₦airaland Forum

grandstar:
I appreciate educated response like these.

Nigeria no longer has the money to fiance the subsidy. It would just make the budget deficit bigger. It cost about 2% of GDP to provide it. The country barely collects 10% of its GDP as taxes. It is not sustainable.

Buhari was borrowing heavily to subsidize it.

The country listed here are all rich except Iran.

Brendaniel:
And since Tinubu stopped the subsidy, is he not borrowing more?

And Nigerians are paying more...

So what has removing subsidy solved?

grandstar:
The removal has been a blessing. The government is asking the central bank to print money to finance the fuel subsidy which would eventually lead to a depreciation of the Naira. Keep that subsidy and the Naira will fall to N4,000 for a dollar in 4 years time.

I can't say if the borrowing has gone up in real terms. 10 trillion in 2015, may be more in real terms than 50 trillion today.

The borrowing today is also more sustainable due to a massive increase in revenues.

A lot of the borrowing is for infrastructure projects which would help the economy grow.

Some of the spending I msut admit are questionable. A lot of these projects prime objects are to win votes.

I decided browse following your complaint.

Yes, the government wants to borrow $21bn. The question is how sustainable is it?

Revenue collection has been growing fast under Tinubu. Nigeria hopes to improve revenue collection by 3% of GDP in the next 3 years which will be easily achieved.

Nigeria's GDP is 370trillion. 3% of that is 11.1trn which is $7.4bn. Assuming interest rates on the loans are 10% per year using the worst case possible, that is $2.1bn a year in interest. The borrowing is sustainable. $7.4b-$2.1 = $5.3bn

I generally would prefer more prudent spending, and far less borrowing.

Tayorshd87:
Are you telling me that morroco , Kenya and d likes with one country that beat their leader recently are all thieves 🤔

Who told you even US citizens are looking for a way to beat triump too , did they tell u they are happy with him??

Leadership is always like that because you can't satisfy everybody..

Ask yourself this question if all the president we have since 1960 till date are all thieves and no one has d intention to turn Nigeria like America 🤔🤔🤔

It's always like that because u are not part of the leaders by then you will know it's easier said than done 👍

Brendaniel:
Where do you think most of the revenue is coming from? more taxes and what are the citizens getting in return? insecurity, inflation and corruption in governance with high government running cost...

So after writing all these things you wrote, what is the benefit of it to the average citizen?

Just to add, the revenue did not increase, it was only bloated, if you need stats I will provide them for you...

grandstar:
Nigeria only collects about 10% of GDP as taxes. This is one of the lowest rates in the world. It needs tobbe increased.

Let me use my sister as example why things need to change.

In December 2010 tjhereabout, my sister got a job in a Nigerian bank after her Youth Service. Her salary was 91k a month. Then the exchange rate was around $1-155. Let's just say about $600

Today, that N91,000 is barely $60.

That kind of job now pays 250,000, which is $160

What went wrong and how could it have been prevented?

First, had Buhari simply continued with the policies of GEJ, and had been more product than him, the exchange rate would at worst be $1-N300

That doesn't fully answer the question

Two of Nigeria biggest problems are its over reliance on crude oil revenues for both government spending and forex inflow through its exportation.

Oil for a long time constituted more than 70% of government revenue and for more tha 80% of fx inflows.

So, if the price of crude oil crashed, government would crash, leaving a big hole in the budget while dollar inflows would crash, causing the currency to crash as well.

The solution is for the economy is be far less dependent on crude oil for both revenue and for foreign exchange.

That is why revenue drive of this government is the right way to go. I am certain they can increase revenues to about 18% of GDP eventually. Whenever the price of oil should crash, the economy and the Naira don't come crashing.

For exports, the nation needs to diversify. Non-oil exports need to grows to the point that it dwarfs what is received from crude oil. The floating of the Naira has led to an export boom. Exports are rising fast. If it continues like this, in 10 years time, crude oil will account for like 25% of export.

This year, the price of crude oil fell due to a slowing world economy. However, the government was able to weather the storm due to an increase in non-oil revenues.

By the way, inflation is high and could go down. The prime reason why it is high is because the central bank does not want to increase interest rates to the point that it would bring down inflation. This is because Tinubu does not want the economy to slow or even enter a recession.

Christistruth03:
Think!!!
Why isn’t IMF telling the West to return those illegal outflows to the Countries of
Origin under strict supervision and organise the arrest of the bankers in the West tAccepting such illegal
outflow ?

IMF is more interested in inmposing heavy debt burden on 3rd world countries than helping
to retrieve their stolen wealth that can keep them from going into debt permanently and not
Needing the IMF at all


IMF helped Western Interests to plunder Africa more efficiently

Christistruth03:
IMF has its eyes on Nigerians Earth Minerals and Natural Gas

Brendaniel:
This your analysis is not solid, do you know why? you are not being realistic, firstly I'm not against diversification, but you can't tell me a man who has a well paying job like the MD of a bank and his salary is based on let's say 2% of the profit of the bank on a monthly basis.

The bank has boom profits for 6 months and then because the profits dropped thereafter then the bank MD starts complaining that he is broke and unable to take care of his family.

Would you call him a serious man? what was he doing when there was boom?

And even as he is still earning, what was is he doing with the one he is still earning?

You see why your first analysis with your sister's jpb did not really hold waters, OBJ also proved this your theory wrong, if the government is not responsible with the management of resources no matter how big it is, the country will always be broke, whether they collect more tax or diversify, it doesn't change much because mismanagement will follow to destroy whatever gains and that's the case of Nigeria today.

Nigeria is like a man who earns x 10 of what his neighbor earns but is more in debt than his neighbor and looks poorer than him because of mismanagement.

Mismanagement is one of Nigeria's biggest problem in economics not just the earnings, like I said I'm not against diversification but the leadership has to be gotten right for any of your theories to work if not it will be like what Tinubu is doing now...

Does Nigeria look like what is working under Tinubu even after all the policies you and him claims to have implemented?

grandstar:
I did respect how OBJ managed resources. Nevertheless, there's just a limit dependance on one resources can achieve,

Botswana, the best run country on mainland Africa, managed its diamond wealth so well that you'd be gushed why you did not learn of them sooner. Diamonds was its primary source of wealth. Corruption was very low and the extra earnings from diamond was being saved. There was a time, it had enough money saved to run for about 3 years if no revenue came in.

Though rich, it had a problem. It was wholely dependant on diamonds for its wealth. It tried to diversify but it was disadvantaged by its location. It is an landlocked country that is mostly desert, and with a small population. It was never successful in diversifying.

Then the worst happened. Diamonds prices not only crashed but the crash was sustained. It's economy was badly hit, that the ruling party that brought managed the country's wealth prudently was kicked out of power through the ballot box. It has always been a democracy since independence.

Let me enlighten you about something, Many unsavory things said about BAT are true. The godfatherism, the massive sleaze, the cronyism are true. And one more thing is also very true: he is a very good manager.

These economic policies are gradually changing the economy. It is a pity they weren't implemented since 1999. Wale Edun and Cardoso are dynamos. The country is gradually moving away from dependence on crude oil for the bulk of government revenue and foreign exchange inflows.

It is a pity that he inherited bankrupt country. That's why there's so much misery today.

banku:
Thank you.

All they care about is the importation importation and importation of used electronics, used clothes and toothpicks. They even import foreign junks from ships destined to anywhere willing to take them.

Then claim importation is not the problem. Very selfish and inconsiderate set of people willing to make money anyhow.

Parasites.

Jaga9ja:
How much is being remit and stolen from the import and export duties.

How can a government achieve her optimal revenue without the interest of fighting corruption?

You don't also know that fighting corruption is a major aspect of a government functions, or you think the EFCC body should be a statue as your government has turned it to?

MIKOLOWISKA:
doesn't matter how much corruption you fight if you only produce 1 yam when you need 365 for a year. You will still starve

Brendaniel:
You guys really need to know how an economy works, you think productivity is only about physical product

Chai! no wonder you can support someone like Tinubu...

Secondly if Tinubu did not come to fight corruption, why did he accuse Jonathan and PDP of corruption?

[size=8pt]
So you are trying to tell me that he was accusing them because they were not as good as him in corruption, so he came to outdo them?

MIKOLOWISKA:
what are you producing non physically to deceive gullible people like you your guess is as good as mine

Jaga9ja:
When you produce one yam that is stolen?