Tuesday July 7th, 2015
Tuesday July 7th, 2015
Latest

Fuel imports: The real cabal

  /   in News, Rational Perspectives 12:45 am   /   Comments

fuel-pump

A cursory survey of media reports on the downstream oil sector suggests that the prevailing popular belief is that a predatory cabal has a vice grip over the business of fuel importation. There is concern, therefore, that this, presumably, vicious class of businessmen would do everything to ensure that refineries will never work, and that the subsidy regime would subsist, while fuel supply will continue to be carefully manipulated to regularly induce artificial scarcity so that bountiful profits can be harvested from the attendant sufferings and economic dislocation deliberately caused by the oil cabal.

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Mr. President: Beware of the day of subsidy removal

  /   in News, Rational Perspectives 12:30 am   /   Comments

Buhari-oil

According to recent media reports, almost N5tn was disbursed as subsidy payment on fuel consumption between 2006-2012? Thus, the annual average provision of about N1tn is probably equivalent to about one fifth of total annual federal budget in the same period. In effect, subsidy payments clearly exceeded the consolidated annual allocations for health, education, transport and agriculture every year.

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Salary arrears: What manner of bailout?

  /   in News, Rational Perspectives 12:46 am   /   Comments

CPC Presidential candidate, Gen. Buhari

So, where will Buhari get the additional funds to bail out the States and also remediate those critical infrastructural deficits that urgently cry out for attention on the federal level, particularly in the areas of Education, Health and Transportation. Regrettably, rather than deploy the modest proceeds of the Excess Crude Account directly to critical infrastructure, these funds were stashed away as idle deposits and then gradually, simply whittled down, as recurrent consumption expenditure.

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Why higher oil prices cripple the economy

  /   in News, Rational Perspectives 12:20 am   /   Comments

Buhari-oil

Well, as you can imagine, if the system is already deluged with problematic surplus Naira, the infusion of any additional Naira will only worsen the already suffocating burden of too much money. Consequently, if government makes sectoral interventions with hundreds of billions of Naira when surplus cash is already a problem, you will understand that the impact of spending the additional intervention funds in any manner whatsoever, will simply ‘inadvertently’ exacerbate the threat of inflation.

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Thieves in the treasury

  /   in Rational Perspectives 2:26 am   /   Comments

EFCC operatives leading fresh suspects in the N8 billion CBN staff fraud to the court premises in Ibadan, Oyo State, yesterday

One does not really have to be a medical expert to recognize that the heavy grime and dirt on Nigerian currency notes would also readily serve as vector for the spread of germs and diseases.

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Buhari vs a clueless MPC?

  /   in News, Rational Perspectives 12:41 am   /   Comments

Buhari

By Henry Boyo More Nigerians will probably consider widespread insecurity, unstable power supply and our faltering economy as the three most critical challenges for which President Muhamadu Buhari would have to urgently find sustainable solutions. Nonetheless, some critics may trace the root of insecurity to increasing desperation from unemployment and ‘forced’ idleness on a rising

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Painless abolition of fuel subsidy with dollar warrants

  /   in News, Rational Perspectives 12:05 am   /   Comments

fuel-fight-1

In retrospect, the Naira was readily accepted in major cities like London and New York, ironically, at a time when our total foreign reserves hardly approached $10bn dollars! Indeed, as CBN consistently places Naira at a disadvantage in the market place against the dollar, the economy has also become dollarised by monetary strategies that weaken the Naira.

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Latest

Fuel subsidy dilemma: The sensible way out

  /   in News, Rational Perspectives 12:44 am   /   Comments

fuel-fight-1

Clearly, however, the retired General certainly does not need an early confrontation with the public or indeed Labour who will as usual insist that subsidy should only be removed after sufficient local refineries can meet domestic consumption! In the event however, that refineries (depending on size) have between 18-36 months gestation, this may suggest that subsidy may not be wished away very soon!

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The oppressive folly of fuel subsidy

  /   in News, Rational Perspectives 1:13 am   /   Comments

fuel-fight-1

The data released on fuel subsidy outlays from responsible Agencies of government have, overtime, regrettably remained divergent, such that, it has become a challenge to obtain definitive estimates. Nevertheless, the Finance Minister, Dr. Ngozi Okonjo-Iweala recently explained that the inconsistent figures often quoted were unavoidable because subsidy payments is a continuous, rolling process, therefore, relevant government agencies could only provide specific data relating to approved claims that have passed through each department at any point in time.

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Is the abolition of fuel subsidy imminent?

  /   in Finance, Rational Perspectives 7:40 am   /   Comments

subsidy-cartoon

Regrettably, delayed payments of verified subsidy claims, may inadvertently also further bloat the already oppressive service charges on loans obtained to finance the 2015 budget deficit and other earlier government debts. Curiously, the imminent federal and state elections, may have forced government to accede to pressure from marketers to pay the demanded balance of N256.2bn, which they claimed included core subsidy as well as interest on delayed payments and exchange rate differentials.

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When $ became cheaper in the black market

  /   in Rational Perspectives 12:31 am   /   Comments

naira-Dollar

The actual value of dollars deployed for this purpose is not known, but it was certainly large enough to temporarily overwhelm subsisting Naira supplies with BDC operators to make the Naira relatively scarce against the dollar. It was consequently no big surprise therefore, that the heavy inflow of dollars into vibrant black market centres in Lagos, Kano, Ibadan, Port Harcourt, Abuja etc. quickly strengthened the Naira exchange rate below the official N197=$1.

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Naira/Dollar ATM cards and inexplicable profligacy

  /   in Rational Perspectives 12:38 am   /   Comments

ATM-Naira-and-Dollar

One cannot be certain whether Nigerians would celebrate or decry the recent Central Bank of Nigeria’s decision to reduce the existing limit on the usage abroad of Naira denominated cards from $150,000 to $50,000 per annum, per person. Nonetheless, the directive to banks in CBN’s circular of April 13,2015, may mean nothing to possibly over 98% of our country men, who have never seen the inside of an aeroplane.

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Buhari and the economy: which way forward?

  /   in Rational Perspectives 7:09 am   /   Comments

President-elect Muhammadu Buhari (L) waves in Abuja on April 1, 2015. Nigeria's new president-elect Muhammadu Buhari hailed polls that will lead to the first democratic change of power in Africa's most populous nation as "historic" hours after he secured a decisive victory. AFP PHOTO

Expectedly, goodwill messages have deservedly, poured in from far and wide to congratulate the clear victor of the 2015 elections and President Elect, Mohammed Buhari, may not be unduly disturbed that President Jonathan’s inspirational and totally unexpected early acceptance of defeat, ironically, favorably raised the incumbent’s rating as a statesman beyond the pedestrian perception induced by his performance in governance.

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Guess who is dollarising the economy!

  /   in Rational Perspectives 12:40 am   /   Comments

naira-Dollar

“….The committee observed that its previous decisions needed time for their effects to fully permeate the economy and therefore “all eleven members unanimously” voted to maintain the current position!! The above is a summary of the conclusion reached by the Central Bank of Nigeria’s Monetary Policy Committee (MPC) at its latest meeting held between 23-24th March, 2015. Incidentally, the MPC has the critical statutory responsibility for advising the CBN on an appropriate strategy for managing the supply of money at the optimal level that would progressively grow the economy.

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Shareholders as victims of devaluation

  /   in Rational Perspectives 12:40 am   /   Comments

naira sign

The Nigerian Stock Exchange was founded in 1960 to provide a platform for buying and selling of shares of listed public companies. Consequently, the size and vibrancy of domestic stock markets generally provide a bird’s eye view of the degree of confidence and scope of activities in an economy.

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Will PDP or APC rescue the economy?

  /   in Rational Perspectives 12:50 am   /   Comments

Goodluck-money-Buhary

The 2015 election is barely two weeks away and yet, not even close followers of events in the political space can satisfactorily articulate distinctive differences in the ideology of the two major contestants. Instead, Nigerians have been fêted to a reality edition of an otherwise Nollywood dramatization of a “rofo rofo fight” between two wives in a polygamous setting. Ironically, the protagonists expect the favoured husband to make the louder and less civil combatant his favorite!

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Latest

The tragedy of errors in the fuel market

  /   in Rational Perspectives 12:55 am   /   Comments

NNPC Mega Filling Station now selling at N138 per litre in Abuja yesterday.

Certainly, the Naira will continue its free fall unless the market supply equilibrium between Naira supply and the dollar is redressed in favor of the Naira. If however, excess Naira supply continues to be driven by CBN’s substitution of Naira allocations for dollar derived revenue, then a Naira rate of N300/$ would soon evolve to drive fuel prices well above N200/litre with disastrous consequences for inflation and consumer demand, and ultimately on manufacturing capacity and employment opportunities.

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Latest

Budget 2015: Planning to fail?

  /   in Rational Perspectives 12:45 am   /   Comments

money

Over the years, both the Legislative and the Executive arms of government have consistently demonstrated their faith in the popular axiom that “he who fails to plan, plans to fail”; consequently, they have, always ensured that an Income and Expenditure plan is passed into law annually; nonetheless, inspite of their apparent loyalty to the concept of planning, public expectation for improved infrastructure and enhanced social welfare has, ironically remained unfulfilled, such that some cynics may suggest that our economic and social welfare couldn’t be worse even if we ignored the need for a formal plan of action.

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Save The Naira, Save Nigerians

  /   in Rational Perspectives 12:59 am   /   Comments

naira

I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people.” Reginald McKenna, Chairman of the Midland Bank, 1924.

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Where is the $7BN CBN loan to 14 banks?

  /   in Rational Perspectives 12:26 am   /   Comments

Naira notes

“The report of the 14 Nigerian banks which were appointed as Asset Managers of Nigeria’s reserves was carried on the back page of The Guardian Newspaper of the 5th of October 2006. The report confirmed that “already deposits worth $7bn representing part of the Central Bank of Nigeria’s share of foreign reserves estimated at about $38bn had been released to the consortium of bankers”, according to CBN’s Head of Corporate Affairs, Mr. Festus Odoko.

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Economic mismanagement in retrospect

  /   in Rational Perspectives 1:00 am   /   Comments

naira

”Media reports at the end of July 2007 confirmed that the Presidential Committee which probed the $480 million which the CBN invested in the African Finance Corporation (AFC), has completed its investigations. After what appeared to be a painstaking audit exercise, over three months, and spanning three continents, the Committee Chairman, Tunde Ogunshakin, disclosed that CBN’s equity contribution was actually $462.923 million.

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SOLUDO VS IWEALA: The pot and the kettle

  /   in Rational Perspectives 12:07 pm   /   Comments

iweala-and-soludo1

If Soludo wants to regain respect, he should return to the path of professionalism. He certainly needs something to improve his image from that of someone whose sojourn into national economic management ended in disaster for the banking sector.”

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Latest

Is fuel price now deregulated?

  /   in Rational Perspectives 12:28 am   /   Comments

oil platform

In the wake of the steady decline in crude oil prices in recent months, Nigerians anticipated the good news of a drop in pump price of petrol. Sadly, however, last week’s announcement of a new price of N87/litre quickly deflated the high public expectation for a price well below the existing, previously subsidized N97/litre.

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Economy: Let’s do it Right

  /   in Rational Perspectives 1:52 am   /   Comments

naira-Dollar

“In the medium to long-term, addressing truly economic transformation becomes imperative. “—Tella

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ECONOMY: LET’S DO IT RIGHT

  /   in Rational Perspectives   /   Comments

naira-Dollar

“In the medium to long-term, addressing truly economic transformation becomes imperative.”—Tella

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Latest

FG saves N500bn through implementation of Single Treasury Account

  /   in Rational Perspectives 3:00 am   /   Comments

Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala

The federal government saved about N500 billion in unutilized funds last year through the implementation of the Single Treasury Account (TSA).

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Is CBN defending the naira or dollar?

  /   in Rational Perspectives   /   Comments

Well, we do not have to wonder any longer, as reduced revenue from crude oil prices below $60/barrel has clearly constituted another major onslaught on the Naira exchange rate and economic progress.

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Nigeria: Stop Treasury Bills Scam

  /   in Rational Perspectives 12:11 am   /   Comments

Emefiele

In last week’s article we discussed why inclusive economic growth is made unattainable in Nigeria by the process, which the Central Bank adopts for reducing money supply in order to restrain inflation.

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Latest

T/BILLS: Who will stop this looting spree?

  /   in Rational Perspectives 12:19 am   /   Comments

money

The contradictions in our failed economy are probably best captured by the stark reality of deepening poverty and unbridled rate of unemployment despite the celebrated recent increase in the Gross Domestic Product, with increasing revenue and bountiful reserves to boot for over two decades!

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Latest

Is de -industrialisation imminent?

  /   in Rational Perspectives 12:09 am   /   Comments

One of the busy streets in  the Computer Village Ikeja, Lagos

The above title may seem out of place in the wake of the launch of “Nigeria’s Industrial Revolution Plan” (NIRP) by the Jonathan administration in February this year. The NIRP is clearly a recognition of the embarrassingly modest contribution of manufacturing (less than 7%) to our Gross Domestic Product; conversely, the contribution, for example, of the services subsector has grown from about 23% in 2011 to a robust 52% by 2013 without any significant job creation component!

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Latest

Victims of devaluation

  /   in Rational Perspectives 12:12 am   /   Comments

cartoon-economy

Regrettably, inspite of the earlier assurance to maintain the stability of the Naira in his inaugural address, Emefiele, the CBN Governor’s, policy summersault with Naira devaluation shortly afterwards, has since led to the National Currency trading above N173=$1, thus establishing Naira depreciation of about 13%; alarmingly, the pressure remains unabating and there are real fears that sooner than later, the Naira exchange rate may tumble below N200/$1 with the attendant severe social and economic consequences.

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Latest

The CBN act and the oppressive failure of monetary strategy

  /   in Rational Perspectives 12:21 am   /   Comments

The Central Bank of Nigeria head office  in Abuja.

The public’s usual refrain to rising prices is that “manufacturers/suppliers/farmers have increased prices of their respective goods and services; the supplier is evidently the villain in public consciousness; it would indeed require the patience of Job to convince most Nigerians that such condemnation was misplaced and it may even be more difficult to put the blame for high cost of funds at the doorstep of Central Bank. Consequently, it would be unbelievable to even suggest that CBN is infact the ‘devil in our economic workshop’.

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