|
|
Post by olukumi on Apr 15, 2016 11:15:07 GMT
To keep it simple and short. I hate the terms due to the following reasons :
1. The yuan. China devalues their currency as a routine and each time they mess around with their currency, to remain competitive in the export market, we get screwed.
2. The structure of the loan is dodgy. It's not a straight cash deal, it will be delivered in the form of contracts and services and if we don't have an external monitoring agency like IMF or the world bank to give overall oversight in its implementation, we are screwed. They can decide to expense a $1 screw driver as $20.
3. The loan is fixed to the dollar. See point #1.
4. The details of the loan is shrouded in secrecy. Who knows if Buhari simply sold us to imperialist China?
|
|
|
|
Post by ajanaku on Apr 15, 2016 12:34:10 GMT
To keep it simple and short. I hate the terms due to the following reasons : 1. The yuan. China devalues their currency as a routine and each time they mess around with their currency, to remain competitive in the export market, we get screwed. 2. The structure of the loan is dodgy. It's not a straight cash deal, it will be delivered in the form of contracts and services and if we don't have an external monitoring agency like IMF or the world bank to give overall oversight in its implementation, we are screwed. They can decide to expense a $1 screw driver as $20. 3. The loan is fixed to the dollar. See point #1. 4. The details of the loan is shrouded in secrecy. Who knows if Buhari simply sold us to imperialist China? I think your second point should be viewed as an advantage to us, as we would be fully assured of drastic improvements in our infrastructure base, as no minister or government officials would have the chance to siphon monies. What do you think? As regards your first and third point, If I ain't mistaken, I think the ministry of finance or CBN could hedge against the currency risks. A derivative forward or futures contract would suffice. Your fourth point...At this critical stage in Nigeria's life, with the country grappling with the woes of infrastructural decay, I don't think the average forward-looking and development-optimistic Nigerian would care about the details of the loan agreement with China as long it yields concrete results and benefits at the end of the day. As matter of fact, I wouldn't mind "dashing out" oil blocks to China in exchange for them turning Nigeria to a construction site and giving us facilities that would ensure 24-7 electricity. I never see PHCN light for 5 straight days and fuel still scarce small. Even if you see, you go pay through your nose. Naija is fucked up big time! #Respect, olukumi ... |
|
|
|
Post by olukumi on Apr 15, 2016 13:15:43 GMT
To keep it simple and short. I hate the terms due to the following reasons : 1. The yuan. China devalues their currency as a routine and each time they mess around with their currency, to remain competitive in the export market, we get screwed. 2. The structure of the loan is dodgy. It's not a straight cash deal, it will be delivered in the form of contracts and services and if we don't have an external monitoring agency like IMF or the world bank to give overall oversight in its implementation, we are screwed. They can decide to expense a $1 screw driver as $20. 3. The loan is fixed to the dollar. See point #1. 4. The details of the loan is shrouded in secrecy. Who knows if Buhari simply sold us to imperialist China? I think your second point should be viewed as an advantage to us, as we would be fully assured of drastic improvements in our infrastructure base, as no minister or government officials would have the chance to siphon monies. What do you think? As regards your first and third point, If I ain't mistaken, I think the ministry of finance or CBN could hedge against the currency risks. A derivative forward or futures contract would suffice. Your fourth point...At this critical stage in Nigeria's life, with the country grappling with the woes of infrastructural decay, I don't think the average forward-looking and development-optimistic Nigerian would care about the details of the loan agreement with China as long it yields concrete results and benefits at the end of the day. As matter of fact, I wouldn't mind "dashing out" oil blocks to China in exchange for them turning Nigeria to a construction site and giving us facilities that would ensure 24-7 electricity. I never see PHCN light for 5 straight days and fuel still scarce small. Even if you see, you go pay through your nose. Naija is fucked up big time! #Respect, olukumi ... I understand your point due to past abuse of monies, trust, etc etc. I would love oversight on point #2 by pitching West vs. East as I described so we get the better end of the deal. Hedging currency is not as easy as it would seem. You remember how Britain suffered under George Soros' bets against them? Two way street. I guess we'll be better off when compared to the past but we need to keep the vigilance. China don't play. |
|
|
|
Post by ajanaku on Apr 15, 2016 14:49:26 GMT
I understand your point due to past abuse of monies, trust, etc etc. I would love oversight on point #2 by pitching West vs. East as I described so we get the better end of the deal. Hedging currency is not as easy as it would seem. You remember how Britain suffered under George Soros' bets against them? Two way street. I guess we'll be better off when compared to the past but we need to keep the vigilance. China don't play. I had to google George Soros' bets. Mehn, some people get mind o. He's a billionaire anyway. He couldn't have been one without taking big risks. Sorry, what do you mean by china don't play? Abeg, shed more light. |
|
|
|
Post by olukumi on Apr 15, 2016 15:29:15 GMT
I understand your point due to past abuse of monies, trust, etc etc. I would love oversight on point #2 by pitching West vs. East as I described so we get the better end of the deal. Hedging currency is not as easy as it would seem. You remember how Britain suffered under George Soros' bets against them? Two way street. I guess we'll be better off when compared to the past but we need to keep the vigilance. China don't play. I had to google George Soros' bets. Mehn, some people get mind o. He's a billionaire anyway. He couldn't have been one without taking big risks. Sorry, what do you mean by china don't play? Abeg, shed more light. Usually when China invests (government loans or business investors), apart from giving you the funds, they take full proprietorship. They take control of almost everything in the chain by using Chinese workers from the bottom to the top without transferring requisite skills to the local population. They will mostly take our raw materials and sell it back to us as finished goods. This currently takes place in some form when we trade with other countries but the Chinese approach is brutal. They have the poor population that will live in your remote villages and compete with you on labor rates. We just have to be very careful dealing with China. |
|
|
|
Post by ajanaku on Apr 15, 2016 16:31:27 GMT
olukumi, I get your point. But no matter how self-centred they wanna be, a large chunk of the workers they'd use for the projects would be Nigerians, especially the low-cadre workers. These construction projects would no doubt reduce unemployment and increase our infrastructure base. I think the partnership with China will no doubt, be highly beneficial in the long run.
|
|
|
|
Post by olukumi on Apr 15, 2016 16:43:26 GMT
olukumi, I get your point. But no matter how self-centred they wanna be, a large chunk of the workers they'd use for the projects would be Nigerians, especially the low-cadre workers. These construction projects would no doubt reduce unemployment and increase our infrastructure base. I think the partnership with China will no doubt, be highly beneficial in the long run. Ha! You assume China will spare low cadre jobs. They won't! |
|
|
|
Post by omohayek on Apr 16, 2016 21:00:17 GMT
Ha! You assume China will spare low cadre jobs. They won't! It's not who the jobs for these projects go to that I consider most important - after all, the point is the infrastructure, which will remain in Nigeria. What concerns me is that Buhari seems to think that the way to fix the country's infrastructural deficits is by taking on more government debt, when there is no shortage of private investors around the world who could provide a lot more funding in the form of equity. The African Development Bank estimates Nigeria's infrastructural deficit at $300 billion, so how much can a $2 billion loan from China realistically do to plug that gap, no matter the terms on which the money is borrowed? And in any case, as you point out, the Chinese government (which is hardly a stranger to corruption) can easily inflate the cost of these projects to reward well-connected Chinese businesses, and yet we'll still have to end up paying back the loan at full cost. Buhari's statist approach to economic management is fundamentally wrong-headed, and unless another Middle-Eastern war comes along to spike oil prices, I can't see Nigeria's economy growing robustly under this government. |
|
|
|
Post by olukumi on Apr 16, 2016 21:10:23 GMT
Ha! You assume China will spare low cadre jobs. They won't! It's not who the jobs for these projects go to that I consider most important - after all, the point is the infrastructure, which will remain in Nigeria. What concerns me is that Buhari seems to think that the way to fix the country's infrastructural deficits is by taking on more government debt, when there is no shortage of private investors around the world who could provide a lot more funding in the form of equity. The African Development Bank estimates Nigeria's infrastructural deficit at $300 billion, so how much can a $2 billion loan from China realistically do to plug that gap, no matter the terms on which the money is borrowed? And in any case, as you point out, the Chinese government (which is hardly a stranger to corruption) can easily inflate the cost of these projects to reward well-connected Chinese businesses, and yet we'll still have to end up paying back the loan at full cost. Buhari's statist approach to economic management is fundamentally wrong-headed, and unless another Middle-Eastern war comes along to spike oil prices, I can't see Nigeria's economy growing robustly under this government. I haven't paid too much attention to this area but what are the significant barriers against PPP deals in Nigeria? Why don't we have more of such? If an investor is guaranteed access and non interference from government besides oversight, why don't we have more locals investing? |
|
|
|
Post by omohayek on Apr 16, 2016 21:21:19 GMT
I haven't paid too much attention to this area but what are the significant barriers against PPP deals in Nigeria? Why don't we have more of such? If an investor is guaranteed access and non interference from government besides oversight, why don't we have more locals investing? Simple - corruption and misgovernment. Who wants to have to deal with the hassles of paying bribe after bribe to simply be allowed to do business, only to then run into populist politics that prevents charging enough to cover one's cost of investment (e.g. the Lekki-Epe expressway, and the current situation with the gencos and discos), or incompetent regulators who kill mobile banking in its cradle (the CBN's policy), or impose outrageous fines that seem designed to push companies into bankruptcy (the MTN saga). Then of course you have a corrupt judiciary which takes forever to render judgement on any disputes, leaving you in limbo for years if you happen to quarrel with any domestic partners. Even if Buhari were serious about eliminating systemic corruption - and he is not - the sheer level of arrogance and incompetence in Nigeria's governing organs would be sufficient to discourage most investors. Neither Buhari nor GEJ's governments have seemed to know or care that the country ranks amongst the worst in the world for ease of doing business. Honestly, the only Nigerian ruler who had a clue about what it takes to attract foreign investment was Obasanjo - and even he had his problems like blatantly favoring Dangote by granting him all sorts of special deals. |
|
|
|
Post by olukumi on Apr 16, 2016 21:44:00 GMT
I haven't paid too much attention to this area but what are the significant barriers against PPP deals in Nigeria? Why don't we have more of such? If an investor is guaranteed access and non interference from government besides oversight, why don't we have more locals investing? Simple - corruption and misgovernment. Who wants to have to deal with the hassles of paying bribe after bribe to simply be allowed to do business, only to then run into populist politics that prevents charging enough to cover one's cost of investment (e.g. the Lekki-Epe expressway, and the current situation with the gencos and discos), or incompetent regulators who kill mobile banking in its cradle (the CBN's policy), or impose outrageous fines that seem designed to push companies into bankruptcy (the MTN saga). Then of course you have a corrupt judiciary which takes forever to render judgement on any disputes, leaving you in limbo for years if you happen to quarrel with any domestic partners. Even if Buhari were serious about eliminating systemic corruption - and he is not - the sheer level of arrogance and incompetence in Nigeria's governing organs would be sufficient to discourage most investors. Neither Buhari nor GEJ's governments have seemed to know or care that the country ranks amongst the worst in the world for ease of doing business. Honestly, the only Nigerian ruler who had a clue about what it takes to attract foreign investment was Obasanjo - and even he had his problems like blatantly favoring Dangote by granting him all sorts of special deals. Sigh. The naija factor. I remember Yaradua reversing a bunch of deals when he came into power. Our moribund refineries could have been recovered years ago. With 180 million people, our fundamentals are conducive for growth just by opening more sectors of the economy to private play without the undue interference from the government. Aside from the government, most of our citizenry are used to getting something for nothing. They will bitch and moan about every single fee they have to pay and always look for ways to game the system. Methinks NASS should be spending their time working out barriers to doing business in Nigeria and also making sure we get benefits from investments. |
|
|
|
Post by omohayek on Apr 16, 2016 21:55:32 GMT
Sigh. The naija factor. I remember Yaradua reversing a bunch of deals when he came into power. Our moribund refineries could have been recovered years ago. With 180 million people, our fundamentals are conducive for growth just by opening more sectors of the economy to private play without the undue interference from the government. Aside from the government, most of our citizenry are used to getting something for nothing. They will bitch and moan about every single fee they have to pay and always look for ways to game the system. Methinks NASS should be spending their time working out barriers to doing business in Nigeria and also making sure we get benefits from investments. That bunch of election-rigging parasites, led by a thief called Bukola Saraki? I doubt that anything constructive will be on their agenda in the immediate future: tearing down barriers would mean depriving themselves of opportunities to shake down businessmen for bribes, which is precisely why most of them ran for office in the first place. Before we can get anything positive out of the NASS, we need to reform the very way in which politics is done in Nigeria, to make it less about godfatherism, bribery, rigging, "na our son" and "stomach infrastructure", and more about choosing representatives who actually care about bettering their voters' lives. SW politicians are hardly a perfect bunch (we did invent "amala politics" after all, and we also gave Nigeria a clown like Fayose) but those from other parts of the country almost make ours look like saints, and to get anything done in the NASS you need a national majority of votes. Can one realistically expect anything good from SE representatives who sabotaged their own region by removing the Lagos-Calabar railway from the budget, or northern politicians who opposed PRESSID because it was mostly going to Yorubas and Igbos? |
|
|
|
Post by olukumi on Apr 16, 2016 22:25:16 GMT
Sigh. The naija factor. I remember Yaradua reversing a bunch of deals when he came into power. Our moribund refineries could have been recovered years ago. With 180 million people, our fundamentals are conducive for growth just by opening more sectors of the economy to private play without the undue interference from the government. Aside from the government, most of our citizenry are used to getting something for nothing. They will bitch and moan about every single fee they have to pay and always look for ways to game the system. Methinks NASS should be spending their time working out barriers to doing business in Nigeria and also making sure we get benefits from investments. That bunch of election-rigging parasites, led by a thief called Bukola Saraki? I doubt that anything constructive will be on their agenda in the immediate future: tearing down barriers would mean depriving themselves of opportunities to shake down businessmen for bribes, which is precisely why most of them ran for office in the first place. Before we can get anything positive out of the NASS, we need to reform the very way in which politics is done in Nigeria, to make it less about godfatherism, bribery, rigging, "na our son" and "stomach infrastructure", and more about choosing representatives who actually care about bettering their voters' lives. SW politicians are hardly a perfect bunch (we did invent "amala politics" after all, and we also gave Nigeria a clown like Fayose) but those from other parts of the country almost make ours look like saints, and to get anything done in the NASS you need a national majority of votes. Can one realistically expect anything good from SE representatives who sabotaged their own region by removing the Lagos-Calabar railway from the budget, or northern politicians who opposed PRESSID because it was mostly going to Yorubas and Igbos? The system as-is will not change. How do we change the incentive system in politics is the golden question. We really can't change the human corruption factor but the only thing that can be done with the right people and guts is to cut down the size of the government. If we start by embracing regional governments and getting rid of states as a whole with meaningless political structures duplicated across mushroom states, then we have a chance. One can imagine the level of waste and corruption with state legislators and local government chair people. Eliminating those structures will free up resources and we will have less career criminals entering politics. |
|
|
|
Post by Honorebu on Apr 16, 2016 22:45:31 GMT
omohayek , dishing out knowledge as usual To be honest, I'm not really the biggest fan of these foreign investments Not saying its bad, but still I'd have a preffered a situation where we have local investors given the foreign ones a good run for their money These days, it appears to me like China is colonizing us We need to start building our economies ourselves
|
|
