₦airaland Forum

Subsidy is gone, but borrowing has not abated with little or nothing to show. Yet massive looting of common resources.

Flangelo12:
Projects everywhere.

External reserves growing nicely.

Atiku just wants to pocket the money.

Did you read the article?
You need urgent help

greatiyk4u:
Did you read the article?
You need urgent help

Yours is critical.

Flangelo12:
Projects everywhere.

External reserves growing nicely.

Atiku just wants to pocket the money.

Ok data boi, you know you are lying. Name one tangible project that has a direct effect on the lives of the average Nigerian for the past 4 yrs since the faaake certttifficcate hollldderr grabbed and snatched

tuoyoojo:
That talk on the 29th may that subsidy was gone was a scam

It was just a plot to increase fuel price by over 300 percent. That was tilimbu's welcome package

They made it seem as though with subsidy removal all our problems would be solved

Now the so called subsidy is "gone" but tilimbu is still borrowing recklessly so tey IMF sef dey fear for us....IMF when dey borrow countries money to keep Dem in the debt cycle come dey advise Nigeria to slow down borrowing

A farmer who planted 120 yams but claimed he planted 200 would reap 120 yams and 80 yams

This comment shows that you do not know what Nigeria's problem really is.

That's why you believed the government line that problems would go when subsidy goes.

Nigeria's problem is reliance on oil, instead of industries and innovation. The issues with subsidy are a symptom, not the cause, of our problems

And yes, subsidy had to go. Our debt was eating over 90% of our revenue....because decades of chronically low oil prices meant that there was not enough revenue to pay for subsidy from oil money alone, so, we borrowed, worsening our debt, and forcing government to essentially use oil windfalls for servicing debt instead of benefiting the nation, and taking monies from other parts of the budget and replacing it with borrowed money to pay for rising costs.

The subsidy issue did not start in the last ten years, or the last twenty. It's been an ongoing process.

Am sure you love GEJ...the guy wanted to remove subsidy because of the problems outlined above.


The issue with subsidy is this. Government can budget say 10 trillion for subsidy, and either oil prices for the year are too low to fund the subsidy effectively...borrowing...or oil prices are too high that subsidy payments have to go up to pay for the subsidy...meaning that monies that were budgeted for other things have to be taken to pay for the subsidy, and borrowing has to be done to fill in the reusltiing gap....plus saving money in the reserve becomes difficult.


Or to put it into practical means...government says we go spend 10 trillion on subsidy for year x

Low oil prices below the budget benchmark for the same year, means that subsidy would be paid for by taking money from other parts of the budget to pay for the subisdy plus borrowing. Debt gets worse.

High oil prices means a windfall...which FIRST has to help to go to paying off debts incurred in the previous year from low oil prices induced borrowing,plus high oil prices means higher subsidy costs because the production cost has shot up, and along with it subsidy, meaning again...monies have to be taken from other parts of the budget to pay for subsidy, and replaced with borrowing. Debt gets worse.

And then there is smuggling. Even if government tried, they can stop the big tankers but not the millions of small scale smugglers , and even stopping the big tankers is difficult. Costs go up and result is more spending on subsidy and more debt.

The ten trillion envisaged for year X can go up to 20 trillion by the end of year X. See the problem. And government can stop stealing, but it cannot control the production costs at all. Trying to control production costs to make subsidy costs fall is why we lost four NNPC refineries...government stopped spending money on maintenance for over 10 years..from 1993. BIG MISTAKE.

That's why tinubu and buhari opposing subsidy removal in 2012 was not only wrong, it was damaging, and why GEJ Not growing a pair and ignoring them and removing it back then was also wrong too. Ditto the previous opportunities for us to remove it.

Yes, there are countries with subsides...but either they pay high taxes for it, or they litterally drain their forex reserves to pay for it. Iran even limits subsidy. Only countries that can pay subsidy and pay for refineries are countries like libya, and saudi where population is low enough for the oil revenue to sustain them, and still have massiv surplus left over. And outside the arab countries, subsides on fuel only apply to the very poor...or are production subsides which are a different type of subsidy.


Angola has a subsidy, and also has a ton of government projects, including schools and hosptials that are uncompleted, because every year subsidy costs eat the parts of the budget that could pay for those things. That's why they want to be rid of it in two years time. And they are not being run by Nigerians by the way.

Flangelo12:
How much dollars have you brought in?

NNPC’s privatised petrochemicals brings more than enough dollars to help your master strategist of propaganda reach his N300/$1 if he was not such a terrible thief.

anonimi:
How Indorama sustains manufacturers, boosts Nigeria’s FX earnings

Indorama Eleme Petrochemicals Limited (IEPL) has emerged as a major value creator in the Nigerian economy. It is responsible for the survival, growth and sustenance of many manufacturing companies in Nigeria today. A large number of plastic and allied firms depend on the Eleme-based company for petrochemical resins (or polymer resins) which serve as their raw materials.

The petrochemical company is just one of the several subsidiaries of Indorama-Nigeria Group, which also comprises Indorama Eleme Fertilizer & Chemicals Limited (IEFCL), Indorama PET Nigeria Limited, and Indorama Port Operations.

Since Indorama Corporation of Indonesia became core investor in the old Eleme Petrochemicals Company Limited (EPCL) in 2006 through privatisation programme of the Federal Government, the group has become a game changer in the Nigerian economy.

The petrochemical company has solved the major challenge facing a number of manufacturers— poor access to raw materials. Rather than scramble for foreign exchange to import inputs, the company ensures that manufacturers have access to their critical raw materials, enabling them to save costs and improve margins.

The major resins used by plastic and allied companies are polyethylene and polypropylene. Indorama produces about 45 grades of these products for various industries. About 600 of such companies in Nigeria depend on IEPL for their survival. They are estimated to have over 90,000 workers.

https://businessday.ng/real-sector/article/how-indorama-sustains-manufacturers-boosts-nigerias-fx-earnings/

iwaeda:
Subsidy is gone, but borrowing has not abated with little or nothing to show. Yet massive looting of common resources.

Incompetence and corruption is the worst combination for government performance.

It is the oil windfall part I am totally amazed about. Complete and utter silence.

The government and it's fansatics that sang endlessly to high heavens about the 'Jonathan era windfall from a 100 dollar oil) are conspicuous by their morgue grade silence.

So....what has happened.
Nigeria has not turned to the Garden of Eden despite this gift from the gods of war since January, 8 months or so and counting....

anonimi:
Incompetence and corruption is the worst combination for government performance.

This your poster should be on the gates of the National Assembly....with a huge, big, fat question mark....

anonimi:
NNPC’s privatised petrochemicals brings more than enough dollars to help your master strategist of propaganda reach his N300/$1 if he was not such a terrible thief.

That means they are doing a good job.

Flangelo12:
That means they are doing a good job.

1. It means that deregulation and privatisation of public companies is better for the economy.

2. It means that Obasanjo would have been a failure with his military dictatorship era focus on government ownership of businesses and OFN peasant farms. Atiku’s business-friendly deregulation and privatisation policies made the huge difference.

anonimi:
Neo-black Problem: Must Blacks Be Ruled by Whites in Order to Prosper?

In short, the neo-black dilemma may be framed as follows: is it better to live under white rule without political dignity but with basic life-sustaining standards for many;

or to live under black rule with illusory political dignity and without basic life- sustaining standards for the majority?
@
@
The path forward for Africa lies in cultivating higher and adequate levels of personal and communal agential integrity as well as full personal responsibility and productivity. Not to mention creativity (including epistemic creativity), productive justice (such as merit and freedom), harmony and reconciliation at local and international levels, and a proper domestication of capitalism and other related values and institutions.

Africa must stop wasting her time on dreams of socialism because it is a system of wealth distribution primarily. Whereas, capitalism is a system of wealth creation primarily, and wealth has to be produced before it can be distributed.

https://www.thisdaylive.com/index.php/2024/10/12/neo-black-problem-must-blacks-be-ruled-by-whites-in-order-to-prosper/

ratcock:
His finance minister Taiwo or whatever he answers will soon come up with fabricated figures and lies on how the windfall did not reach the coffers of government

That guy go answer questions when Tinubu is booted out of office next year.

Atiku keep dragging Tinubu for brokus

anonimi:
Atiku’s stewardship ended 19 years ago. APC’s anti-corruption squad has been in power for 11 years.

It’s either Atiku is squeaky clean or Tinubu is way more corrupt than him. Which one is your choice?

It's a case of kettle calling the pot black. That his stewardship ended 19 years ago doesn't exonerate him from the allegations against him. However, I love criticism so much, and that's why I love the way Obi and Atiku are giving it to this government left, right and center.

Criticizing them will make them want to impress us by doing the right thing. So, it's the citizens that are gaining.

yemre:
It's a case of kettle calling the pot black. That his stewardship ended 19 years ago doesn't exonerate him from the allegations against him. However, I love criticism so much, and that's why I love the way Obi and Atiku are giving it to this government left, right and center.

Criticizing them will make them want to impress us by doing the right thing. So, it's the citizens that are gaining.

Who is the pot and who is the kettle between Atiku and Tinubu

Reference:
It is the oil windfall part I am totally amazed about. Complete and utter silence.

The government and it's fansatics that sang endlessly to high heavens about the 'Jonathan era windfall from a 100 dollar oil) are conspicuous by their morgue grade silence.

So....what has happened.
Nigeria has not turned to the Garden of Eden despite this gift from the gods of war since January, 8 months or so and counting....

Well, in 2005, we had the large portion of the debt forgiven. And we paid off the rest. From 2008-14 oil prices were sky high....which meant that times were very good....as seen in the 1970's...when oil prices were high.

The thing is, our debt service was not as high under GEJ due to debt forgiveness. EVEN then, keeping subsides on power and electricity (which you support) led to the GEJ you admire draining the reserves from 60 billion dollars in 2009 to 32 billion dollars on May 29 2015.

And life was still hard for most people. And it was fake prosperity based on high oil prices.

OIl prices crashing in 2014, essentailly led to us entering a borrowing spiral that we are still in to this day. Which means that we now have a massive debt of over 150 trillion naira and counting.

And we have been borrowing because oil prices since 2015, have been for the most part below what we need to adequyately fund the budget. Even under your hero GEJ, they were that low, which is why GEJ Borrowed. YES HE DID.

Now, am sure you are saying I am defending tinubu by saying he didn't have it good like GEJ...lol. I AM NOT. Tinubu is just GEJ without oil money. I'm even surprised you don't also support him.


But here is where the problem is....

Corden and Neary (1982) have demonstrated how Dutch disease occurs in an economy. According to them, in a country experiencing "boom" in the export of a commodity, the economy can be divided into three sectors: the "booming" export sector, the "lagging' traditional export sector and the non-export sector. [b]The Dutch disease occurs when the traditional export (tradable goods) sector is crowded out by the booming export sector and the non-tradable goods sector. The lagging traditional tradable goods sector may include cocoa, palm produce, cotton, rubber, coal, copper, textiles and some manufactured goods while the booming export sector may be crude oil, coffee, gold, etc. The non-tradable (non-export) goods sector covers all those goods that are produced for domestic consumption only, e.g. staple food items, clothing, building materials, locally-assembled cars. [b]Where crude oil (and gas) is the booming export sector, the non-oil export sector may be crowded out by the oil sector and the non-tradable goods sector of the economy. This can happen when the oil revenue windfall increases domestic demand for non-tradable goods and pushes up domestic prices leading to an appreciation of the real exchange rate which in turn reduces the competitiveness of the non-oil export sector. This will in turn lead to a reduction in non-oil exports in both quantum and value terms. The oil windfall may also lead to movement of the factors of production in the economy. For instance, capital and labor (and land) may shift from the non-oil export sector to the oil sector (in order to maintain or increase reserves and production) and the non-tradable goods sector (to take advantage of the growing domestic demand). This explains why the increase in oil prices and the subsequent oil revenue windfall in many oil-exporting countries have tended to depress their non-oil export sector while at the same time generating a boom in both the oil and the non-tradable goods sectors. With capital and labor shifting from the non-oil export sector to the oil-sector and non-traded goods sector, firms in the non-oil export sector are forced to either close down or reduce their scale of operation. The boom in the oil and non-traded goods sector increases the demand for imported goods. This may not be a problem in the short-term so long as the country has enough foreign exchange to pay for the imports. The depression in the non-oil export sector and the boom in the other two sectors have medium to long term implications for the economy because the oil windfall will not be permanent given the volatility, unpredictability and exhaustibility of crude oil. For instance, if there is a decline in oil prices and oil revenue, the lagging and collapsing non-oil export sector will not be able to compensate for the drop in oil revenue while domestic demand for the non-traded goods and imports remain sticky. Consequently, the country will be forced to borrow from the international financial market to compensate for the decline in oil revenue. Over time, external debts will increase and so will the debt service obligations. Even when oil prices go up later and there is another round of oil windfall, it is difficult to correct the earlier damage or distortions created by the initial or previous oil windfall. In some cases, the oil exporting country may be forced to adopt some form of structural adjustment program (SAP) to correct such distortions or imbalances. Some of these SAPs are painful and may increase the prevalence, depth and severity of poverty[/b]

And thus the explanation as to why all your leaders are the same. But most of you see what you want to see.

GEJ and tinubu are bad leaders because at the end, both of them do not do the needful. And I should say, all our leaders are bad leaders, because most of them do not do the needful...which is why we have most of the problems we have today.

But most of you see what you want to see. You avoid what you do not want to see.

I guess this is where you call me a tinubu supporter without saying 'you are a tinubu suppoprter'

That's today';s pearls.

SAUCE