ALTERNATEID:


Have we been able to expand the economy by spending all our forex earnings plus loans to subsidize PMS and defend the naira in the last 30 years or so? That’s definitely not the way to go. It only leads to debt and economic stagnation. That’s why we are where we are today.

First, we need stability. Once we stop spending on subsidies for a sustained period of time, the gains will start accumulating and we can spend on areas of economic development. Infrastructure, health, tech, start ups, msmes, education, agriculture, increased oil production etc.

It is going to take a bit of time. There is no shortcut to it. Even foreign investors will flood in once they see we are finally serious about getting our macro economic priorities right.

😂 😂... my brother, every serious nation subsidises its energy sector in some way... otherwise we are making no headway but let me understand your thought process.

Removal of Subsidy frees up funds ba? What then is point of subsidy removal when CURRENCY FLOATATION has wiped of its gains?

Why are companies pulling out if the future is bright? Companies that NEVER PULLED OUT during the dark days of the military and some of the worst economic conditions like SAP?

It appears you guys don't understand the impact of the damage of the twin policies of subsidy removal and naira floatation.. 😂

mrvitalis:

I have been explaining this same thing for 3 years..

Do you think it's a cultural thing?.

it's straightforward partisanship and bigotry built on a foundation of illiteracy.

At the end of the day they must rid the party of nyesom wike to make any headway.

ALTERNATEID:
As we don’t have the revenue to keep defending the naira as we’ve seen in the last 12 years or so, let’s keep borrowing to keep petrol prices and exchange rate low.

At the time Buhari was leaving, our debt to revenue was already 97%. If Tinubu did not change course, we would be doing over 110% by now instead of 67%. We would have started defaulting and by now, no one will be willing to borrow us money again.

No one is against defending the naira, the problem is we don’t have the money to defend it. We need to improve and expand our economy to make more money and using all our earnings plus loan to defend the naira and pay PMS subsidy will not expand the economy. At least, it has not done that in the last 15 years.


Buhari did exactly what Peter Obi said he would do for 8 years and we all saw the sorry state of the economy that he left behind.

How do you expand the economy? 🤔... where will you get money to do it?

mrvitalis:

developmental economics is very complex but I would use a sector to illustrate for you

Let's take pharmaceutical ;- this is an industry Nigeria can have comparative advantage and dominate at least on the African continent

President, calls the pharmaceutical companies
What do you import that you can produce locally if you have credit And would do you need to expand and dominate the African continent

Say the top 50 companies list their demands and it's say about 3 billion dollars

The president borrows the money at a low interest since nations loans have low intrest of say 1.5% per year

Gives the loan to banks at 3% per year intrest in the condition that they give the loan to the pharmaceutical companies at not more than 7% per year... The government gives banks 5 years zero payment and no interest if they give the pharmaceutical companies same

Now you have pharmaceutical companies with a 3 billon warchest...
Will improve
1) local sourcing of input materials
2) expand production
3) increase revenue
4) they would have to employ more people 10s of thousands
4) their tax payment increase

Government
1) traps the pharmaceutical companies into the tax bracket with more access to their books
2) increase revenue from them
3) their loan repayment is used for debt services
4) job creation surges

The ripple effect is felt across the economy

This is an oversimplification, but imagine this in 15 sectors..... Imagine the employment, money in circulation

I don't understand how this is too difficult for folks too understand abi na the quality of posters wey dey this forum? ..

Topman7:


Peter Obi is a corrupt, useless pretender who has no clue how to run an economy.

What did he do as governor of Anambra state apart from building a brewery?

He also refused to pay state doctors for a year. Goodness knows how they survived.

Meanwhile Obi’s personal bank accounts in the Cayman Islands were bulging with millions of dollars of stolen money.

Now he has turned ‘Professor of Economics’, prescribing mass borrowing as the way out, condemning future generations to heavy indebtedness.

We want nothing to do with him!

No wahala! Enjoy the one you want something do with 😂 😂

These tribalistic cunts will never cease to tickle me 😂

mrvitalis:

Obi too quiet... Man spent over a million dollars to educate himself on governance

Came back proposed solution to solve problems and you hate him because of where he is from

See what's happening the Air peace today.. The same man preaching ome Nigeria

Igbos are hated because we are loud blah blah blah... Today see people celebrating his indictment... Lmaooo I would like to ask him if he is loud too to bring the hate to him

Go to North core North a significant doctors, nurses and pharmacist are igbos... They trust Igbos with their life but are brainwashed wash same Igbos would kill them if they become president

Nigerians never ready

My brother, its irritating but no worry yourself, eye go clear them. No just worry.

Na my people for South east I dey vex for. It is time we sef put our house in order. Let's look inwards and stop looking at others.

Obaaderemi2:
As long as they have access to the dollar unlike the days of Buhari when they were strangled and we're at the mercy of the black market.

Exactly my point! Borrow to defend naira and keep it at a level that local companies will find convenient to produce with. That is Obis aim.

The problem all this while is that cheap dollars have gone into consumption and NOT production!

Ensa777:


This is where pettiness jam pettiness.
I remember what Wike did to Célestine Omehia.Recalled him as one of de ex Govs, to spite Amaechi,and even added his pic frame to show it.
Months later,still use his hand to remove him and stripped him of them.

Don't mind the Bot.. Wike himself is king of pettiness ! 😂

Obaaderemi2:
You can borrow money to do that. But borrowing money to defend a currency so your importers can import more is silly. You can borrow money and through commercial banks put the money into agricultural production and SMEs.

😂 😂... what of local companies that IMPORT RAW MATERIALS NEEDED FOR PRODUCTION?

mrvitalis:

Intervening How by treating symptoms? Giving BDC cheap dollars? ... You have done for 9 years... It didn't work... You have borrowed to build infrastructure for 9 years it has not boasted the economy

Yet Obi propose an alternative that has worked all over the world you are all against him

Na Obi I blame sha if na me I never leave una

😂 😂

nairalanda1:



At the expense of a growing debt burden?

I understand you perfectly. .. but would you really mind increasing your debt AS LONG AS ITS A MEANS TO AN END?
I wouldn't mind at all. Yes, I'm raising my debts by borrowing AS LONG AS WHAT IM BORROWING FOR LEADS TO AN INCREASED REVENUE at the end of the day.

Wow, so igbos are enjoying this government? 😂 😂 Bloody idiots!
See as hunger don confuse all of them finish 😂

richmond500:
if u know, then stop asking me questions that u know, I am avoiding another round of ur silly questions, u have already drained my energy.
I am too old to engage on a second fruitless expeditions.
There is no sense in asking question that u already know the answers to.

Silly questions because you can't answer them 😂.. Next time don't jump into issues you are confused about. Doest tell well on you.

And by the way, if Nigeria was floating its currency during Covid 19, we would have been way worse than we were.. QED!


Have a nice Sunday Bro. 😂

Bro, if you really understand currency floatation and you understand the Nigerian problem, you'll see it offers us no advantage AT THIS POINT IN TIME. just leave the matter 😂

richmond500:
.

I no get time to explain this, there are many benefits and it's not hidden to common sense.
If u want to know about the benefits, just go to Google and type "benefits of floating exchange rate"
U don already drain my energy like leech

O trust me! I know. Na you I dey ask to tell us the benefit of currency floatation TO NIGERIA and its specific circumstance. Leave Google! 😂

Google has no solutions for the Nigerian problem. Na you mention economic stability.. oya explain na.. wahala! 😂

challoxxx:
I remember vividly when Obi Wali was murdered ; the whole of Mile 4 was in chaos hmmm; how time flies

I remember.. 1993.. even Apiti of Rumueme was fingered in it.. crazy times 😂
His wife smuggled in assassins who butchered and dismembered him.m
It was horrible!

Chijioke Ihunwo rugged sha! 😂 . WIKE don use im own hand destroy im legacies 🤦🏾‍♂️

Obaaderemi2:
Keep their currency stable by ramping up production not by borrowing more to add to a debt profile that's already a quarter of your GDP. Obidunces are just stupiid

Very good! 😂 😂... Pray tell, HOW DO YOU RAMP UP PRODUCTION?

Sergio103:
Dear Seun, please if you can help provide a block button for nairaland users....we will really appreciate.

Please it's really important especially in this messed up economy of the country. There are some monickers that are just here to punish fellow citizens (maybe not). And I wouldn't like if I enter a thread, they will just fill it spewing balderdash.

Twitter is day by day taking over.

There are some good reasonable APC members you at least get to listen to, view thier opinion and get to argue constructively i.e Legendhero.

But you see this moniker as Helinues and bands of scallywags....I just want to block them from my feeds

Seuns, thanks for consideration

😂 😂.. ignore the guy! Which block wey you wan BLOCK am wey im own family members never BLOCK am? 😂

richmond500:
"Now when a currency is floating, it can adjust to shock from external influence".
That is what I said from the comment u quoted.
I never said the only way for our economy to be stabilized is through currency floatation. There are other factors and policies that play a major role, u are telling me to admit that the only way to stabilize the economy is through currency floatation, which u know that isn't what I said.

I also made mentions of covid-19 in that comment, that is an example of external force outside economics. I wonder why u missed the whole point and fix-in something that wasn't there to begin with.

Nope! I NEVER said that was what you said. Now, you are the one trying to say what I didn't say. That guy asked you the benefit of floating our currency AND YOU MENTIONED ECONOMIC STABILITY in the context of an external shock.

Till now you've not said anything different. I've even asked you to answer the question again AND THIS TIME DONT LIMIT IT TO EXTERNAL SHOCKS. What other economic benefits are there for Nigeria in this currency floatation?

Obaaderemi2:
You obviously know little about commerce. Niger and it's neighbors are landlocked. Most of their imports come through other neighbouring countries worth billions of dollars. A railway from Nigeria to Niger would corner much of that trade and there will be return on investment.

But does it make sense to you to devalue your currency and then start looking for loans with interest to keep defending it. If you are rich enough like China or the UK, why not? But at a time when your debt problem is already choking you, getting additional $15bn is madness

Did we deliberately DEVALUE our currency? I agree with your first paragraph by the way.

muykem:
Please tell me any country in the world that's using 95% of it's revenue to service debt and still continue to borrow to defend it's currency. You really want to defend Peter Obi error. Those countries are not defending their currency but intervene in the market just like what CBN is doing presently.

Ok fine. 95% debt to revenue. .. so if we earn 100naira, we spend 95 naira on debt servicing ba? So what is the way foward?? What are our options?

nairalanda1:



Well, not to defend t-pain, but the fact is, years of defending the currency left us with a very limited amount of money most of which has been chopped by debt service.

Unless this government can start diversifying the economy, something I see them not being serious about right now, we are not going to improve our forex earnings, and means of defending the naira.

And taking loans to do so, is not going to make things better...we would just be pushing the evil day further. Like Bhari and initially t-pain.

I disagree with the bolded.. what you mean is that years of defending the naira WHILE WASTING THE ADVANTAGES OR BENEFITS IT GAVE US IS WHAT KEPT US IN THIS POSITION.

Remember, the aim of defending the currency especially for countries like ours whose COST OF PRODUCTION requires a very high dollar input is to SPUR AND MAINTAIN PRODUCTION.

Now, since you've decided to move the goal post with your answers, no wahala, i will happily oblige you.

I'm going to now ask you directly...HOW DOES THE FREE FLOATING of our currency HELP THE NIGERIAN ECONOMY? both short term, and long term.. feel free to "go to town" with your answer...

No mind me, I be olodo for the matter so please explain to me 😂

richmond500:
What the govt is doing is forceful stability which has caused devaluation thereby leading to lower purchasing power and currency depreciation.
Now when a currency is floating, it can adjust to shock from external influence.
What this means is that, our economy will grow when world economy is growing and we will not fall if there is a global catastrophe in world economy.
If our currency was floated all these while, COVID-19 wouldn't have affected us that much cos the economy would naturally adjust to the pressure.

Ogbeni, the above was your response to the question below.. SO IN EFFECT YOUR ANSWER OF ECONOMIC STABILITY WAS IN THE CONTEXT OF EXTERNAL SHOCKS

Kukutenla:

So how has the economy stabilised since the floating? It seems to have been on a free call instead
I'm seeking for knowledge that's why I'm asking what I don't know
I believe you quoted me because you saw a gap in my knowledge

richmond500:
what I said was, floating the currency helps stabilize the economy, I stressed further and said in time of external shock.
What is there that u don't understand?

Very good... so I was correct initially.. that your definition of economic stability was in the context of if there was an "external shock" ba? 😂

richmond500:
It's for stability, they have over-explained this thing more than necessary, I wonder why some people are still asking the same question

What u should ask is when will the hardship end, cos we don tire.

richmond500:
not stability of the currency but stability of the economy.
Guy abeg get more knowledge on this issue before u type cos e get somethings weh deh tiring to explain to a grown adult.

Explain the bolded pls. 😂

richmond500:
It's for stability

richmond500 post=132406616:
not stability of the currency but stability of the economy.
Guy abeg get more knowledge on this issue before u type cos e get somethings weh deh tiring to explain to a grown adult.

, they have over-explained this thing more than necessary, I wonder why some people are still asking the same question

What u should ask is when will the hardship end, cos we don tire.

😂 😂.. ogbeni, calm down... explain the bolded please. Your own words o! Not mine.

Softmirror:


Lol 😂 that is all you see. 😂😂😂😂😂😂 Of course that's all you will see.

Bro, please tell or show me what else is there to see 😂