₦airaland Forum

EternalTruths:
Long story that touches the heart

True federalism remains the only sure way out of this tight corner. Though it will take time, but surely it will workout.

Yeah. We need True federalism ~ maybe that will help curtail the fiscal spend-thrifts at some level of governance...but will that also solve the macroeconomic issue Nigeria is currently facing?

Zoharariel:
Chase this western colonial bastard out of Nigeria now before I fly to Abuja to commit murder.

They gave us Boko-Haram in their bid to depopulate us & legalize same sex marriage.

They brought Ebola in their bid to market Zmapp but Obatala disappointed them.

They sold us HIV/AIDS and are making fortunes through their antiretrovirals & condoms.

They crashed the oil price deliberately to keep us under perpetual slavery.

Now, they have come again to lure us into devaluating our Naira.

Buhari, if you like, entertain them and repeat the same mistake you made in 1984. Keep smiling like a Mumu instead of aligning with Russia & China.

Hmmm what a theory?!

I think IMF observations have elements of veracity & credibility. Also, there recommendations are quite plausible and practicable! At least, it's different from the insinuations from some folks on IMF pitching another "Loan with conditionalities" to Nigeria!


However, I think our policy makers, CBN crew, etc should give this a deep thought!

I see another immediate policy priority—strengthen Nigeria’s external position. The essential fact is that, given the structure of the economy, the massive fall in oil prices—which is expected to continue—has changed the medium term foundations for economic resilience. To be clear, the goal of achieving external competitiveness requires a package of policies including business-friendly monetary, flexible exchange rate and disciplined fiscal policies, as well as implementing structural reforms. Additional exchange rate flexibility—both up or down—can help soften the impact of external shocks, make output and employment less volatile, and help build external reserves. It can also help avoid the need for costly foreign exchange restrictions - which should, in any case, remain temporary. And going forward, improved competitiveness from improved exchange rate flexibility and other reforms will facilitate the needed diversification of the exports base and, ultimately, growth.



God bless Nigeria!

.

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3. Achieving inclusive and sustainable growth

The good news is that Nigeria is already, in many ways, a 21st-century economy.
• Think of the boom in mobile communications in a country where more than 140 million cell phones are in use, nearly one for each Nigerian.
• Think of the vibrant, home-grown film industry that has become the world’s second-largest by output. Nollywood employs about one million people who create films that are winning audiences across the continent and beyond.
• Think of the growing number of innovative startups—from fashion to software development—that are promoting Brand Nigeria. Indeed, the growth in services to about half of Nigeria’s output is a testament to the transformation that has begun, and which needs to continue.

But we all know that huge structural challenges remain, despite the many initiatives that are ongoing. Let me highlight the conditional cash transfer scheme in Kano, where poor households receive financial assistance linked to girls’ enrolment in schools. Overall, however, poverty and inequality still remain high, especially in some parts of the country.

Women account for about 42 percent of the total labor force—which is comparatively low—and their literacy rates are well below that of men. Maternal mortality is relatively high because of limited access to health care. Many women and children are dying every day simply because they cannot get to medical facilities fast enough.
With that in mind, what are the key policy priorities? Invest in quality infrastructure, make the banks work, and improve governance. Let me take each in turn:

The first—act with resolve to significantly improve transportation networks and power delivery [i.e., generation, transmission, and distribution]. For example, Nigeria could be exporting tomato paste—a staple of Nigerian cuisine—on a large scale, but it imports about half of what it needs. This is why Nigeria needs to build more roads and better rail networks, so that more farmers can bring their crops to market.

Likewise, more investment is needed in energy infrastructure in a country where too many businesses and households regard their backup generators as their main power source.

The second priority—build resilience by fostering a sound banking system. This will help channel more savings into productive investments, especially in quality infrastructure.

To be sure, Nigeria’s banks are generally well-capitalized and more resilient than during the downturn of 2008-09. But they are beginning to feel the impact of the growing vulnerabilities in the corporate sector. This means rising non-performing loans, which will need to be carefully monitored and managed.

The third priority—act with resolve in fighting against corruption. In his first public speech after the election, President Buhari singled out corruption as a “form of evil that is even worse than terrorism.”

Corruption not only corrodes public trust, but it also destroys confidence and diminishes the potential for strong economic growth.
At the global level, it is estimated that the cost of corruption is equivalent to more than 5 percent of world GDP1, with over US$ 1 trillion paid in bribes each year2.
Here in Nigeria, important initiatives to discourage graft are underway and should be applauded. Let me highlight the publication of monthly data on the finances and operations of the Nigerian National Petroleum Corporation. This provides information on a key sector, building confidence in transparency, and improving accountability of oil revenues, for the benefit of all Nigerians. Much more can—and needs to be—done. Fighting corruption is a multi-year, multi-generational struggle that must be won.

Conclusion

So let me conclude: today your nation has embarked on a new journey. Nigeria is looking ahead, while drawing strength from its assets—the richness and diversity of its culture, the ingenuity of its people, and the belief in a better future.

Today policymakers have the opportunity to address near-term vulnerabilities and medium-term challenges—with resolve, resilience, and restraint. Today the “Giant of Africa” is walking with a spring in her step—inspiring others in the region and across the world.

As the great Nigerian poet Ben Okri once said: “Our future is greater than our past”.
Thank you.
1 World Economic Forum
2 World Bank

Source:

http://www.imf.org/external/np/speeches/2016/010616.htm?hootPostID=a19f086d5e39df1ff3864c267b4782d1

Act with resolve—by stepping up revenue mobilization. The first step is to broaden the tax base and reduce leakages by improving compliance and enhancing collection efficiency. At the same time, public finances can be bolstered further to meet the huge expenditure needs. For example, the current VAT rate is among the lowest in the world and well below the rates in other ECOWAS members—so some increase should be considered.

Build resilience—by making careful decisions on borrowing. Nigeria’s debt is relatively low at about 12 percent of GDP. But it weighs heavily on the public purse. Already, about 35 kobo of every naira collected by the federal government is used to service outstanding public debt.

Exercise restraint—by focusing on the quality and efficiency of every naira spent. This is critically important. As more people pay taxes there will, rightly, be increasing pressure to demonstrate that those tax payments are producing improvements in public service delivery.

Let me give you examples of what I mean:
On capital expenditure, the focus must be on high-impact and high value-added projects. This is why the government is focusing on power, integrated transport (roads, rail, air, and ports), and housing. These can help connect centers of activity across the country and drive growth prospects.

On recurrent expenditure, efforts should be made to streamline the cost of government and improve efficiency of public service delivery across the federal and sub-national governments. Transfers and tax expenditures should also be addressed. For example, continuing the move already begun by the government in the 2016 budget to eliminate resources allocated to fuel subsidies would allow more targeted spending, including on innovative social programs for the most needy.

Indeed, fuel subsidies are hard to defend. Not only do they harm the planet, but they rarely help the poor. IMF research shows that more than 40 per cent of fuel price subsidies in developing countries accrue to the richest 20 per cent of households, while only 7 per cent of the benefits go to the poorest 20 per cent.

Moreover, the experience here in Nigeria of administering fuel subsidies suggests that it is time for a change—think of the regular accusations of corruption, and think of the many Nigerians who spend hours in queues trying to get gas so that they can go about their everyday business.

At the same time, we should not forget the huge challenges facing Nigeria’s state and local governments. These sub-national governments—which account for the bulk of social spending—have only limited tools to manage the impact of declining oil revenues.
My message here is to manage better the smaller purse, while building capacity to increase internally generated revenue.

The IMF can help in that regard by providing technical assistance on public financial management. We did so for the Kaduna State Government. We can explore how to support states’ efforts to undertake budget reform.

I see another immediate policy priority—strengthen Nigeria’s external position The essential fact is that, given the structure of the economy, the massive fall in oil prices—which is expected to continue—has changed the medium term foundations for economic resilience.

To be clear, the goal of achieving external competitiveness requires a package of policies including business-friendly monetary, flexible exchange rate and disciplined fiscal policies, as well as implementing structural reforms. Additional exchange rate flexibility—both up or down—can help soften the impact of external shocks, make output and employment less volatile, and help build external reserves. It can also help avoid the need for costly foreign exchange restrictions - which should, in any case, remain temporary. And going forward, improved competitiveness from improved exchange rate flexibility and other reforms will facilitate the needed diversification of the exports base and, ultimately, growth.

This brings me to my final topic—how can policymakers achieve more inclusive and sustainable growth?

More broadly, Sub-Saharan Africa is also facing spillovers from geopolitical factors, including the fight against Boko Haram. The threat of terrorism is very real and never far from our minds. Having been in Paris during the November attacks, I know firsthand the sorrow that so many Nigerians carry in their hearts.

In this region, terrorism not only takes a human toll but it also makes public finances more fragile. How? By widening budget deficits. Revenues are lower, including from lower growth, and spending needs higher, including for security and for supporting those impacted by the violence. One immediate downside is higher financing needs that can crowd out other essential public spending.

This brings me to my second topic—how can policymakers manage these near-term vulnerabilities?

2. Managing near-term vulnerabilities
Let me start by underscoring the progress made in recent years. Nigerians have created a large and diversified economy that has grown by about 7 per cent a year over the last decade. This has been a remarkable achievement, a testament to Nigeria’s immense potential.

The outlook, however, has weakened. Growth in 2015 is estimated at about 3.2 percent—its slowest pace since 1999—and only a modest recovery is expected in 2016.
For a country with a rapidly increasing population, this means almost no real economic growth in per capita terms.

On top of the slowdown, vulnerabilities have increased. The ability to manage shocks is restricted by low fiscal savings and reserves. And the weakening oil sector could stress balance sheets and put pressure on the banking system.

Reduced confidence and lower capital spending also impact the non-oil corporate sector. Unfortunately, this sector looks less resilient today than during the downturn of 2008-09. Companies that have increased their leverage and US-dollar debt in recent years may now come under pressure as they face rising interest rates and a stronger dollar.

Nigeria also has a large regional footprint, and its fortunes affect that of its neighbors, especially through trade. For example, it is estimated that a one percent reduction in Nigeria’s growth causes a 0.3 percent reduction in Benin’s growth.
So what can policymakers do?



I see an immediate priority—a fundamental change in the way government operates. What do I mean by that? The new reality of low oil prices and low oil revenues means that the fiscal challenge facing government is no longer about how to divide the proceeds of Nigeria’s oil wealth, but what needs to be done so that Nigeria can deliver to its people the public services they deserve—be it in education, health or infrastructure.

This means that hard decisions will need to be taken on revenue, expenditure, debt, and investment going forward. My policy refrain is this:

Introduction

Honorable Speaker of the House, Honorable Members of Parliament, Honorable Members of the Government, Ladies and Gentlemen,
Good morning—and—Happy New Year!


I would like to thank you for the gracious introduction, and Members of Parliament and the people of Nigeria for their incredible hospitality.

I have been looking forward to starting my new year here in Nigeria—and I am grateful for the special privilege to speak before this parliament.

My first visit to Africa as IMF Managing Director was in late 2011, and the first country on my itinerary was Nigeria. At that time, Nigeria was emerging from the 2008-09 commodity price collapse and the banking crisis that followed.

Since that visit, Nigeria has been acknowledged as the largest economy in Africa—with a maturing political system. We saw a peaceful general election last year in which, for the first time in Nigeria’s history, there was a democratic transition between two civilian governments. It was a strong sign of Nigeria’s commitment to democracy, to a new Nigeria.

At the same time, the external environment has changed. Oil prices have fallen sharply; global financial conditions have tightened; growth in emerging and developing economies has slowed; and geopolitical tensions have increased.

All this has come at a time when Nigeria is facing an urgent need to address a massive infrastructure deficit and high levels of poverty and inequality.

So, Nigeria faces some tough choices going forward. Nigerians, however, are well known for their resilience and strong belief in their ability to improve their nation and lead others by example. I firmly believe that Nigeria will rise to the challenge and make the decisions that will propel the country to greater prosperity.

As the great Nigerian novelist Chinua Achebe once said: “If you don’t like someone’s story, write your own.” This is exactly what you are doing right now.
And let me assure you that, as you go forward, as you develop your story, the IMF will support your efforts.

Today, I would like to offer my perspective—on your story and punctuate it with three R’s: resolve, resilience, and restraint.

• I will first identify the global economic transitions that are affecting Nigeria and the region.
• I will then turn to the importance of managing the near-term vulnerabilities facing Nigeria’s economy.
• And, finally, share my thoughts on what might help to achieve more inclusive and sustainable growth.

1. Global economic transitions and implications for Nigeria and the region

So let me start with the big picture. For more than a decade, growth in Sub-Saharan Africa was driven by an extraordinary combination of improved policies, stronger institutions, high commodity prices, and high capital inflows.

The region has now entered a different phase, where commodity prices and capital flows are far less supportive. We are in the process of updating our forecasts, but broadly the IMF staff estimates that regional economic growth dropped from 5 percent in 2014 to about 3.8 percent last year, with only a modest recovery expected in 2016.

There is a similar picture at the global level—modest growth last year, with only a slight acceleration expected in 2016. Emerging markets, which propelled global growth after the 2008 global financial crisis, have slowed; advanced economies are still recovering from the impact of that crisis; and financial markets remain volatile.

In fact, both at the regional and global level, growth is affected by three major economic transitions. They include China’s move to a new growth model, the prospect of commodity prices remaining lower for longer, and the increasing divergence in monetary policy in major economies, especially since the recent rise in U.S. interest rates.

Understandably, policymakers in this region are concerned—because these transitions can create spillovers through trade, exchange rates, asset markets, and capital flows.
For example, spillovers are now affecting oil-exporting countries, which generate about half of this region’s GDP. These economies, including Nigeria, are facing massive pressures and challenging prospects.

Over the medium term, oil prices are likely to remain much lower than the 2010-13 average of more than $100 a barrel. Why? Because of the huge oversupply in global oil markets. Think of the shale oil boom in the United States, and some historically large producers such as Iraq and Iran coming back to the market. Other factors include OPEC’s strategic behavior and the drop in global demand for oil, especially in emerging economies.

Already, lower oil prices have sharply reduced Nigeria’s export earnings and government revenues. Both are likely to remain at depressed levels, reducing the space for policy interventions to address Nigeria’s social and infrastructure needs.
Private sector investment will also be affected. Investor confidence about the outlook has remained weak, and financing is likely to become more difficult and more costly for everyone. With U.S. interest rates expected to continue to rise, albeit slowly, the likelihood of capital outflows will increase, and exchange rate pressures could mount as investors re-assess their appetite for risk.

MathsChic:
Clearly electrical contact issues, resulting in more heat than necessary. That is, the charger is doing more work with the fraction of electricity it's getting. Did it drop on the ground at any time? Smashed? Does any part of it look cracked or dented? If not, you may need to open it up before it goes completely kaputt.

In case you are wondering, elect/elect was my major.

I still hope to get FULL gist on your journey into the finance world someday

Lol


Iyaff well!


Sometimes I hate the game but then I feel it's necessary!


Did I see "love" up there or what


Bro, I think I understand how you feel. Nevertheless, I think you over-shoot too early in terms of emotional and some other investments~and it seems you have good intentions for her ooo~ you even discuss you previous relationship with her (that early)

She is at the losing end: take heart & move on! all the best Bro

>>that love thing, pls how does it do someborry? wanna know~ I think the thing is real sha <<

I think Okechukwu Enelamah – Industry Trade and Investment should be on the list given how important the office is towards our bid to build an export-promotion and import substitution economy.

Awww...soooooo sweet.

If he can afford it without breaking bone, why not

I wish the duo the very best mehn!

captain247:
Fuel subsidy removal is of the advantage when global oil price goes down like its happening now but will be of disadvantage when global oil price goes up.
Say for example, If for now you're buying at #86 per liter with no subsidy and global oil price is $35 by the time global oil price goes up to $60 you'll have to buy at say #120 or more.

Yeah!

And of course, given the present state of our foreign exchange and probably the foreseeable future state(if remedial measure is not taken) with the likely northward fluctuations in the commodity price in the future time, one can only imagine the huge impact it's gonna have on the cost of living~ given that transport cost & production cost are potential transmission channels via which this affects day-to-day living of Nigerians.

I hope the present government will rise up to the challenge; fix our refineries so they could operate at optimal conditions thereby limiting the adverse impact such removal could have on the cost of living of the citizens~ given that we import the finish products at a high cost cum the fact that this is also susceptible to the foreign exchange dynamics.

I strongly hope that as revealed in the budget, measures are on the way to make up for the gap subsidy could have filled if properly used and administered~ by putting up means to alleviate poverty as well as improving citizen's quality of living.

Btw: I doubt if there will be such stiff competition among these marketers that will drive the price below the minimum possible and obtainable price(which might still be on the high side). As for the hoarding, that should be curtailed.


God Bless Nigeria!

O'boy! See question +

It's not being bad that gets ladies; it's the display of certain traits which are more prominent among the so called "bad guys" (not being needy, don't-give-a-damn attitude, sexual appeal, confidence, many-fish-in-the-ocean-mentality, etc) which I believe the so called "nice guys" can also adopt along with their cool attributes.

We can have hybrids; who have both the feature of a nice guy as well as the traits that draws ladies to bad guys


Most bad guys can be jerk and nice guys don't always have to finish last

MathsChic:
Happy New Year to everyone. All the best
Stycon,

Thanks Dear. I wish you the same and more. Cheers

Quality Education is worth the investment!

Quite laudable! ...though not a drop out in that sense naaaaa ~good headline strategy

However, if he believes in his invention:its value-creating cum problem-solving potential, why not package it in form of a good business proposal and pitch it to investors(venture capitalist, private equity guys, and the likes)?

Sequel to that, government can then be a buyer of his product and not his idea~ if it worth it anyway. I'm not sure if government buys ideas


Good job!

To all the non-Jews and those who do celebrate Christmas on this forum; I wish you all a Merry and fun-filled Christmas


I've learnt quite a lot on this forum from quite a lot of you guys. I wish there could be a get-together somewhere(on planet earth) sometimes this year to get to meet the wonderful faces behind all this monikers ~ it's an extension of the wish


My special shout-out goes to:

MathsChic, caracta, Chylo,MrCork, Estharfabian,Cutehector,seun,UjSizzle,misspicy,Mznelly, tosyne2much, seun and the OP: robosky02

Love you guyz!

Cheers!

She doesn't feel what you feel for her and I think it will be great if you respect her view and move on.

Being in that zone may not be a bad thing after all. But then, you may wanna step up your game

Good read!

Real estate investment is a good one if you do you homework very well before investing; it promises great ROI with relatively less risk. It's a good bet for the risk averse.

As for investment in share, a good understanding of the fundamentals, financials and the technicals is very important and most times it's beyond what the corporate report says.

Yeah, investing in oneself pays the highest return

I doubt if people get rich by saving ~ wise investment precedes wealth!

SMH

Hey Dear,

It's all boils down to "finding the balance" as well as try not to get caught up in the pursuit of "happiness"~ whatever it's called anyway


I think you can have it both ways

And mind you, not getting the A's might not necessarily "challenge you to dream big and force you to come up with a living that could probably break bounds, making you into a household name." if you don't get hold of the wheel of your life and make meaning outta it(in other words; if you're not smart).

Please note that when we get "there" we may discover there is NO "there" in the first place ...so Live & Enjoy the moment!

If you ask me, I would say becoming a household name like Linda Ikeji, Toke Makinwa, Folorunsho Alakija, Oprah comes from being "smart" ~ although it's another level of "smartness " and remember that being yourself is all that counts!

The irony of life is that some folks out there are also wishing they are as smart as you are and perhaps have the kind of life you have too

Embrace who you are; knowing that it's not too late to create something remarkable for yourself

I'm impressed! Bravo!

SolomonAdeola:
Thanks guys for your comments. I think my thoughts are centered on ensuring that we don't stop being courteous with our spouses. The simple 'thank you, am sorry, I love you' shouldn't end immediately after she/he has said 'I do'.

Ideally, I think love curve should take exception to the law.

And yeah. You are right, all these little acts of courtesy matter a lot! They are kinda lubricant in a lasting relationship.

Nice one!

I think we need something like Relationship Economics

Hmmm...soooooo hot!

Wao!

It's so funny that the fact that we all live in a two period model economy is obscure to most of this noise makers~where we are today, economic-wise, is not unconnected to the cumulative gross fund mismanagement by past leaders.

Need I say that it's quite interesting that this present government is blessed with a fall in the price of the commodity which happens to be the main source of financing government expenditure.

And my guess is that, if past administration invest in Infrastructure(maybe enough) as well as make some move to create good environment when the going was still rosy; when boom is still the order of the day or perhaps even save the fund early enough ( kudos for d sovereign fund~NSIA ), I believe the state of our economy won't be as worst as this.

I can only hope that the present government will come up with good initiatives to better diversify the economy and source for better way of financing the economy.

It's hilarious when I see Nigerians following the thought of those portfolio investors on our economy. In as much as they are wanted, I think it's high time we rather encouraged green investment and promote policies that facilitate physical investment and establishment of production base in the country.

Do you think all those calling for fast declaration of economics direction has the interest of the country and her citizen at heart? I think we need no prophet to tell us they wanna find way of optimising the policy hole and opportunities for their self-interest~it's understandable: they gat to always act out the capitalists that they are

I'm Impressed.

It's indeed a sorry state

I really wish this country can see the urgent need to invest in capacity building and human capital base "Cos this is the bedrock for any meaningful and sustainable development. Little wonder, we still have a very poor HDI in spite of the growth in GDP.

I look forward to a Nigeria where attention will be given to more important things as education, physical infrastructure, etc. A country where manifesto will not latter become propaganda. A country where citizens will see development issue as a collective responsibility.

God bless Nigeria!

Impressive!