NewStats: 3,265,016 , 8,185,347 topics. Date: Friday, 13 June 2025 at 07:35 AM 5v3z1z

Everything happening to Nigeria's economy could have been predicted as far back as 2008. In 2012, it became obvious we were heading to hell, and some of us started shouting and screaming that change was necessary to avoid catastrophe. Unfortunately, we only moved from crony capitalism to feudalistic socialism.

Summary. In 2008, low-income Americans were unable to pay their mortgages. These mortgages were backed by banks from several countries. A crisis of confidence occurred causing a global credit crunch.

Two things are responsible for the growth of GDP. Productivity and credit. With lenders refusing to lend to new businesses, the global economy started to slow down. Interest rates dropped almost to zero per cent, but Lenders gave money to market speculators only, so Stock and commodity prices rose to ridiculous levels.

Around June 2014, interest rates started rising, and commodity prices started falling as speculators shifted their funds from riskier commodities to treasury notes. Countries with commodity-driven economies, like Nigeria, South Africa, Venezuela and Russia, were exposed to the shocks the rest of the world had been facing since 2008. This is why there are so many anti-immigration sentiments and also why people like Trump are world leaders today. The global economy is messed up and maybe this way for an extended period.

As earlier stated, two things lead to the growth of GDP: productivity and credit. Nigeria has never really been a credit-driven economy, nor has it been a highly productive one. We rely on productive countries to buy our raw materials to increase their productivity. Things have to change, or poverty will consume us.

As Grandstar stated, the federal government must carry out painful restructuring. Any hope that oil will rise to over 100 dollars again is wishful thinking, and even if this were to occur, it probably would not be for an extended period. A focus on primary and secondary education and healthcare to improve productivity is necessary.

Good luck to Nigeria.

grandstar:


The strength of an economy is not based solely on the quality of its infrastructure; otherwise, Taiwan and Italy would never have become rich countries.

Companies in developing countries can still thrive with poor infrastructure. Two examples today are India and Pakistan.

I have always argued that structural reforms are necessary for the country to hit 7% growth rates.

Buhari's exchange controls, using the words of Charles Soludo, made a "bad matter worse.". That's my anger with Buhari.

I wrote off this government within a month of taking over. He arbitrarily fixed the exchange rate at 197 to $ without regard to market forces. He thought wicked economists were the ones who determined exchange without regard to the masses. It's like thinking that mathematicians determined that 1+1=2. They are simply interpreting what nature says. The same goes for economists.

Diversifying exports is very important, but commercial lending rates of 25% do the most damage to businesses in the real sector, not even infrastructure. Dangote said, "How can the country have a thriving agricultural sector with leading rates at 20%?"

Low lending will enable manufacturers to import world-beating machinery, for instance, making them competitive. Productivity is very low because of the high cost of credit. If Nigeria were a mine, it would be artisanal, with corresponding low levels of productivity. Low credit would enable them to keep expanding until the local market is too small and exports are the only option.

Non-oil exports can only boom until lending rates are brought down through foreigners setting up factories and mines. FDI tends to target areas in the country that have a comparative advantage.

Angola was badly governed by Dos Santos, so it's not surprising. This country has about 20 million people and produces about 2 million barrels of crude oil daily, but it can't balance its budget.

Venezuela has been a basket case to me since 2003, but it wasn't discernible . It is not until you marry your fiance that you realise she's not wife material. The signs were already there from the word go.

FG can bring down lending rates to single-digit levels by ending the "Naira substitution" policy.
Google " Ending Naira substitution policy by Henry Boyo".

Slashing corporate taxes to 15% or less can lure foreign investors. FG must also end multiple exchanges, as they scream economic incompetence to foreign investors.

Comments like this one seem so enlightening and educative, yet unfortunately, are wrong.

Nigeria does not need to increase exports or consider reducing interest rates. As you rightly stated, economists do not control exchange rates and interest rates. The rates proposed by the CBN only act as a guide to the market, but in reality, the rates would naturally rise to that level.

What is the Reason for high interest rates in Nigeria? The high importation of foreign goods. High interest rates make treasury bills/bonds attractive to foreigners, bringing in a high amount of foreign exchange. This foreign exchange is then substituted for the naira to allow for importation. If Nigeria imports less, it would not need as much foreign exchange, so it would not need such high interest rates.

Obviously, to reduce imports, Nigeria has to increase its people's productivity. The best way is to increase investments in education and healthcare.


Steve Babaeko, founder of X3M Records, said the Nigerian government did not invest in music or Nollywood, yet both industries are highly productive, increasing Nigeria's earnings and projecting a good image of Nigeria to the world.

How much money did the US government spend on Google, Facebook, or Amazon? Zilch.

With education, people will naturally find productive endeavours to pursue. The government does not need to focus on agriculture, science, and technology. Even electricity was not discovered through government intervention but by educated and creative people whose focus was on increasing their productivity. Even in infrastructure, there may be more efficient ways to solve our deficit, but without mass education, such solutions will never occur.

Another way the Nigerian government can increase its GDP is by becoming more efficient in spending its earnings on crude oil sales. Just as a business can improve its profitability by reducing its costs, a country can also increase its GDP similarly.

Ways to increase efficiency include:

-further devaluation of the naira would reduce local demand for dollars, naturally bringing down interest rates.

- Sack government workers. Most of them are unproductive, including myself, TBH. Interest rates will fall without having any adverse effect on the economy. It is actually brainless to continue paying people for no services. It is a moral hazard to cater to only 1 per cent of your population. Funds need to be spent on education and healthcare as earlier stated.

- Increase taxation, specifically on the rich. Increased taxation reduces disposable income, lowering demand for foreign exchange and lowering exchange rates.


I just reread Boyo's view. He will invariably float the naira, thus allowing market forces to determine its value. His view is better than what is currently being carried out, but monetary policies are not enough to turn this tide. I thought his point of view was not valid.

Ovamboland:


The USA has been running Social Security since the 1930s. Despite the country's $17 trillion debt, there are no serious discussions about ending it.

Many Western countries started their even earlier; they know the importance. The Nigerian government has begun within what it can sustain, yet the privileged cry the most. Why has the IMF not advised European countries having economic crises over the past 100 years to cancel their welfare programs? Why should no poor person in Africa have or help while more affluent whites have? Why should the few rich access so much via contracts and connections while nothing is offered to the poor?

No sensible country puts social spending/welfare over investments in primary education. If you read the article, you would have seen that attainment of a percentage of a population being educated is a metric used to measure the development prospects. In Nigeria, the government focuses on helping people experiencing poverty. In these countries, the governments seek to invest in people with low incomes to be able to tax them in the future.

I like Buhari, so do not take this comment personally. Buhari invests in his cattle because he sees them as his wealth. Our leaders need to see us as their wealth, not problems.

Living conditions in Nigeria have always been worse than in Venezuela. Nigerians are used to suffering and can adapt to any condition.

I can no longer find a fishhead in the market to buy for my cat as people have started purchasing it to eat.

Economics is a social science and not a science that is based solely on numbers. Venezuelans expect more from their government, so they protest, and their rulers make hasty decisions, which are bad for their economy to maintain peace and orderliness. If you push a Nigerian to a wall, they through it.

The people buying the fish head will still dress well, wear polished shoes, and smile, thanking God that their situation is better than that of their neighbours.

This is Nigeria!!!

SocialFinance:


Before you shout Buhari and APC,


PDP CREATED POVERTY.....

This analysis below is vital to the commoner.... who is the majority of Voters in this 2019 election.....

1. They said when Buhari took over from them, a bag of rice was N11,500, but they took over when it was N2,500

2. They said when Buhari took over from them, the ltr of petrol was N87, but they took over when it was N11.

3. They said when Buhari took over from them, $1 was N235, but they took over when it was N20.

4. They said that when Buhari took over from them, a bag of cement was N2,000, but they took over when it was N400.

PDP met the minimum wage at 1500 and took it to 18500.
Buhari has failed to increase the minimum wage even though the price of everyday items has gone up. This has pushed many into extreme poverty.

To cushion the effect of property tax on homeowners. That you own a home doesn't mean you're rich. You're not planning to sell your home, of course. Most homes were built on mortgages and years of savings. There's no property tax in Dubai.

People pay municipal taxes equal to 5% of the rental value of similar houses in their neighbourhood.

Property tax has been argued over and over again to be wrong because owning a house doesn't mean you're as rich as the value of your home (except you're making money from the house, which usually isn't the case).

Please name any prosperous nation that doesn't tax properties and state where these arguments have been carried out.

People go out of money and go broke. They rely on the house they built when they have something going for them.
They still have to pay their taxes. They can sell the house. This would improve Nigeria's estate management industry as many houses will be up for sale as in the US housing market. 90's star, MC Hammer, had to sell his house.

Pensioners/retirees (people above 60 years) don't pay property tax because they're exempted. The question is, what happens to people who are out of jobs or without a regular income?

Not all countries exempt senior citizens. Once they away, the new owner starts paying property taxes. People without regular income should cut their coats according to their size. You know you cannot afford to pay the property tax on a mansion, yet you can build one. They can SELL IT on OLX.



Money is not Nigeria's problem. A clueless nation is clueless. Nigeria has no bearing, just disoriented. What we make is enough if we know what we're doing.

We have one of the lowest tax-to-GDP ratios on earth. What are you talking about, Willis?
Do you know how many unoccupied buildings there are in Abuja and Kaduna? More houses would be on the market if people had to pay property taxes.

dadark:


Nigerians don't like paying taxes...if people who don't pay taxes are thrown into prison like in Western nations, many Nigerians will land in prison...

No one likes paying taxes. I have never met or heard of anyone who genuinely likes paying taxes.

So why do other nations pay taxes? The same reason you brush your teeth or bathe in the morning. Without taxation, civilizations can never develop. It is a necessary evil.

When the government collects taxes, the people are more willing to fight for their rights. The government uses taxes to invest in its people in their youth and then recoup the investments through taxation when their citizens start working.

No one is naturally good. Without structures and institutions, humans are not much better than animals.

Newboss:


Nigeria has property tax.

The Lagos tax rate (the craziest in Nigeria, apart from Abuja's) is 0.076% for property the owner lives in. There's also a 40% relief (discount) for all properties.

So, a house valued at 2 billion will pay about 912k in property tax yearly. That's nothing much. My maths may be wrong tho

Why is there a 40 per cent discount?
Nigeria has one of the lowest tax-to-GDP ratios on earth. Our government always complains about diversification, but governments primarily earn revenue through taxation.

Our public healthcare system and education system are broken. Shouldn't taxes be used to develop Nigeria?

Is the property tax even enforced? What is the penalty for defaulting?

Newboss:


Go and check the meaning of estate tax before you say what you don't know

Sorry, Mr Lecturer. Property tax*

The same thing used to happen in England in the past.

Every wealthy family built a castle to show their wealth.

What made them change their ways? Estate taxes.

Omooba77:


Thanks, sir. If there is a subsidy, some dishonest people may profit from it. Let it be a free-flowing economy determined by demand and supply

My post s the removal of subsidies. It is how subsidies are to be removed that my view differs from the popular view. The price of petrol in Nigeria is affected by the demand and supply of crude oil in the international market and the demand and supply of dollars within Nigeria. Petrol should be 210 Naira because of the fall in the value of the naira. My point is that through taxation, Nigeria can lower the price of petrol by reducing the demand for dollars. This invariably will eliminate subsidies without further impoverishing the masses.

Omooba77
This is a great article with a lot of important information and an absolutely accurate conclusion. However, there are a few recommendations I do not agree with.

Fuel subsidies should not be removed; we do not need to seek foreign investments. I know my view is unpopular, but please pay attention to me momentarily.

Your article focuses on the fall of federal revenue and the hardship it has brought. It also focuses on the unsustainable path the federal government is taking.

Is Nigeria's issue the fall of revenue or the resulting hardship? Must these two events go side-by-side?

Nigeria's issues are the crazy levels of inequality between the rich and the poor. I think our lack of productivity is tied directly to the high rate of extreme poverty in this country. The government's biggest failure is not equitably using our oil revenues in ways that benefit all Nigerians.

Nigeria runs a trickle-down economy where government workers and contractors take all the oil money. The rest of us earn our living by providing goods and services to these government workers. So basically, we get the crumbs that fall off their tables. What makes the matter worse is that Nigeria, like most nations, operates an open economy, so once an iPhone, Samsung, or any individual in Nigeria buys a Mercedes, we have invariably exchanged our crude oil for the purchased item, thus reducing the number of crumbs that can get to the ordinary person.

In the past, our leaders exchanged our people (resources) for mirrors cause they found their images amusing. Today, they exchange our resources (oil) to satisfy their vanity.

My issue with oil subsidy removal


In general, two things affect the local fuel price: The price of crude oil and the value of the naira against the US dollar. Between 2006 and 2007, crude oil prices were 70 dollars, yet petrol was 75 naira per litre. The dollar was 130 something then as opposed to 360 now. Why has the naira fallen so severely? I guess more demand for iPhones, Samsungs and Benzs.

Should a Barber, a Tailor, a Carpenter, a Plumber, a Farmer and an Electrician pay more for fuel because Nigerians want to use iPhones?

SOLUTION
As your article stated, increasing our VAT to the continent's average will help. Yearly progressive taxation on houses and cars will also go a long way. This is how to eliminate subsidies by raising the value of the naira through decreased demand for dollars rather than increasing the price of petrol. We already have the highest number of people living in extreme poverty, yet we have the wealthiest black woman in the world and the richest black man in Africa.

Foreign investors do not have to be marketed to. Investors look for profitability with the smallest amount of risk. Rather than focusing on attracting them, we should make our country more productive by investing in our public education system. Investors will naturally troop in when we produce our iPhones and live in peace and harmony. We need to look inward. Our people are more critical than mirrors and Benzs.

Jpphilips
My guy, no informed person is saying Buhari caused this mess. Even if Jonathan had saved money, that money would have served as a shock absorber and not a solution to this economic crisis. Challenging policy changes need to be made to improve this country, and for 4 years, Buhari has done nothing to move this nation forward.

From your write-up, you seem to deceptively imply that this crisis is over when, in reality, Nigeria is profoundly indebted and may start selling national assets to stay afloat.

What exactly do you want? Progress for your country or APC winning this election?

Buhari's relaxed attitude towards his re-election is the same attitude he has shown towards managing our economy.
(One week to elections, and you start YouTube ads. You aren't serious about winning.)

You are an intelligent man. You should only do this if you benefit from Buhari and are loyal. You should take a non-partisan stand in the election and let the chips fall wherever possible. Goodluck

theoldpretender:


We are borrowing because oil is below the price we need it not to borrow.

Right now, we need oil at 140 USD before we can run a budget without borrowing. Oil is at 60 USD.

Foreign reserves are not for spending recklessly. They are a buffer for the day when Nigeria cannot sell oil.

I'll give Buhari kudos for growing the reserve amid declining oil prices. Venezuela did not do the same. See where they are now

When a country earns money in foreign currency, it can do two things: set up a sovereign wealth fund(excess crude ) or save the foreign currency in its foreign reserves.

What is the difference between these two s?

In foreign reserves, the naira equivalent of the dollars earned is spent by the country and only the dollars remain in savings. This means that the country can only use the dollars to meet the demand for foreign currency by its locals and not for purchasing infrastructure or investments. The value of money in the foreign reserves has already been spent by the government and cannot be spent twice.

Sovereign wealth funds are what we believe are foreign reserves, true savings that can be used for investments, infrastructure or whatever.

The increase in our foreign reserves reflects the increase in our foreign borrowing, not better management of earned funds. the naira equivalent of that money has already been spent.

The only props a person can give this government is by reducing the demand for dollars by raising the price of dollars (from 160 to 360) which has invariably brought untold hardship to the Nigerian masses.


By the way, the key difference between Nigeria and Venezuela is that the Venezuelan MASSES are used to drinking milk(fresh milk), eating pasta, eggs, butter(not margarine), cheese, brioche, sausages and other assorted foods uncommon to average Nigerians. Many of these foods are imported into Venezuela so when oil prices fell and the value of their currency fell, the common people in Venezuela could no longer afford the food they were accustomed to. In Nigeria, our diet is very West African and our masses eat locally produced food. Food prices may have fallen as farmers compete to sell their perishable foods to fewer people with money.

In summary, the Venezuelan crisis is a result of the taste and preferences of the Venezuelans and not because their government is worse or better than ours.

omohayek:

For such retrograde thinking to for "policy" is all the evidence one needs that Buhari has probably never even heard of the term "comparative advantage", let alone attempted to understand it. I'm guessing there probably aren't more than 3 or 4 of Buhari's entire cabinet who would know what comparative advantage means (Fashola, Osinbajo and a few others), and in any case, they have little influence on Buhari's decision-making, so it wouldn't matter if they did. 4 more years of Buhari's poorly informed leadership will see Nigerian living standards drop to a level last seen in the Obasanjo era, that's how bad it is.

I wish I could hope that an Atiku victory (unlikely as it is) would make a big difference for the better, but in his case, I don't see any greater understanding of business and economics translating into a significant improvement in the average Nigerian's standard of living, even if the annual GDP growth numbers rise to 7% or more. I say this because I fully expect most of any such gains to be captured by Atiku and the tiny clique surrounding him, through shady privatizations that grossly undervalue assets, the facilitation of yet more oligopolies like the ones Dangote already has in cement and rice, the expansion of "import substitution" schemes that allow a privileged few to make risk-free profits at the expense of the general public, etc. I simply don't believe it's possible for a 72-year-old man whose entire fortune is built on corruption, and who relies heavily on the of crooks like Saraki, to suddenly turn a page and start seriously working for East Asian-style broad-based growth - especially not when he bought his nomination as the PDP standard-bearer. President Atiku will want a healthy return on his "investment", which means any "good" policies he enact will likely be subverted to primarily enrich him and his ers.

In short, Nigeria is doomed to another 4 years of economically subpar policy-making as long as Atiku and Buhari remain the only serious choices.

Just as he set up Mikano (power), Faro (water), and ABTI (education), for himself during his last time in power, he is coming in this time to set up mining, agriculture, construction, and telecommunications companies for all his children.

Buhari does not value knowledge of economics and Atiku is too criminally inclined. Only God will see Nigeria through the next 4 years

Ohh, if only I could write as well as you!!!

Vote for Mughalu. He is the only candidate capable of improving Nigeria. I mean it. Not joking. Okay now, I guess you have another 53 days and a few hours to go to vote, so. Read a book

We all hate taxes but is taxation such a bad thing?


The effect of taxes is that people will have less money to spend after taxation. The effect of the naira losing value is that people will have less money (in dollar ) to spend. in both scenarios, the result from the people's perspective is the same.

When the government allows its currency to be devalued, it blames its masses for being unproductive. It blames international factors such as a fall in oil prices. It blames the IMF and the World Bank. The government blames everybody but itself for its own failed macroeconomic policies. However, when the government taxes its citizens, it is seen as the bad guy and if the citizens keep suffering, the government will have to pay a political price. Taxes make the citizens hold their governments to .

NIGERIA'S SITUATION
Revenues are falling, debts are dangerously high and the labour unions are demanding higher minimum wages. It will take an act of God, for Nigeria, to fund its budgets in a few years. realistically, the government has two choices:

1. increase taxes or fire civil servants (or a combination of both)
2. further devalue the naira.

These are the same choices Buhari had in 2015. He chose to devalue the naira, ushering in a biting recession that Nigeria is only "technically" out of.

Some Nigerians tend to think we can become a productive country overnight without massive investments in mass housing, education and healthcare. This is simply not possible anywhere in the world.

We should have invested in our people during the oil boom, but we didn't. Now we must all come together to face this crisis. We either grow together or die together.


IMHO, this current tax policy does not go enough. we pray the minister of finance knows what she is doing.

Very nice write-up. I concur!

grandstar:


Togo being a francophone country "may" have quality public schools but I'm sure the most eligible kids are out of school because these schools won't be free!

Whether these countries have good schools or not is irrelevant

More money is wasted on fuel subsidies than is spent on education, health, and defence combined!

If this waste can be spent on education alone I am sure the quality of education will improve.

Anyway, primary and secondary school education are the responsibility of the state governments and not the FG so each state is to be held responsible for the quality of education given to their wards

The fuel subsidy also discourages investment in the downstream sector of the economy because investors are discouraged by price controls on products.

Merry Christmas.
Most of what you just typed is faulty thinking of the PDP and APC governments. I can say most older elitist Nigerians share this common view with you and that is why Nigeria will never progress until you guys are booted out of government.

First of all, our fuel subsidies are due to the fall in the value of the naira, not fluctuations in the prices of oil. When Obasanjo was president, oil sold for 70 dollars yet fuel was 65 naira. Today oil is selling for 50 dollars and the federal government is paying subsidies.

Why is the naira constantly falling? Too many unproductive workers purchasing foreign goods that add no productive value to Nigerians.

How do you correct this?

Reduce government workers, raise taxes and use the saved funds for social investments such as mass education, healthcare or low-cost housing.

If the government fires workers but does not use the savings on social programs, a recession may occur. We are not using our revenues efficiently. The only way out of this mess is for the government to refocus its priorities from paying government workers to providing social services to all Nigerians.

This is how you stop the naira from falling and reduce subsidies. We have systemic issues. This isn't a headache that Panadol will solve. Nigeria is having acute Malaria and its treatment is not building refineries or other nonsense plans these old men have. Even if Dangote's refinery were to open next year, petrol may still be expensive. The advantage of local refining is that in theory, it should reduce the pressure on our foreign reserves. If all petrol in Nigeria is gotten through swap deals, then there may be no difference in refining crude oil here or abroad.

Your point about state governments versus federal government jobs on education is semantics. All that needs to be changed is the law. All governments have three basic functional requirements. Every other thing they do is Jara. These are Education, Healthcare and Security. Even electricity is a non-functional requirement and only adds value to these three priorities. As you can see, the federal and state governments are failures as they do not even attempt to handle these issues.

Fuel prices rise because our unfocused government lacks ideas and fails to assign the right people to the right jobs. If the government removes the subsidies, the economy will spiral out of control and people will protest. The government is not doing anybody any favour but preserving its elitist way of doing things.

Finally, please Google Education in Togo. Quality Primary Education has been free since 2008 and the country is moving forward.

obaataaokpaewu:
This was because when crude oil prices rise, under-recovery on products also rises.

I need someone to educate me on the emboldened, when the price of crude oil rose to $100+, the price of PMS was below #100. but now the price of crude oil is below $100, yet the price of PMS is #145. I read that the under-recovery keeps going up every year/budget. Is it that the current is importing more volumes of PMS compared to the previous or what? Isn't that an indictment on/of the current Minister of Petroleum?

Oil is sold in US dollars and the Naira has fallen in value since then. All in all, it is both GEJ's and PMB's fault. Our leaders are cluelessly managing our economy

grandstar:
Poorer neighbouring countries pay the full market price for Petrol and they've not died.

Rice and many other things are cheaper despite the higher prices of Petrol.

Neighbouring countries like Ghana and Togo provide quality basic education to their people. Tell your government to be responsible for its people. When you want to build a house the first step is to draw a blueprint and dig the foundation on the land. The first step to grow productivity is to develop your people's abilities through education. What is the average class size in our government schools? A government that wants to diversify and does not take mass education seriously is irresponsible.

jpphilips:
This analysis is pretty flawed in some areas, I will still commend the writer for an effort, it is hard lately seeing Nigerians that wish to embrace reality not the mumbo jumbo thrown around by politicians.

Nigeria earns most of its revenue from oil but not all, you skipped FIRS receipt, NIMASA & NLNG.
Rightly put, Nigeria is doing about 1.9mbbls daily but you forgot that Egina is coming on board in January to inject another 220k bbls daily. The trans Ramos pipeline presently undergoing repairs injects another 110k bbls daily, Realistic production for 2019 is around 2.1mbbls or more.

The present Opec basket is selling at $54/bbl, so the $60 may be a stretch today, however, OPEC+ is looking at a reasonable production cut and most refineries like Formosa under repairs and Dangote with 680kbbls coming upstream will inject a demand that will have positive price implications, 2nd phase of Iranian sanctions will equally necessitate a significant production cut, therefore, $60/bbl is very realistic for 2019 fiscal year not wishful thinking.

The FG has nearly reached her borrowing cap so it will be most reasonable if we see a tax increase in 2019, which will equally balloon the FG's revenue standing.
The CBN pegs its transactions at 305 naira to a dollar since 2015, so it is not surprising to see it feature in the
2019 fiscal year, that doesn't mean you will have access to that cheaper dollars but a benchmark for government transactions.

The present inflationary pressures we have are the elections and yuletide celebrations, recall it was at 11.23% in August, and the CBN's aggressive mop-up of over 1.4T in excess naira liquidity in the last month will surely drive it downwards.

Overall, the budget is an ambitious one with less deficit like 2018, also the war on terror will, as usual, put the country under a fiscal strain, we can only hope for the best.

As for Atiku and his rhetorics, he can only appeal to those bereft of fundamental economics principles.
The challenge is beyond APC and PDP, I agree with that.
Buhari may not add stealing to the fiscal crisis, I can't speak for Atiku.

This analysis gives me a lot of hope. Although the initial op criticised prayers, I cannot think of any option the Nigerian masses have. It shall be well. We are in the END GAMES now.

I like Sowore, but his statements on the economy are always wrong.

If Sowore had partnered with Mughalu and one of them had ed the other, this election would have been more competitive. Sowore blamed SAP for Nigeria's problems but countries like the Czech Republic successfully implemented SAP.

Sowore blames IBB (I agree, he is a bad man) for Nigeria's economic troubles but Soludo wrote in his book that the Buhari-led government had brought the economy of Nigeria to a complete halt before IBB took over and that policies implemented by IBB restarted the economy. Sowore studied geography, which is a challenging and important course. He should stick to people-oriented policies and things his experiences have taught him. I see him as an exceptional human being and he is a gift to Nigerians. All he has to do is to stop speaking on economic matters or he should get quality advisers.

gbolah1:


Very sound argument and analysis, from your own observation, what did you think is the way forward and which advice did you think you can give this government?
Do you think changing the government is the best solution or allowing the current occupants to correct their mistakes and put more pressure on them to do the right thing?
I need your unbiased response please as you may not know that so many high-ranking government officials are in this forum and they read people's views and they might as well take your advice and suggestions.
Awaiting your suggestions

There are lots of smart Nigerians both within the APC and the PDP. El-Rufai for instance may be failing as a governor, but his general idea on governance is right. Take HRH SLS as another example. These are two competent men from the north west region. There are many others from Professor Sam Amadi, Obi Ezekwesili, Charles Soludo, and even Peter Obi(Atiku may not allow him to change Nigeria) all from the southeastern region. In the southwest, we have all seen what Fashola and Ambode have been able to accomplish, so there is no shortage of smart Nigerians.

We are like a sick patient who refuses to take chloroquine because it is bitter. We will not get well no matter what. The solution to Nigeria's problems is to implement the Oronsaye report, reduce the current civil service and invest the saved money in mass education.

Economics is not buying and selling. It goes way beyond this. It is about aggregate spending. If one person earns 100 naira and buys something imported with that money. That money has left Nigeria. If however, the person buys something produced locally and then the new owner buys another thing produced locally, three people have now earned 100 naira each and now have the spending ability of 3 hundred naira.

If you pay people more money than they need for their basic survival, this extra money( disposable income) can be used to buy imported things. Once these imported things are purchased, that money has left the country. This is why the IMF asked the government to raise taxes on the rich. In fact, the British government regularly raises taxes in place of devaluing the Pound.
Raising taxes would reduce the pressure on our foreign reserves and stabilize the currency.

I must it, that Nigeria's economic problems are not an isolated case. A majority of countries are going through issues. Capitalism as we know it is under attack and several economists such as Tom Piketty and Paul Krugman have suggested that a way out would be a wealth tax. Nigeria seems to be worse than other countries because although we have many smart people in the corridors of power, implementing their ideas is unpopular with the public and our Ogas at the top are not smart enough to understand that popularity is different from governance.

Buhari has done well in trying to tackle the recession, the best way to tackle a recession is for the Federal government to release stimulus packages, hold up the currency and pay for subsidies,
This is extremely false logic. Who told you this or where did you read this? The IMF advised Buhari to raise taxes, float the naira and invest in education and healthcare. This is the very same advice Bill Gates gave. But did Buhari listen? No!

America's economy and currency are different from Nigeria's. The US cannot devalue its currency to gain production advantages because the USD serves as a reserve currency. If America were to devalue its currency, lots of countries would cry foul. Nigeria is not in this complex position.

Nigeria's economic problems stem from 2 issues. Poor taxation on the part of the government and lack of productivity on the part of the citizenry.

Both issues are tied to Nigeria's over-dependence on crude oil for revenue. The government needs to reduce the size of the current civil service and invest heavily in education (primary and secondary schools). By switching its spending from civil servants who produce nothing to building schools and employing lots of teachers, many poorer Nigerians will earn a livelihood.

No serious country leaves basic education to parents and private individuals. Both capitalist and socialist nations invest heavily in basic education. China's former One-child policy was tied to this as their government is fully responsible for educating children.


but did PDP leave any money for this in the treasury? wasn't PDP already borrowing to pay salaries in the later years of GEJ's government, and what's worse even the borrowed funds were also looted.


Yes, the PDP messed up by relying on revenues from crude oil sales and stealing borrowed funds. No government has indebted Nigerians as this present government. Please, correct me if I am wrong.

Buhari and his cabal's only hope to revive Nigeria's economy rested on the recovery of oil prices. In the 1980s, oil prices fell because of innovation in the industry (drilling of offshore rigs). Oil prices only recovered momentarily during the early 90s Gulf War, and prices remained low until the early 2000’s. That is a 20 to 30-year period. When Buhari chose to contest in 2015, intelligent Nigerians assumed he was aware of hydraulic drilling and the anticipated fall in prices for another possible 20-year period. But his first action was to tell NNPC to search for OIL in the north.


It took the US three years to get out of recession, and trillions of Dollars were released from the US government, you now expect the same feat from Buhari? With which money if I may ask, from oil? At 25$/barrel at less than 300,000 bpd?


Every recession is different and the solutions are different. Economics is a social science because it deals with human behaviour towards policies implemented by the government. If all recessions had the same solution then economics would be a science. e.g. The boiling point of water is also 100 degrees centigrade. what goes up must come down due to gravity.


The majority blame the hardship we are going through now on Buhari, something PDP has succeeded in doing.

The majority are unfortunately wrong. However, if Nigeria falls into another recession, whether Buhari, Atiku or any other candidate is president, the full blame for the next recession is on Buhari and his Cabal for failing to take the necessary steps to protect the future of this country.


An example of different solutions to recessions. In the 2000 and 2008 recessions in the United States. Interest rates were reduced to stimulate bank lending. In Nigeria however, reducing interest rates would lead to a fall in demand for treasury bills which will lead to a fall in our foreign reserves as investors who bring in dollars to purchase treasury bills would not be interested in lower yields.

Our people are like monkeys, no matter how you try to explain to them, they cannot understand.
The Nigerian military has messed this country beyond even most of our understanding. Back in the '60s, intelligent citizens went to universities whereas the secondary-trained students who couldn't were taken to the military. These dull students robbed this country of the best-trained leaders. As soon as independence was given, our education standards started dropping as we black people tend to lack the discipline to maintain structures.

Today, Nigeria is a jungle in every sense. A soldier shoots at unarmed protesters and a "SANE" citizen would blame the protesters. All the Sunni Muslim thinks is that the Shiites would convert their , so they hate them the way satan hates God. This is the simple truth. The few that have spoken are only voicing the opinions of a large population of core northern Muslims. Only mass-quality education will save this country.

Oshigun:


My guy, the slide into recession now bedevilling Nigeria is something that was unavoidable because of PDP misrule and the 2015 crash of oil prices from over $100 per barrel to around $25 per barrel in months after PMB became President. Today it is about $56.00 per barrel. If you don't fear man try to fear God because he won't bless you for trying to deceive others.

PMB is the best choice for now to get us beyond this unavoidable economic downturn. We are earning far less than we did under GEJ yet more is being achieved because we have a frugal and highly responsible manager in charge of our income. Even Donald Duke confessed that no President, however well-intentioned, can succeed under PDP's corrupt and profligate model of governance.

Go and vote for your Atiku. We will return PMB to power, gradually crawl out of the crippling economic downturn PDP caused and create a more robust and diversified economy that won't be at the mercy of corruption and on its knees every time oil price crashes. Always that PDP had 16 years to address our woes yet you guys cannot even bear with the APC for 4 years and want us back to PDP Egypt.

Yes, you are right. The 2016 recession was caused by Jonathan's negligence. Nigeria seems to be heading for another recession by next year and this one will squarely be on Buhari. Global demand for crude oil is diminishing as the whole world's economy slows. This spells doom for Nigeria as Buhari has wasted the last 4 years without making any meaningful change. I believe he has finally realised trouble is on the horizon which is why he is asking the governors for help.


On the matter of this thread. The core Muslim north will always vote for the more religious candidate. This is always a certainty. No election in Nigeria has been won solely based on the core northern vote. you can split Nigeria into 3 political zones.

1. The core North (North-east and North-west): consists of Muslim Northerners.
2. The old Eastern block (Suth-east and South-south): consists of Christians. Will only vote for a Christian or moderate Muslim.
3. The middle-belt and southwest: consist of all Northern minority groups across all northern states and Southwestern states. mixed religiously. will vote based on religious lines but usually tips the scale towards the more popular candidate.

This brief analysis implies that the core northern votes are usually countered by the old eastern block votes. Although the core north has a greater population size, the Middle belt and the Southwest typically hold the keys to getting elected.

In my opinion, the Southwest will shock Buhari and this is Atiku's Joker.

0monnak0da:

What you are displaying here is a typical undergraduate mindset.
If it is printed somewhere it is gospel.
Government spending may or may NOT be a significant part of GDP. Depends where the money goes.
If a government spends half its income servicing debt abroad e.g with the IMF how is that part of GDP
There are many ways of calculating GDP none wholly satisfactory none perfect. The fundamental thing is to understand the concept of GDP as the aggregate of goods and services produced by an economy for which there is payment.
Gaddafi settled the Lockerbie case with a nearly 4 billion payment to the victims families.
That was government spend. It had NOTHING to do with the GDP of Libya.
What it would affect is Balance of payments.
So looking at Government spend is crude and inaccurate in today's world
Especially when government borrows heavily to fund the spending or a large part of the spending is on interest payments to foreign creditors

Okay I understand your point. Not all types of government spending should be added into the calculation of GDP. the point I was trying to make in my initial post is that rather than focusing on mining resources, the Nigerian government can raise our GDP and get many more Nigerians out of poverty by simply investing in public quality basic education. My point is that we do not have to produce and sell something tangible to grow an economy. If you disagree with this point, I would like to hear your opinion.

The second point I made was that cutting salaries of workers who produce no value to Nigerians and using that money to finance basic education will also lead to economic growth, so the government should not borrow money for this but look inwards.

New Zealand implemented a policy similar to this in the 80's

0monnak0da:

Please stop twisting things
Body temperature is a measure of health
Body temperature is not health
GDP is simply economic output of a nation
Stop confusing yourself with all this nonsense.
Government spending may or may not be part of the GDP depends WHERE government spends. If it is borrowing money to buy weapons ABROAD to fight a war how is that economic output?
e.g when the spend is borrowed money from Brazil spent on Helicopters from the USA what has that got to do with GDP for the reference period?
GDP is not measured by imports/exports. Balance That is nonsense.

What do you mean by economic output? How do you calculate economic output? Common man, you don't need to be rude. gross domestic product is an economics term and it is calculated by adding the 4 components I mentioned. You can check any macroeconomics textbook. This is really common knowledge. The thing is education isn't really the best in Nigeria.

Your example is also shitty. Trader moni is an example of government spending. Whether the money is borrowed by the government or not, it is part of our GDP. the government spending on infrastructure such as schools is part of government spending.

0monnak0da:


You seem to be mixing so many things up here
I do not know what is the basis for your "components" of GDP or how government spending is a "component of GDP"
Government spending is not economic output.
That America is the largest economy is not evidence of "efficiency"
largeness does not necessarily mean efficiency or indeed prosperity.
Largeness is often an indication of "hinterland" size and population e.g China and India are among the largest economies
A better measure of "efficiency" would be output per capita though that is still a crude measure if it ignores purchasing power parity.

The US economic dominance is very much a measure of military and strategic dominance and not just economic dexterity. The dominance of the US is a direct consequence of winning the second world war and having dominance over the major economic powerhouse of Europe ,Japan and Korea.
This has made the US banking system in control of the world economy with the dollar as the go to reserve currency .
If we consider that for decades all trade between Nigeria and countries like China, Taiwan India and many others is conducted by first buying dollars and then converting to the index currency and vice versa on return . The US profits from that structural issue without moving a finger and that is the case with several other countries around the world. not only that crude oil and virtually all commodities are priced and traded in dollars.The US dollar thus has international value based on demand because of trade in goods and services that are neither entering or leaving the US and have nothing to do with the US but often involves the US banking system and they get a slice of virtually all dollar transactions one way or another. This is a strategic consequence of winning World War 2 , isolating Russia and China and bringing the other significant economies under its control. What this has meant for decades is that the US warehouses most of the World's capital which has been available to the US government ,its businesses and people to borrow at very low interest rates.

There is no money to borrow in Nigeria but billions are available in the US and this is what led to the crash in 2008 . The US dollar is pretend gold and the US is screwing the whole world. Yes there have been many good businesses started in the US but ultimately it comes down to access to cheap finance
Many countries are waking up but there is a long way to go e.g. Nigeria and China announced a currency swap and many countries

https://www.investopedia.com/articles/investing/051415/how-calculate-gdp-country.asp

a country’s GDP is a measure of consumer spending (C) plus business investment (I) and government spending (G) as well as its net exports, which is exports minus imports (X-M).

Nice educative comment. I actually had this same opinion you have and blamed Kissinger for creating the petrodollar which is the deal between America and Saudi Arabia for oil to be priced and sold in USD. This effectively ended the gold standard and dollarized (not a real word) the world.

A few years ago, I realized that this advantageous position America has also has its disadvantages such as the fact that since 1970, America has had a current deficit every year apart from four years. This is as a result of the strength of the dollar. Companies in the states have had to close down because of expensive labour and the federal reserve cannot manipulate the value of the dollar since its true value is in its transparency. In my opinion, President trump thought he could reverse this system but quickly realized that this petrodollar system has not only led to global growth and prosperity for hard working serious nations such as Singapore, China and Malaysia and preserved the way of life for the western world, but it has also prevented another world war.

Think about it this way. Global economics is like a pyramid. As you work hard to get rich, you climb up the pyramid. A higher number of countries are poor so these countries form the base of the pyramid. Once you get too rich, wages in your country start to rise. This makes producing goods in your country less profitable.
You the G6, you get a higher percentage of IMF's special drawing rights (SDR), and you compete with other countries at your level for global reserve currency rights. The other mismanaged countries at the bottom of the of the pyramid beg you for aid and you print your currency (piece of paper) and you provide aid to these countries. You bargain for trade deals and you either take their mineral resources, since they really have no use them, or your set up factories to take advantage of their cheap labour, if such countries have managed to handle their security and political risk. After all, Life is always more important than money. God bless Henry Kissinger.

The point I am trying to make is that it is a fair system. For many years, I felt just the same as you presently do, but my present opinion is that the system has maintained peace and hasn't prevented serious countries from developing.


Finally, America's GDP growth is tied mainly to improvements in efficiency both in production and in meeting peoples basic needs. Even the idea of outsourcing provides cheaper goods at the same Quality and is a prime example of the move towards efficiency in the States.