₦airaland Forum

valuedammy:
I don't understand myself.

How will I have enough money in my savings account and I will still be borrowing money from another person to take care of myself and family.

Do not consider this as an employee. Look at it as a businessman.

Every country runs as a family business with the president and its equivalent as CEOs.

They should have products to sell and Services to render.

They should be a plan to carter for feeding

There should also be another to save FOR VARIOUS REASONS.

Big businesses thrive by borrowing Money... investing and then later paying back either in intervals or at once. They grow with the profits they male.


It therefore means borrowing money to invest, or run a country is not a bad idea.

It is only a act done to augment for low investments from within or outside.

When investors are not coming along, then borrowing is one way of reaching out to them.

Either ways, a self sufficient economy would not need to borrow.

An economy becomes self sufficient only when exports rises above imports.

We are not there yet.

Experts Will always advise you invest, make profit, save and reinvest with a BIGGER capital to grow.

To live off Your savings is a bad idea
The right thing is to live off Your profits whilst increasing your savings for the rainy day.

You can borrow to pull returns on an immediate investments whilst leaving Your savings intact, and ofcourse growing.

That is exactly why the FX reserves should increase.

An increasing FX reserve is due to 2 things:
1. Increasing export/Decreasing import
2. Trade Surplus due to improved macroeconomics

Increased FX connotes a secured Financial future.

Infact, one way of becoming an ivy leaque economy is by increasing FX.

It helps mitigate the impact of economic deficits and reduction in revenue whenever they occur.

ALTOGETHER

You can borrow to invest in running Your business and later pay back with interest and ofcourse keep Your profits and increase Your savings.

Badb0y4lyf:
Fake statistics, Na statistics we go chop.
Why can't we be in IMF list of fastest growing economy.

Na only bad news Una de like. Go for deliverance

casualobserver:
Forex reserves is how much money is available in the official banking system to finance our imports. If you want to buy a product from Amazon and you pay with your Nigerian debit card, you are spending from our reserves. If an importer wants to bring in goods the $, RMB or £ comes from our reserves.

Think of the reserves like your bank balance. You have a salary and you also also monthly expenses. Let’s say your salary is 100k a month and your expenditure is 90k a month and your bank balance is 1m. It means if you lose your job, (or if you are a member of a union that goes on strike and the your employer says no work no pay) you can go 11months until you are bankrupt and can’t feed yourself and your family. The bigger your bank balance the longer you can be out of work without a drop in your lifestyle. Same thing with forex reserves, every month we spend (I can’t remember the exact figure) I think it is $4b on imports. It means assuming all forex inflows stop we can only import for 10 months and there will be scarcity of imported items. Consider we import almost everything!

Let’s go back to the guy earning 100k who spends 90k a month with a bank balance of 1m. Let’s say he want to invest for the future of his family and buy a plot of land for 700k because he feels it will be worth 1.4m in 2 years. Somebody is willing to lend him the money if he can pay 10k a month for 6 years, what should he do? Should he use the money in his savings or borrow the money? Bear in mind if he uses the money in his bank AC, it means if he loses his job tomorrow he only has 3 months reserves before he is hungry and can’t pay children’s school fees.

The smart thing is to borrow the money, he still has his safety net of 10 months reserves (down from 11 due to 10k additional expense of repayments ) if he loses his job. He can maintain his lifestyle and invest for his family at the same time. In 2 years the land is worth 1.4m, if he decides to pay off the debt after only 2 years. He will have increased his wealth by 460k without the uncertainty that comes with with fear of losing his job and having no reserves.

Same thing with govt.

A bit more complex than this but that’s the general idea. Running a country is no different in principle from managing the finances of a household. You have income, you have expenses, you save for rainy day, you invest to build wealth and raise your standard of living, you borrow when it makes sense even if you have the money in your bank account. You don’t borrow to eat.

I hope it helps.

Your example of a man buying a piece of land to resell at a profit isnt appropriate for our case as a nation. Lagos-Calabar for example, is more like a man having a underutilised car, but still going ahead to buy a luxury one. That's wasteful and not the sort of project that justifies taking supposedly low interest loans.

Another angle to the mismanagement of economy is wasteful spending on religious exercises. How can qe claim to lack fund for critical things when useless things get funded?

CodeTemplarr:
Your example of a man buying a piece of land to resell at a profit isnt appropriate for our case as a nation. Lagos-Calabar for example, is more like a man having a underutilised car, but still going ahead to buy a luxury one. That's wasteful and not the sort of project that justifies taking supposedly low interest loans.

Another angle to the mismanagement of economy is wasteful spending on religious exercises. How can qe claim to lack fund for critical things when useless things get funded?

I don’t think you have what it takes to understand. Lagos calabar is an investment. It will lead to rapid development which will lead to increased govt revenue for all those along its path and hence the country. I am not here to argue or discuss with cowboys and people who are more emotional,, unenligtened and who want to turn every intellectual subject into an opportunity to vent their lack of knowledge of matters of the day.

If Lagos did not borrow to build Eko Atlantic or Lagos deep sea port,, they won’t be receiving all the property taxes and revenues that will accrue from those projects. Lagos calabar and sokoto badagry are opening up new corridors, other existing roads are being fixed.

Please take your emotional arguments elsewhere or I will block you if I see you on my mentions. Someone asked a genuine question and I am trying to give him an academic answer. I am here to share knowledge not to lower myself to pedantic emotional unsound arguments with the unschooled on every matter.

You are probably one of those who would have been against Jakande when he took a loan to build the lekki Epe express way in the 1980s. In those days lagos ended for all intents and purpose at v/I I never even heard of Oniru, Maroko was a slum, look at that corridor today and the money the govt makes from it today!

casualobserver:
I don’t think you have what it takes to understand. Lagos calabar is an investment. It will lead to rapid development which will lead to increased govt revenue for all those along its path and hence the country. I am not here to argue or discuss with cowboys and people who are more emotional,, unenligtened and who want to turn every intellectual subject into an opportunity to vent their lack of knowledge of matters of the day.

If Lagos did not borrow to build Eko Atlantic or Lagos deep sea port,, they won’t be receiving all the property taxes and revenues that will accrue from those projects. Lagos calabar and sokoto badagry are opening up new corridors, other existing roads are being fixed.

Please take your emotional arguments elsewhere or I will block you if I see you on my mentions. Someone asked a genuine question and I am trying to give him an academic answer. I am here to share knowledge not to lower myself to pedantic emotional unsound arguments with the unschooled on every matter.

You are probably one of those who would have been against Jakande when he took a loan to build the lekki Epe express way in the 1980s. In those days lagos ended for all intents and purpose at v/I I never even heard of Oniru, Maroko was a slum, look at that corridor today and the money the govt makes from it today!

It is your brain that lacks ability to understand investments not mine.

Lagos-Calabar will no doubt open up some hitherto, rural area up for urbanization but is that the next step for a nation like Nigeria. Even the blind man knows that road was concieved to decieve Nigerians into being tolled for the sake of one family and few close associates.

You celebrate revenue like it is all that matters. Printing and borrowing, then aggressively taxing it from the lower cadre isnt sound economic practice. The aggressive taxation model means a disappearing middle class and only those with sizable warchest to take on capital-intensive, industrial ventures stand any real chance economically.

@bold, i understand your type so well. You prefer to gaslight and blackmail anyone who exposes your folly and mischief.
Taking a loan to buy a new car when an underutilised one exists only to use the excuse of investment and probable scenarios to justify waste is really poor for reasoning with your level of grammar.

Badb0y4lyf:
Fake statistics, Na statistics we go chop.
Why can't we be in IMF list of fastest growing economy.

When you get on that list, you will STILL complain and say it's 'audio'.

Because negativity is in your DNA.

Badb0y4lyf:
You just acknowledge that the nation is struggling and not improving with your statistics my problem is why are you praising Tinubu for a good job when you have just said things are not right with the human developing index. Why don't you call a spade a spade. I don't have problem with your boss Tinubu if he likes grab and run away with it but let him work not make things worst than he met it. How can buharis administion be far better than Tinubu owns it is deming on the Yoruba race buhari is the benchmark of failure.

Read the report, we attain 22% increase since 19 years ago!! Why won't the FGN under Tinubu be praised (i.e under 2years)!!
I don't know how else the citizens followers can encourage the leaders!