Kobojunkie:
Wanting imported things isn't bad at all. The Naira did not crash because of that. It crashed because of the many anti-people & anti-business policies of its government along with the massive weight of corruption bearing down from all sides.

With a population like Nigeria’s, you have to produce your cars, clothes and phones. You can’t simply import these things. Your currency will collapse.

Oil was $70 per barrel when Obasanjo was president. The naira went from 145 to 116, to a dollar between 2004 and 2008. Petrol sold for N75. Nigeria accumulated 25 billion dollars into its excess crude account. These are facts. In less than 20 years, everything has collapsed even though oil is selling at the same $70 per barrel today.

Social media and population growth destroyed that country

Kobojunkie:
Who are those purchasing those bonds in the current economic state that Nigeria is in?

Nigerians with dollars. It should be obvious. Nigeria’s income from crude hasn’t really dropped off. Our population has doubled and Nigerians want imported things. This is why the naira has crashed. The politicians and top civil servants are making more money now than ever before.

sslcrypt:


There's what we call optics when passing on information. Element of truth that can be manipulated to alternate the facts. Because what they technically saying is that foreign investors are rushing to get the FG bond. Which is a big lie because which investor in their right mind will invest in a failing economy.

I believe the interest rate on the bond is 9.75 per cent annually for five years. If a bond holder keeps the bond to maturity, he/she will earn over 60% interest in five years. This is open theft of Nigeria’s wealth.

The five-year bond, which was issued at par with a 9.75% annual coupon, witnessed a 180% subscription.

mrvitalis:

Name one index of development just one that North is not worse than national average n South not better than national average

I dare you... Just one

Road networks and other infrastructure.

Holding corrupt leaders to account.

Agriculture.

I think IQ correlates to holding your leaders accountable as opposed to education. Look at the list, most countries on the list have little inequality, higher than African average HDI's or have had major protests or revolts against their leadership. The only country missing from the top of the list is Botswana. Maybe the list is also biased against resource-rich nations.

Tribalism and religious fanatism is a problem in Nigeria. Poverty is evenly spread.

IbeOkehie:


I don't see too much disagreement. You're a reasonable fellow. Sincerely, I'm happy to have "met" you here, so to speak. It's rare to meet a thoughtful Nigerian...I'm assuming you're one...and living in Communist California for that matter. Truth told, you made my day. Like the day I met the resident melon farmer of Nairaland.

I don't know if you can find the time, but hopefully you can tell some of what is really going on in that state. I have met MANY people that have moved from California to NC where I'm at and I ALWAYS ask them about the crime and social disorder and they assure me it's worse than I think. The guy that does my pest control moved here from Los Angeles.

Good Luck to Nigeria.

It’s nice to “meet” you too. Nairaland is fun when people exchange ideas and seek to learn from each other. The weather is great in Los Angeles. Things are expensive. Women are beautiful. That’s Los Angeles in a nutshell. The city is very large so I am only aware of crimes I see in TV and within my neighborhood. Los Angeles is beautiful but expensive.

IbeOkehie:


No, Sam Amadi destroyed MYTO.

Property Taxes are gonna go away in Conservative States. Just you watch.

Your residence explains a lot. I hope the USA can sell California to Venezuela or Cuba. Useless state. Maybe an earthquake with snap it off and it will fall into the ocean. Of course I will pray for your exception from the calamity

I've made many comments acknowledging the dire state of USA finances. The cause is....SOCIALIST POLICY. There's some hope that the debt can be paid if the right government comes in Jan 2025. Bad as it is, the problem is easy to solve with some drastic policy changes.

Good Luck to USA.

Lol, let's agree to disagree.

IbeOkehie:


Taxes - Laffer Curve is the answer to all queries. No society has ever been taxed into prosperity.

There's a campaign on right now to abolish property taxes in the USA. Texas for sure has a bill in process, and a few other states.

Sam Amadi is a socialist that deliberately destroyed cost reflective tariffs at NERC.

Thanks.

Good Luck to Nigeria.

Art Laffer explains that higher taxes lead to people evading taxes which leads to lower tax collection (revenue). I agree with his hypothesis. Taxes are not only a source of revenue, but a means to correct societal behaviour. Take, plastic bag taxes and cigarette taxes as examples. As I mentioned taxes are also used to control exchange rates and I can tell you for a fact, that property taxes and all other taxes in America will be higher in the near future, than lower to help maintain the strength of the Dollar. Whatever ignorant property bill the Texans are trying to pass is sure to fail.

I live in California.

The fall in the value of the Naira destroyed Sam Amadi's MYTO. the naira fell because of GEJ's explosive non-sustainable economic Agenda which saw to the collapse of Nigeria's Excess crude account

IbeOkehie

I have learned a lot from your conversation. Unlike most people, I agree that SAP was a positive policy which wasn't fully implemented. Most industries in Nigeria are privately owned or privately run, yet Nigerians have gotten progressively poorer over the years. As you rightly said, there is more work to be done.

I can't entirely agree with your views on taxation and how free currencies are around the world. For instance, Countries manipulate the value of their currencies through taxation policies. Taxes reduce people's disposable income, limiting their purchases of imported goods.

on taxes, Nigeria's tax-to-GDP is between 6 and 10 per cent and is about the lowest in the world. The OECD nations have an average tax-GDP ratio of about 34 per cent.

You also spoke about having no property taxes. America has property taxes.

I believe all industries should be privately owned, however, funding for certain industries can be provided by the government. In America, as the baby boomers retire, nursing homes are springing up to care for the elderly. these homes are privately owned but are subsidized by the government to ensure the elderly are treated well.

In Nigeria, PBAT has initiated a loan scheme for university students. I believe this is the first step to privatise Nigerian universities shifting funding from the government directly to the universities, to the students paying the universities.

In Economics, an Externality is a cost or benefit that is caused by one party but financially incurred or received by another. This is a grey area when discussing free markets. a common is a public park. quality basic education is also a positive externality. if every child is educated up to secondary school, society becomes more productive giving the government more taxable income. The government as an individual, invests in its young people's health and education and then profits through taxation of the productivity of its people. Schools and hospitals do not need to be government-owned or controlled, but the government can provide the funding.

Lastly, you mentioned Sam Amadi. Please what did he do wrong at the NERC?

NB
Your last post answered my query on education and healthcare. I am also against all forms of subsidies and government interference apart from the education and healthcare sectors.

MyMouth:

Bros, take it easy na, we no dey fight. I only made an observation. All u needed to do was reminded me that I could get everything I need for a house locally. I just felt there might be something one may need while building that is not made in Nigeria.

Sorry for my harsh reaction.

Excellent points by Mrvitalis and Grandstar. Nigeria does not have the resources waste on textile production. Our biggest comparative advantage is our young population (cheap labour costs).

I wonder how our leaders come up with ideas.

tommy589:


Government has to stay off granting loans directly to farmers and SMEs. Those foreign loans company,offline and online, operating in Nigeria for years are not running at a loss or bankrupt yet. Government needs to work with them in providing templates on how to make it work. Government may even provide the funding and tell them what to set as interest.

Anything that has to do with Nigerian government giving out money or managing money won't ever walk. Where are all the government owned commercial banks today

I agree with your points.

MyMouth:

So those of us that have not built our own houses won't have the opportunity to build abi?

Your comment illustrates why Nigeria is in its current condition.
You can build a nice house with local materials but you want an exclusive house.
Your currency is collapsing, but your focus is on satisfying your primal desires.
You are not capable of making sacrifices and decisions to benefit your country. You are simply focused on yourself.

MyMouth:

So those of us that have not built our own houses won't have the opportunity to build abi?

Your comment illustrates why Africa is in its condition.

tommy589:


Imported cars (mint or tokunbo)including bend down select clothes are essentials. We can not do without them.
Manufacturing outfits that should have ended importation of certain items are no more,when they can not compete with cheap imported products.All the textile factories that get supplied by cotton farmers are dead. This applies to tobacco farmers and manufacturers too

Our focus should be on food production not importation. We are not helping naira with food importation.I do tell people if we are at war are we not going to manage and survive. We survived COVID.

Let the government adopt an agricultural loan program like the student loan. It won't be the direct cash to cooperatives or to individual that's ridden with corruption.
For accountability,this loan should only be accessible from accredited providers at the point of buying fertilisers, pesticide,hiring of equipments and other stuffs needed for farming. Let it be LGA and private partnership program funded by Federal government.

Food sufficiency is the goal of every country. Nigeria is in crisis mode now and needs short, medium and long term solutions. The Naira is on very shaky grounds can still fall to N3000 within the next few years if structural changes aren’t made.
The time for trial and error has passed. The federal government has tried many programs which have mostly failed. This is simply my opinion.

malali:


Good idea, but first they have to deter the smugglers.
Once they raise all those tariffs you mentioned, guess what.
Smuggling becomes rife once again.
In case you don't know, there are so many land borders in Nigeria ,controlled by cartels and cabals.
They will ship the car to Benin republic and drive it in to avoid tariffs

You make a great point. So far a person drives the car in Nigeria, the car can be appropriately taxed. Some countries mandate all cars to have insurance and the cost of insurance is proportional to the cost of the vehicle. The government then taxes the insurance companies. Drivers have to maintain insurance on their cars else they commit traffic offenses.

In Nigeria, VIO collects a flat rate for cars based on the style of the car, rather than the value of the car. This encourages importation of newer expensive cars and puts pressure on the Naira.

malali:


How can the government defend Naira without exports ?
After borrowing loans with crude oil as collateral ?
There is no way to defend the Naira, other than subsidizing it.....which is good short term but a suicidal disaster long term.

the government can defend the naira by raising tariffs and taxes on non-essentials such as imported cars, building materials and ready-made clothes and then reducing taxes on food imports. This should reduce imports and strengthen the Naira.

Wahala Dey!!!

Wahala dey!!!

chatinent:
In Jonathan's era, he used aggressive criticism and direct insults to both Jonathan and his wife. He even came in person to buttress those strong words hurled at them.

Surprisingly, in Tinubu's era, he became a grandiloquent “if I may” adviser with carefully selective words aimed as not to hurt.


All-time Nobel Prize winner in Tribalism.

not everything is tribalism. You may be reflecting you own feelings onto the professor.

1. Soyinka has a personal relationship with Tinubu. Whether the two men are the same language is irrelevant. It is hard to criticize a friend.

2. Jonathan’s spending of Nigeria’s excess crude account is directly related to the naira’s collapse. Jonathan has direct responsibility for the issues Nigerians are facing. In any developed country, he would have long been convicted and jailed.

3. Every well meaning Nigerian knows that an Igbo man should have become president after Buhari. The igbo’s have been cheated politically. That does not make Jonathan a good president.

4. If Tinubu remains in office until 2027, the Naira may fall to N3000. This is the reality a lot of Nigerians fail to see. The man is a disaster. Anyone that can help Nigerians push this evil man out should be praised. We are waiting for Obasanjo to write his own later and hopefully, Babangida and Abdulsalam will also talk.

5. Stay focused on surviving Nigeria and not on tribal differences.

Dear Nairalanda1, the telecom industry vastly differs from the energy (petroleum and electricity) industries. Increases in telecom service prices do not have a major impact on inflation in other sectors. Energy prices have a major effect on inflation so you can not implement the same solution across these sectors.
If you are based in Nigeria, you have witnessed massive inflation due to energy price increases. companies have shut down, people are hungry and people are protesting.

Subsidies are bad because they create inefficiencies in the market leading to waste which inevitably leads to higher prices. Raising petrol or electricity prices is not the only way to remove subsidies. Raising prices is horrible, as it would lead to inflation as earlier stated.

Taxation on imported building materials, furniture, cars, new clothing, shoes, electronic gadgets, luxurious wines and food, property, estate, etc, would reduce the demand for dollars, leading to a stronger naira, thus eliminating the need for subsidies. The negative effect of taxation is a slower GDP growth rate (no free lunch).

Policies to boost GDP must not incur importing many foreign goods or services and must increase productivity. These include building schools, hospitals, industrial zones etc.

nairalanda1:
Ways and means is a big way government pays for subsidies over the years.

Workers salaries consume 80 percent of the budget

grandstar:


The country is broke. The government is broke! There's no money! Government can not sacrifice any revenue.

Any shortfall in revenue will have to be borrowed. Nigeria isn't a country that can cope with a huge debt burden as the interest rates are above 25%, and tax collection is barely 10% of GDP. The only way government can service more debt is simply by printing more money which is very inflationary.

Contrast with America where rates are around 3% and tax collection is about 28% of GDP.

There are better ways to help the poor such as lifting the ban on the importation of certain food or slashing import duty on them.

Import duty on wheat is 70%. Why not slash it to 20%? This will help bring down the price of bread. I won't be surprised of 1,500 bread won't crash to 1,200 or less of this happends.

The ban on rice imports makes no sense as Nigeria lacks any competitive or comparative advantage producing it. It is cheaper for the country to import than to produce it more locally. The government plans to open the borders for the import of unprocessed rice into the country with a zero percent duty is a fine move if implemented. Import duty on processed rice should be 30% at the beginning and eventually reduced to 20%

The ban on the importation of poultry meat also makes no sense. Allow its importation with an import duty of 20% maximum. Nigerians are starving, really starving.

These policies will not only help bring down the price of food, but also but boost the government purse with 100s of billions of Naira, which it desperately needs.

nice write-up.
please what is the import duty on cars, building materials and furniture?

Without a proper understanding of why petrol prices rise, any policy action by the government is certain to fail.

When crude oil prices rise, the government should raise the petrol price.
When the value of the naira falls, the government should reduce spending or raise taxes.

This is so basic, yet Nigerian "LEADERS" are so foolish.

nairalanda1:
And by the start of 2015, we were borrowing to pay salaries, and the economy was in freefall, and the revenue was falling, and one of the brains was being honest and saying that whoever wins, the economy is going to crash.

Remember, the period 2008-14 reminds one of the period 1973-82. As someone growing up in the 1980's...by 1991, people were telling us about the good old days of the 1970's and 80's when people were enjoying and when one naira was equal to one dollar....

The same thing happened between 2008-14.

High oil prices fuelled an illusion of a perfect economy. BY the time oil prices crashed, the illusion was gone. It happened in 1982, and it happened again in April 2014.

The first sign that there was palaver with the regime was when GEJ did not totally remove subsides. Problem 1. Problem 2 was the failure to develop a plan to get us off oil. Problem 3 was our very low tax to gdp ratio.

All the above meant that even during the time of plenty, we were taking high loans.




Now, does that mean that Tinubu and Buhari did well? NO. The two of them knew our problem, but chose to keep on spending, and used loans to hide the cracks. Result...by 2023, we had 99 percent of our revenue going to y'know.....




And one can see the same problem in Venezuela...which was not run by PDP or APC....



I will drop this link here. Those who want to read the link and understand why we have issues as a nation economically can read it. Those who want to bow down and praise GEJ, TINUBU and buhari, and all our past leaders since independence, you are free to abuse me and my dog. I defend no one, I never voted for this government, I wish APC had been voted out in 2019 and last year, and I believe we have never had a good government since 1960.....because of the resource curse.



Resource curse


Exceprt..https://www.nairaland.com/7526493/managing-dutch-disease-nigeria-excerpt



That is why despite all the brains we can appoint, NIgeria;s economy has been on a free fall.


DUTCH DISEASE.

This is your best write-up. I agree with 99 per cent of what you wrote. Brilliant work.

osuofia2:
nothing special . na poverty memtality de affect Africa
. All over the world presidential movement is a big deal. Ask America, China, Russia etc.

Presidents of developed countries use cars manufactured within their country. this is a big difference. they are not wasting their money exporting jobs to other countries but boosting their economies and currencies.

GeneralPula:
And so?

Her convoy reach Putin convoy?

All the cars in Putin's convoy will be Russian-made/assembled. This is a huge difference between developed and under-developed countries

casualobserver:


With due respect your submissions are naive. You seem not to understand that the IMF is not your friend. The institutions are not set up for you. Your position would make sense if the IMF was truly a friend of Africa.

Look what I am saying will sound crazy to you. I know because when I was young I thought all those anti world bank, anti IMF voices were nut jobs. I was naive, I was green, fresh out of school with their western focused curriculum and exuberance of youth. Experience and life. ( including living amongst them) has taught me otherwise.

The IMF is there to keep you enslaved.

As far as Kenya, I have not made up my mind if the protesters are stupid, reckless or just naive. Kenya through Rito has pivoted to a full grown western puppet….it never ends well…just watch.


African countries do not need the IMF. If you ask me which country is likely to make progress long term between Uganda and Kenya, my money is on Uganda…..they know what time it is. Kenyans are still emerged and infact are doubling down on mental enslavement.

I suggest you read up on the history of the IMF and other institutions. When you understand how and why they exist, you will understand.

You did not understand my last post. In fact, you have not understood my argument. No one is good and no one is bad. The staff of the IMF come from various countries. Its leadership is European so its primary interest is to Europe.
The staff and leadership at the IMF are also human. Europe became rich through struggle and revolution. They had incompetent rulers too. If Africans are ready to fight for their rights, the world would support us because we will be displaying our shared values as humans.

casualobserver:


Thank God you are finally for the first time beginning to talk some sense. There is not much you and I can do about it and I agree 100% because your efforts will be neutralized by others who are western puppets.

The point is to have the enlightenment to understand the system and know who is your friend and who isn’t, to understand that our collective inferiority complex, subservience to the west is the root of our problems. A man who doesn’t even know the root of his problem cannot solve it. It doesn’t mean you have the power to solve it but at least you know what the problem is.

What is progressive? What do you define as progressive? There is no progressive in Nigeria as far as our politics is concerned, they are all western puppets. It’s a question of degrees and who is least bad. I stated this during the elections. I attack you and your type because IMHO you are parroting western propaganda. So long as you are parroting western ideologies, values and propaganda you are not progressive as far as I am concerned because these western ideologies are exactly what has impoverished us.

I repeat embracing everything western to the point of nauseating mental enslavement is the root of our problems.

You want to know how bad things are? Everybody said they would remove subsidy. No matter what anyone tells you, they would have removed it because there was no money. Now we removed it, impoverishes the people and we are back to square 1 because whether implicitly or explicitly subsidy is back. That should give you an idea of the rot in the country and how difficult it is for ANYONE to turn this country around.

I can tell you this for a fact, no one is going to turn this country around following western prescriptions . All this talk about agric and industrialization revolutions will always remain a myth because to achieve, these we will have to be prepared to fight the west and you know what happens when you fight the west.

Which is why I harp on the that we need to prepare ourselves mentally because to make real progress in this country we must be prepared to see the west for what they are and be prepared to ditch them and take them on because they will try to crush us.

See what they are trying to do to China! Let he who has ears hear.

Please don’t be offended by what you are about to read. You and I see things the same but from different angles.
Let me play the devils advocate (assume I am western puppet). The West(IMF) understood than Nigeria was in a big mess. Our leaders had shown that they were incapable of making decisions to benefit Nigerians. What they didn’t know was if the Nigerian people were also foolish. Advocating for the fuel subsidy removal, the IMF expected Nigerians to protest. If Nigerians had protested, it would have shown the world that the people were not the problem but the leaders.

This same game has just been played in Kenya and the Kenyans responded in an appropriate way. The Kenyan people will now receive support both in terms of political pressure on their politicians and also financial support. The Kenya’s have shown that they are worthy of support.

casualobserver:


My friend abeg! You have been practicing this western based system for years when are you going to sit down and ask yourself real hard questions? This intellect and critical thinking skills that your western education was supposed to enhance when are you going to unleash it? Something has not worked for you for over 60 years different governments, different parties, different styles military/civilian, when are you going to get to the root of your problem?


When is the penny going to drop for you?

Obasanjo put Nigeria on the path to prosperity. The system was working. From 2004 to 2008 the Naira strengthened from 145 to 116. Nigerians got richer and our society was starting to flourish.

We were on a path to sustainable growth. Our budget was based on crude oil price of about $70 per Barrel and the rest was saved in the excess crude account.

The idea was so simple, if oil prices fell below $70, Nigeria would take money from the excess crude account and if prices were above $70, the excess funds would be saved.

Jonathan move the budget to over $100 per barrel and consumed almost all that was saved. This is the primary reason why things are bad and not any action by western nations.

casualobserver:


Your leaders were made greedy by the west

Also don’t forget the leaders come from the citizens. It is people like you and I that become leaders, they are not aliens. The man who claimed he had no shoes was the one whose administration was involved in so much corruption like every corrupt government and their monies are in the banks in the west and they know. If as a citizen you are already shouting God bless America, God save the queen what will you do when you become a leader?

There is no country especially one of size that has pulled itself from underdeveloped to developed by puppeting the west. I really dont understand why this is so hard for people to grasp.

I understand what you are saying. Every nation competes against each other. I also understand your initial criticism. My issue is that right now, Nigeria has collapsed through no fault of mine. I have advocated for progressive policies but no one listened. I have now chosen to place me tent with progressive minded people who look nothing like me since my on people can not understand basic issues, yet you attack people like me.

What choice do I have? Continue to live amongst ignorant people whose actions continue to impoverish me?

casualobserver:


We don’t share anything the quicker you realize that the better. That’s the kind of brainwashing they dish out to impoverish you.

Why do countries fall for it

1). We are operating in a world system that was designed for the west by the west to cushion the effects of loss of colonies.
2) they have brainwashed us to lose our sense of self respect dignity, pride identity self worth etc and programmed us to seek validation of the west.
3) we do not have the balls to say enough is enough, we are not westerners and never will be so we will do what is best for us. Those who speak out are silenced.

Simple as.

The global financial system gives advantages and disadvantages to western nations. The system also creates pathways for countries to exploit to become successful.
America has had a trade deficit since the 70’s because of the global financial system. The huge debt America has is the price America pays to sit on top of this system. It’s military benefits, and its people have a higher standard of living.
Have you heard of the Triffin Dilemma?
https://en.m.wikipedia.org/wiki/Triffin_dilemma

All a nation has to do to take advantage of the global financial system is to educate its population and to produce goods and services other nations want. It is so simple.