₦airaland Forum

NNPC GMD explains how 32m consumption per day is very reasonable based on a report that in 2007. there were 31 passenger cars for every 1000 Nigerians.

Pipeline vandalisation in the SS and SE: what's their solution? (no pipeline vandalization in north)

They had to shut down pharcourt refinery because they were losing 35% of the crude they paid for. It will discourage any private person from coming to refine in this country.  So subsidy removal is not the key to that. The question is: what is the solution?

"Kaduna Refinery is not working optimally because we cannot sustain crude supply (pipelines are vandalized constantly)

3 refineries combined will produce 23 milliion liters of petrol, 9 million liters of fuel

Turn around maintenance of refineries can only take place in the dry season.

Naira dollar exchange rate is also a factor.

80% of the cost of petrol is accounted for by the price of crude oil.

claremont:
My female work colleagues hit me, I hit them as well; sometimes I even go beyond hitting them on the Bottom, and do other things. We see it as just mild flirtation, some people may see it as s-exual harrassment. Different strokes!

Just make sure you limit your sexual harassment to those that harassed you in the past. That's all.

PapaBrowne:
A better way to run it would be a Public Private Partnership based on the stated model such that the Government is the Public Partner and the Community is the Private partner. The teachers would continue to get their salaries and allowances from the Government while the Private parties would focus their energies on providing better learning experiences for the students.

Can you explain how this might work? It appears as if this approach won't allow private operators to sack lazy and uncooperative teachers so they can hire better teachers and improve the performance of the school.  If the benefits of privatization are lost (competition, exposure to market forces), it defeats the purpose.

Iolo:
Nice plan but difficult to pull off in Nigeria. Here are potential bottlenecks:

1. I firmly believe the Nigerians masses won't be in support of this. Its going to be xtremely difficult explaining the benefits of such a system when the masses just want to do everything. They really don't want to be involved in anything more or less schools dat were once the standard but have been left to rot by corruption and negligence. The perfect question would be why can't your govt fix things?

The best way to get people to support this is to privatize one public school in this manner. When it works, it will be easy to sell the idea to residents of other areas.

2. The teachers unions, labors unions would be against for reasons in 1.

The solution to that problem is easy. Sack them all and hire non-union teachers.

3. How do you keep track of each citizen? Do you just use mouth to give the shares of how exactly?

Door-to-door visits, passport photos and fingerprints.

I think there's going to be a really thin line between this and the government basically sayin you guys are on your own. Develop your schools yourself

If we convince the masses first, it will be more like "give us the schools and let us run them ourselves!"

5. Residency issues. We are poor record keepers here. What happens if I change location etc.

The share grants will be a one time thing for people living in the community at a particular time.  You'll continue to hold the shares unless you sell them. It doesn't matter much; most people won't change location.

4. What if I don't want any shares? What if I want to sell my shares? Can they be sold? Thru what medium?

I'm working on the answer to that question.

For a small private company like a school, it's actually ideal to have a small number of active shareholders who can actually influence the management of the school because they own a significant percentage of the shares.  For a large public university going private, you can just float the shares on the NSE, though the approach discussed on this thread won't work for them at all.

It's a dumb idea that most developed countries have not been able to avoid, because essentially, you are paying people to be jobless.  If you pay people to be jobless, then more people will want to be jobless.  Some of them would rather manage the amount than find something to do. It's dumb. Besides, most unemployed people have families to depend on. And those that don't have families can be helped by private charities. This sort of thing will increase unemployent and destroy family relationships and people's desire to help the helpless (if the govt is helping them, why should I care?) So even in the ideal situation, assuming there's no corruption at all, it's still a dumb idea.

She was trying to say they continued to work in spite of the strike.

Is it still on?

Hi. Thanks God the strike is over now. What are your buy and sell rates at the moment? Thanks!

What's the current BDC buying and selling price of the dollar?

What are your current buy and sell rates?

debosky:
Nigerians are not resigned to anything - we are simply tired of all these 'schemes' which neglect the core issue which IS corruption.

That is a very challenging issue, but if I stumble on any good idea related to this, I'll share it.

Great idea!

Quite a silly idea - Why sell this week when I can wait four weeks and get a GUARANTEED higher price?

God question.  Imagine that under normal conditions, you're supposed to buy at 1000 liters at 55 Naira and sell at 65 Naira for a guaranteed profit of 10 naira per liter or 10,000 naira.  If you hoard the fuel for one month, you'll be able to sell at 68.4 naira or 13,400 naira profit.  So you'll make a bit more.  But the problem for you is that you would have made 100,000 naira during that same month by turning over your inventory 10 times instead of hoarding the fuel.  Hoarding is not worth it unless you can make more than what you would have made by selling normally. And a gradual increase in price over a long period of time minimizes the amount you can make by hoarding relative to the cost of hoarding.

naija traders are not scrupulous or rational.

You can't really succeed in business if you're consistently irrational. If 80% of Nigerian traders are irrational, and only 20% are rational enough not to increase prices beyond what the minute increase in petrol price merits, then consumers will only patronize the rational 20%, since they will always buy from the cheapest source. This will force the irrational 80% to reduce their prices in order not to go out of business. It's a self-correcting problem.

2. Marketers will take advantage of d situation. Eg sell only 4 days in a week and hoard for the next 2 days in order to make more profit the next week.

That's absurd. How will 85k per liter compensate them for profits lost by closing shop for 2 days every week?

whirlweend:
Then we shall be faced with the problem of scarcity, as dealers will just accumulate and hoard products and sell at a future date, to make excessive profits.

Hoarding is unavoidable if the subsidy is ever to be removed. But a gradual increase minimizes the profits that can be gained by hoarding because to make significant profits you will have to tie down your resources (tankers, etc) for a very long time.  If a marketer is making significant profits in the normal course of business, then hoarding may not be as profitable as providing a normal service over the same time period. The only way to eliminate hoarding completely is to eliminate the subsidy right now, but we can minimize it using this approach.

toba:
it wouldn't work cos prices of goods and services will skyrocket almost daily

Prices will go up slightly once in a while, but they won't go up sharply like what we saw earlier.

The best way to remove the fuel subsidy

If the fuel subsidy must be removed, then the most humane way to remove it is to adjust the price by a very small amount every week for a few years. This will give the masses (poor individuals and small businesses) enough time to adjust to the removal of the subsidy with minimal hardship.

If the current true cost of petrol is ₦141 per litre, then in 3 years at an average inflation rate of 12% the true price of petrol should be about N198.1 per litre.  If we start from 65 naira, and increase the fuel price by just 85k every week, then within 3 years, the subsidy would be gone.  If we start from 65 naira and increase the fuel price by ₦1.07 every week, the subsidy will be gone in 2 years. If we increase the fuel price by ₦1.78 every week, starting at 65 naira, the subsidy will be gone in 1 year.

According to some reports, the NLC is fighting for an initial price of 90 naira. If we start at 90 naira, then we only have to increase the pump price by 69k per week to remove the subsidy in 3 years, 83.5k to remove it in 2 years, and N1.31 to remove it in a single year!

If the price of fuel is increased by such small amounts every week, most people will be able to cope, because the sudden inflation in prices we've seen won't be. Instead of prices going up all at once in every sector, price increases will happen gradually over a very long time.

During those years, people will be able to replace their petrol generators with diesel generators, import diesel-powered cars and more fuel efficient cars to replace petrol guzzlers. Every business will have enough time come up with new ways to cut costs and increase their productivity.  The privatized power sector would start working better and better, so the need for petrol to power small generators will gradually disappear.

Some people have considered a phased approach: increase the price from 65 naira to 90 naira, then 120 naira, and finally, deregulate. That's a mistake because it will lead to hoarding. If fuel price is to be increased to 90 naira per litre next week, marketers won't want to sell at 65 naira per litre this week because of the huge profits they can get by doing nothing (N25/l). The same thing will happen sometime before the price is increased to 120 naira and sometime before full deregulation.

A more graduated increase in the fuel price will eliminate the problem of hoarding, because you would have to hoard the fuel for a very very long time to achieve significant profits.  For example, if the price is increased by 85k every week, you would have to hoard the fuel for more than 7 months, to earn the same N25/l.  During that time, a marketer selling regularly would have made more than that. So, a weekly price bump is better than a 3 step price bump, because sharp increases in pump price encourage hoarding, causing fuel scarcity.

Summary: Starting at 65 naira, if the price of petrol is increased by 85 kobo every week, the subsidy will be gone in 3 years. If the fuel subsidy must be removed, this is the most humane way to go about it. This is probably what we should be fighting for.

Other ideas:
- Increase Petrol Price By 85 Kobo Every Week For 3 Years
- Privatize Public Schools And Distribute Their Shares To The Masses

A private cowbell-award-winning secondary school located on Ota, Ogun State - home of Covenant University and Obasanjo Farms - is in need of smart, honest, and dedicated hostel masters and hostel mistresses to manage their male hostel and female hostel. They should be firm but kind, incorruptible disciplinarians who love to work with children. Candidates should have a bachelor's degree, H.Nd, or NCE with relevant experience.

<<This Vacancy Is No Longer Open>>

proudly9ja:
I'm not an expert but quick question, how do you hope to fund the schools.

Primarily fees. They can also lease out their properties (land, classrooms) to churches, etc after school hours. For capital projects, they can obtain loans using their land and other property as collateral.  They can engage in related businesses too.

If the students are to pay fees, why would the school fund scholarships for poor children?

Schools will fund scholarships for poor children to raise their academic standard and give their poor shareholders an opportunity to send their children to school, too.  They will look for ways to reduce the cost of education so they can charge lower fees. Necessity is the mother of invention.

In addition, with all due respect to current principals in public schools, are you sure they can manage such a  business?

Some may be capable, but others won't be. In theory, if they are incapable, the directors of the school will sack them and recruit a capable replacement. if they don't, then the shareholders will vote them out. In practice, it may take some time for the shareholders to start exercising their power.

PapaBrowne:
You guys mights want to check out this site. There's a lot of information in there regadring Private Education for the poor.
That site informs that 50% of the poorest Lagosians attend Private schools!

http://www.enterprisingschools.com/markets/africa/nigeria

Wow, great link! It's interesting that the Lagos State government is trying to shut the schools down.

@Uyi Iredia: Let me address your lengthy post!!

The cost of government in Nigeria is best achieved by removing redundant parastatals and officials and cutting down on habitual extravagant spending.

Good luck with that.  If you remove redundant parastatals today, what stops the national assembly from creating new redundant parastatals tomorrow?  If you cut some forms of extravagant spending today, what stops officials from finding new ways to waste money?  If you spend all your time fighting the government to achieve these goals, and you are not corrupt, then what's in it for you?  Where will you find the time to fight a never-ending battle you can't personally gain from?  Why should a govt official continue to serve the people selflessly and efficiently if he cannot reap the fruits of his labor (unless he's pocketing the savings, which is corruption)?  Those incentive issues are the reason why it often makes sense to privatize. It's about setting up a competitive system where individuals have very strong incentives to do what's best for society. In the private sector, the profit motive motivates you to reduce costs to maximize profits, but competition motivates you to maximize quality to keep your customers.

This shows that government will inevitably have to take the bull by the horns and tackle its inefficiency instead of lazily pushing the burden on the private sector.

Actually, I think it's lazy for us to sit on our bums waiting for the government to solve our problems. The government is not God and it's not Father Christmas. Whatever the government gives you or does for you will be paid for by your taxes, so it's not magic.  Even if you don't pay taxes because you're poor, whatever the govt does for you will prevent the govt from doing other things which may be more important.  Our government can't maintain law and order, can't prosecute crimes, can't do the basic duties of government, so should it waste time and money doing what we can do? Food is more important than education, because a dead man can't learn. Yet the government doesn't grow food for us. So why education?

I attend a private university that was built by contributions from the poor as well as the rich. A considerable amount did not benefit from their contribution. Your proposal here is idealistic especially when I consider that schools don't make quick profit.

That's Covenant University, right?  Yes, many poor people contributed to that school, but the fact is that they were not given shares in the school proportional to their contribution. As a result, they have no power to influence the policies of the school, because they have no shares!  They can't pressure the chancellor to reduce the school fees, because they don't have the right to attend shareholder meetings.

My proposal is to fix that in two ways: (1) granting shares to the masses (2) granting the same number of shares to the poor and the rich so the rich won't dominate the votes during shareholder meetings, so the poor can strongly influence the policies of the schools.

manny4life: Fairfax City has 20 school including elementary, middle and high schools, the principals of that schools are CEO while Parents/Teachers are Boards. In Fairfax City, you have about 500,000 between ages 18+ (aged required by law to hold a not-for profit share), so we have 500,000 shares evenly distributed amongst these citizens. So what you're suggesting is though these schools are "for-profit", shares cannot be purchase but transferred?

People should be able to sell their shares if they want to, but the initial distribution will be voluntary.  For this example, Fairfax city can be divided into 20 zones based on proximity to the public schools. Each zone will have 25,000 adults only, and they'll each get one share to the school in that zone.

manny4life:
Having everyone being a part of a school system means too much hands in one basket. Rather than that improving the system, it will cause more chaos than good. Using a Limited  Liability Company, these people are bound to votes so how does this address the conflicts of interest?

Many well-run companies have thousands of shareholders, for example: Dangote Cement, GtBank, IBM. In a limited liability company, shareholders don't run the company directly. They run the company indirectly by voting for directors they trust. The directors control the company by appointing key officers like the CEO.  So giving one share to every adult member of a community won't lead to chaos. If most of the shareholders can't physically attend meetings, they can select proxies to attend shareholder meetings and vote on their behalf. Corporations are designed to scale.

Blackteeth:
if shares are given to poor people can they raise the needed massive capital to provide those learning facilities and other expenses involved to make the schools up to standard?

Learning facilities don't have to be expensive to be effective. Second-hand textbooks are as effective as new textbooks, but cheaper. A educational DVD shown on a cheap TV is as effective as an excursion or lab visit, but much cheaper. A class with 50 well-behaved students per class is as effective as a class with 20 disruptive students per class, but cheaper. There are many ways to keep education affordable for poorer students, if you really want to.

Nnamsco4real:
what is the essence of government if every sector becomes privatalised? Still wondering

Maintaining law and order:
- A police force that is effective and not corrupt.
- A judicial system that tries cases quickly and thoroughly so that people don't stay
in jail for up to 7 years awaiting trial as happens in Nigeria.
- Creating fair laws that encourage enterprising people to move society forward.

OAM4J:
@Seun

I couldn't vote because I don't want subsidy back to N65, I also don't want it removed at once. My stand is a phased removal tied to government performance over a period of 1 - 2yrs.

Yes, but if you must choose between the two, which do you think is the lesser evil? Vote for that.

76% of Nigerians online want the fuel subsidy back so they can buy petrol at N65/liter.
24% of Nigerians online want the fuel subsidy removed so the govt can spend the money as promised.

What's your stand?  Visit http://subsidy.nairaland.com/ to vote (requires Javascript)