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Re: Nairaland Economics Academy by efficiencie(m): 1:03am On Dec 05, 2014 |
Appliedmaths: This brings to mind the view 'theories are twisted to suit facts and not facts to suit theory'...but this begs a question: how factual are facts and to what extent do they measure accurately observable phenomena? In a world of color blind people black and white alone exist and if this is termed a fact then a person without this disorder (but in such a world is consider sick!) would likely theorize based on observation out of the ordinary in that world but his theory would be thrown out for explaining colors not observable to the color blind... So in a way, sometimes, facts may be twisted to suit empirically justified theories! |
Re: Nairaland Economics Academy by efficiencie(m): 1:05am On Dec 05, 2014 |
...That's why we need independent data repositories... |
Re: Nairaland Economics Academy by efficiencie(m): 11:14am On Dec 06, 2014 |
efficiencie: anyone attempting this! |
Re: Nairaland Economics Academy by khattab008: 10:06pm On Dec 06, 2014 |
efficiencie: Op, nice thread, definitely following. A lecturer of mine recently said ''No economy can make meaningful progress when it's citizen's consume what they not produce, while consuming what they do not produce''. Personally, I believe that the main reason increased to the current $510b or so, was as a result of inflation. That seems to be the only logical explanation for the overnight astrounomical increase(although our production level has increased overtime but sufficient enough). We need to start exporting value added goods, rather than raw materials, to reduce our unemployment level, increase our income and to bring about much needed development. @Efficiencie: am my views in line? |
Re: Nairaland Economics Academy by khattab008: 10:10pm On Dec 06, 2014 |
efficiencie: NBS should probably be given some sort of autonomy. |
Re: Nairaland Economics Academy by efficiencie(m): 11:28pm On Dec 06, 2014 |
khattab008: My bro you are so right! I wonder why 'DEVELOPMENT' is such a dreaded term!? Our policy makers and OGAs at the top are only happy with word 'GROWTH' but they frown at 'DEVELOPMENT'. First, our 'GROWTH' is not sustainable. Nigeria's dependence on oil is deadly. The oil sector has generated environmental concerns, held us to a 'federalism' that's not working, made Nigeria vulnerable to oil price shocks and deepened the effects of the Dutch disease in Nigeria. We cannot continue to grow like this. This kind of growth is futureless, rootless, ruthless and deadly! It appears we have a ruling elite sponsoring and profiting from the current state of the country. I believe this elite thrives on the lack cohesion, decisiveness and tact among poor Nigerians. It's such a pity!!! |
Re: Nairaland Economics Academy by efficiencie(m): 11:35pm On Dec 06, 2014 |
khattab008: yes sir! that's it...until the NBS breaks from stronghold of the govt our data cannot be trusted...Imagine calculating GDP growth rate (year-on-year) and getting 20% 80% or 140% is that not outrageous? if those figures were true then we would be in the security council of the UN ![]() Can you imagine the stress you go through just to get data from NBS! I suspect they collect data and keep it for policy makers and not academics or independent researchers. We need an autonomous NBS indeed! |
Re: Nairaland Economics Academy by khattab008: 6:42am On Dec 07, 2014 |
efficiencie: Quite true, Data that's suppose to be easily available to the general public is been hoarded(data that's not even accurate), Primary data remains the best data source. The GDP is the most used macroeconomics indicator by our politicians, that shows how dubious they are. efficiencie: It's a pity indeed. They place so much emphasis on growth that's not even sustainable, some sort of illusious growth. The Nigerian economy as it is now is performing far below it's potential, we need to diversify our economy, there's also the need to look inward in a bid to drastically reduce our imports. Am still waiting to see what (positive)impact Madam Minister has had on our economy so. |
Re: Nairaland Economics Academy by efficiencie(m): 8:41pm On Dec 08, 2014 |
Let's examine the Solow Model. Given an open economy with a government with aggregate output relation: Y=A(K^α)(L^β)(e^vt)...1 From 1 dY/Y=v+α.dK/K+β.dL/L...2 But it is assumed that labor grows at a rate 'n' and hence dL/L=n...3 Also capital growth is given as: I=dK+δK ...4 where 'I', 'F' and 'δ' are private investment, foreign capital and depreciation respectively. But given the keynesian identity: Y=C+I+G+X-M...5 Since X-M=F according to the BOP equilibrium rule then 5 becomes: S+T=I+G+F S+T-G=I+F S+S*=I+F ...6 where total savings is the summation of private savings S and public savings S*=T-G And since: S=sY...7 S*=s*Y ...8 where 's' and 's*' are the savings ratios in the private and public sectors Equation 6 becomes sY+s*Y=I+F From 4 sY+s*Y=dK+δK+F sY/K+s*Y/K =dK/K+δ+F/K s/σ+s*/σ=dK/K+δ+f Where σ=K/Y and f=F/K Hence dK/K=s/σ+s*/σ -δ-f...8 On plugging the value of dK/K in the equations 2 and 8 into the equation 1 we have: dY/Y=v+αs/σ+αs*/σ-αδ-αf+βn G=v+αs/σ+αs*/σ-αδ-αf+βn ...9 The Solow model as a planning model shows that growth can be sourced from: i. Technical progress 'v' ii. The productivities of capital and labour 'α' and 'β' respectively iii. The savings ratios in the private and public sectors 's' and 's*' respectively iv. The capital output ratio 'σ' v. The rate of depreciation 'δ' vi. The growth rate of labour 'n' and vii. The ratio of foreign capital to private capital 'f' Now let's discuss the variables 'n' and 'f' a. To what extent can growth rate in Nigeria be hinged on labor force growth. b. We produce 'high level' manpower every year as graduates and professionals and can we say this 'high level' manpower is instrumental for growth as seen in the equation 9 c. The equation 9 shows that as the negative balance on the capital account increases in relation to private capital, indicating a rise in foreign reserves in relation to private capital, the economy's output grows. How relevant are foreign reserves in the coffers of the CBN to growth in Nigeria. |
Re: Nairaland Economics Academy by efficiencie(m): 12:08am On Dec 09, 2014 |
efficiencie: a. To what extent can growth rate in Nigeria be hinged on labor force growth. considering the disconnect between new entrants into the labor market and vacancies...UNEMPLOYABILITY should come to mind! |
Re: Nairaland Economics Academy by efficiencie(m): 10:58pm On Dec 12, 2014 |
...However, Dr Ngozi, like a serial offender, had simply addressed the one matter on which she will be exonerated. She had left the other charges of incompetence, self-serving public utterances and subordination of the national economic interest to the political ambition of her boss. In that regard she had done severe damage to the economy and to President Jonathan himself. Her departure, either through resignation or dismissal is a matter of time. And the reasons are not hard to find. First, she sent a budget to the National Assembly, with $78 as benchmark, at a time when the price of crude oil was already sliding downwards. We told her $78 was unrealistic; she stuck to her guns. Second, when crude came down to under $80 per barrel, she sent her “more realistic” budget based on $73 per barrel. Again, we cautioned that the figure is still unrealistic. As fate would have it, the price of crude oil fell below $73 per barrel the day after she was beating her chest about presenting a “more realistic” budget. That second budget is again on its way to the trash can – after millions of naira had been spent on it. On Friday, November 28, 2014, the price of Brent crude, Nigeria’s light crude went below $73 and it is expected to fall further. The consequences of the difference between $78 and whatever will be the final destination for Nigeria are extremely grave. Yet, the Minister of Finance is down-playing a global, as well as, a national catastrophe about to occur. That is the reason she should pack up and go or be shown the way out. Certainly, no Chief Financial Officer of First Bank, Shell or Nestle S.A could have been wrong so often in a matter of days and survive the embarrassment to the company... http://www.vanguardngr.com/2014/12/goodbye-okonjo-iweala/ |
Re: Nairaland Economics Academy by efficiencie(m): 11:22pm On Dec 12, 2014 |
Sola Shobo: Here's a response to the above comment can we please throw more light? |
Re: Nairaland Economics Academy by efficiencie(m): 7:56am On Dec 13, 2014 |
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Re: Nairaland Economics Academy by khattab008: 3:42pm On Dec 13, 2014 |
efficiencie: Are you an energy economist ![]() |
Re: Nairaland Economics Academy by efficiencie(m): 10:35pm On Dec 13, 2014 |
khattab008: oh not necessarily but i'd love to coauthor a paper with a lecturer friend of mine on issues relating to oil price shocks and its implication for monetary policy and targets. By God's grace i'd like to delve deep into Game Theory and its applications to politics, macroeconomy and international trade and finance... |
Re: Nairaland Economics Academy by khattab008: 11:17pm On Dec 13, 2014 |
efficiencie: Hmmm, You have really gone far oo. We are still new in the game. |
Re: Nairaland Economics Academy by efficiencie(m): 2:37pm On Dec 15, 2014 |
khattab008: Every writer, research and analyst all started from somewhere...so start bro! |
Re: Nairaland Economics Academy by efficiencie(m): 11:18pm On Dec 15, 2014 |
Inadequate gas supply and frequent sabotage of the pipelines had contributed immensely to lack of electricity supply in the country. “We are constrained due to the gas challenges and it has contributed to the drop of power generation to 3,500 megawatts, he said. The senior special adviser said that available power generation capacity currently stood at 6,000 mega watts while system capacity stood at 5,000 mega watts. Edozie said that the real challenge of epileptic power supply was caused by gas inadequacy. Presently, power generation as at today stood at 3,500 megawatts; we have not gone below that but we are gradually beefing up the generation to hit 5,000 mega watts as promised. The Ministry of Power had indicated on its website that 64.01MW of electricity was stranded on account of the weak and insufficient equipment used in distribution. The national electricity generation has dropped to 2,954.51 Mega Watts in the latest setback for the authorities to meet the expectations of consumers. The ministry said 3,206.09MW was generated as at Dec. 2 only to drop to 2,954.51 by Dec. 11, a reduction of 251.58MW in nine days. The Transmission Company of Nigeria (TCN) from which the power distribution companies source electricity has the capacity to transmit 6,000MW. Peak energy demand forecast for the market is 12,800MW. The Federal Government planned to generate 5,000MW in 2014. (NAN) source: http://www.vanguardngr.com/2014/12/power-supply-drops-3500mw-due-gas-challenges-special-adviser/ |
Re: Nairaland Economics Academy by efficiencie(m): 12:12am On Dec 16, 2014 |
efficiencie: The bolded comments raise issues to be addressed: The problems causing power outtage are said to be: i. Inadequate gas supply ii. Pipeline vandalism Yet it's agreed that we have a 'power generation capacity' of 6000 megawatts but yet we generate 3500 megawatts (58%) due to gas shortage and pipeline vandals. With this deficit, we have a peak power demand of 12800 megawatts. Now that means that compared to the peak demand we generate about 27%. This means that asides curbing pipeline vandalism and increasing gas supply there must be an increase in the power capacity by 97% from 6500mw to 12800mw. This increment at the pace at which the federal government is going cannot be achieved. But if power generation is devolved, the states could handle policing better and healthy inter-state competition could be enhanced. The following data can help: State [%Pop] (share 97%)* Kano [6.7%] (6.5%) Lagos [6.4%] (6.2%) Ondo [2.5%] (2.4%) Osun [2.4%] (2.3%) Nasarawa [1.3%] (1.2%) Bayelsa [1.2%] (1.1%) Source: http://www.nigerianmuse.com/20070820063612zg/sections/important-documents/nigeria-2006-population-census-arranged-by-state-wikipedia/ The population size is a strong spatial determinant of the demand for power and it's hence expected that power generation responsibilities should be rationed by the relative population size of states represented by percentages above. Assuming that the required 97% increment is allowed to be supplied by the states according to the relative population size and assuming these ratios hold for 2014 then Lagos and Kano would only have to bother about increasing generation by 6%, Ondo and Osun by 2% and Nasarawa and Bayelsa by 1% with each state meeting it peculiar demand... Why would the FG devolve this responsibility!? 1 Like |
Re: Nairaland Economics Academy by khattab008: 6:58am On Dec 16, 2014 |
efficiencie: Thanks for the words of advice |
Re: Nairaland Economics Academy by efficiencie(m): 12:32am On Dec 17, 2014 |
Jonathan said he expected not to have to cut the government’s benchmark oil price further because of estimates that crude could stabilise at between $65 to $70 a barrel next year. But he warned: There is no iron-clad guarantee where oil prices are concerned due to numerous underlying global, geo-political factors that are outside our control and unpredictable. “Should prices fall below the range, the country would have to make further adjustments.” Brent crude slumped to a five-year low under $59 in trading on Tuesday. Nigeria is Africa’s largest oil producer and depends on crude exports for 70 percent of government revenue and some 90 percent of its foreign exchange earnings. The downward revision of the benchmark has already led to changes in next year’s budget forecast and prompted the finance ministry to impose belt-tightening measures. Nigeria goes to the polls to elect a new president and parliament in February next year and the funding squeeze could force politicians to reign in spending pledges. Given Nigeria’s oil-dependent economy, Okonjo-Iweala has described the fall in global oil prices as a “serious challenge” to the country. The ECA should have been well-funded from when prices were higher but the government has been repeatedly accused of raiding it to meet budget shortfalls brought on by corruption. source: http://www.vanguardngr.com/2014/12/oil-prices-fall-range-govt-make-adjustments-jonathan/ |
Re: Nairaland Economics Academy by efficiencie(m): 12:37am On Dec 17, 2014 |
now GEJ knows how susceptible oil price is to a myriad of factors that are outside the scope of the control of monetary, fiscal and even foreign policies yet he encourages dependence on oil proceeds so much that 70% of govt spending and 90% of our foreign reserves are sourced from oil! What a shame!!! |
Re: Nairaland Economics Academy by efficiencie(m): 10:28pm On Dec 17, 2014 |
Mr KnowAll suggested the following SOLUTION TO THE PROBLEM OF CORRUPTION Read and [size=20]SUGGEST YOUR OWN SOLUTION TO CORRUPTION IN NIGERIA[/size] KnowAll: |
Re: Nairaland Economics Academy by efficiencie(m): 10:40pm On Dec 17, 2014 |
...the solution will fail ultimately due to the following reasons: i. The solution assumes that FG is not corrupt already. FG will never create an agency to fight the elite group it belongs to if it is corrupt. ii. The solutions assumes the agency is not corrupt and that the agency itself must not vet the assets of its own members. The agency itself will become powerful and soon become a weapon of oppression. iii. How and who would fund and staff the agency...'whoever plays the piper dictates the tune' Not a great solution! |
Re: Nairaland Economics Academy by khattab008: 7:10am On Dec 19, 2014 |
efficiencie: Well, Dr Ngozi argued yesterday, on a radio program, that the gov't is pursuing serious diversification of the economy, but i guess it's not that serious. Efficiencie pls i have question: The value of the Naira against the Dollar is falling as a result of dwingling oil prices occasioned by a fall in the demand of Brent crude, Right? If so, since we are an oil dependent economy, the decrease in the demand for oil also translates into a decrease in the demand for our local currency, hence the fall in it's value. Is this(decrease in the demand for Naira) main reason why the value of naira is falling? |
Re: Nairaland Economics Academy by efficiencie(m): 11:57am On Dec 19, 2014 |
khattab008: A look at the balance of payment components will supply the answer to your question. As far as the current account is concerned the oil price drop reduced our net export volume and this is reflected in official settlement account by a reduction in foreign reserves. The drop in net exports and hence reserves signify a drop in the supply of dollars (our reserve currency) given the demand. And since demand for dollars is ever increasing due to rising imports the excess demand for dollars (amidst dwindling reserves) will bid up the price of dollars and thus reduce the value of the naira. On the speculative side, dwindling reserves as a result of the oil price drop may trigger a speculative attack as forex players will anticipate the rising value of dollar vis-a-vis the naira and will demand for more dollars now to sell later hoping that the oil price falls even further. This adds to the excess demand for dollars and depletes the value of the naira. On the capital account side, investors may interprete the oil price fall as bad news and this may trigger massive capital outflow and thus diminish the value of the naira. 1 Like |
Re: Nairaland Economics Academy by Engineer96(m): 7:34am On Dec 20, 2014 |
Hello great economists. I wish to know to what extent has the relationship between t statistic and F statistic been exploited to advance studies, not only in economics but in all social sciences. Do you believe that the the relationship has been exploited at all? To what extent has it been in the advancement of knowledge in the field of social sciences. |
Re: Nairaland Economics Academy by khattab008: 8:51pm On Dec 20, 2014 |
efficiencie: Thanks for this detailed explanation, I really appreciate. |
Re: Nairaland Economics Academy by futurewise11(m): 10:33pm On Dec 20, 2014 |
wrong. efficiencie: |
Re: Nairaland Economics Academy by efficiencie(m): 11:18pm On Dec 20, 2014 |
Put forward a correction futurewise11, that we may learn... |
Re: Nairaland Economics Academy by efficiencie(m): 11:27pm On Dec 20, 2014 |
Engineer96: Bro shed more light on this! The relationship between the t and F stats is purely statistical and though i know that both test stats are in use in econometric models i don't see how practically relevant the nexus between the t and F stats is towards researches in social science...but on second thoughts it appears you are on to something could you please teach us the nexus between the t and F stats and how relevant they are to researches in social science! |
Re: Nairaland Economics Academy by efficiencie(m): 10:28pm On Dec 21, 2014 |
[b] Renowned economist Henry Boyo described the eight per cent devaluation of the naira as “a big mistake ”. He said the policy shift remained a wrong concept that will persist because the CBN has learnt nothing from history. He said the devaluation will even move to 20 per cent as the black market continues to outstrip the official rate. Boyo said the prices of goods and services will gradually go up, as importers add the increase to the cost of goods and services. He equally sees the price of fuel going up, despite declining oil price. He said Nigeria has learnt nothing from what happened to the Ghanaian and Zimbabwean currencies. “I see the naira being devalued by 20 per cent as time progresses. I have repeatedly said that mopping up the naira to achieve exchange rate stability is wrong. The CBN substitution of the naira allocations for dollar should be stopped. Allocations should be divided based on dollar certificates. The exchange rate for the naira will continue to fall ,” he said. [/b] Source: http://thenationonlineng.net/new/devaluation-of-naira-the-good-the-bad-the-ugly/ |
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