₦airaland Forum

In 2012, when Nigeria was listed on JPMorgan emerging market Bond index, it was done based on a two way quote by the CBN and the then minister of finance, Okonjo Iweala, backing their decision on Nigeria growing economy of 7.4 percent annual GDP and 6.9 percent in 2011, substantiated with a blooming global oil price averaging between $90 to $100 a barrel as at the time, and Knowing fully well that cost of servicing foreign debts will reduce significantly and position she, Okonjo Iweala as the powerhouse of Africa largest economy on the international scene and the force behind the actualization of Nigeria dream to a more mainstream investment destination, they concluded it was the right thing to do without proper consideration for future consequences in the advent of global disaster like current drop in global energy prices and emerging market economic rout.

Here is the logic, Nigeria is a petrol-dollar economy, which means her economic growth is directly proportional to both petroleum (crude oil) and dollar strength. The former is regulated by global demand and supply while the latter is determined by the US economy, while Nigeria’s economy is being driven by non-oil sector (construction, telecoms, manufacturing and agriculture) mainly, it is normal to expect the economic team representing the nation to base their decisions on those sectors that are thriving and can be internally regulated even if it means not been listed as at the time but no, their decision was based on crude oil price.

In 2014, when oil price started falling after peaking at $105.64 in June, with fewer options left to curb the situation, Okonjo Iweala, the minister of finance took to the media, in her words “Nigeria should brace for tougher economic times ahead” insinuating she has no solution apart from her overzealous ambiguity to be at the realm of power and yet we were being chastised for not retaining her team in power.

The current Central Bank of Nigeria (CBN) administration came in without much time to curtail the situation, and with naira weakened to more than 200 per dollar for the first time, Godwin Emefiele, Chairman of Central Bank of Nigeria was forced to take a decisive decision which includes spending $380 million to stop the fall of the Naira, restricting 41 item’s importers from accessing FOREX official rate, overhauling foreign currency domicile accounts, restricting dollar withdrawal limit on locally issued credit cards and pegging naira to a fixed rate of 197 to a US dollar. Bear in mind that these might not be perfect economic measures as Nigeria is a heavy import-dependent economy but juxtaposing the danger of what would have happened without these measures with been delisted, an economist will agree it is an acceptable policy given the circumstances.

Here are the possible consequences if the CBN had succumbed to JPMorgan pressure and gone ahead with the devaluation using two-way forex market has suggested, naira value would be between 300 to 320 naira to a US dollar by now, inflation would have surged to double digit from 9.20 percent recorded in July, 2015. Cost of goods and services would jumped to a new height, followed by increase in unemployment as interest rate would have risen, making loan almost inaccessible for companies to finance capital projects. Overall, the decision would have created negative perceptions about Nigeria true economic growth (GDP), and subsequently, forced these same foreign investors backed by JPMorgan to safeguard their fund by withdrawing based on uncertainty and high risk after profiting from the decline.

http://investorsking.com/jpmorgan-poor-economic-decision-by-okonjo-iweala/

Dullest man ever liveth

Baba one chance

Dullest man ever liveth. diz poster abov mi siriouzly sick as in sick real sick

The legendary body odour should fix this. Is it only to take glory that it does?

I didn't even bother to read the obvious blame game detailed in the article. That's what the ruling party is known for and it's time wasting.

Story for em gods

Nw without jp Morgan
Let's see hw many investors we will get

JPMorgan...

But I remember Okonjo played a very key role to put us there, anyway I don't really care about the fucking JPMorgan

Op in as much i like your analysis the truth is when the oil price began to fall our naira to dollar exchange rate was not up to 200 and the CBN had other options too...

1miccza:
Op in as much i like your analysis the truth is when the oil price began to fall our naira to dollar exchange rate was not up to 200 and the CBN had other options too...

Can you mention one of those options? It is simple, the only commodity backing that listing was oil and it fell, if they had allow the currency to react proportionally, it would have been a total disaster as our domestic market would suffer and cost of production would have increased by 40%.

They did what they had to, what was the benefit of the listing? Are average Nigerians gaining from it? The truth is all the benefit was never accounted for when their team left office, our foreign reserve dip, naira slide to all time low, gdp started dropping from first quarter, etc.

Before we were listed, our foreign reserve was way better and our economy was averaging 7.4 growth rate and pose to be the fastest economy after China.

Gboliwe:
The legendary body odour should fix this. Is it only to take glory that it does?

I didn't even bother to read the obvious blame game detailed in the article. That's what the ruling party is known for and it's time wasting.

This is not about the ruling party but our dear country.

Truth234:
Can you mention one of those options? It is simple, the only commodity backing that listing was oil and it fell, if they had allow the currency to react proportionally, it would have been a total disaster as our domestic market would suffer and cost of production would have increased by 40%.

They did what they had to, what was the benefit of the listing? Are average Nigerians gaining from it? The truth is all the benefit was never accounted for when their team left office, our foreign reserve dip, naira slide to all time low, gdp started dropping from first quarter, etc.

Before we were listed, our foreign reserve was way better and our economy was averaging 7.4 growth rate and pose to be the fastest economy after China.

When i said options i meant he could have taken other decisions than the one he took,the depleting of the reserves was not due to the index or anything related to it,it was due to our own greed and corruption let's represent our facts right...

Truth234:
Here is the logic, Nigeria is a petrol-dollar economy, which means her economic growth is directly proportional to both petroleum (crude oil) and dollar strength.
The former is regulated by global demand and supply while the latter is determined by the US economy, while Nigeria’s economy is being driven by non-oil sector (construction, telecoms, manufacturing and agriculture) mainly, it is normal to expect the economic team representing the nation to base their decisions on those sectors that are thriving and can be internally regulated even if it means not been listed as at the time but no, their decision was based on crude oil price.

http://investorsking.com/jpmorgan-poor-economic-decision-by-okonjo-iweala/

Meanwhile someone said he will regulate global oil price not too long ago

APC still blaming GEJ for their woes. Simply put, GEJ is still the president of Nigeria

1miccza:
When i said options i meant he could have taken other decisions than the one he took,the depleting of the reserves was not due to the index or anything related to it,it was due to our own greed and corruption let's represent our facts right...

You still don't understand, I am asking you what are these options? The reserve depletion was directly due to poor economic decision which saw our debt servicing cost surged to 26% of our annual budget (http://leadership.ng/news/422050/debt-servicing-to-gulp-35-of-nigerias-revenue-imf).

Part of the idea of listing on emerging market bond index was to reduce debts servicing cost and increase inflow of investment fund but when the administration couldn't help their appetite for borrowing, they had to pay the cost from our reserve. How is it not related?

Truth234:
You still don't understand, I am asking you what are these options? The reserve depletion was directly due to poor economic decision which saw our debt servicing cost surged to 26% of our annual budget (http://leadership.ng/news/422050/debt-servicing-to-gulp-35-of-nigerias-revenue-imf).

Part of the idea of listing on emerging market bond index was to reduce debts servicing cost and increase inflow of investment fund but when the administration couldn't help their appetite for borrowing, they had to pay the cost from our reserve. How is it not related?

If i would borrow from your last paragraph,it says when the administration couldn't help their apetite for borrowing that sure smarks of greed and something else you know...

ok enough of blames, let buhari fix it he is the president now not Jonathan after all refineries, power and control were claimed to have been working as result of his body language.

1miccza:
If i would borrow from your last paragraph,it says when the administration couldn't help their apetite for borrowing that sure smarks of greed and something else you know...

Well, the entire Nigeria economic landscape ooze greed and corruption

1miccza:
When i said options i meant he could have taken other decisions than the one he to

ok,the depleting of the reserves was not due to the index or anything related to it,it was due to our own greed and corruptions let's represent our facts right...

You have just manify your ignorance. you don't know Jack about economic analysis.it is better you follow the topic and learn. state the decision

Truth234:
In 2012, when Nigeria was listed on JPMorgan emerging market Bond index, it was done based on a two way quote by the CBN and the then minister of finance, Okonjo Iweala, backing their decision on Nigeria growing economy of 7.4 percent annual GDP and 6.9 percent in 2011, substantiated with a blooming global oil price averaging between $90 to $100 a barrel as at the time, and Knowing fully well that cost of servicing foreign debts will reduce significantly and position she, Okonjo Iweala as the powerhouse of Africa largest economy on the international scene and the force behind the actualization of Nigeria dream to a more mainstream investment destination, they concluded it was the right thing to do without proper consideration for future consequences in the advent of global disaster like current drop in global energy prices and emerging market economic rout.

Here is the logic, Nigeria is a petrol-dollar economy, which means her economic growth is directly proportional to both petroleum (crude oil) and dollar strength. The former is regulated by global demand and supply while the latter is determined by the US economy, while Nigeria’s economy is being driven by non-oil sector (construction, telecoms, manufacturing and agriculture) mainly, it is normal to expect the economic team representing the nation to base their decisions on those sectors that are thriving and can be internally regulated even if it means not been listed as at the time but no, their decision was based on crude oil price.

In 2014, when oil price started falling after peaking at $105.64 in June, with fewer options left to curb the situation, Okonjo Iweala, the minister of finance took to the media, in her words “Nigeria should brace for tougher economic times ahead” insinuating she has no solution apart from her overzealous ambiguity to be at the realm of power and yet we were being chastised for not retaining her team in power.

The current Central Bank of Nigeria (CBN) administration came in without much time to curtail the situation, and with naira weakened to more than 200 per dollar for the first time, Godwin Emefiele, Chairman of Central Bank of Nigeria was forced to take a decisive decision which includes spending $380 million to stop the fall of the Naira, restricting 41 item’s importers from accessing FOREX official rate, overhauling foreign currency domicile accounts, restricting dollar withdrawal limit on locally issued credit cards and pegging naira to a fixed rate of 197 to a US dollar. Bear in mind that these might not be perfect economic measures as Nigeria is a heavy import-dependent economy but juxtaposing the danger of what would have happened without these measures with been delisted, an economist will agree it is an acceptable policy given the circumstances.

Here are the possible consequences if the CBN had succumbed to JPMorgan pressure and gone ahead with the devaluation using two-way forex market has suggested, naira value would be between 300 to 320 naira to a US dollar by now, inflation would have surged to double digit from 9.20 percent recorded in July, 2015. Cost of goods and services would jumped to a new height, followed by increase in unemployment as interest rate would have risen, making loan almost inaccessible for companies to finance capital projects. Overall, the decision would have created negative perceptions about Nigeria true economic growth (GDP), and subsequently, forced these same foreign investors backed by JPMorgan to safeguard their fund by withdrawing based on uncertainty and high risk after profiting from the decline.

http://investorsking.com/jpmorgan-poor-economic-decision-by-okonjo-iweala/

Hi OP, when Obama became US president, he blamed Bush almost every second, a time came he could not blame Bush anymore. The Time is coming when Buhari can't blame Jonathan for his woes.

It is unfortunate that Buharists are determined to turn truth on its head and deceive Nigerians.

While the immediate past administration made some forecast using the projected oil price, it implemented a lot of policy that will promote local production, encourage export and less dependency on import thereby acting as a tool to help sure the naira. The CBN monetary policy would have been complimentary and not primary to see that the naira don't drop to the most embarrassing state . The defeat of Jonathan at the poll means that Nigeria were expecting a new economic direction, this expectation also applies to investors. Unfortunately, since May 29, no single policy direction came coming from the Federal government leaving the CBN to implement the craziest and most insane monetary policy just to 'defend' the naira. Let us recall that the CBN Governor some weeks back decried the absence of fiscal policy from the government as a major challenge. Till date, non has been forthcoming. No Economic team in place.

Investors are worried that the crazy manipulation of the FX by CBN cannot be accepted in any sane clime. The JP Morgan index were simply saying that 'hey, play by the rules. Stop manipulating FX and get economic team on board/fiscal policy". Whether the effect of the ruke will make Nigeria naira depreciate to N300/$ is not the fault of JP Morgan but the clueless Buhari administration. We also need to agree that the present state of the naira is a false state. The real value of the naira is about N300-350/$. So why can't we do the right thing by doing what is proper and boost investor's confidence? If investors run away from our bonds, is it alien that will come in? JP Morgan delistment means we will lose prospect as well as lots of existing investors. This means economic trouble, job loss and its resultant effect.

Please @OP, stop blaming GEJ and NOI because they have nothing to do here. For the record, NOI announced austerity in the face of oil drop price in 2014 and never said Nigeria will suffer.

Pay the cost of servicing debt from our reserves? Foreign Reserves is more of an index similar to balance of trade. It is not your usual bank physical vault

Truth234:
You still don't understand, I am asking you what are these options? The reserve depletion was directly due to poor economic decision which saw our debt servicing cost surged to 26% of our annual budget (http://leadership.ng/news/422050/debt-servicing-to-gulp-35-of-nigerias-revenue-imf).

Part of the idea of listing on emerging market bond index was to reduce debts servicing cost and increase inflow of investment fund but when the administration couldn't help their appetite for borrowing, they had to pay the cost from our reserve. How is it not related?

HzRF:
Story for em gods

Nw without jp Morgan
Let's see hw many investors we will get

How many did we get before with the listing? Do you think investment decisions are based wholly on issues like index listings?

sholatech:
Pay the cost of servicing debt from our reserves? Foreign Reserves is more of an index similar to balance of trade. It is not your usual bank physical vault

Nigeria committed to using foreign reserves, salted away as oil prices soared, to cancel its debt

http://www.nytimes.com/2006/04/22/world/22nigeria.html?_r=0

Truth234:
Well, the entire Nigeria economic landscape ooze greed and corruption

Thank you very much bro for reading between the lines which of course some find so hard to do the previous person that i was chatting with understood it this way too...

pafra:
You have just manify your ignorance. you don't know Jack about economic analysis.it is better you follow the topic and learn. state the decision

Visit "the state of Nigeria's economy under Buhari" here on Nl and you'll find all your answers there peace!!!!

First of all, Okonjo Iweala was not responsible for the fall in international oil prices. Secondly, crude oil is the major source of Nigeria's foreign exchange. Thirdly, the value of the naira is tied to the dollar via price of crude oil. The value of the naira is directly proportional to international crude oil prices. The higher the price, the higher the value of the naira and vice vasa. Its no rocket science that in view of falling price of crude, the naira will experience some kind of economic pressure. This is why extraodinary measures like fiscal policies are crucial to cushion the effect of lower foreign exchange coming through crude oil.
This article is nothing but a cheap attempt to excuse the Daura born Magician of his unpreparedness in governance and forming a cabinet. The slide in economic activities in Nigeria within the last three months was mainly because of the directionless and autopilotness of the Buhari APC led government.
Investors do not make business decisions based on body language and news papers, but on sound government fiscal policies.
The absence of finance, trade and investment, and commerce ministers, positions responsible for executing government's economic policies send signals to the international community that this government is not serious.

jaytee01:
How many did we get before with the listing? Do you think investment decisions are based wholly on issues like index listings?

Okay
Let's see hw many will stay

Getting listed makes us a "developing country" an investment haven for investors
Now about to be "under developed" country o
U want to put ur money to where ur mouth is not

It is unfortunate that Buharists are determined to turn truth on its head and deceive Nigerians.

While the immediate past administration made some forecast using the projected oil price, it implemented a lot of policy that will promote local production, encourage export and less dependency on import thereby acting as a tool to help sure the naira. The CBN monetary policy would have been complimentary and not primary to see that the naira don't drop to the most embarrassing state . The defeat of Jonathan at the poll means that Nigeria were expecting a new economic direction, this expectation also applies to investors. Unfortunately, since May 29, no single policy direction came coming from the Federal government leaving the CBN to implement the craziest and most insane monetary policy just to 'defend' the naira. Let us recall that the CBN Governor some weeks back decried the absence of fiscal policy from the government as a major challenge. Till date, non has been forthcoming. No Economic team in place.

Investors are worried that the crazy manipulation of the FX by CBN cannot be accepted in any sane clime. The JP Morgan index were simply saying that 'hey, play by the rules. Stop manipulating FX and get economic team on board/fiscal policy". Whether the effect of the ruke will make Nigeria naira depreciate to N300/$ is not the fault of JP Morgan but the clueless Buhari administration. We also need to agree that the present state of the naira is a false state. The real value of the naira is about N300-350/$. So why can't we do the right thing by doing what is proper and boost investor's confidence? If investors run away from our bonds, is it alien that will come in? JP Morgan delistment means we will lose prospect as well as lots of existing investors. This means economic trouble, job loss and its resultant effect.

Please @OP, stop blaming GEJ and NOI because they have nothing to do here. For the record, NOI announced austerity in the face of oil drop price in 2014 and never said Nigeria will suffer..

Ok

https://investorsking.com/wp-content/uploads/2015/09/Okonjo-iweala.jpg

In 2012, when Nigeria was listed on JPMorgan emerging market Bond index, it was done based on a two way quote by the CBN and the then minister of finance, Okonjo Iweala, backing their decision on Nigeria growing economy of 7.4 percent annual GDP and 6.9 percent in 2011, substantiated with a blooming global oil price averaging between $90 to $100 a barrel as at the time, and Knowing fully well that cost of servicing foreign debts will reduce significantly and position she, Okonjo Iweala as the powerhouse of Africa largest economy on the international scene and the force behind the actualization of Nigeria dream to a more mainstream investment destination, they concluded it was the right thing to do without proper consideration for future consequences in the advent of global disaster like current drop in global energy prices and emerging market economic rout.

Here is the logic, Nigeria is a petrol-dollar economy, which means her economic growth is directly proportional to both petroleum (crude oil) and dollar strength. The former is regulated by global demand and supply while the latter is determined by the US economy, while Nigeria’s economy is being driven by non-oil sector (construction, telecoms, manufacturing and agriculture) mainly, it is normal to expect the economic team representing the nation to base their decisions on those sectors that are thriving and can be internally regulated even if it means not been listed as at the time but no, their decision was based on crude oil price.

In 2014, when oil price started falling after peaking at $105.64 in June, with fewer options left to curb the situation, Okonjo Iweala, the minister of finance took to the media, in her words “Nigeria should brace for tougher economic times ahead” insinuating she has no solution apart from her overzealous ambiguity to be at the realm of power and yet we were being chastised for not retaining her team in power.

The current Central Bank of Nigeria (CBN) administration came in without much time to curtail the situation, and with naira weakened to more than 200 per dollar for the first time, Godwin Emefiele, Chairman of Central Bank of Nigeria was forced to take a decisive decision which includes spending $380 million to stop the fall of the Naira, restricting 41 item’s importers from accessing FOREX official rate, overhauling foreign currency domicile accounts, restricting dollar withdrawal limit on locally issued credit cards and pegging naira to a fixed rate of 197 to a US dollar. Bear in mind that these might not be perfect economic measures as Nigeria is a heavy import-dependent economy but juxtaposing the danger of what would have happened without these measures with been delisted, an economist will agree it is an acceptable policy given the circumstances.

Here are the possible consequences if the CBN had succumbed to JPMorgan pressure and gone ahead with the devaluation using two-way forex market has suggested, naira value would be between 300 to 320 naira to a US dollar by now, inflation would have surged to double digit from 9.20 percent recorded in July, 2015. Cost of goods and services would jumped to a new height, followed by increase in unemployment as interest rate would have risen, making loan almost inaccessible for companies to finance capital projects. Overall, the decision would have created negative perceptions about Nigeria true economic growth (GDP), and subsequently, forced these same foreign investors backed by JPMorgan to safeguard their fund by withdrawing based on uncertainty and high risk after profiting from the decline.