₦airaland Forum

BedLam:
What law ? If Buhari can detain Dasuki against what the law states then he has no problem using the money for anything meaningfu! If Buhari can sanction the Zaria massacre then he has no problem using the money as well. They only consider the law when it's for the good of the citizens. This same govt is backing Custom officer that's flouting the law.
The only reason they haven't used that money is either the money is not there or it's in there pocket already.

one carton of orijin bitters for. Infact I go give you my sis come marry her all expenses paid

Love u reasoning

IDEKEALUMONA:
Caused by Useless govt of GEJ and PMB.

GEJ was recklessly borrowing even at the time of oil boom and nothing to show except some micro interventions like almajiri school blocks.

PMB came,dashed all hopes and took cluelessness to next level

GEJ and PMB have made OBJ a hero.

Baba, OBJ o! GEJ o! PMB o! Are thieves but OBJ really worked on your debt profile.

The debt will keep rising until PMB finishes his tenure. The old guy is a debtor, he even borrowed money to get form.

Amoto94:
The money can't be used without the backing of the law and there's a bill to that effect but NASS have failed to pass it talk more of signing into law.

This is nonsense. On a certain level, no money can be spent without appropriation by the legislature but just as the government spend its tax revenue to meet its spending needs, it can spend the recouped money in the same manner. There is no requirement for a special appropriation process .

The reality is that the recovered loot is grossly exaggerated and does not amount to much. Hence the government has to resort to borrowing.

It depends on what the debt is used for e.g if properly spent on capital investments to diversify the economy then it is justified, but if not then that's the trouble.

Also the bigger issue here isn't Nigeria's debt to GDP but Nigeria's debt repayment ratios. We are now spending a significant amount of each budget to finance existing debt leaving less and less for capital expenditure.

Amoto94:
This is not good for a country seeking diversification of its economy.

ephi123:
Very soon it will climb to 100% of GDP. Nonsense

Nigerians underestimate how government debt can spiral out of control. From 12% to GDP in 2015 to 24% to GDP in such short order is a sign of out of control spending.

Yes, I know some folks will be quick to draw parallels with industrialised countries with higher debt to GDP ratios - Japan has 240% public debt to GDP ratio - but we are not an industrialised country. The interest rate our debt attracts should make this clear.

If we borrow in our domestic currency, we might retain some control over our debt but we risk increasing the market interest rate and crippling the domestic economy. This is because higher government borrowing leads to banks focusing their lending on the government at the expense of businesses.

If we borrow in a foreign currency, we incur exchange rate risk. A billion dollars today may mean N380bn today but N1 trillion in 5 years time as the Naira depreciates.

The reality is that we need to keep spending in control as Okonjo Iweala said in 2015. You cannot spend your way out of a currency crisis. I understand the need for infrastructure but the hurdle rate of return (particularly for a Nigerian government project) is insurmountable to make borrowing worthwhile: These infrastructure projects will not generate sufficient economic growth to produce enough tax revenues to cover the costs of the debt used to finance them. Reality is different from theory.

We need to rely on structural reforms to do the heavy lifting to get our economy on a faster growth path: deregulation, tax reforms and a genuine crack down on corruption. The fixed exchange rate regime needs to go and the government should look to selling/privatizing assets.

IDEKEALUMONA:
Caused by Useless govt of GEJ and PMB.

GEJ was recklessly borrowing even at the time of oil boom and nothing to show except some micro interventions like almajiri school blocks.

PMB came,dashed all hopes and took cluelessness to next level

GEJ and PMB have made OBJ a hero.

DID I HEAR YOU WELL?

4Play:
Nigerians underestimate how government debt can spiral out of control. From 12% to GDP in 2015 to 24% to GDP in such short order is a sign of out of control spending.

Yes, I know some folks will be quick to draw parallels with industrialised countries with higher debt to GDP ratios - Japan has 240% public debt to GDP ratio - but we are not an industrialised country. The interest rate our debt attracts should make this clear.

If we borrow in our domestic currency, we might retain some control over our debt but we risk increasing the market interest rate and crippling the domestic economy. This is because higher government borrowing leads to banks focusing their lending on the government at the expense of businesses.

If we borrow in a foreign currency, we incur exchange rate risk. A billion dollars today may mean N380bn today but N1 trillion in 5 years time as the Naira depreciates.

The reality is that we need to keep spending in control as Okonjo Iweala said in 2015. You cannot spend your way out of a currency crisis. I understand the need for infrastructure but the hurdle rate of return (particularly for a Nigerian government project) is insurmountable to make borrowing worthwhile: These infrastructure projects will not generate sufficient economic growth to produce enough tax revenues to cover the costs of the debt used to finance them. Reality is different from theory.

We need to rely on structural reforms to do the heavy lifting to get our economy on a faster growth path: deregulation, tax reforms and a genuine crack down on corruption. The fixed exchange rate regime needs to go and the government should look to selling/privatizing assets.

Very comprehensive comment, good read.

I don't even have an issue with debt because it can be a good thing if managed well. Also, if the borrowed sums were being used for infrastructure and key development projects which would eventually pay for themselves then it makes sense. But no, a good chunk of this money ends up in individuals' pockets e.g. the grass cutter who spent millions on such a ridiculous task. APC should please not mortgage Nigeria into oblivion.

ttmacoy:
It depends on what the debt is used for e.g if properly spent on capital investments to diversify the economy then it is justified, but if not then that's the trouble.

Also the bigger issue here isn't Nigeria's debt to GDP but Nigeria's debt repayment ratios. We are now spending a significant amount of each budget to finance existing debt leaving less and less for capital expenditure.

Hmmm. This surely cannot be sustainable, we are really not in a good place at all.

4Play:
Nigerians underestimate how government debt can spiral out of control. From 12% to GDP in 2015 to 24% to GDP in such short order is a sign of out of control spending.

We need to rely on structural reforms to do the heavy lifting to get our economy on a faster growth path: deregulation, tax reforms and a genuine crack down on corruption. The fixed exchange rate regime needs to go and the government should look to selling/privatizing assets.

More evidence to prove that the current finance minister is clearly out of her depth.

maxiuc:
one carton of orijin bitters for. Infact I go give you my sis come marry her all expenses paid

Love u reasoning

Haha. She fine ?

Tinyemeka:
More evidence to prove that the current finance minister is clearly out of her depth.

The govt has no business in running airports, for real! Most things should be given to the states. Every state should manage all roads in their "territory" and there's lots more I don't even want to mention. Just to be in control, presidents have failed to see how this country can move forward by putting power in the hands of the states.

ephi123:
Very comprehensive comment, good read.

I don't even have an issue with debt because it can be a good thing if managed well. Also, if the borrowed sums were being used for infrastructure and key development projects which would eventually pay for themselves then it makes sense.

Development projects such as?

The initial poster you quoted also said this:

4Play:
The reality is that we need to keep spending in control as Okonjo Iweala said in 2015. You cannot spend your way out of a currency crisis. I understand the need for infrastructure but the hurdle rate of return (particularly for a Nigerian government project) is insurmountable to make borrowing worthwhile: These infrastructure projects will not generate sufficient economic growth to produce enough tax revenues to cover the costs of the debt used to finance them. Reality is different from theory.

So the GDP will not increase by 2018.

Tinyemeka:
Development projects such as?

The initial poster you quoted also said this:

I will assume you are not being sarcastic by asking that question.

Does Nigeria have 24-hour electricity? Does Nigeria have a functional railway transportation system across the whole country? Are our educational institutions up to scratch? Same with healthcare systems?

All those things are what make up an environment attractive to investors to come in and invest, and money is required to put such things in place.

Every time price of oil.
Let the north bring all the resources in their region to the table for benchmarking. Yet they want to rule Nigeria forever with no single contributions from all the resources in the north, and Buhari is been borrowing to go for treatment in London hospital which results in killing Nigeria economy and increasing debt rates.

Within two years, one of APC government achievement is increasing debt by 100%, that's from 12.1% to 24.1%....

What a change!

These fellas keep harping on Debt - GDP ratio, whereas we should be taking about the Debt service ratio. Nigeria currently uses 66% of her Revenue to service Debt annually and because the economy is still recording negative GDP figure's per quarter, they don't want to risk increasing revenue via tax thus impoverishing the people even more. So its a tricky situation, the real problem now is how to utilize the debts to be able to spur revenue generation to an improved level.
It makes no sense when 66% of your income goes to settling your debtors, what then is left to improve the economy via capital infrastructure? With these new projection and a stalled revenue qoq, when do we stop borrowing? is it when we now use 85% of our revenue to service debts?

Join other nigerians for meaningful discussions and arguments on economic issues such as these on WhatsApp with this link https:///EFyFRvB7bRWHHhhiyJ8z4G

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Amoto94:
The money can't be used without the backing of the law and there's a bill to that effect but NASS have failed to pass it talk more of signing into law.

When will all these excuses end?