This is about $50b and i think i need an explanation on how such a huge amount of money outside our continent has been contributing to the needs of poor Nigerians.


Your invaluable contribution will be appreciated

I would suggest that till we sort out corruption issues in the country, that reserve should remain where it is until then

I would suggest that till we sort out corruption issues in the country,

on the face of it looks OK but then NIgerians will suffer forever, if we wait to resolve this corruption problem.

meanwhile the money is yielding benefits for US/UK economy.

and what happens if $ loose its value?

babasin:

on the face of it looks OK but then NIgerians will suffer forever, if we wait to resolve this corruption problem.

meanwhile the money is yielding benefits for US/UK economy.

and what happens if $ loose its value?

How in the world is our money in reserves to yield benefits for only the US and UK? is that what you understand reserves to mean?? Would it be better for us to release that money and maybe add it to the many more billions we have to get back cause we have been SPINELESS all this while in our dealings with the very thieves right there at home with us who continue to mock and taunt us each day

Which foreign reserve?  What OBJ and IBB cleaned out before OBJ left office?.  Please go and check for yourselves and see if there is anything was ever in there or was left in there.  All na paper magic--- Na serious 419 dey smell so.  Does Nigeria look like a country with 1 Cedi in the foreign reserves account?

almondjoy:

Which foreign reserve? What OBJ and IBB cleaned out before OBJ left office?. Please go and check for yourselves and see if there is anything was ever in there or was left in there. All na paper magic--- Na serious 419 dey smell so. Does Nigeria look like a country with 1 Cedi in the foreign reserves account?

We actually have a foreign reserve worth about $50m madam. Without it we wouldnt be able to import anything.

Gettolove:

This is about $50b and i think i need an explanation on how such a huge amount of money outside our continent has been contributing to the needs of poor Nigerians.

The reserve is better left where it is. Even if it were to be released it still wont contribute to the needs of poor nigerians. Better to know we at least have a reserve somewhere than to watch it disappear into the pockets of hair dressers and diploma holders training to be boxers in the house of reps.

davidylan:

We actually have a foreign reserve worth about $50m madam. Without it we wouldnt be able to import anything.

The reserve is better left where it is. Even if it were to be released it still wont contribute to the needs of poor nigerians. Better to know we at least have a reserve somewhere than to watch it disappear into the pockets of[b] hair dressers and diploma holders training to be boxers in the house of reps. [/b]

I say go and check again. We are dealing with the best 419 nation in the world. That thing had dwindled as soon as OBJ left. What are we importing? Nigeria is a dumping ground--no need for imports!

The sum is about $50 Billion dollars and not  $50million dollars.(per davidylan)

First and foremost foreign reserves is a savings and Investments of the country. The equivalent of a saving to an individual.

Based on our current budget which is about $24Billion dollars, we would have money to spend for 2 years if we don't have any other income at all and simply relies on the reserves

Thank God Oil is still selling for close/over $90 per barrel so we would still have a decent income for sometimes. And even better that Oil income is based on $53 per barrel so that should all price were to fell it wouldn't affect our economy because it has already been factored into it.

Then we must also give OBJ, Finance ministers and Soludo the credits for having the discpline to have this reserve. Reserve is what we have left after paying our heavily burdened foreign debts.

Coming to the benefits of the reserve,

1. It allow the international business community to have faith in us and credibility that we have monies to pay for whatever credit or trade we transact with them.

2.It allows us something to fall back in case of emergency

3. If we need to carry out  major project like electricity we would have money to spend


The downside as I see it (which i think may have cross the mind of the poster before posting this thread)

1.  when we have enormous economic challenge like electricity and transport network problem why do we keep money which could have been used for national development?

2. (although this foreign reserves I believe is held in investement form) why can't we use it for creating further wealth producing industries and businesses.


On a final analysis it is a balancing excercise and the people who are in charge at present are able to make a better informed decision in any event.

I am particular about 2 major sector power/energy  (electricity and refinaries)  and Transport network. Once those two sectors are in place everything else would move on highspeed.

Security and regulatory measures will be needed to solidify the entire economy.

almondjoy:

Which foreign reserve? What OBJ and IBB cleaned out before OBJ left office?. Please go and check for yourselves and see if there is anything was ever in there or was left in there. All na paper magic--- Na serious 419 dey smell so. Does Nigeria look like a country with 1 Cedi in the foreign reserves account?

almondjoy:




I say go and check again. We are dealing with the best 419 nation in the world. That thing had dwindled as soon as OBJ left. What are we importing? Nigeria is a dumping ground--no need for imports!

This MAN (Previously several WOMAN) always talk out out sequence and lack of basic facts.Most of the time just singing unprogressive melody.

Facts can be surpressed in Nigeria, not in the International business and financial community for so many reasons least being regulatory reasons and market effects.(for concealment)

We don't have 1 cedi in our foreign reserves but about $50 billion dollars. So ignore HER (or HIM depending on what takes your fancy)

We don't have 1 cedi in our foreign reserves but about $50 billion dollars. So ignore HER (or HIM depending on what takes your fancy)

This is very possible; untill we see picture of all these cash plus documentary evidence; we should not believe them. That said

Nigeria has no business keeping $50B foreign reserve.

$20B is ok and we can use rest to improve our infrastructure and economy.

It allow the international business community to have faith in us and credibility that we have monies to pay for whatever credit or trade we transact with them.

This is not true. Belgium has $13B foreign reserve, Nigeria has $50B; So why are internation business have more faith in Belgium than Nigeria??

2.It allows us something to fall back in case of emergency

um are you sure; $ is fast loosing value. Serious countries keep their reserve in GOLD

3. If we need to carry out  major project like electricity we would have money to spend

so why do we start?  When half of Nigerians are dead and we have $100B, yielding benefit to US/UK?

How in the world is our money in reserves to yield benefits for only the US and UK?

1. simple the CASH is not in Nigeria or in CBN vault! It is held by UK/US banks. They trade with it.

2. US could print more money since we help to shore-up its value.

Way forward: Nigeria should reduce reserve to $20B. Keep GOLD reserve to another $20B

They should invest heavily in infrastructue(sensible ones) roads, power,education, foods, military and strength democratic institutions.

vigasimple:

The sum is about $50 Billion dollars and not $50million dollars.(per davidylan)

thanks for the correction, i meant billions and not millions. Typo i guess.

babasin:

Nigeria has no business keeping $50B foreign reserve.

YES we do have business keeping a huge foreign reserve. Like Vigasimple said earlier, Nigeria has an annual budget of about $8bn a yr. If all that money was JUDICIOUSLY SPENT and not simply put in the pockets of thieves ad brigands, we would have no business being poor!

Fact is government should not spend a penny in my opinion.

Public accountability is very poor.

and spending in a sharp burst will only lead to inflation. Wages will not prolly increase as fast as prices
and it is the working man that will suffer the consequences.

@topic

How is your bank savings helping you? Why don't you stop saving and spend all your income as you earn them.

I-man:

@topic

How is your bank savings helping you? Why don't you stop saving and spend all your income as you earn them.

perfect analogy

vigasimple:

This MAN (Previously several WOMAN) always talk out out sequence and lack of basic facts.Most of the time just singing unprogressive melody.

My frieend, most you be insultive push home point, she talking from a perspective she have clear understanding. Do you know her profession? So watch your posts.

Yet when a world renowned  scientiest say we the black people are less intelligent than others we go about raving and villifying him, how on earth can you have about $50 billion in your foreign reserve and still not have stable electricty and good road network?   , how and where is this possible? its only the black man that can engage in this kind of absurd and appalling excercise. what is the $50 billion doing for Nigeria what is the essence of keeping the money? we are so unintelligent that we can't even reason like rational human beings sometimes. ahhh how can you have about $50 billion and not have good roads,electricity,good water, good medicare and quality education? the black race is doomed.

 

How is your bank savings helping you? Why don't you stop saving and spend all your income as you earn them

Its expedient for you to save money in a bank when your basic  necessities are meet, you can't have $1000 in your saving account and be going about with out proper food, clothing or shelter its ludacrious. why do we have to keep about $50 billon in the foreign reserve? why don't we reduce it to about $20-$25 billion and use the rest to develop our decayed nation? its just does'nt add up and make sense.

@Mazaje

Do you realise that we have been through this process before?We have a large foreign reserve because we have a spike in oil prices,that spike in oil prices won't be permanent.The question is,how do we manage when oil prices fall.

Back in the 70s,we had a similar scenario.Then,they did what you are advising they should do now,the Govt spent the money. . . . and what happened? By 1980,we were borrowing money as oil prices fell and we ended up going cap in hand to the IMF,enter SAP,with a resultant $32 bn external debt and an economy that had shrunk to 1/5th its 1979 size.

What have we learnt since then ?Apparently,people like you haven't learnt anything .You propose that we should do the same thing. . . .spend our oil windfall,what is the point of history if you don't learn from it?

Our problem is not spending money,our problem is how we spend money.Believe me,many politicians would love to spend our reserves.Since 1998,we have seen Govt expenditure quadruple.Has there been a commensurate spike in living conditions?No!Yet,your advice is. . . . lets spend even more!!Keep spending.

Lets find out how and where all the previous spending was utilised.We saw a huge spike in spending on power infrastructure,what is the result?Your solution is. . . spend more.

Our biggest problem is that most Govt revenue(85%) comes from oil.Oil is volatile in price.If you have most of your revenue from a resource which can change rapidly in price(oil was $9 p/b in 99 and $90 p/b today) you simply have to save for when the inevitable price fall happens.This is the case, most especially when you have past experience in this and when you seen an upsurge in Govt expenditure already which hasn't achieved much.

In the analogy I used,an individual who makes a living from a crop that is price sensitive will save for the inevitable period when there will be deflation.This is why human beings have savings.Unless you suggest that the desperately poor shouldn't save.

I-man:

@Mazaje

Do you realise that we have been through this process before?We have a large foreign reserve because we have a spike in oil prices,that spike in oil prices won't be permanent.The question is,how do we manage when oil prices fall.

Back in the 70s,we had a similar scenario.Then,they did what you are advising they should do now,the Govt spent the money. . . . and what happened? By 1980,we were borrowing money as oil prices fell and we ended up going cap in hand to the IMF,enter SAP,with a resultant $32 bn external debt and an economy that had shrunk to 1/5th its 1979 size.

What have we learnt since then ?Apparently,people like you haven't learnt anything .You propose that we should do the same thing. . . .spend our oil windfall,what is the point of history if you don't learn from it?

Our problem is not spending money,our problem is how we spend money.Believe me,many politicians would love to spend our reserves.Since 1998,we have seen Govt expenditure quadruple.Has there been a commensurate spike in living conditions?No!Yet,your advice is. . . . lets spend even more!!Keep spending.

Lets find out how and where all the previous spending was utilised.We saw a huge spike in spending on power infrastructure,what is the result?Your solution is. . . spend more.

Our biggest problem is that most Govt revenue(85%) comes from oil.Oil is volatile in price.If you have most of your revenue from a resource which can change rapidly in price(oil was $9 p/b in 99 and $90 p/b today) you simply have to save for when the inevitable price fall happens.This is the case, most especially when you have past experience in this and when you seen an upsurge in Govt expenditure already which hasn't achieved much.

In the analogy I used,an individual who makes a living from a crop that is price sensitive will save for the inevitable period when there will be deflation.This is why human beings have savings.Unless you suggest that the desperately poor shouldn't save.

I was going to post a reply but then read yours and though, "no need"

vigasimple:

This MAN (Previously several WOMAN) always talk out out sequence and lack of basic facts.Most of the time just singing unprogressive melody.

Facts can be surpressed in Nigeria, not in the International business and financial community for so many reasons least being regulatory reasons and market effects.(for concealment)

We don't have 1 cedi in our foreign reserves but about $50 billion dollars. So ignore HER (or HIM depending on what takes your fancy)

Hmmm!  Yeah!  You sure look like you come from a country that has 50 billion bullcraps in the foreign reserves. Of what use is it when your "poverty" level is unrivalled globally?

"This MAN--Several WOMAN--singing unprogressive melody"----BLAH BLAH BLAH BLAH BLAH!!!

You bloody illiterate. You sound like you would know much about the state of affairs in the foreign reserves. You antelope! Keep typing rubbish--you piece of Dr. Waston's experimental waste!

@I-man

Mazaje's proposition is not unreasonable at all. There is nothing wrong in spending money if it will affect productivity
positively. As a matter of fact, if our main problem is an over reliance on oil, isn't it sensible that the money be spent to help
disversify the economy.

Domestic productivity is very low because of the poor roads, telecommunications, transport and general infrastrucuture.
Inflation is a demon in such circumstances because inevitalby the balance of wealth is so heavily skewered at small industrial centres.

It is the classic economist's dilemma. Damned if you do, damned if you don't.

Personally I subscribe to Keynesian economics, which is very much concerned with the short term cause in the 'long run we are all dead'.

The only disincentive to spending in the Nigerian context are the leakages that our corrupt politicians create.

Our biggest problem is that most Govt revenue(85%) comes from oil.

so use part of the reserve to diversify the economy. and reduce $ to GOLD ration of the reserve.

reserve = 70% GOLD, 30% $

Confucius: excess and in-adequate are equally at fault.

$50B is exccess for country where there is no water, power, roads, school, security, life expectancy is 50yrs.

i support that

babasin:

so use part of the reserve to diversify the economy. and reduce $ to GOLD ration of the reserve.

reserve = 70% GOLD, 30% $

Confucius: excess and in-adequate are equally at fault.

$50B is exccess for country where there is no water, power, roads, school, security, life expectancy is 50yrs.

Tell me about it.  Other countries will talk about foreign reserves and Nigeria will raise it's finger.  What a joke.  Starvin' Marvins have external reserves too I am sure.  All statistics and nothing to show for it.

@babasin

I don't see what holding gold will do in the present configuration.

Hoarding gold is largely a defensive move cause it is reckoned to be
a good storer of value in uncertain times.

Oil being our main source is NOT the problem at all. Look at countries like Saudi Arabia or other oil rich countries. Why is it not their problem?? IF we had oil as our main source and we had no other issues, that would not be a problem at all. The Problem we have is corruption. Our reserves should be greater than that considering we have been in the oil business for years . Nigeria's one and main problem is Corruption. If Corruption was not a major issue, the reserves would have been used to actually help get the country somewhere. In the past 8 years alone, the government has spent over 35% of what we have in reserve on various fraudulent projects, projects for which we are yet to see result.

We need to get our act together first.

@Kobo junkie.

It is definitely a problem, but obviously it is not responsible for the poor state of our general economy.

Besides
Nigeria is conspicuous amongst the Oil producing countries for a high population-oil revenues ratio.

the middle eastern states have far smaller populations and generate more revenues from their oil,
so they are literally awash with cash.

An oil/gas exporting country comparable to Nigeria in terms of population, Russia, also has significant problems with income disteibution, because
the money has to go round far more people than say the Saudi's 40- 40 million.

[size=14pt]leaVe the money alone[/size]

im sure there are more than one way to kill a rat

just scratch ur peoguin brain a little bit harder, sure that will do some magic for nigeria

here nigeria come

hey watch that dail course soldiers like me are on the move

god bless 1 Nig

Kobojunkie:

Oil being our main source is NOT the problem at all. Look at countries like Saudi Arabia or other oil rich countries. Why is it not their problem??

Saudi Arabia has actually witnessed a fall in income per capita compared to 1979.

The idea that the Nigerian Govt can engineer a diversification of our economy by spending our reserves is pure fantasy.Again,we have already done this before.The Volkswagen,Peugeot,Leyland, ANAMCO et al were all built in the 70s as a way of diversifying our economy.Where did all that lead?

The best way to bring about diversification cost nothing-Govt policies that encourage foreign investors to invest in different sectors of the economy.Foreign investors won't be encouraged by a depletion of the reserves

Again,I have asked,where has all the money we have spent already gone?Shouldn't we account for what was spent before spending more?

almondjoy:

Hmmm!  Yeah!  You sure look like you come from a country that has 50 billion bullcraps in the foreign reserves. Of what use is it when your "poverty" level is unrivalled globally?

"This MAN--Several WOMAN--singing unprogressive melody"----BLAH BLAH BLAH BLAH BLAH!!!

You bloody illiterate. You sound like you would know much about the state of affairs in the foreign reserves. You antelope! Keep typing rubbish--you piece of Dr. Waston's experimental waste!

Leopard as they say never change its spot. LADY/MAN head of Choir carry on with your melody


Coming back to the issue

External reserve that we are talking about,  I am sure is not just kept in savings. I have said it before it will have been spread into different investments including holding some in Golds as oopossed to the dollars once the forecast is that the Dollars is going to slide or on a freefall.

The other most important reason why we don't just start spending the monies is our corruption level and if we started spending like there is no tommorrow then we risk undoing what  God has help us to build over times and history (GOD forbid) may then repeat itself (as in post second Republic 1979-83 Shagari Administration leading to IMF and IBB SAP.

My own take here as I have said time and time again that unless we can somehow find a magic formula to allow people to stop thinking about 'national cake' mentality and spend half of those reserves in conjuction with the private sector on 3 things

1. Energy - Electricity/refineries

2. Transport Networks-  Road, Airports infrastuctures, railways, waterways

3. 6-8 Regional Business Zones ( like Milton Keynes Business Zone in the UK)

True wealth creation is what will make us a great nation. without any of the above we have no chance of being anywhere near the 20 biggest economy by the year 20202

True wealth creation is what will make us a great nation. without any of the above we have no chance of being anywhere near the 20 biggest economy by the year 20202

so u also believe in that fallacy that we will be amongst the top 20 economies by 2020 how is that going to be possible when we don't seem to know what our priorities are. i dont want to sound cynical but hmmm we are still slumbering and we have to wake up first before we can start making progress.

@I-man

But how will the economy be diversified without good infrastructure.
There is no incentive in any climate for private companies to improve the infrastructure
by themselves. If they do what we will have is a patchy infrastructure geography with some
very good areas and the rest abysmal.