7lives:


Every oil producing country have a SWF sovereign wealth fund account, Norway alone have as much as $830 billion wetin PINDEEPIN save for Nigeria?
In my opinion baba should do whatever he can to keep the country afloat while he recovers the looted billions.

The sovereign wealth fund idea was floated by Goodluck Jonathan to keep Nigeria afloat financially in times of crises, it was Amaechi, nudged and backed by mainly APC governors like Oshiomhole, Fashola, Rauf and Fayemi that stopped it, insisting that all the money in the excess crude account must shared.

http://www.thisdaylive.com/articles/govs-oppose-swf-demand-power-deregulation/96857/

RisingSun1:
Which type of Daura Economics is this?

They want borrow to finance a budget that will be largely recurrent expenditure.So how do the govt hope to repay the debt?

Because there is no guarantee that crude price will appreciate in the coming future,infact it could most likely fall below the projected $38 per barrel.

This ppl are planning to mortgage the future of our unborn children.What happened in Greece is about to occur here.

If you are having deficit,the best economics is to drastically cut down the cost of running govt.

This is how they threw SW Nigeria into debt

Borrowing money to finance non profitable ventures in the name of infrastructure without asking themselves how will the project pay back the loan


APC SW Nigeria about to replicate the disaster they inflicted their region on a national scale


Sophistication indeed

Good analysis but u failed to proffer solutions or alternatives.

PapaBrowne:
Apparently we have the wrong Finance Minister.
In times of Economic crisis, you need the best of heads and this lady doesn't appear like one of them.

Borrow locallyThe question is when the local economy is comatose, how would the populace buy bonds to borrow the FG money. You buy bonds when there is excess liquidity and you want to save long term. There is no money in the system, hence there is gonna be little or no investment in bonds. Worse still, Nigeria has been taken off the Emerging Markets Bond Index, so no Foreign money coming into our bonds. When that happened, the FG said, to hell with JP Morgan.


Economic management is the job of an Economist. This lady, although with a basic education in Economics is an Accountant by experience and nothing more. The ministry of Finance manages our economy. She would have been better off as an Auditor General. Financial Management in economic terms is a totally different ball game. And bad enough, her highest degree is a Post Graduate Diploma.

You set out a 6 trillion Naira budget with an oil price benchmark of $38 when oil is trading at $36 and going downhill. First error.
You decide you will raise a chunk of you finance form custom duties and taxes. You fail to realise that because the economy is weak and dollar rate is high, there would be much less importation, hence reduction in your income from customs.
Also you forget that taxes are on profits, so with a weak economy most companies would declare losses which means they would have no tax to give to you.

I fear for Nigeria. APC has already started out on a terribly wrong footing. First it appear to have no direction at all. And secondly it has the wrong kind of people running its affairs. In a time of crisis, you need the best brains AND especially those fit for purpose. Kemi Adeosun is not capable of running our economy especially in a time like this.
.

porka:


You guys are looking for free financial consulting services up and down now that realities are setting in.

High level financial services are highly priced. They don't come cheap. What you can do is take these criticisms back to your think tank (if you have any) and thrash them out. He has done well by highlighting the pitfalls in the proposed fiscal framework.

You don buy market. Deal with it.

you guys kwa? Is this about Apc vs. Pdp? Lolzzzz.
You don't worth much effort but I will leave you with this word from Ralph Waldo Emerson : '' Any fool can criticise but let me not fall into the vulgar mistake of dreaming that I'm being persecuted whenever I'm being contradicted'' - I hope the guy would proffer a better idea to neutralise the flaws he has highlighted in the news.

IbnIslam:
Good analysis but u failed to proffer solutions or alternatives.

Thank God I'm not the only one thinking alone on this thread, that is the same question I have been asking since.

IyaIode:

Loads of bullsiot

dis thread is for seasoned economist, not alaba roadsite bread sellers.

drss:
dis thread is for seasoned economist, not alaba roadsite bread sellers.

FUCTARD forming economist on nairaland. Ezu ipapa

Am short of words, how did we get here?

From day one, I knew this woman will be full of excuses

I am not surprised as I made a forecast about this present reality 4 years ago in this thread below:

https://www.nairaland.com/731115/nigerias-economic-financial-future-within

With the current economic and financial challenges facing Nigeria as a country, I believe the following will take place (some already taking place) in Nigeria within the next ten years:
1. Continuous weak Naira against major foreign currencies.
2. IMF / World Bank Bailout.
3. Redenomination of the Naira inevitable.
4. Continuous Two-Digit inflation.
5. Downsizing / Rightsizing of the Federal and State Civil Service.

With the past and current mismanagement of our oil and gas resources amidst high crude oil prices, our economy remains very precarious to the impending drop in crude oil prices as a result of the following:
1. Increase in the use of renewable energy resources.
2. Discovery of new oil fields in international waters juxtaposed against decrease in world oil recoverable oil reserves.
3. Global slow pace of economic recovery.

Please kindly state your own forecast for Nigeria's economic and financial future within the next ten (10) years.

This was my forecast in 2011.

Also in August 2011, I made the following comments:

As a result of the foregoing I believe the exchange rate of the Naira against the USD will get to about =N=200 by 2014 and crude oil price might hover around USD 50 per barrel without any major war or conflict in the middle east. Hence, the country might turn to the IMF / World Bank to finance her deficit budget by that time.

PapaBrowne:
Apparently we have the wrong Finance Minister.
In times of Economic crisis, you need the best of heads and this lady doesn't appear like one of them.

Borrow locallyThe question is when the local economy is comatose, how would the populace buy bonds to borrow the FG money. You buy bonds when there is excess liquidity and you want to save long term. There is no money in the system, hence there is gonna be little or no investment in bonds. Worse still, Nigeria has been taken off the Emerging Markets Bond Index, so no Foreign money coming into our bonds. When that happened, the FG said, to hell with JP Morgan.


Economic management is the job of an Economist. This lady, although with a basic education in Economics is an Accountant by experience and nothing more. The ministry of Finance manages our economy. She would have been better off as an Auditor General. Financial Management in economic terms is a totally different ball game. And bad enough, her highest degree is a Post Graduate Diploma.

You set out a 6 trillion Naira budget with an oil price benchmark of $38 when oil is trading at $36 and going downhill. First error.
You decide you will raise a chunk of you finance form custom duties and taxes. You fail to realise that because the economy is weak and dollar rate is high, there would be much less importation, hence reduction in your income from customs.
Also you forget that taxes are on profits, so with a weak economy most companies would declare losses which means they would have no tax to give to you.

I fear for Nigeria. APC has already started out on a terribly wrong footing. First it appear to have no direction at all. And secondly it has the wrong kind of people running its affairs. In a time of crisis, you need the best brains AND especially those fit for purpose. Kemi Adeosun is not capable of running our economy especially in a time like this.
.

Nice write up; saying I am disappointed in most of PMB's ministerial nominees is an understatement. I also have an instinctive feeling that most of the money that will be borrowed will be used to fund recurrent expenditure in paying salaries which is a terrible idea that will further worsen our economy; It is best that Nigeria invest in agriculture and other mineral resources to boost our foreign reserve and economy; the days of over relying on oil should have been phased out by now, that is if we are serious about it.

NavierStokes:
APC believes GEJ and Iweala inflated the size of the economy, but then decide to borrow based on a debt to GDP ratio of 12[-]. Their hypocrisy and villification of the previous administration is revealed with each passing day.

How l wish most Nigerians understand the hypocrisy of this administration

BlackPeni5:
One of the few times our finance minister is making any comments publicly. She is intelligent but lacks experience and capacity to carry out that role for now. Right now, the CBN Governor seems to be doing more work on the economy than she is....but he is doing serious damage never the less.

What you need to understand is the CBN need the ministry of finance and economy for better planning

I don't think this woman know what she is doing.

femimailbox:
Mehn! crude oil is a curse to this nation! without the boom in the commodity I doubt if our leaders would have stolen so much and put the whole country in this big mess.

we are talking of borrowing upto 2 trillion naira to finance the budget deficit of 2016.

I strongly recommend and support diversification in full scale. Agriculture can cover this lapse if properly explore and invest in.

it will reduce unemployment and increase revenue for the nation.

hmmm, is anyone on this same page with me or we are still playing the blame game? LET'S DIVERSIFY PLEASE!

Mouth action!!!?

PapaBrowne:
Apparently we have the wrong Finance Minister.
In times of Economic crisis, you need the best of heads and this lady doesn't appear like one of them.

Borrow locallyThe question is when the local economy is comatose, how would the populace buy bonds to borrow the FG money. You buy bonds when there is excess liquidity and you want to save long term. There is no money in the system, hence there is gonna be little or no investment in bonds. Worse still, Nigeria has been taken off the Emerging Markets Bond Index, so no Foreign money coming into our bonds. When that happened, the FG said, to hell with JP Morgan.


Economic management is the job of an Economist. This lady, although with a basic education in Economics is an Accountant by experience and nothing more. The ministry of Finance manages our economy. She would have been better off as an Auditor General. Financial Management in economic terms is a totally different ball game. And bad enough, her highest degree is a Post Graduate Diploma.

You set out a 6 trillion Naira budget with an oil price benchmark of $38 when oil is trading at $36 and going downhill. First error.
You decide you will raise a chunk of you finance form custom duties and taxes. You fail to realise that because the economy is weak and dollar rate is high, there would be much less importation, hence reduction in your income from customs.
Also you forget that taxes are on profits, so with a weak economy most companies would declare losses which means they would have no tax to give to you.

I fear for Nigeria. APC has already started out on a terribly wrong footing. First it appear to have no direction at all. And secondly it has the wrong kind of people running its affairs. In a time of crisis, you need the best brains AND especially those fit for purpose. Kemi Adeosun is not capable of running our economy especially in a time like this.

You are being too critical, son. Kemi may not have the same pedigree as NOI, but she cannot be discounted before she even begins the job. She will be working with an Economic Team that will include Udo Udoma (Budget & Planning), Emanalah (Trade & Investments), etc. These are really experienced folks.

On borrowing locally - most bond buyers are usually institutional investors like Pension Funds, Banks, Investment houses, etc. With the CBN's expansive monetary policy of reducing CRR & MPR, then some of the extra liquidity will find its way to bond purchases.

Nobody can predict for sure what oil price will be tomorrow. The MOF and her team can only estimate what the average price will be over the next 1 year. They could be right, they could be wrong. Even the best analysts make wrong calls. NOI, last year, presented a budget with oil price estimated at $73 and she argued that she used the 5 & 10 yr weighted moving average to arrive at her estimate. In the end, she was dead wrong.

Most of the funds expected from Customs & Excise Duties are going to be from efficiency in management & collections.

Give Kemi & APC a break. The party inherited a battered economy from the PDP. NOI & PDP should have utilized the opportunity of high oil prices to position and diversify the economy, but alas, they squandered away everything. And you have the effrontery to abuse a man who is trying to clean up the mess with very little oil revenue.

Bevista:
You are being too critical, son. Kemi may not have the same pedigree as NOI, but she cannot be discounted before she even begins the job. She will be working with an Economic Team that will include Udo Udoma (Budget & Planning), Emanalah (Trade & Investments), etc. These are really experienced folks.

On borrowing locally - most bond buyers are usually institutional investors like Pension Funds, Banks, Investment houses, etc. With the CBN's expansive monetary policy of reducing CRR & MPR, then some of the extra liquidity will find its way to bond purchases.

Nobody can predict for sure what oil price will be tomorrow. The MOF and her team can only estimate what the average price will be over the next 1 year. They could be right, they could be wrong. Even the best analysts make wrong calls. NOI, last year, presented a budget with oil price estimated at $73 and she argued that she used the 5 & 10 yr weighted moving average to arrive at her estimate. In the end, she was dead wrong.

Most of the funds expected from Customs & Excise Duties are going to be from efficiency in management & collections.

Give Kemi & APC a break. The party inherited a battered economy from the PDP. NOI & PDP should have utilized the opportunity of high oil prices to position and diversify the economy, but alas, they squandered away everything. And you have the effrontery to abuse a man who is trying to clean up the mess with very little oil revenue.

U meant to say that he's being too honest and real??

Bevista:
You are being too critical, son. Kemi may not have the same pedigree as NOI, but she cannot be discounted before she even begins the job. She will be working with an Economic Team that will include Udo Udoma (Budget & Planning), Emanalah (Trade & Investments), etc. These are really experienced folks.

On borrowing locally - most bond buyers are usually institutional investors like Pension Funds, Banks, Investment houses, etc. With the CBN's expansive monetary policy of reducing CRR & MPR, then some of the extra liquidity will find its way to bond purchases.

Nobody can predict for sure what oil price will be tomorrow. The MOF and her team can only estimate what the average price will be over the next 1 year. They could be right, they could be wrong. Even the best analysts make wrong calls. NOI, last year, presented a budget with oil price estimated at $73 and she argued that she used the 5 & 10 yr weighted moving average to arrive at her estimate. In the end, she was dead wrong.

Most of the funds expected from Customs & Excise Duties are going to be from efficiency in management & collections.

Give Kemi & APC a break. The party inherited a battered economy from the PDP. NOI & PDP should have utilized the opportunity of high oil prices to position and diversify the economy, but alas, they squandered away everything. And you have the effrontery to abuse a man who is trying to clean up the mess with very little oil revenue.

at d bolded Ngozi Iweala was very right. It was the national assembly who needed more money that pecked oil price bench mark at $78 from NOI's $73. In the end the senate were proved wrong. International oil price later fell to below $78pb.
Ngozi's bench mark of $73 was the more logical one compared to that of d national assembly.

drss:
at d bolded Ngozi Iweala was very right. It was the national assembly who needed more money that pecked oil price bench mark at $78 from NOI's $73. In the end the senate were proved wrong. International oil price later fell to below $78pb.
Ngozi's bench mark of $73 was the more logical one compared to that of d national assembly.

Oh really?!

Maybe you need to go back and check your records. She first started with $78, then $73, then $67. It is the National Assembly that effectively brought down the final approved budget to $53. I'll check related articles and post the link here for you.

Bevista:
Oh really?!

Maybe you need to go back and check your records. She first started with $78, then $73, then $67. It is the National Assembly that effectively brought down the final approved budget to $53. I'll check related articles and post the link here for you.

go n do more research.

drss:
go n do more research.

Go to the link below, it will help cure your arrogance and ignorance. Sometimes, half knowledge is worse than no knowledge.

http://www.premiumtimesng.com/business/177493-nigeria-senate-approves-52-crude-oil-benchmark-for-2015-budget.html

Bevista:
Go to the link below, it will help cure your arrogance and ignorance. Sometimes, half knowledge is worse than no knowledge.

http://www.premiumtimesng.com/business/177493-nigeria-senate-approves-52-crude-oil-benchmark-for-2015-budget.html

hahaha... And how do u think d senate settle for $52 in d end? You think i will dodge d link u provided? I went through it and all i saw was dat d national assembly settled for $52 in veiw of d fall in international oil price after foot dragging several times with d executive which eventually led to d delay in passage of d 2014 budget.
Check dis link n see matters for ur self: www.nigerianbestforum.com/index.php?topic=358978.0;wap

The international community should stop lending us money. It will force us to make use of what we have for some time until we know how to manage ourselves.

Before Banks give loans to people, they usually conduct thorough research to make sure that there is good collateral and means to pay the money back.

We just use federal and state government stamps to borrow money from nations who can just go down to their printing room and print out billions for us without losing anything.
Then we mortgage our future and cripple the next government to come.

Bevista:

Give Kemi & APC a break. The party inherited a battered economy from the PDP. NOI & PDP should have utilized the opportunity of high oil prices to position and diversify the economy, but alas, they squandered away everything. And you have the effrontery to abuse a man who is trying to clean up the mess with very little oil revenue.

I have always marvelled at the audacious hypocrisy in Nigerian political discourse. The poster demands that we give Kemi Adeosun and APC a break whilst bemoaning the mismanagement of Nigeria's economy. This is odd given that Kemi Adeosun was responsible for the management of Ogun state's finances and she left office having overseen the accumulation of debt and the undertaking of expenditure which left her state requiring a bailout as it was practically bankrupt. Having been rewarded for this "excellent" performance by being appointed finance minister, she is proposing an unprecedented expansion in FG expenditure and debt in her very first budget and we are supposed to maintain hope in her. Hope has to be hinged on experience and not faith.

She also represents a party that makes the corrupt and venal PDP seem like a symbol of fiscal rectitude. It is funny seeing the financial carnage left by state governments managed by APC politicians. We should also not forget that APC's official position, when oil prices were high, was that we should scrap our rainy day funds which were meant to provide a bulwark against oil price falls:

Nigeria’s main opposition party said it will scrap the country’s sovereign wealth fund and a separate excess crude account if it wins elections in February.

“We’re going to put a stop to them,” Lai Mohammed, a spokesman for the All Progressives Congress, or APC, said in an interview in London yesterday. “The sovereign wealth fund and the excess crude account are illegal.”

http://www.bloomberg.com/news/articles/2014-09-30/nigeria-s-opposition-wants-to-scrap-sovereign-oil-funds

You cannot today bemoan Nigeria's financial illhealth and lack of savings when in words and in deeds, you did not make any provisions for oil prices crashing. To the contrary, at both the national and state levels, APC ran state governments and made pronouncements that seemed to assume that oil prices will always remain high. To cap it all, they have been running a misinformation campaign against the one person who was notorious for demanding fiscal prudence:

ABUJA – Coordinating Minister for the Economy and Minister of Finance, Mrs. Ngozi Okonjo-Iweala, yesterday raised alarm over the depletion of the Excess Crude Account, which stands at a mere $ 3.6 billion.

Speaking at the first civil society forum organized by her ministry to acquaint civil society groups with the Jonathan transformational agenda, Okonjo-Iweala also appealed to state governors challenging the constitutionality of the Sovereign Wealth Fund to have a re-think, noting that the Fund is critical to national survival given Nigeria’s mono-economic status.

According to her, the nation could go broke in the next few years if it does not initiate savings from oil proceeds while lamenting that the Excess Crude account which has depleted to $3.6bn cannot sustain the nation in the event of an economic crisis.

- See more at: [url]http://www.vanguardngr.com/2012/04/okonjo-iweala-raises-alarm-over-depleting-excess-crude-account/#sthash.ZtXi5GPl.dpuf [/url]

Further, I have noticed a tendency among Nigerian commentators to make the following ignorant claim: Nigeria does not have a diversified economy. This claim is made out of ignorance. Nigeria has a diversified economy as oil and gas represent less than a fifth of the economy. Agriculture is a bigger component of GDP than oil. What these people should be saying is that Nigeria should raise further the share of non-oil tax revenue and non-oil export revenue. Again, I would have taken APC more seriously if the state governments it ran, with the exception of Lagos, were not so comically dependent on FG allocations which allocations were largely dependent on oil tax revenues.