₦airaland Forum

lionshare:
But how will village B function without additional investments in infrastructure? Village B is thinking in years while village A is thinking in decades.

Village B just small infrastructure especially in areas that needed it.

Village B will record economic growth, pay back their loan, make profit and use it to build infrastructure they need.

FiveFootNinja:
Cool story, but there's too much emphasis on the infrastructure. How is the infrastructure alone going to guarantee foreign investment? Don't you think a skilled workforce is just as relevant?

If you have all the infrastructure in the whole wide world, but there's no productive economic activity, then what's even your objective? What's your end goal? Where are the direct revenue streams to pay back the loan mentioned in the OP's hypothetical?

That's where education comes in. I first talked about skilled work force before talking infrastructures.

Remember he said community A invested in education - that will guarantee skilled work force and will make available the labor force required for those industries to thrive.

The ultimate human capital development remains education and not doling out cash gifts to people to use as start up capital.

stanluiz:
Village B just small infrastructure especially in areas that needed it.

Village B will record economic growth, pay back their loan, make profit and use it to build infrastructure they need.

Inadequate infrastructure itself poses a risk to those businesses, as it will increase their costs, making them uncompetitive in the long run. This could lead to them relocating to village A with better infrastructure and lower production costs.

mrvitalis:
You are an economist? Really what school

That's not the subject of discuss.
I know you want to resort to name calling, which is the stock in trade of most of you here.

The fact remains that education is the ultimate human capital development to any society and not cash gifts in the name of start-up capitals.

Doling out large sums of money to people to invest is a recipe to hyperinflation as most of those people that were given money they did not work for will embark on spending spree and jamborees.

It might interest you to know that inadequate capital is not the number one reason people don't go into business, instead most people lack the vision, entrepreneurial foresight and innovation required to start up a business venture.

These things can be addressed by education.

I insist that education remains the ultimate human capital development as against the cash gifts and empowerment you're proposing.

stanluiz:
Which Tinubu is building Nigeria ? Is the one that says "Snatch, grab and run like a thief looks like someone that will build Nigeria ?

The same tinubu that is spending tax payers money on Paris hospital while he couldn't even build one single hospital in Nigeria that will treat him.

The same tinubu that him and his cronies are looting Nigeria dry by awarding government contracts to their proxy companies ?

Is it the same man that will build Nigeria ? Shit comot from one side.

Who are you responding to?

Dieselman:
That's not the subject of discuss.
I know you want to resort to name calling, which is the stock in trade of most of you here.

The fact remains that education is the ultimate human capital development to any society and not cash gifts in the name of start-up capitals.

Doling out large sums of money to people to invest is a recipe to hyperinflation as most of those people that were given money they did not work for will embark on spending spree and jamborees.

It might interest you to know that inadequate capital is not the number one reason people don't go into business, instead most people lack the vision, entrepreneurial foresight and innovation required to start up a business venture.

These things can be addressed by education.

I insist that education remains the ultimate human capital development as against the cash gifts and empowerment you're proposing.

Lmaooo no body is asking you to doll out money to people

We gave 12 billion dollars loan to dangote did that cause inflation? Has he not paid back?

Name any project done by APC that has break even not to talk about making profit to pay back it's loan

Asking shoe makers in ABA to form cooperative to build global standard shoe factory is not dolling out money

Nigeria as we stands now already have basic infrastructure for any business to thrive... Might not be glamorous but it's sufficient for now

There is no business man in Nigeria none that would choose his road being constructed over interest free loans to expand his business... None

mrvitalis:
Good evening everyone

Say we have two (2) villages A and B.. Both villages have land worth 100 billion each, both villagw approach a bank to take out 50 billion naira each to be paid back after 10 years

1) Village A
Village A decide to use the money to build her road, market, schools, church, mosque, stadium and recreational centers, the village A becomes very beautiful and the talk of the state

Village B
Village B said we won't build road or schools, we would keep managing what we have instead... Calls back their sons and daughters

A son making shoe in ABA is given 500 million (loan interest free) to sent up his school factory in the village

A daughter into cloths is given 2 billion to set up a garment factory

Village set ups 70 of their sons and daughters like this with interest free loan to pay back after 5 years and they would pay 15% of their profit as tax to the village



Please after 10 years between Village A and B which would easily pay the loan and which would lose their land
Honest answer please

Village A

Reasons: Village A has attained such development status that attracts 10 investors to bring in 500billion each.

With advanced infrastructure, work becomes easy and output would increase.

Half population of Village B citizen will relocate to village A with loan granted then by Village B there by increasing the economic activities of Village A.

The few survival people that took loan will relocate permanently to Village A build houses there and assimilate with the culture and customs of the Village A

Village B will ended up bankrupt because of capital flight.

Ttalk:
Village A

Reasons: Village A has attained such development status that attracts 10 investors to bring in 500billion each.

With advanced infrastructure, work becomes easy and output would increase.

Half population of Village B citizen will relocate to village A with loan granted then by Village B there by increasing the economic activities of Village A.

The few survival people that took loan will relocate permanently to Village A build houses there and assimilate with the culture and customs of the Village A

Village B will ended up bankrupt because of capital flight.

Lmao😂🤣🤣🤣... Nigeria is in big trouble

stanluiz:
The Op is right.

The best form of development is human capital development. You need to invest human first before infrastructure because it is human being that will build the infrastructure.

Remember, china invested massively in human development before building infrastructure that's the reason where able to pull of 700 million out of poverty within the period of 3 decades. From 1980 down to 2010.

Is not that china was not building infrastructure at that time. They were but at a minimum of 25% while the remaining 75% were for human development.

They started building their world class and gigantic infrastructure from late 2010 down after pulling 75% of their population out of population.

The Op has a point as regards to Nigeria. FG allocated 15 trillion naira to build Lagos calabar coastal that leads to nowhere where only 75 billion naira was allocated for SMEs!

Just imagine, 15 trillion for road while 75 billion naira for SMEs in a county that has one of the highest unemployment rate in the world and also the world poverty capital. It nonsense.

As regards of Nigeria. The Op is right. Am not saying that infrastructure is bad. Is not, because it also needed in opening economic corridor and also help in economic growth. But We need to invest massively in human development first and foremost. Then infrastructure will come second.

As you are investing in human, also invest in infrastructure but make sure that human development is the top priority.

Neither am I saying that human development is wrong. I never said you should not approve loans to businesses or scholarships to students. I simply said that deliberate efforts should be made to fasten the pace of infastructural developments as you do so. Like I said in my first post here, the op has consistently criticized the development of infastructures with borrowed funds. And as far as I'm concerned, the argument behind that assertion is jejune. It is as if the government is using money that should be channeled towards human development into the building of roads and bridges, and rail networks etc. And I ask; how many graduates that are churned out every year from Nigerias universities? Sre we not producing a reasonable amount of graduates every year? How many of them are even trained to specifics? Is the problem not about how we train these graduates, and not "if" we train them?

You can not whinsically attribute the corruption and maladministration that goes one within officialdom in Nigeria as being a direct consequence of investing in infastructures. It is wild to assert so. You mentioned the Lagos to Calabr Road to nowhere. How is this infastructure building? A corrupt president decided to award trillions of naira worth of contract to his best friends for an irrelevant road that already has a duplicate, and this becomes the reason why building sea ports, fast speed rail networks, modernising Nigerias antiquated roads and power infastructures are irrelevant? For heavens sake, when I talk about infastructures, I'm talking of power plants, rail networks, modern markets, fast speed Internet, modern Universities.., how are you even preparing to challenge china without these??

When I talk of government functioning optimally with borrowed funds, vis avis the upgrade of a countrys basic infastructures, people like Tinubu and Buhari should not be mentioned. I don't rate them. I gave you a shining example of how a direct imposition of government will, helped Shenzhen to upgrade. If you think that all it takes to build a country is to invest in factories without a corresponding investment in modernising the infastructures of a basically primitive state, then you have a new economic formula to educate us on. This is because the China example can't fly here. I was in China first time in 2003 and the first thing that hit me after I landed , was the shiny Guangzhou airport. I lived in the 21st floor of an apartment building in Panyu for over 5 years, so what are you talking about by saying that Chinese investments in infastructures being a recent event?

Dieselman:
That's where education comes in. I first talked about skilled work force before talking infrastructures.

Remember he said community A invested in education - that will guarantee skilled work force and will make available the labor force required for those industries to thrive.

The ultimate human capital development remains education and not doling out cash gifts to people to use as start up capital.

Your argument isn't terrible by any means, but I don't think I see it the way you see it (doling out cash gifts).

Calling it "cash gifts" sounds very reductive because the whole idea of empowering people with capital is to create a network of entrepreneurs and private business owners that will drive the economy's growth from the ground up.

This country has a lot of gifted and resourceful people that will greatly benefit from this instead of running out of the country or engaging their resourcefulness in fraudulent activities.

Education is highly important though, I'll give you that. Unfortunately, the Nigerian education system is nothing to write home about.

mrvitalis:
Good evening everyone

Say we have two (2) villages A and B.. Both villages have land worth 100 billion each, both villagw approach a bank to take out 50 billion naira each to be paid back after 10 years

1) Village A
Village A decide to use the money to build her road, market, schools, church, mosque, stadium and recreational centers, the village A becomes very beautiful and the talk of the state

Village B
Village B said we won't build road or schools, we would keep managing what we have instead... Calls back their sons and daughters

A son making shoe in ABA is given 500 million (loan interest free) to sent up his school factory in the village

A daughter into cloths is given 2 billion to set up a garment factory

Village set ups 70 of their sons and daughters like this with interest free loan to pay back after 5 years and they would pay 15% of their profit as tax to the village



Please after 10 years between Village A and B which would easily pay the loan and which would lose their land
Honest answer please

Village B will become extremely poor with no infrastructure because the sons and daughters will run off with the money and live happily in Europe or US .
I really expect Nigerians to think better than this. Whatever has advantages would have disadvantages. The example scenario is flawed and childish.

Babalegba:
Village B will become extremely poor with no infrastructure because the sons and daughters will run off with the money and live happily in Europe or US .
I really expect Nigerians to think better than this. Whatever has advantages would have disadvantages. The example scenario is flawed and childish.

And you don't think after they pay back their loan they can use the 15% tax they collect to build up their infrastructure?

stanluiz:
Village B just small infrastructure especially in areas that needed it.

Village B will record economic growth, pay back their loan, make profit and use it to build infrastructure they need.

I don't know why it's difficult to understand for them

mrvitalis:
Good evening everyone

Say we have two (2) villages A and B.. Both villages have land worth 100 billion each, both villagw approach a bank to take out 50 billion naira each to be paid back after 10 years

Village A will eventually triumph.

Let’s say you have 500m to invest in village A&B. Both have same condition of extremely bad road and insecurity.

Village A:
You use your money to build good road, power, and security.
—The land in that area will appreciate massively
—Businesses will start springing up
—Standard of living increase
—People that abandoned the area will start moving back to contribute to that area.
—People are relatively safe and can think well
—External investors bring private money to invest because the basic infrastructure is there.

Village B:
You give 10 people money to establish a shoe factory
—Those 10 people employ more people and business boom
—Their supply chain get K leg, bad road and environment will affect them
—lack of power and good road mean other businesses will desert the area and troop into village A for better life
—Your village only turn to company and no meaningful development or expansion will happen
—The people left will not be able to purchase the shoes from the factory. Your best talent will run to village A and your purchasing power reduce.
—Village A with educated populace will buy shoes from village B and sell for profit because their people have purchasing power
—In 10 years, village B will collapse and village A will triumph in the long run.

FiveFootNinja:
Your argument isn't terrible by any means, but I don't think I see it the way you see it (doling out cash gifts).

Calling it "cash gifts" sounds very reductive because the whole idea of empowering people with capital is to create a network of entrepreneurs and private business owners that will drive the economy's growth from the ground up.

This country has a lot of gifted and resourceful people that will greatly benefit from this instead of running out of the country or engaging their resourcefulness in fraudulent activities.

Education is highly important though, I'll give you that. Unfortunately, the Nigerian education system is nothing to write home about.

People don't seem to understand that a greater percentage of Nigerias problems lies with a deliberate misapplication of policy because of either a corrupt political structure or because of a very incompetent and totally corrupt out of sort civil service..

Nigerias problems are not necessarily a question of wrong policies. In most cases, the policies may not be the best, but they are good enough to have impactfull results. But they still fail! Why? The civil service is full of incompetent hands and politics is handled by corrupt men.

So whether you want to give out scholarships to gifted students or invest in shiny new infastructural projects, there will always be a blunder somewhere. Someone deliberately or mistakenly making a mess of a reasonably sound government policy. The people that need those scholarships or loans won't get it. And the contracts for those big projects will be inflated, will never be finished on time or might even be sabotaged.

And that is where the rub is; effective management of scarce state resources and not in over prioritising of infastructural developments over business/individuals developments. Many roads have been built, the rebuilt and then rebuilt again since 1999. Same road! Yet in many other countries, some roads are still there since the same time simply because the right hands are in charge in related government agencies..

Dieselman:
That's where education comes in. I first talked about skilled work force before talking infrastructures.

Remember he said community A invested in education - that will guarantee skilled work force and will make available the labor force required for those industries to thrive.

The ultimate human capital development remains education and not doling out cash gifts to people to use as start up capital.

A company with enough capital can train people how they need

You guys don't know the magical capital does

LegendHero:
Village A will eventually triumph.

Let’s say you have 500m to invest in village A&B. Both have same condition of extremely bad road and insecurity.

Village A:
You use your money to build good road, power, and security.
—The land in that area will appreciate massively
—Businesses will start springing up
—Standard of living increase
—People that abandoned the area will start moving back to contribute to that area.
—People are relatively safe and can think well
—External investors bring private money to invest because the basic infrastructure is there.

Village B:
You give 10 people money to establish a shoe factory
—Those 10 people employ more people and business boom
—Their supply chain get K leg, bad road and environment will affect them
—lack of power and good road mean other businesses will desert the area and troop into village A for better life
—Your village only turn to company and no meaningful development or expansion will happen
—The people left will not be able to purchase the shoes from the factory. Your best talent will run to village A and your purchasing power reduce.
—Village A with educated populace will buy shoes from village B and sell for profit because their people have purchasing power
—In 10 years, village B will collapse and village A will triumph in the long run.

Oga shoe is not a perishable goods... If the roads become so bad the 10 shoe factory can contribute two million each to grade it and make it motorable

In business capital is King

There is no business man none that would chose road over interest free loan

Example people from port Harcourt and Akwa Ibom left good road to wim in bad water in ABA ro get goods before Otti came around

mrvitalis:
Good evening everyone

Check another scenario. If you have a town in Nigeria with less development, what do you think is the fastest way to develop the area?

A:
Just give them one state/federal university. In 10 years, development to that area will fast track like mad. Private investors will move there, traders, off campus hostels, and etc. You’ll have private people drive that economy.

B:
If you build 1 factory in the area, it might not translate to development because they will just produce and sell it out to other area. You will just be empowering few people and the rest of the workers living on minimum wage.

LegendHero:
Check another scenario. If you have a town in Nigeria with less development, what do you think is the fastest way to develop the area?

A:
Just give them one state/federal university. In 10 years, development to that area will fast track like mad. Private investors will move there, traders, off campus hostels, and etc. You’ll have private people drive that economy.

B:
If you build 1 factory in the area, it might not translate to development because they will just produce and sell it out to other area. You will just be empowering few people and the rest of the workers living on minimum wage.

You don't understand what development means that's your fundamental problem

If you use same money used to establish a university to set up factory... The villages with the factory would have more disposable income and that's the Koko especially when the locals own the factory

Your university outsiders comes build hotels, bars etc make money and send it away.. Villages would be forced to sale land to survive after they begin to hate settlers.. Sound familiar M

Ibos are village B. That's why they're all over the SW, village A.

mrvitalis:
Oga shoe is not a perishable goods... If the roads become so bad the 10 shoe factory can contribute two million each to grade it and make it motorable

In business capital is King

There is no business man none that would chose road over interest free loan

Example people from port Harcourt and Akwa Ibom left good road to wim in bad water in ABA ro get goods before Otti came around

@the bolded, Oh now infrastructure is important? I thought you said it is not important. I thought road is nonsense and infrastructure is wasteful.

So if your argument is that those business will use part of their money to build road. How about the argument that the area with good road will bring more investors that will build 10X the factory in Village A?

Let me tell you, nothing beat infrastructure and educated populace. If you have factories without infrastructure to support it, it will collapse in no time.

Obaaderemi2:
Ibos are village B. That's why they're all over the SW, village A.

Igbos want to be village B... But their land is controlled by people who believe in village A

Igbos are saying let everyone control their land and grow at their own pace

mrvitalis:
Good evening everyone

Say we have two (2) villages A and B.. Both villages have land worth 100 billion each, both villagw approach a bank to take out 50 billion naira each to be paid back after 10 years

1) Village A
Village A decide to use the money to build her road, market, schools, church, mosque, stadium and recreational centers, the village A becomes very beautiful and the talk of the state

Village B
Village B said we won't build road or schools, we would keep managing what we have instead... Calls back their sons and daughters

A son making shoe in ABA is given 500 million (loan interest free) to sent up his school factory in the village

A daughter into cloths is given 2 billion to set up a garment factory

Village set ups 70 of their sons and daughters like this with interest free loan to pay back after 5 years and they would pay 15% of their profit as tax to the village



Please after 10 years between Village A and B which would easily pay the loan and which would lose their land
Honest answer please

This is rather simplistic. No country in the world runs itself like this. 10 years without spending on infrastructure, and the citizens will be happy to wait?

Also, statistically, roughly 75% of all businesses established in Nigeria this year will fail within 5 years or less. I extrapolated that statistics from data from the UK, and Europe. That data is also likely similar for the US, Asia etc.

Using that statistics, it means in the case of your Village B, roughly N75 billion (could be more or less) of the N100 billion will have been lost by year 5.

Of the businesses set up in Village B that makes it past the 5th year, how many will make it up to the 10th year, your year of reference. We can only guess. It could be less than 10%. That means by year 10, village B may have lost around N90 billion of the N100 billion. And yet with no capital expenditure, the village's infrastructure will have completely collapsed, with its citizens living on the equivalent of hell on earth.

In the mean time, Village A that spent its money on good schools, roads, health facilities, and other infrastructure is now reaping the reward in terms of better living standards for its citizens, lower child mortality rate, healthier and better educated citizens that are able to partake in the global economy, take jobs abroad, work remotely from Nigeria, and in many cases create viable businesses that they are able to manage well and expand due to their better education and modern world view.

Over the 10 year period, which turned out better: Village A or B? Clearly Village A.

In any event, your 2 examples are extreme. The happy medium, and the choice of most countries in the world, is a combination of capital spending and encouraging the growth of business through government policies.

That is what Nigeria is practicing.

There is no country in the world that stops infrastructure development for any period, let alone 10 years like you suggest.

LegendHero:
@the bolded, Oh now infrastructure is important? I thought you said it is not important. I thought road is nonsense and infrastructure is wasteful.

So if your argument is that those business will use part of their money to build road. How about the argument that the area with good road will bring more investors that will build 10X the factory in Village A?

Let me tell you, nothing beat infrastructure and educated populace. If you have factories without infrastructure to support it, it will collapse in no time.

No where did I say infrastructure is not important no where... I only said borrowing to build infrastructure is foolishness how you guys can't comprehend the above is beyond me

In the Seneraio above infrastructure is constructed without any loan obligation from village B

The companys can even do the roads for part of their 15% tax up front

DeLaRue:
This is rather simplistic. No country in the world runs itself like this. 10 years without spending on infrastructure, and the citizens will be happy to wait?

No country should spend more than they earn if you are serious

You need infrastructure fine make your people rich so that they can pay more tax

mrvitalis:
No where did I say infrastructure is not important no where... I only said borrowing to build infrastructure is foolishness how you guys can't comprehend the above is beyond me

In the Seneraio above infrastructure is constructed without any loan obligation from village B

The companys can even do the roads for part of their 15% tax up front

If your company contribute to build road from the money you gave to them, is that not borrowing to build road? Abi you can’t comprehend what you are typing?

If road is important and the cost of building it is constant across village, and you are saying you also need road in Village B, so what exactly are we arguing when both village A and B will use borrowed money to build road?

mrvitalis:
No country should spend more than they earn if you are serious

You need infrastructure fine make your people rich so that they can pay more tax

Most countries spend more than they earn. Infact in USA, 90% of people spend more than they earn which is what they call credit card, home mortgage, car mortgage, and etc.

Any economist that tells you that you only need to spend up to what you earn don’t have ambition.

What is important is just that you have the means to pay service the loan you got so you won’t default. That is the only thing bankers will do to check your good standing.

LegendHero:
Most countries spend more than they earn. Infact in USA, 90% of people spend more than they earn which is what they call credit card, home mortgage, car mortgage, and etc.

Any economist that tells you that you only need to spend up to what you earn don’t have ambition.

What is important is just that you have the means to pay service the loan you got so you won’t default. That is the only thing bankers will do to check your good standing.

Reasons why you have inflation when it gets to critical case like ours you can no longer invest in infrastructure without borrowing

LegendHero:
If your company contribute to build road from the money you gave to them, is that not borrowing to build road? Abi you can’t comprehend what you are typing?

If road is important and the cost of building it is constant across village, and you are saying you also need road in Village B, so what exactly are we arguing when both village A and B will use borrowed money to build road?

For the company to build the road they already started production right? They can add grading of road to productivity cost

But the village have no responsibility to pay back cost of the roads the village books are healthy

And the companies would do minimum needed to move their goods

From their 15% tax the village can then build a standard road

mrvitalis:
Igbos want to be village B... But their land is controlled by people who believe in village A

Igbos are saying let everyone control their land and grow at their own pace

Good. So what's stopping Igbo leaders from borrowing money and doling it out to their entrepreneurs like village B in your analogy? Why didn't obi do that when he was governor instead of investing state money in his family business?

MadPolitician:
People don't seem to understand that a greater percentage of Nigerias problems lies with a deliberate misapplication of policy because of either a corrupt political structure or because of a very incompetent and totally corrupt out of sort civil service..

Nigerias problems are not necessarily a question of wrong policies. In most cases, the policies may not be the best, but they are good enough to have impactfull results. But they still fail! Why? The civil service is full of incompetent hands and politics is handled by corrupt men.

So whether you want to give out scholarships to gifted students or invest in shiny new infastructural projects, there will always be a blunder somewhere. Someone deliberately or mistakenly making a mess of a reasonably sound government policy. The people that need those scholarships or loans won't get it. And the contracts for those big projects will be inflated, will never be finished on time or might even be sabotaged.

And that is where the rub is; effective management of scarce state resources and not in over prioritising of infastructural developments over business/individuals developments. Many roads have been built, the rebuilt and then rebuilt again since 1999. Same road! Yet in many other countries, some roads are still there since the same time simply because the right hands are in charge in related government agencies..

I gave you a like because you hit the nail on the head in such spectacular fashion.

I've always seen the Nigerian culture as one that discourages people from planning for long term benefits because everyone wants a solution that is immediately applicable. It's the same culture that makes people seek instant gratification for themselves.

This cycle of incompetence that sadly cuts across nearly every sector controlled by the government needs to be broken.

Obaaderemi2:
Good. So what's stopping Igbo leaders from borrowing money and doling it out to their entrepreneurs like village B in your analogy? Why didn't obi do that when he was governor instead of investing state money in his family business?

Obi invested in many businesses like that...