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Post by omohayek on May 24, 2016 9:31:05 GMT
As far as I can see, the oil marketers are against it for two reasons. - They have been paid for previous imports in Naira, and they want to convert that payment at the same rate at which they bought their fuel, otherwise they'll be taking big losses.
- Keeping the dual-tier exchange rate allows at least some of them to keep making risk-free profits by immediately selling the FX they get on the black market, while pretending that they've used it to import fuel. They can then blame hijackers, vandals and the like for the discrepancy.
In public they'll all pretend it's just about point 1, but no doubt their opposition is as much about the second point. Who would give up 'free' money if a government were foolish enough to be offering it?
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Post by Omoluabi on May 24, 2016 9:38:32 GMT
I think the naira should be devalued immediately while the refineries should be put up for sale or investors who would operate them should be sought. Also emefiele should be booted out immediately even if its to bring back Soludo. I agree with all of your suggestions. I would also add that the government should start trying to sell off not just the refineries, but any loss-making parastatals on the books, as well as the Nigerian Railway Corporation, and open up the whole railway system to private investors from any source. Apart from the need for better management, this would bring in fresh funds that would lessen the need for government borrowing, which in turn would lower the cost of borrowing for private businesses. One problem I see standing in the way of all of these proposals, apart from Buhari's own pig-headedness, is that privatization would mean the end of a huge number of "quota system" jobs, from the bosses of the parastatals all the way down, as no profit-making organization will have time for useless employees who just happen to hail from some region. Obviously, this is something the northerners will never willingly accept. With his statements since taking over about making NNPC profit oriented and Kachikwu taking bold steps to reorganize the behemoth, I don't think buhari will stand in the way because of quota system. The north will have to be content with sharing positions in the regulatory agencies with the south while the south takes up the real jobs as obtains in the IOC's. I trust realities of our financial position will reset his brain to toe the line of complete privatisation of those moribund sectors like railways etc. How soon is what I can't say
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Post by Omoluabi on May 24, 2016 9:42:56 GMT
As far as I can see, the oil marketers are against it for two reasons. - They have been paid for previous imports in Naira, and they want to convert that payment at the same rate at which they bought their fuel, otherwise they'll be taking big losses.
- Keeping the dual-tier exchange rate allows at least some of them to keep making risk-free profits by immediately selling the FX they get on the black market, while pretending that they've used it to import fuel. They can then blame hijackers, vandals and the like for the discrepancy.
In public they'll all pretend it's just about point 1, but no doubt their opposition is as much about the second point. Who would give up 'free' money if a government were foolish enough to be offering it?
Emefiele, his team and some APC stalwarts are obviously on the same team reaping off profits on our collective FX misery otherwise, why should the marketers complain when the N145 was arrived at based on N298/$? Nigerians are being sabotaged because buhari is chasing Jonathan crooks while his own crooks are doing greater damage inside. The marketers have no excuse but of course.....they're Nigerians. Awon fantastically corrupt oshi!!
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Post by omohayek on May 24, 2016 11:02:41 GMT
Emefiele, his team and some APC stalwarts are obviously on the same team reaping off profits on our collective FX misery otherwise, why should the marketers complain when the N145 was arrived at based on N298/$? Nigerians are being sabotaged because buhari is chasing Jonathan crooks while his own crooks are doing greater damage inside. The marketers have no excuse but of course.....they're Nigerians. Awon fantastically corrupt oshi!! The worst thing is that Buhari actually knows that this is the case - remember that notorious al-Jazeera interview? The man knows his policies are breeding corruption, but his answer is just "we will catch and punish the cheaters", as if that has ever worked to kill corruption in Nigeria. For him the "official" exchange rate seems to have become some kind of fetish or a matter of preserving personal pride, so it must be preserved no matter what the negative consequences are for the great mass of Nigerians.
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Post by Omoluabi on May 24, 2016 11:35:43 GMT
Emefiele, his team and some APC stalwarts are obviously on the same team reaping off profits on our collective FX misery otherwise, why should the marketers complain when the N145 was arrived at based on N298/$? Nigerians are being sabotaged because buhari is chasing Jonathan crooks while his own crooks are doing greater damage inside. The marketers have no excuse but of course.....they're Nigerians. Awon fantastically corrupt oshi!! The worst thing is that Buhari actually knows that this is the case - remember that notorious al-Jazeera interview? The man knows his policies are breeding corruption, but his answer is just "we will catch and punish the cheaters", as if that has ever worked to kill corruption in Nigeria. For him the "official" exchange rate seems to have become some kind of fetish or a matter of preserving personal pride, so it must be preserved no matter what the negative consequences are for the great mass of Nigerians. Its simply a matter of stupid pride. Its the same obsession he has with the refineries because he built them. I really don't care about him like before..... I just want this country to work if it can
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Post by olukumi on May 24, 2016 11:37:11 GMT
omohayek , Honorebu , Omoluabi , olukumi , You might find this video interesting, especially the part about net results of the last 9 months: Also interesting is the bit at the end where the analyst talks about how nearly all of the credit growth has been swallowed up by public sector borrowing, with private sector lending growing only 1%: this is a clear-cut case of the crowding out effect, which many financial commentators were predicting months ago as what would indeed happen. Not that impressed with the guy to be honest the major mistake most analyst are making is refusing to quantify the effect of slowing down corruption on the economy. Corruption drives a huge percentage of our economy. The free flow of stolen funds to the banks was key to their survival. Same way you look at banks, you'll extend it to real estate, both commercial and consumer. All huge chunks of the economy but now abruptly stopped. Look into all sectors and industries, you can account for the effects of free flow of government funds in there. When you put a kabush on that easy liquidity for banks, builders, high end retailers, exchange rate operators etc then you send a serious shock into the system. Analysts are not accounting for that either willfully or ignorantly. It was a discussion I had with one of my friends who is into private equity this past week. Our banks have never really practiced real retail banking. They mostly lend to the government or finance LCs or importation POs. Now with the sudden suction of easy funds (TSA @ 3 trillion) they are choking and can't easily manage their books littered with dollar debts. Buhari's faults: 1. Wasting time nominatin his cabinet. Those were vital months that could have been used to gradually ease in policies and guaranty some form of continuity. 2. Lack of clear policy direction. Today they want to be socialists, the next day capitalists and the day after communists. 3. CBN. Grossly incompetent and this started before Buhari but the president made it worse by forcing himself to a completely autonomous area. 4. Oil sabotage and NDA Militancy has a major effect on the economy. Direct engagement and negotiations is the most prudent approach for now while you work on fixing the issue later. We shouldn't spoon feed them but they can incapacitate your economy with a grenade. Catch-22 situation. 5. Messaging and communication. One word, Abysmal. 6. Direct policy intervention on agriculture and small scale manufacturing financed by a development bank or government credit agency. Lacking! Etc etc Like I have said in the past. Government should focus on defense, health, basic housing, and basic primary/secondary education. Anything else should be handled by the private sector. OBJ started on that path but Yaradua killed most of it. Buhari and his team have a chance to revert back to it. Can't type much. Heading to the gym....
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