₦airaland Forum

Good question. Actually, (nominal) GDP is the final value of all the goods and services produced each year. It measures the value added along the production chain, not the total value. And, generally, when input prices go up lower down the chain, you don't necessarily see an equivalent jump in prices of value-added goods and services. That's why you're not seeing the increase you'd expect in the examples you gave.

On final value: I'm not an economist, but let's simplify with an example. Let's say you buy a litre of petrol at filling station for N1,000. To get to you:

NNPC sells crude to refinery - 400 per litre of petrol
Refinery sells to filling station - 800
Filling station sells to you - 1,000

The "gross value" would be 2,200 (400+800+1000), but NBS will only count 1,000 -- the final value of a litre to the end user -- as contribution to GDP.

If you think about it, that's the total value added by each step of the production process:

Crude extraction - 400
Refining - 400 (800-400 cost of crude)
Distribution - 200 (1,000-800 cost of supply from refinery)
Total value added - 400+400+200 = 1,000

awesomeJ:
I'm thinking of GDP being the gross value of all goods and services produced in a country over a year.

If every components of the GDP have increased by an average of 100% over a given period, the maths says the GDP itself should have increased by 100% not the mere 10% they're reporting.

...The numbers aren't adding up.

I hear you, but I think we're saying the same thing in different ways.

Nigerian insurance cos are just not writing enough policies. And insurance works on the law of large numbers: If you have a large number of premium-earning policies, you spread your risk across your insured pool in a predictable way, lowering your claims servicing and reinsurance costs. So, yes, their core business has thin margins or is loss making.

emmaodet:
@ HesinMe

The problem is not the topline rather not reflecting at the bottomline.
Look at Prestige for example -
How can you generate 13.8b and use 14.8b as insurance service expense? Total making loss from their core business.
Most insurance company only pad their EPS and PAT from investment income and not insurance income which is not sustainable on the long run

HesInMe:
Just curious: What do people see in companies like Chams? Just low valuation?

I will check their financial report out but if am to make a guess, I think they are investing on the growth. Potential growth

ositadima1:
To the FA crowd: Are we likely to see an upward repricing of most company assets as financial results start getting released? A Tokunbo car purchased for ₦2.5 million in 2022 is now worth ₦4 to ₦5 million. Similarly, land, buildings, and other assets have all seen significant price increases. I believe the asset sections of most stock reports will be revised upwards. How will the market react when this happens, or is it already adjusting in anticipation?

Bros off your mic o, a toks car of 2.5m in 2022 can't be less than 10 to 14m now!

Obasanjo Says Invitation To Inspect The Refineries Is Disrespectful

https://punchng.com/refineries-rehabilitation-obasanjo-carpets-nnpcl-says-invitation-to-plants-disrespectful/

HesInMe:
Good question. Actually, (nominal) GDP is the final value of all the goods and services produced each year. It measures the value added along the production chain, not the total value. And, generally, when input prices go up lower down the chain, you don't necessarily see an equivalent jump in prices of value-added goods and services. That's why you're not seeing the increase you'd expect in the examples you gave.

On final value: I'm not an economist, but let's simplify with an example. Let's say you buy a litre of petrol at filling station for N1,000. To get to you:

NNPC sells crude to refinery - 400 per litre of petrol
Refinery sells to filling station - 800
Filling station sells to you - 1,000

The "gross value" would be 2,200 (400+800+1000), but NBS will only count 1,000 -- the final value of a litre to the end user -- as contribution to GDP.

If you think about it, that's the total value added by each step of the production process:

Crude extraction - 400
Refining - 400 (800-400 cost of crude)
Distribution - 200 (1,000-800 cost of supply from refinery)
Total value added - 400+400+200 = 1,000

Yes, your analogy makes much sense.

However. Take crude extraction. If it was 400 in 2022, my point is that today it's now 1800.

I mean IN 2022, 500 million barrels were extracted at $80 per barrel and #460 per dollar will translate to N18.4trn contribution to GDP.

In 2024, production is up marginally, say 550 million barrels were extracted at $75 per barrel at #1500 per dollar, why isn't that showing as N62 trn contribution to GDP.


Take cocoa beans: 250,000 tonnes at $4000 per tonne at #460 to the dollar, it contributed N460bn to GDP in 2022.
In 2024, it should be 240,000 at $9000 at 1600 per dollar contributing N3.6trn.

So cocoa as a produce has had about 9x increase, beans is like 4x, and from palm oil to rice to garri, every agricultural produce has had at least 2x increase. Why is agriculture being the largest contributor to GDP not showing at least 100% growth.


That's my whole point.

GeneralDae:
Well increase in prices alone would not automatically boost the GDP at thesame rate of depreciation of the naira. For instance, many businesses and sme’s may have closed down during the early stage of the reforms (Q1 and Q2 2024). Slower purchase of goods by customers would mean the businesses are not having thesame sales volume, making the growth slower. Till date, telcos are making losses and are yet to have competitive pricing to make the kind of profit they made in 2022.

So I agree the growth should probably be higher than what the NBS is reporting, but I believe in 2024, the economy was struggling to adapt to the shocks. If the fx rate doesn’t depreciate steeply in 2025 and the inflation declines even to just 28%, you would see that economic growth reflect again and we would be better than we were in 2022.

Looking at the stock market for instance, as at May 2023, it was approximately $40 Billion ( using black market rate of 750). Today, using 1650, it is also geared towards $40 Billion.

Awesome.
Second issue:

If a CBN governor complained that the reason the currency has lost value was cos 30trn was spent on ways and means and intervention over a given period, but he himself is printing extra N10trn annually that could be avoided, isn't he towing a similar or worse path?

This is what I mean?
If N100 trn in money supply is priced at 30% interest rate rather than a more reasonable 20%, that extra 10% is diluting the money supply even more.

Emefiele kept NTB yields below 10%, baba has carried it to 30%, government debt service alone will go up by at least N3trn due to this elevated rates, then you think of CPs, OMO bills, bonds and even bank loans, the impact of these elevated rates is almost same with ways and means as far as money dilution us concerned.

Even without naira crash, money supply will soon reach N120trn cos the rate of money printing is just quite excessive at 30%

ositadima1:
To the FA crowd: Are we likely to see an upward repricing of most company assets as financial results start getting released? A Tokunbo car purchased for ₦2.5 million in 2022 is now worth ₦4 to ₦5 million. Similarly, land, buildings, and other assets have all seen significant price increases. I believe the asset sections of most stock reports will be revised upwards. How will the market react when this happens, or is it already adjusting in anticipation?

N2.5m car at that time is worth at least N5m except the owner lives in a terrible neighborhood where the car has gotten into very bad shape.

This is sort of the first time the saying of cars being depreciating assets proved false, cos almost everyone who wants to sell cars bought in 2022 now will get more money for the car in naira terms.


About companies revaluing their assets, without any regulatory constraints, they should consider it.

When NESTLE did in it 2024, the assets showing N91bn in their books were revalued to N315bn which was more in line with reality.

I mean how much was one acre in agbara before, how much is it worth today, how about 10,000Kva Perkins generator, etc.

All share index will have a new support at 120k in this new year before a pullback.

We are only at 103k.

Na juju money we are going to make in this first half of 2025.

Enjoy your chams on top and every other stocks in this season.

awesomeJ:
N2.5m car at that time is worth at least N5m except the owner lives in a terrible neighborhood where the car has gotten into very bad shape.

This is sort of the first time the saying of cars being depreciating assets proved false, cos almost everyone who wants to sell cars bought in 2022 now will get more money for the car in naira terms.


About companies revaluing their assets, without any regulatory constraints, they should consider it.

When NESTLE did in it 2024, the assets showing N91bn in their books were revalued to N315bn which was more in line with reality.

I mean how much was one acre in agbara before, how much is it worth today, how about 10,000Kva Perkins generator, etc.

That is why some TA theories may not work as expected. Specifically, the so-called "Burundi Bull" followed by the "mother of all crashes" that some practitioners promote does not apply here. I like to think there is no general bull market; instead, what we are witnessing is a repricing of stocks, either gradually or rapidly in some cases.

I expect an upward movement in stock values, as I have mentioned before. In the near future, stocks could become a way to regain lost value, though this is inherently risky because it relies on crowd decisions. But, in the long term, I believe most stocks will adjust upwards—not necessarily because they are creating more value, but simply because currency has depreciated relative to asset values.

For example, by owning my 2023 mobile phone, my assets have effectively increased. Had I decided not to buy the phone and instead held onto cash, I would have been worth less in real terms.

One strategy, in my opinion, is to focus on companies with substantial physical assets. These companies should reprice accordingly, regardless of their earnings, as long as they are performing adequately and not burdened by negative sentiment. Some of these companies have already repriced to an extent, but I expect more upward adjustments.

This is just my reasoning as a layman. I am not an economist—just a below average person sharing my thoughts.

awesomeJ:
Awesome.
Second issue:

If a CBN governor complained that the reason the currency has lost value was cos 30trn was spent on ways and means and intervention over a given period, but he himself is printing extra N10trn annually that could be avoided, isn't he towing a similar or worse path?

This is what I mean?
If N100 trn in money supply is priced at 30% interest rate rather than a more reasonable 20%, that extra 10% is diluting the money supply even more.

Emefiele kept NTB yields below 10%, baba has carried it to 30%, government debt service alone will go up by at least N3trn due to this elevated rates, then you think of CPs, OMO bills, bonds and even bank loans, the impact of these elevated rates is almost same with ways and means as far as money dilution us concerned.

Even without naira crash, money supply will soon reach N120trn cos the rate of money printing is just quite excessive at 30%

Well with inflation now at 34.6%, it would be difficult to maintain the 10% interest rate Emiefele left it at. In Emiefele’s time, inflation grew steadily to 22% at most. It was below 20% for the most part. The current CBN is in a catch-22 situation. The removal of subsidy and naira devaluation did not occur in Emiefele’s time, so he was able to maintain a more reasonable rate while printing over 6 trillion naira in 2022.

ositadima1:
That is why some TA theories may not work as expected. Specifically, the so-called "Burundi Bull" followed by the "mother of all crashes" that some practitioners promote does not apply here. I like to think there is no general bull market; instead, what we are witnessing is a repricing of stocks, either gradually or rapidly in some cases.




This is just my reasoning as a layman. I am not an economist—just a below average person sharing my thoughts.

An above average guru you mean.

GeneralDae:
Well with inflation now at 34.6%, it would be difficult to maintain the 10% interest rate Emiefele left it at. In Emiefele’s time, inflation grew steadily to 22% at most. It was below 20% for the most part. The current CBN is in a catch-22 situation. The removal of subsidy and naira devaluation did not occur in Emiefele’s time, so he was able to maintain a more reasonable rate while printing over 6 trillion naira in 2022.

Yes. I agree that 10% isn't realistic, which is why I'm proposing 20%

After all the 30% hasn't quite helped in curtailing inflation. If anything it's been probably contributing to it by creating more money.

Last year we had N100trn chasing our goods and services, this year, it could reach N130trn. If the quantity of goods and services don't increase at the same rate, Cardoso would effectively be rendering the currency worth less and pushing prices higher.

awesomeJ:
Yes. I agree that 10% isn't realistic, which is why I'm proposing 20%

After all the 30% hasn't quite helped in curtailing inflation. If anything it's been probably contributing to it by creating more money.

Last year we had N100trn chasing our goods and services, this year, it could reach N130trn. If the quantity of goods and services don't increase at the same rate, Cardoso would effectively be rendering the currency worth less and pushing prices higher.

That’s why it’s a catch-22 situation. If Cardoso makes interest rate 20% today, that would be 14.6% negative for investors when looking at inflation of 34.6%.

In the absence of viable increase in major exports, Cardoso stabilised the exchange rate around 1500-1700 between June to December 2024 and it was mainly by FPI’s and remittances. The increase in FPI’s is due to the current 6% negative which is better than what we had in 2023.

In 2023, we had perhaps record low dollar inflows due to the fact that we took so long to increase rates to match inflation numbers. As a result, naira at the black market rate devalued fast from 750 to 1200 approximately between the corresponding period of June to December 2023.

awesomeJ:
My point is not on what the exact figures are.
It's on the growth being a paltry 10% when all the constituent goods and services have had perhaps 150%+ increase.

For simplicity.

Take the GDP in 2022 to 2024 to be like this:

2022. ... ....... 2024
Agriculture. 60trn. 120trn
Telecoms. 10trn. ..... 15trn
Industrial goods. 10trn. 20trn
Manufacturing. 10trn. 20trn
Oil and gas. 20 trn 60trn
Services. 70trn. 100trn
Total 180 335trn


From cement to tiles to malt to noodles and from the top line of companies' results the estimate are conservative.


Why is the growth not closer to 80%+?

That's my point.

No dey crack your Head to wrap around these statistics..

Na the same NBS say less than 5% Nigerians are unemployed..

Even those who hustle once a week or underemployed are classified as employed..
But statistics paints a different picture.

You go tire for methodology.
No kill yourself to by force understanding.

Like dey say, the more you think you understand Naija, the less you actually do..

megawealth01:
Just imagine this news is Wale resigns?

#tableshaker

Locotrader:
All share index will have a new support at 120k in this new year before a pullback.

We are only at 103k.

Na juju money we are going to make in this first half of 2025.

Enjoy your chams on top and every other stocks in this season.

Who here is looking at WEMABANK and GUINNESS

https://dailypost.ng/MTN-Nigeria-to-increase-call-data-tariffs-by-100-percent

MTN Nigeria To Increase Call, Data Tariffs By 100 Percent

FG said nothing like that... I laugh in SWISS

Here was the Cowboy of Nairaland himself directing on how to post news, in a March 7, 2013 post.

There's somebody here in the habit of posting long, entire story texts instead of just the source link with a short introductory note.

Pls be reminded and guided accordingly.

Seun:
@stockbull, on Nairaland, when we post news, we always post a link to the source. However, mercycilious should also have posted a summary or excerpt of the news in addition to the link.

megawealth01:
https://dailypost.ng/MTN-Nigeria-to-increase-call-data-tariffs-by-100-percent

MTN Nigeria To Increase Call, Data Tariffs By 100 Percent

FG said nothing like that... I laugh in SWISS

The way they are pushing it, it will happen...
MTN is ready to fight it out this year...
They have already sold their Guinea Republic business.
So they won't now watch all their subsidies keep wallowing in losses.
Unfortunately for consumers, they have justifiable reasons.

chimex38:
The way they are pushing it, it will happen...
MTN is ready to fight it out this year...
They have already sold their Guinea Republic business.
So they won't now watch all their subsidies keep wallowing in losses.
Unfortunately for consumers, they have justifiable reasons.

Their operating costs are too high. They need to adapt new technologies if they want to remain competitive.
They should consider using satellite tech. for network connectivity rather than having masts all over the place which costs money to maintain.
I wish I knew the owners of 9mobile. Advent of a new technology is usually a good time for smaller players to leapfrog market leaders.

Got a margin loan of 1m and asset backed loan of 2.5m from Ucee/Ucap seemlessly.
Processing time 3 days and payable in 6 months with an opportunity to rollover.
Bought Nahco 40,000 more units.
@ Oga emmaewunmi .. thanks for the awareness.

ositadima1:
That is why some TA theories may not work as expected. Specifically, the so-called "Burundi Bull" followed by the "mother of all crashes" that some practitioners promote does not apply here. I like to think there is no general bull market; instead, what we are witnessing is a repricing of stocks, either gradually or rapidly in some cases.

I expect an upward movement in stock values, as I have mentioned before. In the near future, stocks could become a way to regain lost value, though this is inherently risky because it relies on crowd decisions. But, in the long term, I believe most stocks will adjust upwards—not necessarily because they are creating more value, but simply because currency has depreciated relative to asset values.

For example, by owning my 2023 mobile phone, my assets have effectively increased. Had I decided not to buy the phone and instead held onto cash, I would have been worth less in real terms.

One strategy, in my opinion, is to focus on companies with substantial physical assets. These companies should reprice accordingly, regardless of their earnings, as long as they are performing adequately and not burdened by negative sentiment. Some of these companies have already repriced to an extent, but I expect more upward adjustments.

This is just my reasoning as a layman. I am not an economist—just a below average person sharing my thoughts.

I believe it has to reflect in their books before adequate reprising..
As u"ve pointed out
companies have to review depreciation of their assets to an appreciable level.
But I think this needs to be done FIRST. When it reflects in the entire report to boost the downline, then stock reprising will be sustained otherwise reprising might just be shortlived.

chimex38:
The way they are pushing it, it will happen...
MTN is ready to fight it out this year...
They have already sold their Guinea Republic business.
So they won't now watch all their subsidies keep wallowing in losses.
Unfortunately for consumers, they have justifiable reasons.

"However, telecom subscribers rejected any move to hike tariffs."

Those Telecom subscribers should get ready to provide the services for themselves. You cannot force the telecoms, or any other industry for that matter, to provide service below their cost of operations.

Govt must approve tarrif hike, perhaps with a little reduction through negotiation or, subsidization.

emmaodet:
Got a margin loan of 1m and asset backed loan of 2.5m from Ucee/Ucap seemlessly.
Processing time 3 days and payable in 6 months with an opportunity to rollover.
Bought Nahco 40,000 more units.
@ Oga emmaewunmi .. thanks for the awareness.

What is the interest rate?

Youngzedd:
What is the interest rate?

30% per annum/15% for 6 months

zendi:
"However, telecom subscribers rejected any move to hike tariffs."

Those Telecom subscribers should get ready to provide the services for themselves. You cannot force the telecoms, or any other industry for that matter, to provide service below their cost of operations.

Govt must approve tarrif hike, perhaps with a little reduction through negotiation or, subsidization.

As if the subscribers have options. Everyone will be fine, Nigerians will always adapt


Starlink isn't cheaper.

With 100% price increase on local ISPs, I see people making money using starlink which is unlimited. Money to MTN and Airtel shareholders.

It's like we're going back to the days of cyber cafe

emmaodet:
30% per annum/15% for 6 months

Eweeee

Choi!

chidiebere1999:
Who here is looking at WEMABANK and GUINNESS

Wema bank entered into a new partnership with chams to enhance cross boarder payment.About 5 or 6 months ago.

Wema is the best bank I can invest because of their robust digital platform that generates good revenue.It is also a 💯 candidate in this bull season.

https://www.vanguardngr.com/2024/07/chamsswitch-partners-wema-bank-to-enhance-cross-border-payment-system/amp/

emmaodet:
30% per annum/15% for 6 months

Plus admin expenses.
Anyway we are in a bull market but never like the stock you invested the money.Transcorp would have been better.

If I know you in person I would have given you that amount at 15% for 12 months duration without extra costs.

It's well sha

emmaodet:
Got a margin loan of 1m and asset backed loan of 2.5m from Ucee/Ucap seemlessly.
Processing time 3 days and payable in 6 months with an opportunity to rollover.
Bought Nahco 40,000 more units.
@ Oga emmaewunmi .. thanks for the awareness.

please what's the interest rate

Please I appreciate all of you that have been making invaluable contributions here. I have really learnt a lot since yesterday that I have been going through this page.
Now I want to buy my first set of shares from the secondary market because I have only participated in IPOs during my university days but the economic downturn of the early 2000s that reduced most of the NSE investors' investments to tissue paper value got me annoyed, more so when I learnt how the actions of top management staff of the big firms in the exchange like Ibru and Atuche contributed to that I decided to leave Nigerian stocks for good.
However, the exposures here shows that I can still make money from Nigerian stocks.
My question now is where is the best place to buy from. In other words, how can I submit my bids.
I have tried bambo app and discovered that not all the stocks in NGX can be bought there, for instance I couldn't find CHAMS on bamboo.
Please where is the best source for seamless trading?