Ofunaofu:
So the naira was actually floated. 

I thought Tinubu paid agents, BATerians said that the naira wasn't floated but rather that the naira was allowed to find its true value. 


I have asked them severally here, have the naira finally found its true value, but they keep changing the goal post and speaking from two sides of their mouth. 

And currency never finds its value unless is controlled by CBN. Tinubu is taking Nigeria backward to IBB era. Shior

Kay17:


I hope you understand that propping up your currency is a form of subsidy. You spend FX in sufficient mass to direct the price of FX towards the direction you wish. If you spend good money on that, it also means there is an opportunity cost in spending on power, education, health, digitization, etc.

The problem is these guys don’t spend money on health, education etc as you mentioned. They still go ahead to loot whatever gains they made. So why punish the people on multiple fronts?

I've come to the conclusion that economics is an ever evolving subject. There are only few laws that hold true, while the remaining concepts that are taught are all speculative. If not, we wouldn't have so many economic "experts" with very divergent views on the same thing. For those of you who hedge your funds by saving/investing on bitcoin, I urge you to continue, even as the world is slowly catching on. Protect your btc from hackers and keylogger spywares by first converting your private keys or master seed to QR codes before you start spending money on hard wallets like Trezor, and Co. Use a website like https://bitaddress.systems for your QR conversion. It's safe and reliable.

Sheuns:


The problem is these guys don’t spend money on health, education etc as you mentioned. They still go ahead to loot whatever gains they made. So why punish the people on multiple fronts?

This is a whataboutism argument. The fact that corruption consumes a huge chunk of our resources is not a basis to misalign and misspend your budget. At the end of the day, our resources are scarce enough for a population of over 200m people.

IbeOkehie:


Yes, but it will still be a futile effort until there's COMPLETE AND UNFETTERED FREEDOM.

In economics there are four factors of production -

Land - in Nigeria all land is owned by government.

Labour - the price of labour is regulated by government and indeed government is a major employer.

Capital - Nigerian currency value is regulated by government.

Until these factors are COMPLETELY controlled by the private sector, Nigeria will not prosper and develop. I know it's very unlikely to happen, so there you are, Nigeria is condemned to perpetual poverty.

So yes I commend President Tinubu. I appreciate his efforts while always noting that the same Tinubu caused all the problems he's trying to fix. The problem though is that the policies reforms are superficial, they are not ALL ENCOMPASSING, they don't go to the BASICS of the political economy. Take LAND, why is it that an individual can't OWN land in Nigeria? This is a BASIC building block of economic prosperity!!! If indeed President Tinubu is serious, he MUST tackle that one issue.

Another thing is price regulation. There should be a Constitutional Amendment that prohibits government from setting or regulating ANY prices of anything or any service in Nigeria.

These are BASIC, BASIC things. Anyway I hope you get the thrust of my thinking.

Good Luck to Nigeria.

Well, we both know absolutism in such freedom by Nigerian government is unlikely. I don't remember the last time land becomes hard to obtain for anyone with money. You're even more likely to encounter issues with the natives, omo oniles, who are the land custodians, than you are with the government. Anyone can own a land in Nigeria. In fact, a pact to cede government from regulating lands may spell chaos as Nigerians build houses on waterways and roads in disregard to the state's blueprint design. Now, imagine what absolute freedom will do–someone may build house inside government house or airport for wanting to live in GRA or just the sake of it. And emotional people would remain stubborn, like they were with Landmark.

Two, there's barely a country on earth that exercises your proposed absolutism in freedom. Not the US, China, Russia, Germany,... It's too much and risky to give. It appears you're only exploring the pros of such delicate policies, leaving the cons out of the way of your POV.

naijaboy756:
at what cost to the masses

Who no block those doing the round tripping?

Why must the masses pay for it?

You can not block roundtripping. It is next to impossible. The roundtripping is the symptom of a problem and not the problem itself. It's like taking only Panadol to fight malaria. If not careful, you'd die.

Buhari tried for 8 years to fight it, and failed. The government created the monster.

The huge differential between the official and parallel market rate
occurred because Buhari refused ito accept the exchange rate be market determined, but rather, preferred fixing it at an overvalued exchange rate by fiat. When the central bank couldn't supply enough dollars to the market at the official exchange rate, buyers flocked to the parallel or black market putting immense pressure on the local currency, causing it to massively depreciate there. That's what caused the huge differential.

With the floating of the Naira, the currency is now fully convertible. I can now even make many purchases online in Naira. I'm thinking of paying for Twitter premium. It is quoted in Naira. Want to advertise on WhatsApp, payment can be done in Naira. Go to cameo.com and be amazed!

IbeOkehie:


No dodge.

1) Mains electricity supply is low and unstable because the entire sector is controlled, dominated and majorly owned by government. The Germans have been trying to help since around 2016, to no avail. Because the government doesn't want a free market system.

2) Roads - do you know its ILLEGAL to export granite from Nigeria since the 1970's? The reason given when the law was made is that Nigeria needs all its granite to build roads, which are badly needed for development. Roads are owned by government.

3) Railways - Where is Oga Gerrard? The Chinese have helped Nigeria to build a new rail network. ALL railways in Nigeria are owned by government and here's what's happening with it -

https://nairametrics.com/2024/09/29/fg-orders-probe-into-ticket-racketeering-allegations-on-abuja-kaduna-rail-route/
https://hallmarknews.com/massive-corruption-rocks-railways-ticketing-system/
https://businessday.ng/transport/article/nigeria-rail-stutters-on-passenger-decline-rising-dollar-debt/

Basically, the ONLY WAY to make Nigeria productive and developed is to adopt a classical neo-liberal, free market and capitalist political-economy. Note the POLITICAL. Because the ingredients of a highly developed nation are KNOWN, it's no longer a secret. They are ECONOMIC-POLITICAL factors as follows -

*demographic homogeneity,
*democracy,
*free markets and
*property rights.

The more of these FOUR factors are present in a country, the more LIKELY it is to be highly developed and prosperous.

For example, Nigeria could CREATE more homogeneity by creating TRIBAL BASED states and giving each a HIGH DEGREE OF AUTONOMY.

Nigeria could bestow PROPERTY RIGHTS by repealing the Land Use Act and give lands back to the people.

Nigeria could ABOLISH the Central Bank and adopt bitcoin as official currency, thus eliminating INFLATION.

Here's a convo between Oga Gerrard and myself that summarizes what I've outlined above.

https://www.nairaland.com/8182619/cant-believe-got-whole-324k/4#131474779

That's it. The problem of Nigeria is NOT corruption, poor infrastructure, low IQ, Western or White Imperialism or anything. People say Western Sanctions have hurt the Zimbabwean economy, true but...Nigeria is NOT under ANY sanctions and yet it's the Poverty Capital of the World.

Nor will Germany, China, Aliens from Pluto or Eskimoes or Singapore ever help Nigeria develop. The ONLY way for Nigeria to develop is to give its people FREEDOM, political & economic freedom. That's all. But we know Black Africans will NEVER allow their own people to be free. I mean these are the tribes that sold their own brethren into slavery. That about says it all.

Good Luck to Nigeria.

Balablu economists.. Transcorp power ownex by Elumelu is owned by FG? Geregu power owned by Otedola is owned by FG?
Azura Power is owned by FG
Genscos and discos owned by FG?
Free markets should roads and hospitals too?

BigIyanga:

Balablu economists.. Transcorp power ownex by Elumelu is owned by FG? Geregu power owned by Otedola is owned by FG?
Azura Power is owned by FG
Genscos and discos owned by FG?
Free markets should roads and hospitals too?

The vast majority of Nigerians are still mistaken about the structure of the electricity sector in Nigeria. Just like they believed the LIE that "there is nothing like fuel subsidy. Fuel subsidy does not exist". Azura Power and Transcorp are obligated by LAW to sell their electricity to the TCN which is 100% owned by the Federal Government AND they don't control their own prices OR operating budget, by law. How private are they under such conditions?

jaxxy:


Is this not the same for Nepa that's has been in comatose state despite deregulation. The investors also want to get their ROI back as quickly as the telecoms industry which is not possible because there are many power and distribution infrastructure lacking and it a more intensive industry than telecoms.

IbeOkehie:


Nigeria is a feudal-socialist nation. Nigeria is NOT a capitalist nation. Capitalist nations have property rights....Nigeria has zero property rights. That's factual.

NEPA was broken up. Parts of it were sold but the most important unit of the NEPA system is still owned by government. It's called TCN, the Transmission Company of Nigeria.

TCN and its sister company NBET is the ONLY legal buyer and seller of electricity in Nigeria. The major input for producing electricity in Nigeria is natural gas and it is completely owned by government.

Since the price of electricity is STILL REGULATED, the above conditions mean the entire electricity sector is COMPLETELY controlled by government.

So despite the tinkering and buzzwords, NOTHING has changed in the electricity sector and it was President Yaradua that made it that way.

Imagine you own your private shoe making company. The government makes a law that you can only sell your shoes to government AND consumers can only buy shoes from government. And government sets the prices. Just think about this for a few minutes and tell me if that's a free and private market for shoes.

So many Nigerians cite electricity as an example of the failure of privatization and free markets. It shows Nigerians have little understanding of markets, the Nigerian economy or economics in general.

Thanks for the exchange though.

I don't understand why Nigerians are so ignorant about their economy. Simple, simple things that any university grad should be able to deduce from available facts are still subject to needless argumentation.

Good Luck to Nigeria.

IbeOkehie:


The vast majority of Nigerians are still mistaken about the structure of the electricity sector in Nigeria. Just like they believed the LIE that "there is nothing like fuel subsidy. Fuel subsidy does not exist". Azura Power and Transcorp are obligated by LAW to sell their electricity to the TCN which is 100% owned by the Federal Government AND they don't control their own prices OR operating budget, by law. How private are they under such conditions?







I don't understand why Nigerians are so ignorant about their economy. Simple, simple things that any university grad should be able to deduce from available facts are still subject to needless argumentation.

Good Luck to Nigeria.

Indonesian exports about $350bn in goods and services.
Indonesia gets about $7bn annually from tourism.
Indonesia gets $24bmb from Palm oil and related industry.
All of the above brought to you by 81k MW of electricity while your Naija generates 5K MW .. and you believe that Naira floatation is the reason why we’re not as industrialized as Indonesia..
1999-2007, our FX wasnt floated and our economy grew in double digits. Our reverses grew.

BigIyanga:

Indonesian exports about $350bn in goods and services.
Indonesia gets about $7bn annually from tourism.
Indonesia gets $24bmb from Palm oil and related industry.
All of the above brought to you by 81k MW of electricity while your Naija generates 5K MW .. and you believe that Naira floatation is the reason why we’re not as industrialized as Indonesia..
1999-2007, our FX wasnt floated and our economy grew in double digits. Our reverses grew.

Indonesia operates a free floating currency system - https://www.investopedia.com/terms/forex/i/idr-indonesian-rupiah.asp

Anyone interested can go read up on the Indonesian economy. Your facts and figures on their economy are about today. The NOW, isn't so important, we care more about HOW they got to where they are.

The root of Nigerian economic underdevelopment is the rigged value of the naira OR capital controls and other popular socialist, anti-market tendencies. The performance of the Nigerian economy in the past 25 years is evidence.

Good Luck to Nigeria.

IbeOkehie:


Indonesia operates a free floating currency system - https://www.investopedia.com/terms/forex/i/idr-indonesian-rupiah.asp

Anyone interested can go read up on the Indonesian economy. Your facts and figures on their economy are about today. The NOW, isn't so important, we care more about HOW they got to where they are.

The root of Nigerian economic underdevelopment is the rigged value of the naira OR capital controls and other popular socialist, anti-market tendencies. The performance of the Nigerian economy in the past 25 years is evidence.

Good Luck to Nigeria.

You’re bereft of how things work. I have followed Indonesia economy and politics since 1990s. I was glued to TV when Suharto, their military president was deposed by protesters. I started following Indonesia when there was no Google. We no be mates
1990.. Indomie Noodles ,Eva soap and some other FMG were produced in Indonesia and sold in Naija market. It was a major manufacturer for automotive parts, electronics, Rubber etc.. they all had nothing to with floating of their currency but by investing in public infrastructure like power, roads , security et
Indonesia has over 17,000 islands.. it has well connected road- rail-.water-air transports systems. It has close to 700 airports with 34 intl airports. Ruppiah flotation didnt build those things…
You be wrong student of history

@BigIyanga don't mind @IbeOkehie as he is too fascinated by his free market economy dreams to see reason in your submissions.... I don't need to be an economist to understand that Cardoso's currency floatation policy is a bad idea because Nigeria lacks the enabling environment for such policies to work.... I do agree with you that critical infrastructures like electricity, transportation and security are key, fast tracking the development of Nigeria's critical infrastructures is only possible when deliberate efforts are made to eradicate corruption and looting of public funds within the government..... As long as these issues are not addressed, no monetary or economic policy can fix Nigeria's economy

BigIyanga:

You’re bereft of how things work. I have followed Indonesia economy and politics since 1990s. I was glued to TV when Suharto, their military president was deposed by protesters. I started following Indonesia when there no Google. We no be mates
1990.. Indomie Noodles ,Eva soap and some other FMG were produced in Indonesia and sold in Naija market. It was a major manufacturer for automotive parts, electronics, Rubber etc.. they all had nothing to with floating of their currency but by investing in public infrastructure like power, roads , security et
Indonesia has over 17,000 islands.. it has well connected road- rail-.water-air transports systems. It has close to 700 airports with 34 intl airports. Ruppiah flotation didnt those things…
You be wrong student of history

Bebigiby1:
@BigIyanga don't mind @IbeOkehie as he is too fascinated by his free market economy dreams to see reason in your submissions.... I don't need to be an economist to understand that Cardoso's currency floatation policy is a bad idea because Nigeria lacks the enabling environment for such policies to work.... I do agree with you that critical infrastructures like electricity, transportation and security are key, fast tracking the development of Nigeria's critical infrastructures is only possible when deliberate efforts are made to eradicate corruption and looting of public funds within the government..... As long as these issues are not addressed, no monetary or economic policy can fix Nigeria's economy

U dey mind people who discovered internet thru Google . Indonesia was feeding Naija in late 80s and 1990s. Indomie noodles were made in Indonesia. Lahda Milk which introduced satchet milk im Naija, stole a lot of market share from peak. Manufactured in Indonesia. There was another popular cooking oil- made from palm oil .. which dominated naija FMCG space.
In fact, Indonesia was making aero plane and car psrts in 80s and 90s when Suharto was their presideng,

Yes you seem to possess deep knowledge regarding Indonesia's economy.... that's nice.... @IbeOkehie is just not getting the point been made here. It will be interesting to read one of his long free market economy epistles once again as a rebuttal to your comment....

BigIyanga:

U dey mind people who discovered internet thru Google . Indonesia was feeding Naija in late 80s and 1990s. Indomie noodles were made in Indonesia. Lahda Milk which introduced satchet milk im Naija, stole a lot of market share from peak. Manufactured in Indonesia. There was another popular cooking oil- made from palm oil .. which dominated naija FMCG space.
In fact, Indonesia was making aero plane and car psrts in 80s and 90s when Suharto was their presideng,

BigIyanga:

You’re bereft of how things work. I have followed Indonesia economy and politics since 1990s. I was glued to TV when Suharto, their military president was deposed by protesters. I started following Indonesia when there was no Google. We no be mates
1990..

HOW did Indonesia BECOME productive? That's what should concern you. What factors and things CONTRIBUTED to their situation? Tell us about that so we can learn and think about how to adapt it to Nigeria.

Bebigiby1:
Yes you seem to possess deep knowledge regarding Indonesia's economy.... that's nice.... @IbeOkehie is just not getting the point been made here. It will be interesting to read one of his long free market economy epistles once again as a rebuttal to your comment....

Indonesia didn't come into being as a productive economy. Was Indonesia producing all these things in the year 1800? Was China a manufacturing nation in 1950? What about South Korea? So WHEN and HOW did it happen for them , that is the issue to really figure out. Typical Nigerians are always salivating over results and not the process.

The proven factors of a successful nation with high HDI are democracy, free markets, demographic or cultural homogeneity, and property rights. The more a nation has of those factors, then the more successful it's LIKELY to be. That's all.

Unfortunately Nigeria only has a little modicum of democracy and THE people elected a socialist party in 2015. The results of that STUPIDITY are manifesting today.

Indonesia is not even a rich country but I'm willing to bet it has more of the factors for productivity and HDI success than Nigeria.
I really haven't read much about Indonesia and I'm willing to risk that statement. We've already established they have a FREE FLOATING currency so we can give them props for being wiser than Nigeria on that one issue.

Good Luck to Nigerians.

IbeOkehie:


HOW did Indonesia BECOME productive? That's what should concern you. What factors and things CONTRIBUTED to their situation? Tell us about that so we can learn and think about how to adapt it to Nigeria.

Indonesia didn't come into being as a productive economy. Was Indonesia producing all these things in the year 1800? Was China a manufacturing nation in 1950? What about South Korea? So WHEN and HOW did it happen for them , that is the issue to really figure out. Typical Nigerians are always salivating over results and not the process.

The proven factors of a successful nation with high HDI are democracy, free markets, demographic or cultural homogeneity, and property rights. The more a nation has of those factors, then the more successful it's LIKELY to be. That's all.

Unfortunately Nigeria only has a little modicum of democracy and THE people elected a socialist party in 2015. The results of that STUPIDITY are manifesting today.

Indonesia is not even a rich country but I'm willing to bet it has more of the factors for productivity and HDI success than Nigeria.
I really haven't read much about Indonesia and I'm willing to risk that statement. We've already established they have a FREE FLOATING currency so we can give them props for being wiser than Nigeria on that one issue.

Good Luck to Nigerians.

Mr Ibe,

I have followed your points so far in this thread. You don try. You have done so well trying to explain the ill effects of socialism and feeding bottles to these people. Yte they have refused to grasp the basic principles behind economic prosperity and national development. Let it go. The tale about someone doing the same thing while expecting different results will tell on everyone in a decade if things continue the way they are. The one who claims to be knowledgeable of the Indonesian economy forgets that the Rupiah value is terribly low. The same applies to Vietnam.

Honestly, the black man is socialist at heart. I am yet to be convinced otherwise.

EXPRESSSMAN:


All these your comparisons and analysis are unrelated and unnecessary.
Economic growth without Economic development is a mirage.
Besides, what you failed to understand is that the amount of leakages and corruption in the system rubished the comparison.
You didn't tell us the level of padding in Indonesian budgets or the number of Jets, Yatchs, Limo and buildings etc, their president acquired in those down periods.

What seguntijan said was quite correct.

The Suharto government was very corrupt

Nepotism was so high, it makes Tinubu look like a primary school boy.

Corruption rarely destroys an economy. Economies are far more limely to fail due to either bad policies, or due to the poor implementation of good ones.

If corruption was to destroy an economy, then the Malaysian economy should have gone under when a former president and his gang brazenly stole $5bn from a pension fund. His own share alone was apparently about $700m. The thief even stood for a second term but lost. He was later prosecuted.

I even forgot Russia. The Sochi Winter Games cost Russia $50bn to host. To understand how insane the cost, the Olympic Games which is several times bigger cost most host nations between $6-12bn.

It is believed that Vladimir Putin is worth between $70-200bn. What of the rich businessmen (Oligarchs) who became so damn wealthy by buying might state owned companies, some as big as NNPC for a token? Why do you think Abrahamovich is so rich?

It was Buhari's bad economic policies that destroyed the economy. I remember Charles Soludo and Lamido Sanusi pleading with Buhari to scrap his statist policies that they would kill the economy in June 2015. I too knew the economy was headed for disaster.

Gerrard59:

Mr Ibe,

I have followed your points so far in this thread. You don try. You have done so well trying to explain the ill effects of socialism and feeding bottles to these people. Yte they have refused to grasp the basic principles behind economic prosperity and national development. Let it go. The tale about someone doing the same thing while expecting different results will tell on everyone in a decade if things continue the way they are. The one who claims to be knowledgeable of the Indonesian economy forgets that the Rupiah value is terribly low. The same applies to Vietnam.

Honestly, the black man is socialist at heart. I am yet to be convinced otherwise.

Naija is a pure capitalist economy.. where goverent doest build roads, airports, hospitals, .. it doesnt provide security.. no social welfare/safety net. There is no city or state in Naija where portable and safe water is provided by government.
In China, railway system which is responsible for moving 95% of people and goods, is controlled and subsidized by govt.
In US/Canada, EU, public transport by road and rail, is heavily subsidized by govts.
In Naija govt gives favors and waivers to to their crony friends, fronts and agents. They socialize losses and pass on to Naija citizens while passing on gains to their friends/cronies.
Naija is where we are today, but govts and cronies found out that exporting our crude oil and importing it back is more profitable.
Oando, owned by Tinubus, is buying an existing refinery in Trinidad and Tobago … for what? Naija market. They want to kick out Dangote. 80% of our FX goes to petroleum imports.

BigIyanga:

Naija is a pure capitalist economy.. where goverent doest build roads, airports, hospitals, .. it doesnt provide security.. no social welfare/safety net. There is no city or state in Naija where portable and safe water is provided by government.
In China, railway system which is responsible for moving 95% of people and goods, is controlled and subsidized by govt.
In US/Canada, EU, public transport by road and rail, is heavily subsidized by govts.
In Naija govt gives favors and waivers to to their crony friends, fronts and agents. They socialize losses and pass on to Naija citizens while passing on gains to their friends/cronies.

Agreed.

However, the sectors of the economy are still controlled by the government. Lands, minerals etc.

Naija is where we are today, but govts and cronies found out that exporting our crude oil and importing it back is more profitable.
Oando, owned by Tinubus, is buying an existing refinery in Trinidad and Tobago … for what? Naija market. They want to kick out Dangote. 80% of our FX goes to petroleum imports.

Dangote wants the government to BAN the importation of petrol because he has a refinery. That is very wrong. He cannot be the sole source of Nigeria's petrol consumption. The scenario of subsidy removal is when ANYONE can import petrol and/or produce it in Nigeria and sell at MARKET PRICES without any restrictions whatsoever. Dangote should run his refinery, but importation of petrol should be allowed.

Gerrard59:

Agreed.

However, the sectors of the economy are still controlled by the government. Lands, minerals etc.


Dangote wants the government to BAN the importation of petrol because he has a refinery. That is very wrong. He cannot be the sole source of Nigeria's petrol consumption. The scenario of subsidy removal is when ANYONE can import petrol and/or produce it in Nigeria and sell at MARKET PRICES without any restrictions whatsoever. Dangote should run his refinery, but importation of petrol should be allowed.

You should not be supporting free market with one side of your brain while supporting govt offering subsidy to Oando and co.
If Dangote wants to buy NNPC at any agreed price without CBN/FG subsidy .. then it’s OK… but importers like OANDO should also export their crude, refine, import it and then sell direct to Naija consumers without NNPC as a middleman.. Oando and co will go out of business in a year.

grandstar:


What seguntijan said was quite correct.

The Suharto government was very corrupt

Nepotism was so high, it makes Tinubu look like a primary school boy.

Corruption rarely destroys an economy. Economies are far more limely to fail due to either bad policies, or due to the poor implementation of good ones.

If corruption was to destroy an economy, then the Malaysian economy should have gone under when a former president and his gang brazenly stole $5bn from a pension fund. His own share alone was apparently about $700m. The thief even stood for a second term but lost. He was later prosecuted.

I even forgot Russia. The Sochi Winter Games cost Russia $50bn to host. To understand how insane the cost, the Olympic Games which is several times bigger cost most host nations between $6-12bn.

It is believed that Vladimir Putin is worth between $70-200bn. What of the rich businessmen (Oligarchs) who became so damn wealthy by buying might state owned companies, some as big as NNPC for a token? Why do you think Abrahamovich is so rich?

It was Buhari's bad economic policies that destroyed the economy. I remember Charles Soludo and Lamido Sanusi pleading with Buhari to scrap his statist policies that they would kill the economy in June 2015. I too knew the economy was headed for disaster.

You said that corruption rarely destroys an economy. This makes every other thing you said here nonsense.
With reference to Nigeria, Learn to place the blame where it belongs. Buhari did his own. As it stands now, he is 100% better than Tinubu. Tinubu is the one that destroyed Nigeria Within one year.
If Tinubu knows what he is doing, he should have targeted 30 to 50% increase in fuel and dollar, reduce the size of the government and improve security and production. But all his attention is on increasing fuel and dollar rate. Have you seen Tinubu talk of any other things?
How do you defend fuel from N197 to N1200 per liter. Dollar from 600 to N1700.
Government is about the people and their welfare. It is not about useless reforms that are killing the people.
Stop defending nonsense. I believe you don't even know how much Tinubu has destroyed the country. Watch what will happen in few days from now, then you will understand.

BigIyanga:

Naija is a pure capitalist economy.. where goverent doest build roads, airports, hospitals, .. it doesnt provide security.. no social welfare/safety net. There is no city or state in Naija where portable and safe water is provided by government.
In China, railway system which is responsible for moving 95% of people and goods, is controlled and subsidized by govt.
In US/Canada, EU, public transport by road and rail, is heavily subsidized by govts.
In Naija govt gives favors and waivers to to their crony friends, fronts and agents. They socialize losses and pass on to Naija citizens while passing on gains to their friends/cronies.
Naija is where we are today, but govts and cronies found out that exporting our crude oil and importing it back is more profitable.
Oando, owned by Tinubus, is buying an existing refinery in Trinidad and Tobago … for what? Naija market. They want to kick out Dangote. 80% of our FX goes to petroleum imports.

This is a good opportunity for clarification of terms. That way we know what we're discussing.

Forex - there are several systems for managing forex.....fixed or pegged values, managed float and free float are the main ones. Unfortunately so many exceptions and conditionalities can be attached to each method. Nigeria operates a MANAGED FLOAT, not a free float. The two are not the same.

The one comment quoted is about economic system. Broadly today can be either pure or a mix of the following -
free market capitalist
socialist
feudalist
fascist

Saudi Arabia is a feudal system.

Nigeria operates a FEUDAL-SOCIALIST system. I know I've mentioned this in my commentary, though I mostly use the simpler term SOCIALIST. That's what you mean when you write:

In Naija govt gives favors and waivers to to their crony friends, fronts and agents.

And you're very correct. Feudal system is where governments award market roles to private participants according to their status in society....according to tribe, religion, class, family or political loyalty. The import licensing systems is an example.

Your complaint about water, roads and other public infrastructure is misplaced. The reasons Nigeria is failing at those functions are simple -

1) Government ownership in a non-homogenous society. Government owned companies are ALWAYS less efficient and productive than private equivalents. It only gets WORSE in diverse nations.

2) The government of Nigeria simply doesn't have the money to do even the little that it SHOULD do. Why doesn't Nigeria have the money? Because the country operates a feudal-socialist economy.

I've thought through these things over a long period of time. I had an interesting encounter with Peter Obi, the Presidential Candidate, at a public forum. I asked him if he would make Nigeria a free market country and his answer was "The Nigerian market is already too free". It's on video because the event was recorded. You have the same mistaken notion as Peter Obi. Most Nigerians have the same wrong perception of their political-economy and that is why the country is a disaster.

The three factors of production in a capitalist economy are land, labour and capital. Peter Obi and any Nigerian university graduate should know that ALL three are completely owned or controlled by government in Nigeria.

And here let me state that when thinking about CAPITAL, the market economist means MONEY, right? If you go read up on forex, systems that are NOT free floats are described as CAPITAL CONTROL systems. Whenever a government in any way controls the value of its currency by fiat, it is indirectly assigning REGULATED PRICES to ALL goods and services. Such regulated pricing is a sure way to DESTROY an economy.

All in all, it's discouraging that most university educated Nigerians can't even figure out basic info about their country. People go around shouting electricity has been privatized, there's nothing like fuel subsidy, SAP is evil, Nigeria is a free market. The level of ignorance in Nigeria can only lead to the outcomes of the present day. No surprises for sure.

Good Luck to Nigeria.

IbeOkehie:


This is a good opportunity for clarification of terms. That way we know what we're discussing.

Forex - there are several systems for managing forex.....fixed or pegged values, managed float and free float are the main ones. Unfortunately so many exceptions and conditionalities can be attached to each method. Nigeria operates a MANAGED FLOAT, not a free float. [/b]The two are not the same.

The one comment quoted is about economic system. Broadly today can be either pure or a mix of the following -
free market capitalist
socialist
feudalist
fascist

Saudi Arabia is a feudal system.

Nigeria operates a FEUDAL-SOCIALIST system. I know I've mentioned this in my commentary, though I mostly use the simpler term SOCIALIST. That's what you mean when you write:



And you're very correct. Feudal system is where governments award market roles to private participants according to their status in society....according to tribe, religion, class, family or political loyalty. The import licensing systems is an example.

Your complaint about water, roads and other public infrastructure is misplaced. The reasons Nigeria is failing at those functions are simple -

[b]1) Government ownership in a non-homogenous society. Government owned companies are ALWAYS less efficient and productive than private equivalents. It only gets WORSE in diverse nations.

2) The government of Nigeria simply doesn't have the money to do even the little that it SHOULD do. Why doesn't Nigeria have the money? Because the country operates a feudal-socialist economy.

I've thought through these things over a long period of time. I had an interesting encounter with Peter Obi, the Presidential Candidate, at a public forum. I asked him if he would make Nigeria a free market country and his answer was "The Nigerian market is already too free". It's on video because the event was recorded. You have the same mistaken notion as Peter Obi. Most Nigerians have the same wrong perception of their political-economy and that is why the country is a disaster.

The three factors of production in a capitalist economy are land, labour and capital. Peter Obi and any Nigerian university graduate should know that ALL three are completely owned or controlled by government in Nigeria.

And here let me state that when thinking about CAPITAL, the market economist means MONEY, right? If you go read up on forex, you will find that forex systems that are NOT free floats are described as CAPITAL CONTROL systems. Whenever a government in any way controls the value of its currency by fiat, it is indirectly assigning REGULATED PRICES to ALL goods and services. Such regulated pricing is a sure way to DESTROY an economy.

All in all, it's discouraging that most university educated Nigerians can't even figure out basic info about their country. People go around shouting electricity has been privatized, there's nothing like fuel subsidy, SAP is evil, Nigeria is a free market. The level of ignorance in Nigeria can only lead to the outcomes of the present day. No surprises for sure.

Good Luck to Nigeria.

Correction: Nigeria currently adopts the free-float system. That is what the CBN has said. That is why we have a disastrous forex regime with escalating prices in the last 18 months of this clueless Tinubu government

Previous governments used the managed float; that was when Nigeria had some reasonable stability and predictability in our forex regime in the past.

mikeapollo:


Correction: Nigeria currently adopts the free-float system. That is what the CBN has said. That is why we have a disastrous forex regime with escalating prices in the last 18 months of this clueless Tinubu government

Previous governments used the managed float; that was when Nigeria had some reasonable stability and predictability in our forex regime in the past.

No, Nigeria is still in a MANAGED FLOAT. The evidence points to it, the most prominent being the existence of a black market for forex. Managed float is NOT the same as a FREE FLOAT, it just isn't.

Managed float generally uses some sort of corridor or band pricing. The corridor can be wide or narrow. What the CBN did was DEVALUE the currency and narrow the corridor.

EXPRESSSMAN:


You said that corruption rarely destroys an economy. This makes every other thing you said here nonsense.
With reference to Nigeria, Learn to place the blame where it belongs. Buhari did his own. As it stands now, he is 100% better than Tinubu. Tinubu is the one that destroyed Nigeria Within one year.
If Tinubu knows what he is doing, he should have targeted 30 to 50% increase in fuel and dollar, reduce the size of the government and improve security and production. But all his attention is on increasing fuel and dollar rate. Have you seen Tinubu talk of any other things?
How do you defend fuel from N197 to N1200 per liter. Dollar from 600 to N1700.
Government is about the people and their welfare. It is not about useless reforms that are killing the people.
Stop defending nonsense. I believe you don't even know how much Tinubu has destroyed the country. Watch what will happen in few days from now, then you will understand .

So much wrong. Ask yourself first, WHAT CAUSES CORRUPTION?

The destruction of the economy didn't start in 2023, it started in 2012 with the Occupy Nigeria protests led by Tinubu and others.

And what will happen in a few days?

Thanks.

Good Luck to Nigeria

IbeOkehie:


This is a good opportunity for clarification of terms. That way we know what we're discussing.

Forex - there are several systems for managing forex.....fixed or pegged values, managed float and free float are the main ones. Unfortunately so many exceptions and conditionalities can be attached to each method. Nigeria operates a MANAGED FLOAT, not a free float. The two are not the same.

The one comment quoted is about economic system. Broadly today can be either pure or a mix of the following -
free market capitalist
socialist
feudalist
fascist

Saudi Arabia is a feudal system.

Nigeria operates a FEUDAL-SOCIALIST system. I know I've mentioned this in my commentary, though I mostly use the simpler term SOCIALIST. That's what you mean when you write:



And you're very correct. Feudal system is where governments award market roles to private participants according to their status in society....according to tribe, religion, class, family or political loyalty. The import licensing systems is an example.

Your complaint about water, roads and other public infrastructure is misplaced. The reasons Nigeria is failing at those functions are simple -

1) Government ownership in a non-homogenous society. Government owned companies are ALWAYS less efficient and productive than private equivalents. It only gets WORSE in diverse nations.

2) The government of Nigeria simply doesn't have the money to do even the little that it SHOULD do. Why doesn't Nigeria have the money? Because the country operates a feudal-socialist economy.

I've thought through these things over a long period of time. I had an interesting encounter with Peter Obi, the Presidential Candidate, at a public forum. I asked him if he would make Nigeria a free market country and his answer was "The Nigerian market is already too free". It's on video because the event was recorded. You have the same mistaken notion as Peter Obi. Most Nigerians have the same wrong perception of their political-economy and that is why the country is a disaster.

The three factors of production in a capitalist economy are land, labour and capital. Peter Obi and any Nigerian university graduate should know that ALL three are completely owned or controlled by government in Nigeria.

And here let me state that when thinking about CAPITAL, the market economist means MONEY, right? If you go read up on forex, you will find that forex systems that are NOT free floats are described as CAPITAL CONTROL systems. Whenever a government in any way controls the value of its currency by fiat, it is indirectly assigning REGULATED PRICES to ALL goods and services. Such regulated pricing is a sure way to DESTROY an economy.

All in all, it's discouraging that most university educated Nigerians can't even figure out basic info about their country. People go around shouting electricity has been privatized, there's nothing like fuel subsidy, SAP is evil, Nigeria is a free market. The level of ignorance in Nigeria can only lead to the outcomes of the present day. No surprises for sure.

Good Luck to Nigeria.

In your partisan mind as a pseudo historian, you can conjuncture up names in order to fit your narrative.
Do I remotely seem to you like someone who doesnt know what a capitalist economy is??
Abeg, this convo is above your partisan pay grade.
Naija is broke because 80% of our budget goes to Recurrent expenditure. Close to 50 ministries with PAs,SA. Your president bought a $200m plane. This is the most profligate presidency ever. Atl least Peter Obi would have been less wasteful.
This president and his gang supported GMB all through his 8yrs, now it has dawned on them that they destroyed Naija economy. Since they took over, the economy has been on CPR with recessionary pressure and policies. The economy has not grown more than 4% year on year… while their predecessors recorded double digit growth. They shrank our GDP by 40%

EXPRESSSMAN:


You said that corruption rarely destroys an economy. This makes every other thing you said here nonsense.
With reference to Nigeria, Learn to place the blame where it belongs. Buhari did his own. As it stands now, he is 100% better than Tinubu. Tinubu is the one that destroyed Nigeria Within one year.
If Tinubu knows what he is doing, he should have targeted 30 to 50% increase in fuel and dollar, reduce the size of the government and improve security and production. But all his attention is on increasing fuel and dollar rate. Have you seen Tinubu talk of any other things?
How do you defend fuel from N197 to N1200 per liter. Dollar from 600 to N1700.
Government is about the people and their welfare. It is not about useless reforms that are killing the people.
Stop defending nonsense. I believe you don't even know how much Tinubu has destroyed the country. Watch what will happen in few days from now, then you will understand.

You said that corruption rarely destroys an economy. This makes every other thing you said here nonsense.

I knew you were going to rubbish that statement. This exposes an ignorance of economics.

When China was growing very fast, corruption was endemic. Japan, South Korea and Taiwan had lots of corruption when they were growing very fast.

Italy which is a developed country had lots of corruption growing fast, and corruption is still common place in that country.



If Tinubu knows what he is doing, he should have targeted 30 to 50% increase in fuel and dollar

You seem to think economists often have the luxuries of doing what they want. The reality is that they have to make the best of the cards they are dealt.

Would a 50% increase in the price of petrol have resolved the problem.

In 2022, the Buhari government spent over 100% of government revenue financing the budget deficit. That means after servicing the debt, the government has no money left to run the budget. Everything would have to borrowed. Buhari was fond of massive borrowing.

The estimated government revenue for the fiscal year 2024 is 18.5bn while expenses would be 27.5bn

https://www.pwc.com/ng/en/publications/budget.html

PwC bulletin: Nigeria's 2024 Budget Highlights
The Federal Government of Nigeria recently presented the 2024 Budget proposal to the National Assembly. The Budget titled "Budget of Renewed Hope" shows a proposed expenditure of NGN27.5 trillion and an estimated revenue of NGN18.32 trillion for the 2024 fiscal year. We have analysed in our infographic a snapshot of the 2024 Budget proposal and its assumptions relative to the 2023 approved and supplementary Budgets.

If government spends 90% of its revenue in debt servicing, that means the government only has 1.85 trillion to spend. The subsidy cost 10 trillion. How would increasing the petrol price by 50% have made a dent? The max it can saved would be around 2 trillion.

The government has no choice but to completely end the subsidy and fully deregulate the price of petrol. To continue borrowing 10 trillion yearly to subsidize petrol is no longer possible. 10 trillion every year at an interest rate of at least 20% is 2 trillion. If the government keeps borrowing that mount every year for 5 years, that is 50 tr and 10 trillion to service it.

The biggest damage the subsidy is doing is that its adversely affecting. It has discouraged investment into refining by the private sector.
Dangote should have been producing petrol long ago, but because the price is subsidized, he did not refine. The prices of kerosene and diesel are fully deregulated, and he is producing those. A litre of crude oil is 750. How then will he make money selling refined petrol at 600?

The only reason why he is producing petrol now is that government has done a deal with him. If there had been no subsidy on petrol, Nigeria by now should be refining over 2m bpd. Over 20 licences for petrol refineries were handed out to the private sector since 1999 but no one would build a refinery where the price of petrol is subsidized.

EXPRESSSMAN:


You said that corruption rarely destroys an economy. This makes every other thing you said here nonsense.
With reference to Nigeria, Learn to place the blame where it belongs. Buhari did his own. As it stands now, he is 100% better than Tinubu. Tinubu is the one that destroyed Nigeria Within one year.
If Tinubu knows what he is doing, he should have targeted 30 to 50% increase in fuel and dollar, reduce the size of the government and improve security and production. But all his attention is on increasing fuel and dollar rate. Have you seen Tinubu talk of any other things?
How do you defend fuel from N197 to N1200 per liter. Dollar from 600 to N1700.
Government is about the people and their welfare. It is not about useless reforms that are killing the people.
Stop defending nonsense. I believe you don't even know how much Tinubu has destroyed the country. Watch what will happen in few days from now, then you will understand.

Why weren't you crying when Buhari was destroying the economy? The government is about people's welfare is balderdash when you have to borrow huge sums of money to achieve that. T

Is it Tinubu's fault that he met only $3bn in the foreign reserves? Was it Tinubu's fault that the CBN was owing $7bn to buyers of forex?

grandstar:


Why weren't you crying when Buhari was destroying the economy? The government is about people's welfare is balderdash when you have to borrow huge sums of money to achieve that. T

Is it Tinubu's fault that he met only $3bn in the foreign reserves? Was it Tinubu's fault that the CBN was owing $7bn to buyers of forex?

Well, I cried when Buhari was destroying the country. This is why I didn't vote for him., both first and second term.
It was people like you and your people that voted and cheered him up for 8 years. You didn't at any time say or see that he was destroying. It is now you saw destruction because you want to defend another disaster.
It is when Tinubu leaves now that your eyes will open again.
And for your information Tinubu did not meet any 3 billon dollars as foreign reserve. Stop misinforming people. If you say Tinubu is doing well, don't worry it will reach everyone.

grandstar:


You said that corruption rarely destroys an economy. This makes every other thing you said here nonsense.

I knew you were going to rubbish that statement. This exposes an ignorance of economics.

When China was growing very fast, corruption was endemic. Japan, South Korea and Taiwan had lots of corruption when they were growing very fast.

Italy which is a developed country had lots of corruption growing fast, and corruption is still common place in that country.



If Tinubu knows what he is doing, he should have targeted 30 to 50% increase in fuel and dollar

You seem to think economists often have the luxuries of doing what they want. The reality is that they have to make the best of the cards they are dealt.

Would a 50% increase in the price of petrol have resolved the problem.

In 2022, the Buhari government spent over 100% of government revenue financing the budget deficit. That means after servicing the debt, the government has no money left to run the budget. Everything would have to borrowed. Buhari was fond of massive borrowing.

The estimated government revenue for the fiscal year 2024 is 18.5bn while expenses would be 27.5bn

https://www.pwc.com/ng/en/publications/budget.html

PwC bulletin: Nigeria's 2024 Budget Highlights
The Federal Government of Nigeria recently presented the 2024 Budget proposal to the National Assembly. The Budget titled "Budget of Renewed Hope" shows a proposed expenditure of NGN27.5 trillion and an estimated revenue of NGN18.32 trillion for the 2024 fiscal year. We have analysed in our infographic a snapshot of the 2024 Budget proposal and its assumptions relative to the 2023 approved and supplementary Budgets.

If government spends 90% of its revenue in debt servicing, that means the government only has 1.85 trillion to spend. The subsidy cost 10 trillion. How would increasing the petrol price by 50% have made a dent? The max it can saved would be around 2 trillion.

The government has no choice but to completely end the subsidy and fully deregulate the price of petrol. To continue borrowing 10 trillion yearly to subsidize petrol is no longer possible. 10 trillion every year at an interest rate of at least 20% is 2 trillion. If the government keeps borrowing that mount every year for 5 years, that is 50 tr and 10 trillion to service it.

The biggest damage the subsidy is doing is that its adversely affecting. It has discouraged investment into refining by the private sector.
Dangote should have been producing petrol long ago, but because the price is subsidized, he did not refine. The prices of kerosene and diesel are fully deregulated, and he is producing those. A litre of crude oil is 750. How then will he make money selling refined petrol at 600?

The only reason why he is producing petrol now is that government has done a deal with him. If there had been no subsidy on petrol, Nigeria by now should be refining over 2m bpd. Over 20 licences for petrol refineries were handed out to the private sector since 1999 but no one would build a refinery where the price of petrol is subsidized.

In your attempt to defend nonsense as usual, you said that government is not about the welfare of the people.
You also said that corruption rarely destroys an economy.
You started quoting irrelevant figures and statistics as a government propaganda machinery.
Well, it is not about me and you arguing here. You don't tell a blind man that there is no salt in the soup.
Millions of Nigerians curse Tinubu every day. Now he is widely called T pain.
I have not seen a President with this level of hatred. So I can only leave you and him to posterity.

IT WAS A VERY CARELESS DECISION. THE COLLUSION BETWEEN THE GOVERNOR OF CBN AND THE MINISTER OF FINANCE TO FLOAT THE NAIRA SHOULD BE PROBED.

BreconHills:


Current fx disparities are tiny. Even in OECD countries there are minor disparities.

Fuel subsidy is significantly reduced and will reduce further.

Electricity subsidies are still a thing and will continue to give a human face to reforms.

The result of the reduction in subsidies is a superior balance of payments sheet with imports dropping and exports rising creating positive trade balances for the first time in years.

More long term fx flows using offshore gas fields are in play and the reserves have continued to rise dramatically.

So why no impact on street?

Government is favouring financing budget deficit with fx gains over a strong naira - brutal but necessary. Policy will change a) based on local adaptation and innovation. b) when unimpaired reserve threshold reaches x

Fiscal policy is non existent. Wale must make up or ship out.

But things are significantly better than they appear. Street may not agree but governments are not elected to carry out whims of street.

If street does not like them in 2027 it knows what to do.

Everything else is cho cho cho.

Opari

It took a while for me to actually read something meaningful on this thread and I am glad I found it, you just needed to read his policy for elections to understand close to what they're doing , the target for FX reserve is 50-60 billion when they can then defend the naira value to decline to an extend, their target in the policy document is 600-700 but I will assume if they can get the reserve to 55billion they can defend the naira rate to like 1000-1100. Also their targets of increase in oil revenue by targeting almost 2milion per barrel should be what they should work on now, I see some movement on the seplat/shell deal and looks like approval will be given this month, also if only Mele Kyari can get his refineries at least 2 working so it can complement Dangote in exportation of refined products , but I am almost given up on NNPC and it's activities with the refineries, this country needs revenue , and needs investments to unlock that revenue , I wish them the best