ahiboilandgas:
Lebanese Banking System
Revenue into Lebanon began to dry up due to upheaval which pushed officials to engage in creative financial engineering to keep the Lira stable. To maintain an illusion of stability and incentivize deposits, banks offered interest rates as high as 14%, which in turn required more deposits to pay the high interest rates, creating a Ponzi scheme.

Na wa

DexterousOne:


Na wa

look closely Nigeria state is currently exhibiting all the signs ,from corruption,to Inflation,to unstable currency to dollaraizarition to electricty shortages

As Lebanon’s economic unrest continued, those holding Lira rushed to buy dollars, driving the black market exchange rate as high as 10,000 Lira per dollar, up from the official peg of 1,507, devaluing the currency by 85%.

Banks began to limit withdrawals of U.S. dollars, first to $300 and then to none at all. Merchants started to refuse to take payment by cards for fear that banks would not honor the payments.

Lebanon may not have been facing a dire choice between paying its foreign creditors and buying bread as suggested by Prime Minister Hassan Diab, but the country’s dollar reserves are indeed critically low, economists tell Al Arabiya English.

In electing not to pay the $1.2 billion Eurobond

More dollars loan by pmb/amechi put Nigeria in more risk of deflauts

As of January, the Central Bank of Lebanon listed its foreign currency holdings as about $29 billion. However, following Monday’s default announcement, Finance Minister Ghazi Wazni told news station LBCI that $7 billion had been given to local banks to help them cope with their liquidity issues.

Of the remaining amount, $18 billion is set aside as an emergency reserve.

“So, in effect, you have $4 billion left -- that is very, very low, so you could say if you use

Our dollars debt is around 80bn dollars while reserves are 34 bn dollars .....we are in already in negative territories similar to Lebanon

For many years, the Central Bank had subsidized the official peg locking in the exchange rate at 1507 Lebanese lira to the dollar, but in recent months, with the supply of dollars dwindling to critical levels, the peg has slipped, with the unofficial exchange rate rising to more than 2500 lira to the dollar. The dollar shortage has caused problems, in particular, for importers, who must pay for their supplies in dollars.

The Nigeria state has been following same routes since buhari came on board....so offical rate 390 (scare) while black markets is 470 (very available) .....meaning fdi and fpi will stop investing and 25 bn dollars remittance by disporary will disappear cos no body will change at 390...

So local fixed income investors we should have a broader understanding of the investments we are doing.....a low tb rate is even good for sustainability of the scheme, a devalued or liberalized Naira ia good for stability of inflow of forex to the system , a corrupt free Nigeria is good for the stability of everbody (rich ,poor, investor,consumer,working ,retired).........my final strategy....try and hold much PHYSICAl ASSET that u have control over ........Gold ,income generating properties, machineries, physical dollars etc .......

ahiboilandgas:
Our dollars debt is around 80bn dollars while reserves are 34 bn dollars .....we are in already in negative territories similar to Lebanon

Do you have any idea howmuch is Nigerias yearly free cash flow, I mean net annual income minus maintenance expenses (like salaries and not roads). Cos if our free cash flow can pay d debts in about 3 years or less then it is not much of a problem. I assume.

Worst case, we stop any developmental activities for 3 years and liquidate d debts.

Our inflow has been dwindling over the years, just when it began to rise again, Covid19 came and took us all down.

I believe there is still a global crisis ahead and Nigeria will feel the aftershock. I do not believe having even physical properties will be enough to stem the tide, if a tenant cannot pay his rent, even if you evict him no guarantee the next guy will also be able to pay.

The low TB rate even though it hurts us in this thread particularly, I think CBN had to make that decision.

ositadima1:


Do you have any idea howmuch is Nigerias yearly free cash flow, I mean net annual income minus maintenance expenses (like salaries and not roads). Cos if our free cash flow can pay d debts in about 3 years or less then it is not much of a problem. I assume.

Worst case, we stop any developmental activities for 3 years and liquidate d debts.

ahiboilandgas:
So local fixed income investors we should have a broader understanding of the investments we are doing.....a low tb rate is even good for sustainability of the scheme, a devalued or liberalized Naira ia good for stability of inflow of forex to the system , a corrupt free Nigeria is good for the stability of everbody (rich ,poor, investor,consumer,working ,retired).........my final strategy....try and hold much PHYSICAl ASSET that u have control over ........Gold ,income generating properties, machineries, physical dollars etc .......

Oga ahiboilandgas, you have made some valid points. Nigeria should work hard to put things in order before it gets too late. This is exactly why it is somehow risky to have portfolios in foreign currencies in Nigeria. FG could default in paying eurobonds and others, but certainly not those with naira investments.

On the other hand, dollar is holding the entire world hostage, not just Nigeria alone, and this had been going on for so long... China, Russia, EU and other world powers are already making progress to do away with dollar's hegemomy. Virtually every country has a problem with dollar against their local currencies and the rest of the world has had enough.

FG should allow Emefiele sanitize our monetary system, Emefiele and team certainly knows how to protect our economy and naira, but Emefiele don't have words of his own, I used to believe CBN is an independent body of its own, not until this present govt came onboard. Soludo and Sanusi made lots of decisions on their own to protect our monetary policies, but we are yet to see Emefiele make such bold steps without receiving calls from Abuja.

I don't think we should be worried about Chinese loans and other foreign loans at the moment, things are still under control, but we mustn't throw caution in the air... If we had invested all these foreign loans judiciously, building critical infrastures, we ought to have been doing well paying back the loans from profits gained from these infrastructures.

Donbrig:
Oga ahiboilandgas, you have made some valid points. Nigeria should work hard to put things in order before it gets too late. This is exactly why it is somehow risky to have portfolios in foreign currencies in Nigeria. FG could default in paying eurobonds and others, but certainly not those with naira investments.

On the other hand, dollar is holding the entire world hostage, not just Nigeria alone, and this had been going on for so long... China, Russia, EU and other world powers are already making progress to do away with dollar's hegemomy. Virtually every country has a problem with dollar against their local currencies and the rest of the world has had enough.

FG should allow Emefiele sanitize our monetary system, Emefiele and team certainly knows how to protect our economy and naira, but Emefiele don't have words of his own, I used to believe CBN is an independent body of its own, not until this present govt came onboard. Soludo and Sanusi made lots of decisions on their own to protect our monetary policies, but we are yet to see Emefiele make such bold steps without receiving calls from Abuja.

I don't think we should be worried about Chinese loans and other foreign loans at the moment, things are still under control, but we mustn't throw caution in the air... If we had invested all these foreign loans judiciously, building critical infrastures, we ought to have been doing well paying back the loans from profits gained from these infrastructures.

i luv ur points dollars holding the world hostages.....dollarlization of global trade after 2nd world war is the greatest scam ever plus the paparlization of money ....it put Americans at a perpetually advantage...

For the Nigeria state (may be some readers in govt are here)...the foreign exchange demand of the economy should be look into critically .....un important items must not be funded ....item like hajj operations, tourism travels , unnecessary foreign education in countries as par with Nigeria (sudan ,eypty,togo India etc)...Then local food production should be encourage....unessary food chain like kfc, shoprites ,etc should not be encourage (we can do all that )

I do not think CBN has funded any of these things in recent times, or have they? They do not even fund BDC for now.
As for food chains and co, it seems to be in line with conglomenrate (logobens) position also.

As for the pegging of nation's currency with dollar, only Europe has the boldness to want to use another currency, any other nation that tries it will go the way of Saddam Hussein and Ghaddafi.

ahiboilandgas:
For the Nigeria state (may be some readers in govt are here)...the foreign exchange demand of the economy should be look into critically .....un important items must not be funded ....item like hajj operations, tourism travels , unnecessary foreign education in countries as par with Nigeria (sudan ,eypty,togo India etc)...Then local food production should be encourage....unessary food chain like kfc, shoprites ,etc should not be encourage (we can do all that )

DexterousOne:



Thank you for sharing

You're most welcome!

ojesymsym:
I do not think CBN has funded any of these things in recent times, or have they? They do not even fund BDC for now.
As for food chains and co, it seems to be in line with conglomenrate (logobens) position also.

As for the pegging of nation's currency with dollar, only Europe has the boldness to want to use another currency, any other nation that tries it will go the way of Saddam Hussein and Ghaddafi.

we might not go the Lebanon way cos we eat a lot of local food infact Nigerians can do without foreign food items ..we can live on yams ,patatos,beans,cow meats ,beef local chieckens ,palm oil locally made....

ositadima1:


Do you have any idea howmuch is Nigerias yearly free cash flow, I mean net annual income minus maintenance expenses (like salaries and not roads). Cos if our free cash flow can pay d debts in about 3 years or less then it is not much of a problem. I assume.

Worst case, we stop any developmental activities for 3 years and liquidate d debts.

we dont have any free cash ...all revenue =equal to salaries and overhead plus debt service)...all capital projects comes from futher debts and loot recoveries, ppp, private citizen's,tax credits,donor..... ( no single money for capital projects outside this source)....unless we suspend the state (civil and public service) and paid up debts only for 5 years ...

For every N100 shared to the Osun State government as revenue allocation from the federation account (FAAC), N91 has deducted to service its debt, a pointer to how the state’s fiscal crisis has moved from bad to worse.

The southwestern state has been grappling with years of backlogs of unpaid salaries owing to what analysts described as failure of the government to judiciously harness the revenue potentials of huge human and capital resources, and fresh data emanating have painted a clearer picture of how worse its financial position has got. The state may even be on the brink of seeking life support.
Of the N6.44 billion obtained as revenue from FAAC in the month of January through March, Osun State spent a whopping 91 percent or N5.87 billion of the amount servicing its debt, according to data compiled by BudgIT, a non-governmental organisation that tracks fiscal expenditure of the government.
That’s seven times more than the amount Yobe, a state with a similar size to Osun, spent as a deduction for debt in the period. It is also the highest deduction done ever on any of the 36 states as a percentage of FAAC, showing how terrible the fiscal situation of the state is at present.
“It simply means that the state is insolvent,” said Cheta Nwanze, lead partner at Lagos-based risk consultancy SBM Intelligence

“Either now or soon enough, the state government will no longer be able to meet its obligations to the people. And one of the things that may arise from that is either social unrest or more people leaving the state,”
A 91 percent federal allocation deducted in servicing the states debt profile would leave the state with only about 9 percent of the revenue to be used as expenditure on health, education as well as other financial obligations for its over 4.6 million people, according to BusinessDay estimate.
This burden on the state could have been a bit lighter but for the government’s inability to look inward and grow its stream of internally generated revenues.
In terms of IGR, the state like many others is also not faring any better either.
Data from the National Bureau of Statistics show that in the whole of 2019, Osun raked in N17.92 billion as revenues generated internally.
This figure represents about 42.5 percent of the total N42.14 billion (FAAC+IGR) the state printed as revenue for the period.
Like others, it could be deduced from the data that revenue gotten from FAAC accounts forms the larger chunk of its total revenue, accounting for close to 58 percent of revenues generated within the period.
With the heavy deduction from the state’s allocation in the first half of the year, analysts believe the state may be in for a tougher time than what was seen before.
For the analysts, they expect a fall in government expenditure, an additional pile-up of salary backlogs, increasing poverty levels in the state, widening inequality, a threat to livelihoods of Osun populace and a further fall in the standard of living to be worsened by the government inability to raise more debt due to a lack of financial viability as well as the coronavirus pandemic which has taken a toll on both federal and states revenue streams.

With a total debt profile of over N170 billion already, Osun state ranks as the sixth most indebted state in Nigeria and is too insolvent to borrow more because of its lack of economic viability to repay.
A $20 million World Bank grant obtained in early 2019 to revamp its health sector has also raised serious controversy by members of the states National Assembly, claiming the money has not been judiciously utilised by the government as many hospitals in the state are still without drugs, appropriate working facilities and understaffed.
The state has slashed its 2020 budget to N82 billion from an earlier planned amount of N119 billion due to the fiscal challenges occasioned by the pandemic, and even at that amount, analysts doubt the state’s capacity to effectively fund the budget.
With a total of 605 confirmed coronavirus cases of the virus out of which 329 have been discharged while 13 died of the virus as of 8th August, according to NDDC data, the state is battling to contain its increasing infection rate so as not to overwhelm its frail health sector.
Osun state might be one of the several cases of states whose finances are on the brinks of insolvency due to a high debt burden compared to revenue, but it is certainly not the only state sailing on that boat.
Due to the inability to generate revenues, many Nigerian states are highly indebted and this singular act has pushed the country’s debt at a record high of N28.6 trillion as at end June, according to data from the Debt Management Office (DMO), of which
Further analysis of the data put forth by BudgIT shows that Lagos, Osun, Plateau, Cross River Ondo, and Bayelsa have the highest FAAC deduction within the period.
The aforementioned states with net FAAC allocations of N25.23 billion, N6.44 billion, N8.53 billion, N8.02 billion, and N35.14 billion, had N15.92, N5.87, N5.18, N5.06, N4.59 and N4.55 billion deducted respectively.
On the other hand, states of Yobe, Jigawa, Anambra, Enugu, with net FAAC allocations of N12 billion, N13.74, N12.34 billion, and N12.09 billion, had the least deduction of N820 million, N1.04 billion, N1.1 billion, and N1.31 billion respectively.

ahiboilandgas:
Our dollars debt is around 80bn dollars while reserves are 34 bn dollars .....we are in already in negative territories similar to Lebanon

Are sure?

I'm not sure it's that much

Maybe you mean our total debts

Foreign debts alone $80b?

Aregbesola who wrecked the state is now a commissioner.

One of the sins of Ambode was that he did not release money to Aregbesola during the last election. He urgently needed the money to pay workers salaries and stomach infrastructural development before the election

That should spurn the state to look inward and find a way to increase their IGR.
Most of those money we are told was spent on infrastructure although not money generating infrastructure. Osun is a state suitable for a lot of agriculture, agroalied and processing of Agric products. They should forget abuja money for now and look inward.

ahiboilandgas:
...

Sholapey:
Lol...3 different username with same IP address.

Ma, please do you mind sharing the tool used to detect the IP address.
For learning purpose.

ojesymsym:
That should spurn the state to look inward and find a way to increase their IGR.
Most of those money we are told was spent on infrastructure although not money generating infrastructure. Osun is a state suitable for a lot of agriculture, agroalied and processing of Agric products. They should forget abuja money for now and look inward.

Where is that man called Nigeriansaredumb. They owe you 2, 3, 4, 5, 6 months, u still dey go work. Who is to blame in this case? That is why these governors do owe salaries nah.

If every one conserned sits at home, will the governor be able to run all their jobs by himself? Will d governor be able to replace every one? If someone can easily be replaced that means his job brings no value in d first place. I tire for my people.

ositadima1:


Where is that man called Nigeriansaredumb. They owe you 2, 3, 4, 5, 6 months, u still dey go work. Who is to blame in this case? That is why these governors do owe salaries nah.

If every one conserned sits at home, will the governor be able to run all their jobs by himself? Will d governor be able to replace every one? If someone can easily be replaced that means his job brings no value in d first place. I tire for my people.

You think it's easy to leave a job? It certainly is not. Leave your job tomorrow. They will have someone new in a month. You can just try it as an academic exercise.

I thought someone said when Naira devalues it will spur industrialization.

We are now at 475, i haven't seen new companies springing up yet, infact some are planning to close.

missjekyll:


You think it's easy to leave a job? It certainly is not. Leave your job tomorrow. They will have someone new in a month. You can just try it as an academic exercise.

If every employee in ur office leave their job(stay at home) cos of nonpayment of salaries I bet you that management will quickly rectify the problem.

It is the only way we protect our selves, acting together for the common good, all this individual complaints is getting boring. That is why we are been taking for a ride by d few.

Lol, It is a gradual process, industrialization doesn't happen overnight. I really like the steps our Vice President is taking to boost small businesses and avoid recession, we will get there, it is a matter of time. Though corruption remains our biggest threat to promise land.

Nigsrdumb:
I thought someone said when Naira devalues it will spur industrialization.

We are now at 475, i haven't seen new companies springing up yet, infact some are planning to close.

EU is doing well in tackling dollar's hegemony in their economy, but watchout for China. China is more frustrated with the dominance of dollar than any country on earth, that is why they are working on their own digital currency and will definitely carry a lot of countries along with them, leaving dollar in a sorry state. One of the reasons Trump is ensuring US companies take over Chinese companies, particularly in high-tech sector.

ojesymsym:
I do not think CBN has funded any of these things in recent times, or have they? They do not even fund BDC for now.
As for food chains and co, it seems to be in line with conglomenrate (logobens) position also.

As for the pegging of nation's currency with dollar, only Europe has the boldness to want to use another currency, any other nation that tries it will go the way of Saddam Hussein and Ghaddafi.

ahiboilandgas:
i luv ur points dollars holding the world hostages.....dollarlization of global trade after 2nd world war is the greatest scam ever plus the paparlization of money ....it put Americans at a perpetually advantage...

Why can't Euro counter this US dollar hostage?. US prints dollars anyhow and expect the world to be chasing what they print locally in the name of exchange rate.