₦airaland Forum

Only fools would believe a country would send Nigeria half of its GDP.

Only fools would believe 7 individuals stole the wealth of Bill Gates, Warren buffet, Carlos Slim & Mark Zuckerberg combined.

And a question to these same fools believing that kind of foolery. If $200 billion were stolen and we still could pay salaries for over 5 million civil servants as well as repair roads here and there, share money to political jobbers etc, then now that the purported theft is said to be over, why do we still hear the feds complain there's no money.

Edo is totally tired of APC.
First because the people are disappointed at the insensitivity of Oshiomole especially in his second tenure.
Second because they terrible performance of Buhari in his fist year has rubbed of negatively in the minds of residents.
Esos are craving for anything but APC right now.

Never come in between two fighting brothers. They will forget they were fighting themselves and punch you blue in the the face.
Wisdom is profitable to direct.

They should be apologizing to Jonathan for criticizing him in his tenure.

This time they have blamed power sector workers, NNPC workers, vandalism and everything else. They are never at fault.

OlujobaSamuel:
from your comment, detecting ghost workers through system audit is wrong
2. it's ghost workers not absentees, so you want a government to arrest ghosts before you believe it exits in our systems. kontinu, the Lord is your strength.

OK maybe you don't know the job of a finance minister. In this current economic scenario, the discuss should focus heavily on fiscal policy, strategic economic planning, innovative ways to shore up our resources and those kinds of thinking.
I'd expect her to seek new models to generate new resources from hidden assets. That is the job of a finance minister. Economics, Economics, Economic.

Leave the job of investigating ghost workers to a much lower institution.

The other day Fashola spoke on the use of Pension Funds to build infrastructure. He also spoke on the use of prisoners as a source of cheap labor. That's thinking that makes all the sense.

About ghost workers, maybe you think we are talking about ghosts as in spirits as in willy-willi. Let me educate you a bit.
The federal government pays salaries to the bank accounts of these ghost workers Abi? Because the last I checked all salaries come from a central payroll system. Now can't those accounts be investigated? Cant the passport photographs used in opening those accounts be used to identify the so called ghosts. If someone had been collecting these monies all these years. Then they are traceable.

Cc
Antispexish. Bbmate. Shamecurls. Olujobasamuel. Agbaletu. Afroniger

You know your country's economy is in the wrong hands when the minister of finance reduces her job to the pursuit of ghost workers.

And for crying out loud, why aren't we arresting these ghost workers?

dowjones:
You sound ignorant. I can easily assume you don't know how contracts are awarded and the heavy interplay of politics in nigerian business.

I've edited my post cos its useless to a person like you who probably works behind a desk and reads motivational books.

Your speech is empty and it speaks loudly about your personal frustrations in life. Surely isn't my fault nor Dangote's.

I don't know how contracts are awarded because I don't do contracts. Neither does Dangote. What we do is production. We create wonderful products after adding real value to raw materials. And you know what, I run my ish and do 7 digits in $$$ yearly using same value chain model Dangote uses.
Keep hating. Hope you don't grow old and have to live in regret. The earlier you fix your mindset and stop expecting govt to spoofed you, the better for your offspring.

dowjones:
Nice one.

See why Nigeria's future is weak? Unregulated power in the hands of one man. Dangote only thives in a monopoly. Nigerians pay more than double for cement compared global prices because of one man.

When IBETO brother were given license to produce cement under the Yar adua admin, they announced they will sell a bag of cement for N800 the NEXT WEEK, that license was revoked through the lobbying of Turai (that witch).

Once dangote is done with his tomato paste farm, government will pass a unfavourable bill against tomato paste production. Or they will use NAFDAC do make new entrants suffer. This is nigeria

Dangote's Nigeria

Lets stop this nonsense. Dangote is a hard worker. He works harder than all the others.
Dangote's strength is in his absolute value chain strategy. He is involved in every segment of his production systems.
He mines the limestone, he produces his own power, owns the company that produces bag for all his commodities, owns the trucks that supply his cement and a whole lot others. Even owns the dockyard that berths his raw materials. Its a business stratey he has built over ages.

If smallers players like Ibeto would play successfully in the same market, they must devise strategies that would make thier products way more appealing than the behemoth. Something as simple as focusing on the last mile using innovative delivery strategies can change the game for Ibeto

Interesting

We are supposed to be happy that he cut the number of ministries/ ministers to 24:

-when the electricity situation is the worse in our history.
- when we spend our lives at the fuel stations queuing for fuel at the most expensive price in our history.
- when Egg, bread and pure water have all increased astronomically.
- when inflation is at the highest point in the last 20 years.
- when the exchange rate hit N425 to the dollar.
- when not a single km of road had been surfaced in 10 months of governance.

We are suppose to believe he is cutting cost of governance-
-When he has visited more countries in 9 months than Jonathan visited in 6 years.
- when he has spent on travels(20 billion Naira plus) what could have built 1000 primary health centers at 20 million per unit.
-when Aso Rock now pays rent to an imaginary landlord.
- when 300 million would be spent to connect wires to Buharis Drivers room.
-when more money is allocated for Aso Rock clinic than is allocated for all the Federal Teaching Hospitals combined.

I don't blame the old man. I blame the zombies who voted him into power without asking what he did with himself in the last 30 years.

Whats happening in the SW?

Interesting piece. With the epileptic power supply in Nigeria, you wonder why our roofs aren't filled with solar panels.

Op. Your Economics teacher should be sentenced to jail for negligence. He failed to impart basic knowledge of forex factors into your skull. That's criminal

The sad reality is that Nigeria is having an exact repeat of 1983- currency controls, a rapidly dwindling economy and a Buhari presidency.
History seems to be replaying itself in the exact same mode. If that means Buhari gets sacked after one and half year, then hmmmnm.....

I pray Nigerians don't curse the day they voted for this man.

How much are you smoking machines?

The disparity between the parallel market and the official CBN rates is too wide. It explains that the forceful pegging of the exchange rate is giving rise to even external forces to have controlling stake in our FOREX market

I don't exactly understand your postulations, but anything that puts Edo and Delta with SW is a no no for me. We are in the South South. And that is that. Pls leave us out out of the SW

Whats the size of the farm. Pretty impressive though, but I'm thinking our farm might be larger. We do sweet Potatoes

A few pics of our farm.

That says it all.

And you know whats funny, Obasanjo came in 1999 with oil prices at barely $25 and remained so for almost 4 years maxing out at about $35.

Despite all that, the Dollar's stability was retained. Obj didn't blame Abacha grand theft nor the years of military decadence, rather he assembled an excellent economic team and went to work instantly.

In 2009, oil peaked at $144, then in less than 3 months it tanked to $45. Then our production dipped to barely 700,000 barrels per day at a time due to shut ins from militant activities. The Yar Adua/Jonathan government didn't play the blame game, instead they designed a quick strategy in the amnesty program that saw our production rise up drastically and things got back to normal.

We have a terrible government. The worse part is that they have yet to craft any strategy solution to the massive economic crisis looking the nation in the face.

Maybe they don't understand that we are probably heading to zimbabwe with the way the economy is going. At this rate, the capacity to import fuel would become pretty hard and fuel scarcity might become so excruciating that a litre could trade for as high as 500 Naira. I hope we don't ever get to see a nigeria where bread would start disappearing from stands because of no forex to import wheat.

We need a solutrion now. And if Buhari cannot provide one, he should be impeached and lets allow Osibanjo to try his hands on something.

This poster is interesting and I understand what he is doing. He is trying to expose to us how stupid Buhari's ideas are. He is playing out for us to see what's going on in the President's uneducated mind. The funniest part is the LFR(looted fund reserve).
To think this is what plays out in Buhari's mind means our economy is in trouble and we might actually be heading for a Zimbabwe situation where there might be scarcity of bread in supermarkets because no forex to import wheat.
Very soon all the smart politicians would seek resignation as Buhari's archaic ideas would have frustrated them.

rottennaija:
Wow... You are both the judge and the jury. Anyway, I'll remind you someday. Did you say 100m? Sorry, if wishes were horses... Anyway, I'll get there someday

You see. You don't expect to produce but easily assume that others would begin production because the price of dollar is bad. It really doesn't work like that. There is something called factors of production in Economics. Classically it references Land, Labour Capital & Entrepreneurship.
For basic production, You should have all these factors combined and in as much comparative advantage as possible for you to produce effectively.

rottennaija:
Smart choice. By then, no one will ask you to stop importing, no one will ask you to look inward or to start producing yourself.

Imagine 1000N to 1$. The retail price will be too high for imported product that the final consumers will be discouraged from buying. Then, you will start thinking and suddenly realised that this things can be produced locally

I would like to know what you- rottennaija- would start producing. I would also like to know how you intend to produce what you want to produce. And importantly too, where you would get the capital and the know how to execute your production.

Even if them dash you 100 million Naira today, you can't even produce a good bar of Chocolate despite having all the Cocoa in the world- because you don't know how to.

The Director said that the ban of these products, particularly agriculture products have begun to yield positive effects on the economy.

“I was in Ibadan last week and was encouraged by a producer that rose from Cassava farming to processing and that farmer is now producing industrial starch which is in high demand” he said.

Ibrahim said he was happy when the producer said that last year, [size=13pt]they were able to record nine billion dollars in exports.[/size]

He concluded by advising Nigerians to think Nigeria, act Nigeria and buy Nigeria, by patronise made in Nigeria goods.

The bolded is how you know that the speaker is lying.
$9 billion....... selling cassava starch and the guy never enter forbes list as the fastest growing billionaire in the world....

unite4real:
make them dey go abeg. Naija enterpreneurs will take the space. Oya MTN wetin una dey wait for?

Oh really.

Where were the Nigerian entrepreneurs before they came in?

4Play:
These debates are akin to flogging a dead horse. Most reasonable people can see that the present policy framework is not working. Many months ago I noted that a fixed exchange rate may be retained long after the market rate has substantially diverged as to render the official rate meaningless. During the Abacha regime, the fixed rate remained at 22 Naira to the dollar whilst the market rate got to 85 Naira to the dollar. This created an excellent opportunity for "round-tripping", i.e., buying dollar at the official rate and selling at the market rate.

This being Nigeria, corrupt interests are formed and converge to exploit these opportunities and to denounce those who criticise the exchange rate policy as exploiters of the masses and the representatives of malicious foreign interests. Because political loyalty in Nigeria is based mainly on ethnic and religious affiliation, bad policies will subsist for long notwithstanding the compelling arguments offered by real world experiences.

Excellent speech.

Interesting. There is an opportunity here. I'll explain in a moment.

chinchum:
To what extent do we export refined goods?


As to your analogy, do you think a N200/chivita juice before devaluation can still be produced with profit margins of 200/juice after devaluation of naira.

The price of Chivita is still selling retail at N250. They surely would sell below cost of production. Plus they source majority of inputs locally.
If you want a better example, use Dangote cement whose price has actually dropped today vs say 2014.
Or commodities we export like cocoa, sesame, cashew et al.

chinchum:
If the main problem is hoarding like you said, you must realise people hoard what is scarce, and there need to be stiffer controls by CBN to monitor those who have access to dollar @ official rate.

As to your other assertion, Yes crude oil accounts for roughly 35% of our import , consequently 35% forex demand, but forex reserves is export value minus import value. Our export value has dropped considerably also due to low crude oil price, in actual fact, we lost more from export value, than we lost at the import value from the differential of crude oil export and refined oil import.

The biggest impact to our declining forex reserves would be functional refineries that meet our local demand, and if we can get surplus, we start exporting refined product (foreign exchange earner), the current refineries are virtually moribund, we need new ones possibly on old sites, but new refineries is a LONG term plan, we hope DANGOTE refinery will save us before 2018, the FG is yet to give an official statement after the dec, 2015 deadline to assess the 4 refineries.

About refineries, I think a short term solution could be to buy or lease existing refineries overseas or enter swap agreements. Ship crude out, get it refined and ship back to base. No much exchange of currency. We save all that 35%.
As regards export value vs import value, I think available statistics would indicate that import values might have tanked to a greater degree across board than our exports.

adeomolisabi:
PapaBrowne,

Thank you for taking the time to carefully explain how the current currency policies only create opportunities for arbitrage by the well-connected. Unfortunately, I doubt it will do much good: the state of Nigerian education is so poor that most respondents will just keep insisting that a "strong" Naira must be good, no matter how powerful your arguments to the contrary, or how weighty your evidence.

The folk belief in Nigeria seems to be that it's within a government's power to give the populace a level of purchasing power greater than what their productivity would actually merit. Right next to that in popularity is the fallacy that imports are by definition bad, and that simply restricting imports to "essentials" will magically make everybody more prosperous ...

Best comment in a while. You have a clear picture of the challenges many of which are stemming from faulty understanding of the basics.
A devalued currency would even help our productivity as the price competitiveness of our goods become quite impressive.
I like using Chivita fruit juice as an example. At N200 per juice wholesale, it would have sold in say Saudi for $1 last year at an exchange rate of N200/$. At an exchange rate of N400/$, that same juice would sell for 50 cents, making Chivita juice more competitive in Saudi vs other juice manufacturers. This is the direction I would have expected the government to push encouraging the best of our goods to be shipped out.

chinchum:
No devaluation of Naira will bring about reduction in the rate at the parallel market.

Dollar is scarce because there is restriction to access, there is restriction to access because we are low in foreign reserves, 27 billion usd (almost 12 years low). Nigeria can not afford to run out of foreign reserves.


If cbn devalues naira from 197 to 260-270, parallel market rate will speedily climb to 400.

The mid term solution is access restriction for now, or else we run out of foreign reserves, long term solution is to think export apart from crude oil in large quantities to earn foreign exchange.

There should be control measures by CBN to prevent round tripping by those with access to dollar at official rate of 198

Trust me, the bigger source of the scarcity is hoarding and not importation. Warehouses are empty. Activities at the ports are Down. Importation has nosedived terribly. The demand for forex is more about speculation than its about importation.
Devaluing the currency, or better still allowing the markets to determine the rates albeit in a controlled fashion would do a lot to reduce the factor of speculation.

You think about this: Oil imports are our largest forex drainer. Probably more than 30%. Since the price of oil is down radically, shouldn't the demand for forex by importers of crude go down radically as well.

stevecantrell:
Did you know it is mainly cbn execs behind round-tripping ? When a fox is in charge of a hen house, that's what you get.

And how would you know that? Asides why not, when there's money to be made from it. Plus it's not exactly illegal. But it's terrible.

AZeD1:
Your scenario says the problem is round tripping should we be thinking of solving the issue of round tripping?

You cannot solve the problem of round tripping when you have created the best market opportunity for round tripping to thrive by pegging the rate.

It's simple, if a house is on fire and the source is electrical, the first thing you do is to cut the supply.

The source of the hoarding is speculation which is a result of the guaranteed downward trend of the Naira. The source of the round tripping is the variance between the parallel market rates and the CBN rates