the Tea Party disturbed Obama over his birth certificate which he initially declined to produce but did eventually, now the question is if Obama can do so even when it's not required by US laws why is Buhari failing to do his (which the law demands)?. Does Buhari think that by organising press conferences and blaming PDP the matter will go away? No certainly not.

mikeansy:


He has not presented any certificate

Katsina ministry of education can not issue a statement of result in an examination it did not conduct. Let Buhari approach WASC.

There is also the pending issue of filling his court incorrectly and I can not wait for the courts to disqualify Buhari in accordance with the rule of law!

mikeansy:


There is nothing immature about vetting the records of a Presidential candidate. Buhari is only being asked to defend his records by Nigerians and if APC have a problem with that then APC can only ask themselves why.

mikeansy:
Why swear an affidavit when you can go to WASC to obtain a certified true copy of your WASC?
Why go to court when you can go to WASC?
Why refer INEC to Military board when you can obtain a copy from WASC and attach it to your INEC form?

Why travel from Port Harcourt to Kaduna via Dubai when you have Abuja?

It just does not make sense! Buhari is hiding something!

Adminisher:


Jona is an agent of the corrupt moneyed class. They own him and the deal is for him to keep hoodwinking his SS ethnic group and dumb young SE supporters to perpetuate the grand lacerny of Nigerias resources. He came into office blank. He never had a plan for jobs.
Everything you hear about transformation agenda was hurriedly put together before 2012 and was all about steal, steal, steal

Mogidi:


Talking of PhD and thesis when you support a semi illiterate, abeg waka.

Adminisher:


This is idiotic. Since it does not involve giving Nigeria's money to billionaires to you it is not going to work.

eleko1:
Where there is no Vision,the pipu PERISH.BUHARI/OSINBAJO have INSIGHT,the reverse is the case with JONA lead PDP of Fayose,Fani,BASTARD OkUPE,Abati and other miserable thieves in PDP cos they are CLUELESS/BLIND and confused

eleko1:
BUHARI/OSINBAJO have a good VISION/MISSION for NIG.We can't afford to mossed dis opportunity.VOTE FOR BUHARI/OSINBAJO than the present Clueless,visionless man who'll rather eat billons food and neva give a damn if una eat or not.