HNosegbe:

My point exactly!!! Why should Nigerian TBs, which are ostensibly issued for the purpose for controlling money supply WITHIN the country, be accessible to FOREIGN investors? Does it make sense?

Well, these things are interwoven and can be looked at from different perspectives.

I don't know what the CBN response for this is but I would see it from the angle that these foreign investors bring dollars to purchase the TBs and by so doing provide support for the naira.

Also, in reality, how do you really prevent/restrict foreign investors from playing in your local debt market? If they can access bonds, open and operate factories, invest in local companies, how would they be stopped from buying TBs? In addition, in accessing the local TBs, they are also exposed to foreign exchange risk which they also have to hedge against.

You may say that the government should not be excited about dollar inflows that would provide support, albeit temporary, for the naira, but should rather invest in local infrastructure and reduce the appetite for imports and boost exports. But, again, this is not within the control of the CBN.

.

I have been debating this loan issue on NL over the past two months,all we do is sit behind our laptops/phones to analyse GDP,excess crude revenue account ,foreign reserve and debts but nobody will be bold enough to confront or hold this govt accountable.
A govt after spending billions of dollars in 24 months generates 1,250MW of electricity yet people celebrate and applaud them without looking at the amount spent to achieve that little,with the continuos excessive borrowing our roads are still the worst,healthcare is still alarmingly poor,the standard of education in continous decline while the polithiefians enrich themselves with the proceeds of the said loan.
Between 2011 and March 2012 we had domestic debt increment of N1.2tn,from March 2012 to August 2012 addition N1tn yet 80% of all on going projects were carried over from the previous administration.
Nigeria is the only nation among the top ten oil producing nations with such huge debt and huge infrastruture deficit,in less than 24 months GEJ administration has already accumulated N2.21tn debt with nothing to show for.
Its about time we put sentiment and political party interest aside to fight for this country,we all need to put heads together to hold this govt accountable for their alarming wastage of the nation's resources.

Pukkah:

Well, these things are interwoven and can be looked at from different perspectives.

I don't know what the CBN response for this is but I would see it from the angle that these foreign investors bring dollars to purchase the TBs and by so doing provide support for the naira.

Also, in reality, how do you really prevent/restrict foreign investors from playing in your local debt market? If they can access bonds, open and operate factories, invest in local companies, how would they be stopped from buy TBs? In addition, in accessing the local TBs, they are also exposed to foreign exchange risk which they also have to hedge against.

You may say that the government should not be excited about dollar inflows that would provide support, albeit temporary, for the naira, but should rather invest in local infrastructure and reduce the appetite for imports and boost exports. But, again, this is not within the control of the CBN.

Not "may", that's EXACTLY what I'm saying. It goes back to the fact that the government debt market has been made too attractive. The incentive to invest in the capital market or in the real sector will remain low.

The long-established practice of sharing money from Abuja is another factor, because such funds are naira-denominated after the CBN must have converted dollar-denominated receipts from oil exports. If we hadn't been so dependent on "oyel" money we wouldn't have been in this mess, because the states and local governments would have been sourcing their revenue from productive activity within their domain, rather than lazily folding their arms and waiting for monthly handouts, which when distributed flood the economy with cash and cause inflationary pressure.

Well, this is the situation we find ourselves in.

HNosegbe: @Pukkah, the DG of the Debt Management Office told Nigerians that all government borrowings would be project-tied i.e. all borrowings would be for specific capital projects. I checked out the DMO's website (http://www.dmo.gov.ng/) to see if I could get a breakdown or listing of the projects concerned. I got nothing except a list of the debt stock of all the states, list of domestic and external debts. So basically I do not know which projects are being funded by government debt.

What a country.

DMO in its entirety is a fraud and deceiving organ that has done nothing but sold lies to Nigeria since inception.

chucky234: I have been debating this loan issue on NL over the past two months,all we do is sit behind our laptops/phones to analyse GDP,excess crude revenue account ,foreign reserve and debts but nobody will be bold enough to confront or hold this govt accountable.
A govt after spending billions of dollars in 24 months generates 1,250MW of electricity yet people celebrate and applaud them without looking at the amount spent to achieve that little,with the continuos excessive borrowing our roads are still the worst,healthcare is still alarmingly poor,the standard of education in continous decline while the polithiefians enrich themselves with the proceeds of the said loan.
Between 2011 and March 2012 we had domestic debt increment of N1.2tn,from March 2012 to August 2012 addition N1tn yet 80% of all on going projects were carried over from the previous administration.
Nigeria is the only nation among the top ten oil producing nations with such huge debt and huge infrastruture deficit,in less than 24 months GEJ administration has already accumulated N2.21tn debt with nothing to show for.
Its about time we put sentiment and political party interest aside to fight for this country,we all need to put heads together to hold this govt accountable for their alarming wastage of the nation's resources.

So what action plan do you propose, Chucky?

chucky234: I have been debating this loan issue on NL over the past two months,all we do is sit behind our laptops/phones to analyse GDP,excess crude revenue account ,foreign reserve and debts but nobody will be bold enough to confront or hold this govt accountable.
A govt after spending billions of dollars in 24 months generates 1,250MW of electricity yet people celebrate and applaud them without looking at the amount spent to achieve that little,with the continuos excessive borrowing our roads are still the worst,healthcare is still alarmingly poor,the standard of education in continous decline while the polithiefians enrich themselves with the proceeds of the said loan.
Between 2011 and March 2012 we had domestic debt increment of N1.2tn,from March 2012 to August 2012 addition N1tn yet 80% of all on going projects were carried over from the previous administration.
Nigeria is the only nation among the top ten oil producing nations with such huge debt and huge infrastruture deficit,in less than 24 months GEJ administration has already accumulated N2.21tn debt with nothing to show for.
Its about time we put sentiment and political party interest aside to fight for this country,we all need to put heads together to hold this govt accountable for alarming wastage of the nation's resources.

I agree with you. This is the reason I was excited when I saw this thread by HNosegbe.

How much is every project the government claims to execute or milestone it claims to achieve costing Nigeria? Do we match expenditure with the results we see on ground? Is there value for money?

The beneficiaries of these inflows into the coffers of the country are the dirty and corrupt politicians who have bestridden the country like a colossus. However, it is very sad when you start this type of argument these days and you find government minions and sycophants politicizing the discussion on the parochial bases of tribe, religion, and party.

HNosegbe:

So what action plan do you propose, Chucky?

The plan or idea should be a collective one,if well informed Nigerians can come together to device a means which to bring this administration and subsequent ones to order whenever issues like this arises. The social media has no doubt put politicians on their toes but not as much to effect the necessary change in the system,I believe there are lots of intelligent men and women who are well informed of economics and fund management in this nation. I have gone through your analysis and that of Pukka which I believe if merge with many of like-brains out there then we can make a great impact,but who will volunteer his time to pursue this goal? Nigerians are not willing to make sacrifices but expect miracles to happen over night.
We all saw how much impact the OccupyNigeria protest had on the government in January,I still believe a group of intelligent Nigerians can have same impact on the govt without protests or violents.

You still haven't hit the nail on the head. "Come together", How? When? Who will organize it? What will be the outcome? Will we form a political party? Will we stage a protest? Will we tell Jonathan and co that we want to take over management of the economy? What will be the objective and what will be the process?

Truth is, we're doing the best we can by coming together to debate these issues. We're learning from each other and proferring solutions. I don't see what else we can do. Feel free to correct me if you think I'm wrong.

HNosegbe:

Not "may", that's EXACTLY what I'm saying. It goes back to the fact that the government debt market has been made too attractive. The incentive to invest in the capital market or in the real sector will remain low.

True.

HNosegbe:
The long-established practice of sharing money from Abuja is another factor, because such funds are naira-denominated after the CBN must have converted dollar-denominated receipts from oil exports. If we hadn't been so dependent on "oyel" money we wouldn't have been in this mess, because the states and local governments would have been sourcing their revenue from productive activity within their domain, rather than lazily folding their arms and waiting for monthly handouts, which when distributed flood the economy with cash and cause inflationary pressure.

Well, this is the situation we find ourselves in.

The bane of the Nigerian problem, ironically, is the 'easy' revenue from crude oil. This is why some see oil as a 'curse'.

Do you know that citizens would likely be more interested in governance and the way government spends money if all government revenues were from taxes?

chucky234: The plan or idea should be a collective one,if well informed Nigerians can come together to device a means which to bring this administration and subsequent ones to order whenever issues like this arises. The social media has no doubt put politicians on their toes but not as much to effect the necessary change in the system,I believe there are lots of intelligent men and women who are well informed of economics and fund management in this nation. I have gone through your analysis and that of Pukka which I believe if merge with many of like-brains out there then we can make a great impact,but who will volunteer his time to pursue this goal? Nigerians are not willing to make sacrifices but expect miracles to happen over night.
We all saw how much impact the OccupyNigeria protest had on the government in January,I still believe a group of intelligent Nigerians can have same impact on the govt without protests or violents.

@chucky234, HNosegbe, Pukkah

There is a thread in the programming section https://www.nairaland.com/930302/project-2012-summer-code-work. The aim of the project is to monitor the government's spending.
Currently we are seeing things from a programmers perspective and we can do with people with knowledge of finance.

chucky234: The plan or idea should be a collective one,if well informed Nigerians can come together to device a means which to bring this administration and subsequent ones to order whenever issues like this arises. The social media has no doubt put politicians on their toes but not as much to effect the necessary change in the system,I believe there are lots of intelligent men and women who are well informed of economics and fund management in this nation. I have gone through your analysis and that of Pukka which I believe if merge with many of like-brains out there then we can make a great impact,but who will volunteer his time to pursue this goal? Nigerians are not willing to make sacrifices but expect miracles to happen over night.
We all saw how much impact the OccupyNigeria protest had on the government in January,I still believe a group of intelligent Nigerians can have same impact on the govt without protests or violents.

It is not about intelligent Nigerians, it is about the general society perception. The intelligent Nigerians are the major problems of that country -- they've failed to fight the good fight for the uplifting of the country from a den of corrupt criminals and propagandists. The same people you are pointing at are not ready to go out there to do the right things because they are always afraid to do so.

The poor masses facing the harm with those who believe in better society, transparency and change can only make the difference not those you are referring to as intelligent. Whereas, it doesn't require much brain work to know that there must be fight for change in that country.

Pukkah:

I agree with you. This is the reason I was excited when I saw this thread by HNosegbe.

How much is every project the government claims to execute or milestone it claims to achieve costing Nigeria? Do we match expenditure with the results we see on ground? Is there value for money?

The beneficiaries of these inflows into the coffers of the country are the dirty and corrupt politicians who have bestridden the country like a colossus. However, it is very sad when you start this type of argument these days and you find government minions and sycophants politicizing the discussion on the parochial bases of tribe, religion, and party.

We attach too much importance on party politics rather than genuine fight for the betterment of this nation,we dwell so much on tribal sentiment that has continue to impact on the nation negatively.
I don't belong to any political party and never will,as SS I can easily pass for GEJ's brother but I'll never allow selfish tribal sentiment to stand in the way of truth.
So many looted funds stashed away in foreign banks by these polithiefians who do nothing but borrowing after stealing the country dry,many of such funds had been returned to FG by most of the banks yet no one can give account of where those funds were deposited or what they were used for.
Our foreign reserve is currently below $10bn which put us in a more difficult situation than Spain if the unforeseen happens.
For a govt that is ranked the most expensive in the world with each elected official assigned more than thirty senior special advisers,they have no excuses for failures.
South Africa with 58 million people generates 45,000MW of electricity while Brazil with 201 million people generates 100,000MW of electricity yet spend far lower than what we spend we spend on power generation annually yet Nigerians celebrate and applaud 1,250MW of electricity generated in 24 months with billions of dollars pumped into that sector.

Pukkah: Do you know that citizens would likely be more interested in governance and the way government spends money if all government revenues were from taxes?

I agree. And that's why I insist that Nigeria's progress is tied inextricably to our stoppage of inordinate dependence on oil money. When we become determined to redirect oil money from wasteful recurrent spending to productive investment in capital projects that will open up the economy, then we can claim to be serious about development. Unfortunately our thieving ruling class will not allow that to happen until we force their hands by kicking out non-performing leaders at the ballot box while continually engaging our leaders and holding them to account.

A-ZeD:

@chucky234, HNosegbe, Pukkah

There is a thread in the programming section https://www.nairaland.com/930302/project-2012-summer-code-work. The aim of the project is to monitor the government's spending.
Currently we are seeing things from a programmers perspective and we can do with people with knowledge of finance.

Thanks A-Zed for sharing that link. I think you, Kobojunkie and co are doing a great job (even though I don't understand it lol)...

A-ZeD:

@chucky234, HNosegbe, Pukkah

There is a thread in the programming section https://www.nairaland.com/930302/project-2012-summer-code-work. The aim of the project is to monitor the government's spending.
Currently we are seeing things from a programmers perspective and we can do with people with knowledge of finance.

I'll check it out.

HNosegbe:

Thanks A-Zed for sharing that link. I think you, Kobojunkie and co are doing a great job (even though I don't understand it lol)...

The application is supposed to be able to explain the budget and other government spending to the common man. We also want to know duplication of projects in successive governments and be able to flag it.

A-ZeD:

@chucky234, HNosegbe, Pukkah

There is a thread in the programming section https://www.nairaland.com/930302/project-2012-summer-code-work. The aim of the project is to monitor the government's spending.
Currently we are seeing things from a programmers perspective and we can do with people with knowledge of finance.

Thanks for sharing,I'll check it right away,but the word programming is always associated with complicated variance.lol

HNosegbe: Now is the time for the CBN to pursue a pro-growth strategy by reducing prime rate (MPR) from 12 to say 6 percent over the next few months. If MPR can be reduced, it will have a knock-on effect on interest rate on treasury bills and government bonds, since all interest rates are tied to the MPR. This will reduce the government's cost of borrowing and free up more funds for capital expenditure.

For banks and other lending institutions, lending rates are also tied to the MPR. Reducing MPR will therefore induce a reduction in lending rates, meaning that more serious entrepreneurs will have an opportunity to access loans at more reasonable rates. 15 percent could be a reasonable target.

There are so many benefits... But they require a change of policy direction on the CBN's part. Pursue growth and de-emphasise short-run stability. My opinion.

The CBN would always display aversion to reducing the MPR to a single digit. Always. Whenever the MPR is reduced, give a space of 3 months and the rates are raised again with the CBN citing inflationary pressure. Meanwhile more TBs are still being sold at prime rates, reducing the amount of funds for the real sector and capital markets.

Who then do you want to caution? Is it the FG that keeps borrowing without a comprehensive plan of spending? Or the DMO? Even the finance minister seems to show indications that her hands are tied. The CBN is not worthy of mention because they only seem to be reactionary, tottering from one failed experiment to another.

Pardon my ignorance but if I may ask, what have all these borrowed funds been used for?

Tinyemeka:

The CBN would always display aversion to reducing the MPR to a single digit. Always. Whenever the MPR is reduced, give a space of 3 months and the rates are raised again with the CBN citing inflationary pressure. Meanwhile more TBs are still being sold at prime rates, reducing the amount of funds for the real sector and capital markets.

Who then do you want to caution? Is it the FG that keeps borrowing without a comprehensive plan of spending? Or the DMO? Even the finance minister seems to show indications that her hands are tied. The CBN is not worthy of mention because they only seem to be reactionary, tottering from one failed experiment to another.

I have earlier tried to explain why why the CBN is limited in what it can do with the MPR especially in the area of reducing it by fiat.

Tinyemeka: Pardon my ignorance but if I may ask, what have all these borrowed funds been used for?

I don't think you've displayed any ignorance. You've asked the question which every patriotic citizen of our 'potentially' great country should be asking.

Pukkah:

True.



The bane of the Nigerian problem, ironically, is the 'easy' revenue from crude oil. This is why some see oil as a 'curse'.

Do you know that citizens would likely be more interested in governance and the way government spends money if all government revenues were from taxes?

Can't they be deterred from easy access to this oil revenue? If that is the way forward let be it.

chucky234: We attach too much importance on party politics rather than genuine fight for the betterment of this nation,we dwell so much on tribal sentiment that has continue to impact on the nation negatively.
I don't belong to any political party and never will,as SS I can easily pass for GEJ's brother but I'll never allow selfish tribal sentiment to stand in the way of truth.
So many looted funds stashed away in foreign banks by these polithiefians who do nothing but borrowing after stealing the country dry,many of such funds had been returned to FG by most of the banks yet no one can give account of where those funds were deposited or what they were used for.
Our foreign reserve is currently below $10bn which put us in a more difficult situation than Spain if the unforeseen happens.
For a govt that is ranked the most expensive in the world with each elected official assigned more than thirty senior special advisers,they have no excuses for failures.
South Africa with 58 million people generates 45,000MW of electricity while Brazil with 201 million people generates 100,000MW of electricity yet spend far lower than what we spend we spend on power generation annually yet Nigerians celebrate and applaud 1,250MW of electricity generated in 24 months with billions of dollars pumped into that sector.

I feel you shld be more careful with d data dat you use to mk arguments. I hv watchd you on sm oda threads talking passionately but unfortunately using incorrect data; and as a person am not swayed by arguments done using insufficient or incorrect data cos they can be distorting and in the long run misleading . 1st, d Foreign Reserve is not less than $10billion but was about $37billion at end June(which shld hv increasd towards $39-40billion mark now up 4rm about $32billion early dis yr), so we are no where near d Spain not only cos of our Balance but cos our GDP/Debt Ratio is still significant less than d 40% threshold while Spain's ratio is mani times dat. Also, in respect of the Sovereign Wealth Fund dat u talkd about in a previous comment, d govt has not collapsd d Foreign Reserve into it, but just $1billion was transferd 4rm d Excess Crude Fund to it(by d way, d Fund is a smart, investment-saavy means of saving and d govt is very much in line in 4 setting it up cos we were about d only major OPEC nation without it nd they shld be commended 4 establishing it ova d huge oppositn of d governors, d guys who hv bn d greatest reasons 4 d 'sharing' of d Reserve down 4rm d height attaind during Obj's time)...similarly about Power, 1700MW has been added to the grid nt 1250MW, and in fact about 4000-5000MW is expectd 4rm d investments made as more completd generatn plants are fired up(PS: I hope u kw dat Power is about a value chain comprising Generatn, Transmission, Distribution and Gas facilities). Plus about d amount usd so far, I hv seen $5.7billion(though i am sure if dis amount is just 4 Generatn or 4 d entire value chain) and $1billion 4 gas facilities- i dont think it is near d $24billion you hv bn quoting on sm oda threads....i do admire d passionate arguments though and completely agree wit u dat we ought to more intensively ENGAGE d govt nd put dem on dier toes. I think dat d criticisms dat we hv bn having lately across d coun3(though a few of dem seem destructive nd petty) hv bn very helpful in dis respect. More focusd nd knowledgeable criticisms are definately needed as u suggestd..I will talk on d Debt issue later. Thanks

A-ZeD:

The application is supposed to be able to explain the budget and other government spending to the common man. We also want to know duplication of projects in successive governments and be able to flag it.

Great

Ayoko007: too bad for d giant of africa,yet the 3rd richest man in d world (dangote) is a nigerian.I cry for my father land

HABA!!! Where did you get that Dangote is the third richest man in the world..he isn't even in top 20..please do your research

Our GDP/ debt ratio is less than Spain yet Spain 10 year bond is around 7% while ours is around 15%.

9ja don finish