Ibime:
Domestic debt is not so much a problem as foreign debt.

Risk is reduced when countries borrow in their own currency.

In a worst case scenario, Nigeria can redeem her Naira bonds by fiat - quantitative easing. The ECB, Bank of England and US Treasury did this as part of their QE program. The difference there is they created the money to buy bonds from the private sector. CBN would be creating money to pay off bonds already bought from the private sector.

It was the same way with AMCON - all the Banks' toxic assets were erased by fiat.

Quantitative easing to pay paper debts do not overly increase Naira supply nor the velocity of money (which leads to hyperinflation) as a lot of the cash ends up sitting in Banks excess reserves.

However, as the article clearly shows, the GEJ Government was a very wasteful one.

olaxco2f:
tophaz
abi

tohpahz

OilGas:



http://dailytrust.com.ng/daily/top-stories/54386-nigeria-s-debt-rises-by-18bn-in-4-years

anonimi:
I hope this story is untrue or that there is a very plausible explanation for it.
I sincerely hope all this is not a scheme to scandalise Jonathan/PDP as they exit the stage at the federal level.

Either way, an URGENT statement from the outgoing federal administration would be very appropriate!

mmsen:
Domestic debt is not as troubling as external debt.

There's a degree of control with internal debt that you do not have with debt owed to the international markets.

It may look problematic but much of the debt is money used for infrastructure.

blym4real:


can you show us the infrastructures?
Didn't you read the part that said most of the fund was borrowed to pay salaries.

mmsen:


The salary part has been a problem for Nigeria for a long time, hopefully the current cash crisis will push the political class into doing something about that.

At least this time around there have been improvements in infrastructure - the roads are certainly better (not all) but there are far more navigable roads than there used to be. It may sound basic but transport is very important.

There are more federal universities. Some airports have been upgraded and others are being upgraded. The military hardware is finally being upgraded after decades of neglect and weakening.

olaxco2f:
tophaz

abi


tohpahz

Joshkid:
tohpahz

blym4real:


Do you even understand the amount we are talking about here.

For the past four years the country experienced economy boom through the high price of oil, but the government was still borrowing as at that time.

IBROHIM:
You are a goat! You vote am?

mmsen:


Do you even understand what form of debt this is?

Show me a country that does not have debts.

What are Nigeria's debts as a proportion to its income?

blym4real:


you still don't get it.

First during the period of oil boom, the oil benchmark for the national budget was between $70 to $78, but the price went as high as $100 to $110, that means we have an excess of around $25 dollar per barrel that was not in the budget.

Do you know what this will amount to if accumulated for a period of two to three years, inspite of excess money available for the government to spend, how can they borrow 3 thrillion naira with nothing to show for it.

mmsen:


The salary part has been a problem for Nigeria for a long time, hopefully the current cash crisis will push the political class into doing something about that.

At least this time around there have been improvements in infrastructure - the roads are certainly better (not all) but there are far more navigable roads than there used to be. It may sound basic but transport is very important.

There are more federal universities. Some airports have been upgraded and others are being upgraded. The military hardware is finally being upgraded after decades of neglect and weakening.

mmsen:


So you're saying that the money was stolen?

Well if you can prove it then you should present the evidence.

I have no doubt that there is pilfering going on from the treasury but accusations without proof are as lazy as the people who claim to work for the Federal government but do nothing.

The article claims that the bond deals were poorly structured by the banks, such that the Federal government is paying higher than necessary interest rates.

Nigeria has such a big infrastructure gap that it cannot afford to just keep money in reserve.

blym4real:

show me the new infrastructures, is it the sub-standard roads, the scam renovation of the airports, the rickety trains,the generation of power on paper, the refineries that are not working, the new one they promised.

mmsen:


Not all of the roads are substandard, they're a welcome improvement. As are the airports.

Clearly money has been wasted, I cannot believe how much both parties managed to spend before and during the election but compared to previous administrations more has been built in terms of infrastructure.

blym4real:


You don't need to be told this administration had more money to spend compare to other administrations.

This is the worst administration ever to rule this country.

As bad as people claimed obj is, with few money to spend, he still managed to leave behind a huge foreign reserve , which jonathan government squandered away and still went borrowing 3 thrillion inspite of having more money to spend.

dustmalik:

If I were you, i'd stop arguing with that guy. His kind should be obvious to you by now.

tohpahz:

tohpahz: