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Post by omohayek on Feb 19, 2016 8:26:13 GMT
Iya Niyen!, Omoluabi, dansoye1, Belmot, osoronga, Omo Oba of the Source, Her Highness, IrekeOnibudo, ioannes, laudate, oduabachanal, stblack, zaynie, ilaje2015, omohayek, AgbongboAkala, Ogbeni Ogunnaike, aparo, black, colonial pikin, skylar, cocoafarmer, missy89, yorumigrant, ajanaku, Short_Biscuit, ijeshaboy, tomtoxic, scully95, anago, olukumi, sesinuWhat does it tell you about the Buhari administration's lack of economic direction, when even a playwright and self-confessed "economic illiterate" like Wole Soyinka can see that the President doesn't know what he's doing? The mark of a truly wise man is knowing what one does not know, and then seeking advice from those who do know. Buhari's big flaw is that he not only refuses to seek advice, but actively rejects freely-given advice from experts, in the arrogant belief that he knows better. Having such a person in charge of Nigeria's economy is like having a blind man in the driver's seat of a bus - and the blind man is now putting his foot on the accelerator as the bus rapidly heads for a cliff ...
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Post by Omoluabi on Feb 19, 2016 10:51:21 GMT
Iya Niyen!, Omoluabi, dansoye1, Belmot, osoronga, Omo Oba of the Source, Her Highness, IrekeOnibudo, ioannes, laudate, oduabachanal, stblack, zaynie, ilaje2015, omohayek, AgbongboAkala, Ogbeni Ogunnaike, aparo, black, colonial pikin, skylar, cocoafarmer, missy89, yorumigrant, ajanaku, Short_Biscuit, ijeshaboy, tomtoxic, scully95, anago, olukumi, sesinuWhat does it tell you about the Buhari administration's lack of economic direction, when even a playwright and self-confessed "economic illiterate" like Wole Soyinka can see that the President doesn't know what he's doing? The mark of a truly wise man is knowing what one does not know, and then seeking advice from those who do know. Buhari's big flaw is that he not only refuses to seek advice, but actively rejects freely-given advice from experts, in the arrogant belief that he knows better. Having such a person in charge of Nigeria's economy is like having a blind man in the driver's seat of a bus - and the blind man is now putting his foot on the accelerator as the bus rapidly heads for a cliff ... Ati ta aja.....afi owo e ra obo bayi o.... Who will help us pull Buhari back from this acceleration to the abyss?
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Post by Honorebu on Feb 19, 2016 13:01:17 GMT
The guy never listens.Unfortunately we're in a country where his followers believe he's infallible. One would expect these clueless individuals in power to be talking about devolution but its like it's not even on the agenda
I'm tired of these people.
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Post by olukumi on Feb 19, 2016 13:43:11 GMT
Guys calm down. There is really little that can be done about the forex situation. As-is, it's a goldmine for commodity exporters that will earn dollars from goods sourced with weak naira. Ultimately, a good thing to get off crude dependency. If you are located abroad, better start looking for goods to export from naija.
Only way we can get some immediate reprieve is if he catch lucky breaks since our exports outside oil can't sustain the uneven demand for import dollars. Lucky breaks such as:
1. Full fledged war in the middle east. 2. MTN and other companies paying us billions of dollars in fines. 3. Break through in repatriating proceeds of corruption.
We have nothing to substitute the level of forex we earn from crude so outside of that our only hope is to borrow to stimulate local economy by going on a massive infrastructure development effort. Even that won't curtail the demand for FX by our importers from the SE and SW, bringing everything from toothpick, second hand cloths, matches, fugazee goods etc.
All the solutions to change the structural deficit are mid to long term efforts so we can't just get out of the situation with ingenuity. That may manage the hemorrhaging a bit.
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Post by omohayek on Feb 19, 2016 13:53:45 GMT
Guys calm down. There is really little that can be done about the forex situation. As-is, it's a goldmine for commodity exporters that will earn dollars from goods sourced with weak naira. Only thing that can happen is if he catch lucky breaks since our exports outside oil can't sustain the uneven demand for import dollars. Lucky breaks such as: 1. Full fledged war in the middle east. 2. MTN and other companies paying us billions of dollars in fines. 3. Break through in repatriating proceeds of corruption. We have nothing to substitute the level of forex we earn from crude so outside of that our only hope is to borrow to stimulate local economy by going on a massive infrastructure development effort. Even that won't curtail the demand for FX by our importers from the SE and SW, bringing everything from toothpick, second hand cloths, matches, fugazee goods etc. All the solutions to change the structural deficit are mid to long term efforts so we can't just get out of the situation with ingenuity. That may manage the hemorrhaging a bit. No, devaluation is not only inevitable but desirable: this is not just hand-waving, but based on solid international trade theory and empirical econometric evidence. There is a very good reason why all international bodies, all major financial periodicals and experienced Nigerians like Sanusi Lamido, Soludo and Okonjo-Iweala are all unanimous on this issue: the arguments in its favor are simply overwhelming. Despite what many laymen may think, modern economics is a rigorous subject, based on rigorous mathematical models which are tested against reality, and from any economist's point of view, all the arguments against devaluation by Nigerians are simply impossible to take seriously. If you want the best for Nigeria in the long run, higher oil prices are the last thing you should be wishing for, as oil money is precisely what has destroyed indigenous Nigerian agriculture and manufacturing since 1970. I strongly suggest that you take the time and read through the Wikipedia article on Dutch disease, and then follow it up with this ebook by Mkandawire and Soludo.
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Post by olukumi on Feb 19, 2016 14:38:36 GMT
Guys calm down. There is really little that can be done about the forex situation. As-is, it's a goldmine for commodity exporters that will earn dollars from goods sourced with weak naira. Only thing that can happen is if he catch lucky breaks since our exports outside oil can't sustain the uneven demand for import dollars. Lucky breaks such as: 1. Full fledged war in the middle east. 2. MTN and other companies paying us billions of dollars in fines. 3. Break through in repatriating proceeds of corruption. We have nothing to substitute the level of forex we earn from crude so outside of that our only hope is to borrow to stimulate local economy by going on a massive infrastructure development effort. Even that won't curtail the demand for FX by our importers from the SE and SW, bringing everything from toothpick, second hand cloths, matches, fugazee goods etc. All the solutions to change the structural deficit are mid to long term efforts so we can't just get out of the situation with ingenuity. That may manage the hemorrhaging a bit. No, devaluation is not only inevitable but desirable: this is not just hand-waving, but based on solid international trade theory and empirical econometric evidence. There is a very good reason why all international bodies, all major financial periodicals and experienced Nigerians like Sanusi Lamido, Soludo and Okonjo-Iweala are all unanimous on this issue: the arguments in its favor are simply overwhelming. Despite what many laymen may think, modern economics is a rigorous subject, based on rigorous mathematical models which are tested against reality, and from any economist's point of view, all the arguments against devaluation by Nigerians are simply impossible to take seriously. If you want the best for Nigeria in the long run, higher oil prices are the last thing you should be wishing for, as oil money is precisely what has destroyed indigenous Nigerian agriculture and manufacturing since 1970. I strongly suggest that you take the time and read through the Wikipedia article on Dutch disease, and then follow it up with this ebook by Mkandawire and Soludo. I was like you about devaluation and I have a bunch of writeups scattered around the internet to support that view, then I had a conversation with a friend based in Nigeria and had a rethink. Who does devaluation really favor? It grossly favors Foreign investors. These are leeches waiting to pick all your assets at a discount. Devaluation guarantees they will get it at a discount. Guess what happens after they invest? Profit taking. They take profit and repatriate their dollars back home and scream devaluation yet again. A vicious cycle and in the mean time, we still won't be able to develop critical sectors! What we need at the moment if done correctly is a protectionist policy. That's how the new giants like India, China, Brazil and South Korea grew. Nobody grows by devaluing currency and not defending your turf. It's a fact. If we are growing to restructure our economy, then useless imports have to be unattractive and the government should have no part in wasting FX on such. Our commodities have to be cheap so we can out compete most countries and most importantly our little forex backed by official rate needs to be channeled on massive infrastructure projects. I know it's extreme simplification and we'll need all sorts to happen simultaneously such as NASS passing laws that will loosen federal government's grip on resources etc. But getting some form of reprieve under a disciplined government can help speed all those up. I no longer support irrational devaluation that benefits the winners, the author of all the books we studied in business school. The system is gamed against us, Africans. We need African oriented solutions that protects us and encourages our growth.
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Post by omohayek on Feb 19, 2016 17:21:47 GMT
I was like you about devaluation and I have a bunch of writeups scattered around the internet to support that view, then I had a conversation with a friend based in Nigeria and had a rethink. Who does devaluation really favor? It grossly favors Foreign investors. These are leeches waiting to pick all your assets at a discount. Devaluation guarantees they will get it at a discount. Guess what happens after they invest? Profit taking. They take profit and repatriate their dollars back home and scream devaluation yet again. A vicious cycle and in the mean time, we still won't be able to develop critical sectors! What we need at the moment if done correctly is a protectionist policy. That's how the new giants like India, China, Brazil and South Korea grew. Nobody grows by devaluing currency and not defending your turf. It's a fact. If we are growing to restructure our economy, then useless imports have to be unattractive and the government should have no part in wasting FX on such. Our commodities have to be cheap so we can out compete most countries and most importantly our little forex backed by official rate needs to be channeled on massive infrastructure projects. I know it's extreme simplification and we'll need all sorts to happen simultaneously such as NASS passing laws that will loosen federal government's grip on resources etc. But getting some form of reprieve under a disciplined government can help speed all those up. I no longer support irrational devaluation that benefits the winners, the author of all the books we studied in business school. The system is gamed against us, Africans. We need African oriented solutions that protects us and encourages our growth. You can't simply dismiss the argument for devaluation as "irrational" without bothering to learn and understand the conceptual framework behind it, and there is nothing in Africa's economic history that can't or hasn't been well-explained by standard economic arguments - we are not a different species from the rest of humanity, after all. Protectionism is utterly discredited, and the reality is that none of the East Asian tigers (Korea, Taiwan, Hong Kong or China) got to where today by practicing it. The opposite is in fact true - the East Asian countries have enjoyed far better growth than most African countries because they have been more open. These are well-studied, empirical facts which can be easily verified by looking at the economics literature. As easy and comforting as it might be to blame others for Africa's problems since the 1960s, the truth is that almost all of our difficulties have been self-inflicted, by leaders who were either simply thieves, or completely ignorant of the most fundamental economic principles. Beliefs like the ones you hold are, sorry to say, exactly why Africa has historically performed poorly: the notion that foreign investment is bad, and that the way forward is to close oneself off from the world, has proven a disaster wherever it has been tried, whether in Africa, in Mao's China, in North Korea, or in Venezuela. Conversely, China's growth since 1979 has relied heavily on foreign investment - for example, the mobile phones we all own are mostly built in China by foreign companies like Samsung and Apple, and the Chinese chip plants that power our computers were built by Americans, Koreans, Japanese and Taiwanese. Looking at foreign investors as greedy people who have no right to want to repatriate their earnings does nothing but guarantee another 50 years of economic stagnation. I suggest you put aside whatever conclusions you might have come to in discussions with friends, and take some time to actually study some basic micro and macro-economics; you'll find that many things you currently think are "obvious" are just as false as the "obvious" belief that time passes at the same rate everywhere, or that an object can't be both a wave and a particle at the same time. At the very least, read up on the theory of comparative advantage, and take a look at a simple model of growth like the Solow-Swan model.
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Post by olukumi on Feb 19, 2016 17:41:29 GMT
I was like you about devaluation and I have a bunch of writeups scattered around the internet to support that view, then I had a conversation with a friend based in Nigeria and had a rethink. Who does devaluation really favor? It grossly favors Foreign investors. These are leeches waiting to pick all your assets at a discount. Devaluation guarantees they will get it at a discount. Guess what happens after they invest? Profit taking. They take profit and repatriate their dollars back home and scream devaluation yet again. A vicious cycle and in the mean time, we still won't be able to develop critical sectors! What we need at the moment if done correctly is a protectionist policy. That's how the new giants like India, China, Brazil and South Korea grew. Nobody grows by devaluing currency and not defending your turf. It's a fact. If we are growing to restructure our economy, then useless imports have to be unattractive and the government should have no part in wasting FX on such. Our commodities have to be cheap so we can out compete most countries and most importantly our little forex backed by official rate needs to be channeled on massive infrastructure projects. I know it's extreme simplification and we'll need all sorts to happen simultaneously such as NASS passing laws that will loosen federal government's grip on resources etc. But getting some form of reprieve under a disciplined government can help speed all those up. I no longer support irrational devaluation that benefits the winners, the author of all the books we studied in business school. The system is gamed against us, Africans. We need African oriented solutions that protects us and encourages our growth. You can't simply dismiss the argument for devaluation as "irrational" without bothering to learn and understand the conceptual framework behind it, and there is nothing in Africa's economic history that can't or hasn't been well-explained by standard economic arguments - we are not a different species from the rest of humanity, after all. Protectionism is utterly discredited, and the reality is that none of the East Asian tigers (Korea, Taiwan, Hong Kong or China) got to where today by practicing it. The opposite is in fact true - the East Asian countries have enjoyed far better growth than most African countries because they have been more open. These are well-studied, empirical facts which can be easily verified by looking at the economics literature. As easy and comforting as it might be to blame others for Africa's problems since the 1960s, the truth is that almost all of our difficulties have been self-inflicted, by leaders who were either simply thieves, or completely ignorant of the most fundamental economic principles. Beliefs like the ones you hold are, sorry to say, exactly why Africa has historically performed poorly: the notion that foreign investment is bad, and that the way forward is to close oneself off from the world, has proven a disaster wherever it has been tried, whether in Africa, in Mao's China, in North Korea, or in Venezuela. Conversely, China's growth since 1979 has relied heavily on foreign investment - for example, the mobile phones we all own are mostly built in China by foreign companies like Samsung and Apple, and the Chinese chip plants that power our computers were built by Americans, Koreans, Japanese and Taiwanese. Looking at foreign investors as greedy people who have no right to want to repatriate their earnings does nothing but guarantee another 50 years of economic stagnation. I suggest you put aside whatever conclusions you might have come to in discussions with friends, and take some time to actually study some basic micro and macro-economics; you'll find that many things you currently think are "obvious" are just as false as the "obvious" belief that time passes at the same rate everywhere, or that an object can't be both a wave and a particle at the same time. At the very least, read up on the theory of comparative advantage, and take a look at a simple model of growth like the Solow-Swan model. Dude, those asian economies opened up after a long spell of self development achieved by protectionism. I did a bunch of courses on these things while in MBA class (fantastic Professors and guest CEOs from all sorts of fortune 100 companies) and of course they sell devaluation and free markets as the key. Nobody will tell you about the timing, the need to first build capability/capacity before opening up your markets and devaluing your currency. That is what we all get wrong!
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Post by olukumi on Feb 19, 2016 18:17:58 GMT
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Post by Honorebu on Feb 19, 2016 18:19:00 GMT
Feels good to be around people who really have in-depth knowledge of these issues abi no be so? Alhaji oil money Omoluabi
Let me do justice to this popcorn while I wait for Professor Omohayek's rebuttal
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Post by olukumi on Feb 19, 2016 18:43:46 GMT
On Free Trade ************** I was wrong. Free market trade policies hurt the poor
by Stephen Byers The IMF and World Bank orthodoxy is increasing global poverty
In November 1999, during the World Trade Organisation ministerial conference in Seattle, I watched from my hotel room as thousands demonstrated against the evils of globalisation. Anarchists clad in black marched alongside grandmothers dressed as turtles and steelworkers from Philadelphia. They saw international trade as a threat - to their jobs, the environment or simply as part of a capitalist conspiracy. As leader of the delegation from the United Kingdom, I was convinced that the expansion of world trade had the potential to bring major benefits to developing countries and would be one of the key means by which world poverty would be tackled. In order to achieve this, I believed that developing countries would need to embrace trade liberalisation. This would mean opening up their own domestic markets to international competition. The thinking behind this approach being that the discipline of the market would resolve problems of underperformance, a strong economy would emerge and that, as a result, the poor would benefit. This still remains the position of major international bodies like the IMF and World Bank and is reflected in the system of incentives and penalties which they incorporate in their loan agreements with developing countries. But my mind has changed. I now believe that this approach is wrong and misguided. Since leaving the cabinet a year ago, I've had the opportunity to see at first hand the consequences of trade policy. No longer sitting in the air-conditioned offices of fellow government ministers I have, instead, been meeting farmers and communities at the sharp end. It is this experience that has led me to the conclusion that full trade liberalisation is not the way forward. A different approach is needed: one which recognises the importance of managing trade with the objective of achieving development goals. No one should doubt the hugely significant role that international trade could play in tackling poverty. In terms of income, trade has the potential to be far more important than aid or debt relief for developing countries. For example, an increase in Africa's share of world exports by just 1% could generate around £43bn - five times the total amount of aid received by African countries. This has led President Museveni of Uganda to say: "Africa does need development assistance, just as it needs debt relief from its crushing international debt burden. But aid and debt relief can only go so far. We are asking for the opportunity to compete, to sell our goods in western markets. In short, we want to trade our way out of poverty." The World Bank estimates that reform of the international trade rules could take 300 million people out of poverty. Reform is essential because, to put it bluntly, the rules of international trade are rigged against the poorest countries. Rich nations may be pre pared to open up their own markets, but still keep in place massive subsidies. The quid pro quo for doing this is that developing countries open up their domestic markets. These are then vulnerable to heavily subsidised exports from the developed world.The course of international trade since 1945 shows that an unfettered global market can fail the poor and that full trade liberalisation brings huge risks and rarely provides the desired outcome. It is more often the case that developing countries which have successfully expanded their economies are those that have been prepared to put in place measures to protect industries while they gain strength and give communities the time to diversify into new areas.This is not intervention for the sake of it or to prop up failing enterprises, but part of a transitional phase to create strong businesses that can compete on equal terms in the global marketplace without the need for continued protection. Just look at some examples. Taiwan and South Korea are often held out as being good illustrations of the benefits of trade liberalisation. In fact, they built their international trading strength on the foun dations of government subsidies and heavy investment in infrastructure and skills development while being protected from competition by overseas firms. In more recent years, those countries which have been able to reduce levels of poverty by increasing economic growth - like China, Vietnam, India and Mozambique - have all had high levels of intervention as part of an overall policy of strengthening domestic sectors. On the other hand, there are an increasing number of countries in which full-scale trade liberalisation has been applied and then failed to deliver economic growth while allowing domestic markets to be dominated by imports. This often has devastating effects.
Zambia and Ghana are both examples of countries in which the opening up of markets has led to sudden falls in rates of growth with sectors being unable to compete with foreign goods. Even in those countries that have experienced overall economic growth as a result of trade liberalisation, poverty has not necessarily been reduced.
In Mexico during the first half of the 1990s there was economic growth, yet the number of people living below the poverty line increased by 14 million in the 10 years from the mid-1980s. This was due to the fact that the benefits of a more open market all went to the large commercial operators, with the small concerns being squeezed out.The evidence shows that the benefits that would flow from increased international trade will not materialise if markets are simply left alone. When this happens, liberalisation is used by the rich and powerful international players to make quick gains from short-term investments. The role of the IMF and World Bank is also of concern. The conditions placed on their loans often force countries into rapid liberalisation, with scant regard to the impact on the poor. The way forward is through a regime of managed trade in which markets are slowly opened up and trade policy levers like subsidies and tariffs are used to help achieve development goals.
The IMF and World Bank should recognise that questions of trade liberalisation are the responsibility of the WTO where they can be considered in the overall context of achieving poverty reduction and that it is therefore inappropriate to include trade liberalisation as part of a loan agreement. This represents a departure from the current orthodoxy. It will be opposed by multinational companies who see rich and easy pickings in the markets of the developing world. But such a change would benefit the world's poorest people and that's why it should happen.
· Stephen Byers is Labour MP for North Tyneside. He is a former trade and industry secretary and was a cabinet member from 1998 to 2002. stephenbyersmp@parliament.uk www.theguardian.com/politics/2003/may/19/globalisation.politics
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Post by Omoluabi on Feb 19, 2016 19:47:46 GMT
No be small thing o my dear Aare.... Na how I go carry this thread go show Aisha to give to bubu and insist he reads it before she pull wrapper for any action I dey ruminate on right now..... There's so much to learn from the exchanges
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Post by Honorebu on Feb 19, 2016 20:58:33 GMT
No be small thing o my dear Aare.... Na how I go carry this thread go show Aisha to give to bubu and insist he reads it before she pull wrapper for any action I dey ruminate on right now..... There's so much to learn from the exchanges I tell you that guy is so stubborn. True words baba.When people like Professor Omohayek, Alhaji Oil money and Professor Olukumi are debating, person like me go just chill with my popcorn dey watch una I'm a student
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Post by AgbongboAkala on Feb 19, 2016 22:19:40 GMT
Implications of Devaluation of Naira
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Post by omohayek on Feb 20, 2016 10:05:55 GMT
olukumi , One can always find fringe articles by "dissenters" and crackpots claiming that the orthodoxy is wrong, but that is no substitute for careful reasoning based on mathematical models which are then tested using the statistical techniques of econometrics. A random FT article can never match up to careful academic research, of which I've already provided you several links, each of which would take you far more time to read through than you spent composing your replies - so I know you didn't bother to actually read them. You breezily repeat the assertion that protectionism explains the rise of the East Asian tigers, despite the fact that the actual evidence against you is overwhelming. Anyone claiming that Singapore and Hong Kong were protectionist simply doesn't have the slightest clue what they are talking about, as these are two of the most open economies in existence in the world - and they have been that way since the 1960s, when they were much poorer. Just look at the countries that top the list of open countries and tell me how many of them are poor, then repeat the exercise at the bottom and tell me how many are rich? You can claim to have taken any number of courses on economics, but if your arguments don't reflect the content of those courses, I won't believe what you have to say. Do you really understand the simple Ricardian model of free trade? Can you tell me what its assumptions are and under what conditions they work? Because if you did, you'd realize that saying protectionism is the answer makes as much sense as telling a doctor that it's the liver that pumps blood through the body, telling a biologist that the earth was created 6,000 years ago, or telling a mathematician that 2 + 2 is actually 5. Protectionism is the national equivalent of someone thinking that they will become richer by growing their own food and making their own clothes, instead of getting a job and buying their clothes and food from the market - in other words, it is economic insanity.
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