₦airaland Forum

oyegbe:
The person that wrote this trash is an international award winning fu! . seun is not every thing you should post because this is a very big, bad and worst misinformation. TSA is not responsible for the recession, No money is lying dormant in the CBN. TSA is just a chanel instead of having multiple fake FG account. The sudden drop in government revenue with lack of savings is responsible for the wahala, no nation will survive when over 60% of its revenue source is not functioning couple with less savings. FG is looking for money to pump into the economy but that cash could only be available by concessioning and sales of FG properties and increase in oil output. if The NDA stay calm like this by december we will get positive growt. Listen to minister of national planning on Channels tv today on sunrise daily. all the necessary question needed to be asked were asked and answers were giving acordinly.

I don't know how grounded you are, but I beg to disagree.

The TSA was the major reason our financial sector collapsed. We all agree there were discrepancies in fg accounts, but these funds were the live wire of the financial institutions, which happened to employ a large portion of youths, used the funds to do biz and stay afloat, while also paying taxes to the FG. With the full implementation of the TSA, the financial sector crashed, banks lost liquidity, millions of jobs were lost, and the funds domicilled in CBN was simply used to pay salaries of civil servants. I'd prefer the funds remained in the banks and were used to generate funds and taxes than sit idle and be simply eaten off by a useless civil service while we lose millions of jobs. Its common sense bro.

homosapien:
The following are the reasons that drove Nigeria into recession.

1- An import Oriented Economy where 90% of what we consume in Nigeria is either made in China or United States. Let me tell you one secret, all the developed countries you can think of today, has a vibrant and functional real sector which can also be called manufacturing.

Manufacturing in the sense that those countries don't plant Coco or extracts crude oil and export, instead their manufacturering sectors turn Coco into chocolate, beverages among other things, turn Crude Oil into pms, diseil, gas, engine Oil etc. And they sell this products to their citizen and export the rest to get foreign exchange.

Let me give you and illustrations on how manufacturers builds the economy using a car. For you to manufacture a car, you need about a million component, and in the process of getting those part, you need sub contractor that will supply you those parts. For those subcontractors to functions effectively, they need raw materials like steel, rubbers, iron woods, which will pass through various process in the manufacturing process.

For that car to be produced, the car manufacturer and it's subcontractors will needs skilled labourer such as welder, technicians, engineers. The list is endless. After the successful production of the car, some will be sold in the local market and the rest will be exported thereby gaining foreign exchange. Suppose Nigeria produce all private and commercial Aircraft, Merchant Ship and Yacht, all the Toyota others brands we use in this country, all your electronics and gadgets including kitchen utensil etc don't you think jobs will be more than sufficient. And TSA will be the least of our problems


Now from the above illustration, imagine if Nigeria produce about just 50% of what we consume, it will have a huge multiplier effects on the following,
High standard of living
Enough jobs that will go round with good salaries
Increase GDP.
The list is not exhaustive

2 the little income we were able to get from the export of crude oil and other agricultural products, IA not been used to develop the Nigeria State rather it been looted by the privilege few. For example, a recent report says Nigeria earn about 215 billions from crude oil within the last five years.

Now the question is what can the government says it achieved with that income. Tell me the sector in Nigeria you can says is operating at the acceptable international standard.

Mr Op, this is the primary reason for our recession and not any TSA and the least we can do is to either support the present administration or disagree with her policy by offering a superior argument.

Peace Out

Usa did all u have listed and still suffered a recession two times in its history i am afraid to op is right starving sme,s and investors access to funds and loans. Through d banks when investor confidence is low in an economy worsens d economy thereby slipping into a recession.pmb,s body language on forex and policies,statements like nigeria is poor killed foreighn investors confidence,implementing tsa was the nail on d coffin because d banks where starved of funds to lend to investors to recycle in d economy.The investors guessed buhari was right and started pulling out investment out of nigeria converting all their assets to dollar which lead to d dollar rush,scarcity and high value for d dollar.i am an apc supporter but i cant pretend i dont know buhari has made mistakes.let us call a spade a spade

homosapien:
The following are the reasons that drove Nigeria into recession.

1- An import Oriented Economy where 90% of what we consume in Nigeria is either made in China or United States. Let me tell you one secret, all the developed countries you can think of today, has a vibrant and functional real sector which can also be called manufacturing.

Manufacturing in the sense that those countries don't plant Coco or extracts crude oil and export, instead their manufacturering sectors turn Coco into chocolate, beverages among other things, turn Crude Oil into pms, diseil, gas, engine Oil etc. And they sell this products to their citizen and export the rest to get foreign exchange.

Let me give you and illustrations on how manufacturers builds the economy using a car. For you to manufacture a car, you need about a million component, and in the process of getting those part, you need sub contractor that will supply you those parts. For those subcontractors to functions effectively, they need raw materials like steel, rubbers, iron woods, which will pass through various process in the manufacturing process.

For that car to be produced, the car manufacturer and it's subcontractors will needs skilled labourer such as welder, technicians, engineers. The list is endless. After the successful production of the car, some will be sold in the local market and the rest will be exported thereby gaining foreign exchange. Suppose Nigeria produce all private and commercial Aircraft, Merchant Ship and Yacht, all the Toyota others brands we use in this country, all your electronics and gadgets including kitchen utensil etc don't you think jobs will be more than sufficient. And TSA will be the least of our problems


Now from the above illustration, imagine if Nigeria produce about just 50% of what we consume, it will have a huge multiplier effects on the following,
High standard of living
Enough jobs that will go round with good salaries
Increase GDP.
The list is not exhaustive

2 the little income we were able to get from the export of crude oil and other agricultural products, IA not been used to develop the Nigeria State rather it been looted by the privilege few. For example, a recent report says Nigeria earn about 215 billions from crude oil within the last five years.

Now the question is what can the government says it achieved with that income. Tell me the sector in Nigeria you can says is operating at the acceptable international standard.

Mr Op, this is the primary reason for our recession and not any TSA and the least we can do is to either support the present administration or disagree with her policy by offering a superior argument.

Peace Out

n all of a suden nigerians started importing everytin wen buari was sworn in was nigeria not importing every tin in d last 20-30 years wat u wrote is correct but a general problem of nigerian economy since independence, but saying it was d cause of nigeria entering recession does not hold water. forex restriction apart from suden implementation of tsa is d major reason why d economy is in recession. two times nigeria was in recession, n both times it was caused by command n control policies.

Moreover for those ppl that always blame recession on corruption, its pertinent to note that nigeria has been earning billions from oil( US began to buy nigerias oil again and it wasn't in the news)nlng never stopped generating billions, customs, etc. May I ask what all these billions have been used for the past 1.6yrs?
Ofcos our govt prefers to use all that money for recurrent expenditure, ie salaries, than capital projects. Then blame every other thing they can imagine.

4Play:
This view is popular but quite naive. Most of the drop in oil price occured in the second and first halves of 2014 and 2015 respectively. Most Nigerians will tell you that whilst things were hard then, they have gotten significantly worse today. GDP growth was 3.86% in the first quarter of 2015 (when oil prices had falled 50%) but -0.36% in the first quarter of 2016.

This suggests that the factors explaining the recent plunge in growth are not simply oil related. Nigeria is not the only commodity dependent state in the world (almost all African countries are). But with the exception of countries like Venezuela, which in any case was in recession as far back as 2013, Nigeria stands apart in the speed with which its currency and economy has collapsed.

Another thing I have noticed is the way people conflate the fall in oil prices with the government's spending power. The government depends on oil for 60-70% of its income - a 50% fall in oil prices will equate to 30-35% drop in oil dollar income. But here is what people forget - the Nigerian government's spending is largely on recurrent expenditure and is largely naira denominated and should not be dramatically affected by a loss of dollar income. I will use a much simplified example for illustration:

Supposing the government has oil revenues of $30bn from oil prices of $100 p/b - at N160 to $1, this will equate to N4.8 trillion. If oil prices fall to $40 p/b but the naira depreciates to N400 to $1 - assuming oil revenues of $12bn (i.e., 40% of $30bn), the domestic spending power will be N4.8 trillion. Of course, inflation erodes the actual purchasing power of money but most government spending going back to the GEJ era has been on recurrent expenditure - things like wages and debt servicing - which are largely unaffected by inflation. This government didn't help matters also by fixing the exchange rate but this is self-inflicted misery.

Remember also that the government's budget this year is the largest in Naira terms, fuelled by borrowing. We are also led to believe that the previous government was stealing with reckless abandon which is no longer the case today. All these should have cushioned the effect of the fall in dollar income.

The reality is that those who just mouth off about the government's income falling by 60% are being disingenous.

correct talk.

Adminisher:
Your parents are the dullards.
You are born victims of a corrupt system and you are too generationally stupid to understand anything.
First of all TSA is the best thing to happen to the economy. Money for development and infrastructure will now go to infrastructure.

You may not realise it but TSA is the only legal way to handle FG money as provided in the construction.

Something more serious.
Nigerians are very stupid people. It is a LIE to say TSA caused recession. It is hype. Please get out a sheet of paper and work it out. THINK about it instead of following hype. All monies in TSA is sequestered in CBN, this money is Naira that eventually goes into the system anyway. It eventually ends up in commercial banks anyway.

The oil market, corruption and our import dependence are the reasons for the recession. The oil.price crash is the single most important of those three.

Anybody telling you TSA is the cause of recession is a cowardly PDP supporter or Buhari hater doing passive aggressive actions against the FG bevause their party lost. If we did not do TSA, the recession would have been just as worse as we have now. The banks are still existing because CBN naira still flows into them regardless of TSA only now they are forced to be an engine of growth by lending to productive sectors of the economy instead of importers.

nobody is saying tsa is a bad tin. wat sound economist ar saying is dat its sudden implementation in one fell swoop via moping up of funds from bank into cbn is one of d major reasons why d con3 slide into recession. banks stopped lending money for businesses cos of low liquidity as a result of tsa. low liquidity no money to lend. no money to lend, banks started laying off their staffs. dont forget banks make their money through lending. no money to lend, business men/women were not able to get loans to start or expand their businesses. in the process bussineses n economic activities slowed down. wat follows next job loses. d matter was even made worse by buari's forex restriction n 41 items ban. lots of companies were unable to source fx to buy raw material due to fx restriction ban. in d process many manufacturing plants shut down, thus slowing down economic activities in d con3. mind u recession is define as d slowing down of economic activities. economic slow down in first n second quarters leads to recession. since nigeria's gdp is a product summation of economic activities in d con3, a slow down in economic activities shrinks gdp. a big sign of recession.
with d above implementations of tsa n fx restrictions policy with 41 ban items most of which ar raw materials, buari catapult nigeria into recession.

4Play:
This view is popular but quite naive. Most of the drop in oil price occured in the second and first halves of 2014 and 2015 respectively. Most Nigerians will tell you that whilst things were hard then, they have gotten significantly worse today. GDP growth was 3.86% in the first quarter of 2015 (when oil prices had falled 50%) but -0.36% in the first quarter of 2016.

This suggests that the factors explaining the recent plunge in growth are not simply oil related. Nigeria is not the only commodity dependent state in the world (almost all African countries are). But with the exception of countries like Venezuela, which in any case was in recession as far back as 2013, Nigeria stands apart in the speed with which its currency and economy has collapsed.

Another thing I have noticed is the way people conflate the fall in oil prices with the government's spending power. The government depends on oil for 60-70% of its income - a 50% fall in oil prices will equate to 30-35% drop in oil dollar income. But here is what people forget - the Nigerian government's spending is largely on recurrent expenditure and is largely naira denominated and should not be dramatically affected by a loss of dollar income. I will use a much simplified example for illustration:

Supposing the government has oil revenues of $30bn from oil prices of $100 p/b - at N160 to $1, this will equate to N4.8 trillion. If oil prices fall to $40 p/b but the naira depreciates to N400 to $1 - assuming oil revenues of $12bn (i.e., 40% of $30bn), the domestic spending power will be N4.8 trillion. Of course, inflation erodes the actual purchasing power of money but most government spending going back to the GEJ era has been on recurrent expenditure - things like wages and debt servicing - which are largely unaffected by inflation. This government didn't help matters also by fixing the exchange rate but this is self-inflicted misery.

Remember also that the government's budget this year is the largest in Naira terms, fuelled by borrowing. We are also led to believe that the previous government was stealing with reckless abandon which is no longer the case today. All these should have cushioned the effect of the fall in dollar income.

The reality is that those who just mouth off about the government's income falling by 60% are being disingenous.

The bolded has been my point for a long time, bros ur overall comment is so on point

vani86:
Are you so filled with hatred for buhari ad APC that when you see a detailed explanation like the one you just quoted, you throw it away and shout dullard.

Bro i have no party affiliation, pdp was a corrupt power filled party but they made some good policies and decison, apc have been disaster in their less than 2 years in power but they have some good points going for them as well.

My point is be objective, the op had some points likewise the guy that broke everything down for you.

From My own conclusion, TSA did not singlehandedly lead us to recession but a contributing factor, as well as poor dollar to naira exchange rate which is as a result of fall in oil price.

The hurried/badly timed implementation of the TSA is not the sole cause of the recession but it is an identifiable cause and when some causes were out of our control, while others were within our control, we have to admit that deciding the time and the pace at which the TSA would be implemented was under our control

coolscott:
The hurried/badly timed implementation of the TSA is not the sole cause of the recession but it is an identifiable cause and when some causes were out of our control, while others were within our control, we have to admit that deciding the time and the pace at which the TSA would be implemented was under our control

You are saying exactly what i said. It is not the sole cause but it contributed to the recession. Spoke with a diamond banker in the gym this morning and he confirmed it. The implementation was a disaster to the industry. Whole department was closed cause of it

vincent10:
You are too dull.

All your points quoted has been occurring before 1990. We have been an import country since many years ago. Are you new in Nigeria.

The government is clueless.

Mr Clever, what you wrote just show how foolish you are and prove beyond reasonable doubts that you either an educated illiterate or your education is a waste.

drss2:
n all of a suden nigerians started importing everytin wen buari was sworn in was nigeria not importing every tin in d last 20-30 years wat u wrote is correct but a general problem of nigerian economy since independence, but saying it was d cause of nigeria entering recession does not hold water. forex restriction apart from suden implementation of tsa is d major reason why d economy is in recession. two times nigeria was in recession, n both times it was caused by command n control policies.

Forex Restrictions is the the sole reason for receccesion according to you. The my question is why the restrictions?