Saturday October 25th, 2014
Saturday October 25th, 2014
Latest

Phony defence of the Naira and the folly of a nation

  /   in Rational Perspectives 12:25 am   /   Comments

naira-Dollar

Nigerians generally believe that large foreign reserves are useful for defending the exchange rate of the naira. However, our total foreign reserves actually comprise of two primary income streams; the first is the Excess Crude Account (ECA), which consists of all crude oil revenue in excess of budget estimates

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Lamido Sanusi: Villain or patriot?

  /   in Business, Rational Perspectives 12:43 am   /   Comments

Former Governor of Central Bank of Nigeria, Alhaji Lamido Sanusi

Whistleblowers certainly have a role to play to promote accountability in public administration; however, when a nation’s Central Bank Governor turns whistleblower on an issue of substantial revenue misappropriation, then, alarm bells must ring, as the credibility of the administration, which the same Central Bank Governor serves would be called to question.

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Will more and efficient refineries reduce fuel prices?

  /   in Rational Perspectives 12:35 am   /   Comments

*File photo

The increasing length of queues lately in petrol stations nationwide may suggest that the erstwhile liberal availability of petrol may be threatened. Consequently, many car owners now inevitably patronise the ‘black market’ in spite of the higher prices on offer, rather than wait endlessly in frustration at petrol stations!

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Are workers better off in Zimbabwe than in Nigeria?

  /   in Rational Perspectives 12:18 am   /   Comments

A Cross section of Workers Match Pasts, during the 2013 Workers Day Commemoration by The Lagos state Council of Nigeria Labour Congress and Trade Union Congress of Nigeria, Theme: 100 Year of Nationhood, The Challenges of National Development, held at Onikan Stadium, Lagos. Photo: Bunmi Azeez

Nigerians could be forgiven, if their impulsive reaction to the above comparison is a derisive sneer because of the general perception that the Zimbabwean economy was dysfunctional. Indeed, about five years ago, Zimbabwe was the ultimate butt of universal jokes because of the abiding inflationary spiral that had gone haywire at 231,000,000%!

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Currency Trafficking, BDCs & CBN: Confusion or Collusion?

  /   in Rational Perspectives 12:12 am   /   Comments

USDollar

In October 2012, several media reports confirmed that two men were helping Economic and Financial Crimes Commission (EFCC) operatives with information on how they came about $986,000 found on them at Lagos and Kano International Airports respectively.

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Futility of increasing CRR on government deposits

  /   in Rational Perspectives 12:00 am   /   Comments

Lamido Sanusi

The Monetary Policy Committee (MPC), at its meeting last week, retained Central Bank’s benchmark interest rate at the industrially destabilising level of 12%, to avert the threat of inflation.

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Kill subsidy before it kills us!

  /   in Rational Perspectives 12:33 am   /   Comments

SUBSIDY-EXPRESS

This week, we will closely examine the inference of the sum of $8.9bn (about N1.4tn) that NNPC confirmed it legitimately retained as fuel subsidy between January 2012 and July 2013!

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“CBN Defended naira with $26.6bn in 2013”: True or False?

  /   in Rational Perspectives 12:45 am   /   Comments

CENTRAL Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi

The Punch Newspaper recently carried a report titled “CBN Defended Naira with $26.6bn in 2013.” The report, apparently obtained from the Central Bank’s website, indicated that this amount was sold to currency dealers in 94 foreign exchange Dutch Auctions between January and December 2013.

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Keshi & EFCC as metaphor for false hope

  /   in Rational Perspectives 12:00 am   /   Comments

efcc logo

Similarly, the impact of serial inchoate and generally misguided annual fiscal plans is clearly visible in the parlous state of our economy despite our fortuitous favourable human endowment and abundant natural resources.
Let us, therefore, examine, hereafter, how poor planning and lack of commitment could thwart our expectations for creditable results in two areas; that is, football administration and the war against corruption.

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ALLEGED UNREMITTED $49.8BN: MISCHIEF, IGNORANCE OR DISTRACTION?

  /   in Finance, Rational Perspectives 12:57 am   /   Comments

sanusI lamido

A letter dated September 25, 2013 written by Lamido Sanusi, Governor of Central Bank, to President, Good Luck Jonathan, was last week, leaked to the media from undisclosed sources.

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Senate’s ill-advised $76.5 crude oil benchmark

  /   in Rational Perspectives 12:08 am   /   Comments

The Senate

We have regrettably remained loyal, as a country, to a culture of late budget approval and partial implementation annually. Indeed, since the beginning of our civil dispensation, no fiscal plan received legislative approval and presidential assent before December 31.

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Paper to polymer to paper currency: They still don’t get it

  /   in Business, Rational Perspectives 12:27 am   /   Comments

naira

The slap on the wrist sanction of public servants, who inadvertently or indeed, knowingly misapply public resources, have expectedly engendered increasingly similar anti-social transactions and commitments by the management of several ministries, departments and agencies nationwide.

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Paradox of debt accumulation in spite of healthy reserves

  /   in Rational Perspectives 12:17 am   /   Comments

Okonjo-Iweala

The subject of reckless debt accumulation has been discussed in several articles such as “Another Useless Debt Burden” November 2006, “National Assembly Fiddles as Debt Burden Cripples” May 2008, etc (please see www.lesleba.com). Incidentally, when Nigeria’s Debt Management Office (DMO) was established in 2003, the excruciating existing burden of external debt was over $35bn; domestic debt, however, was still tolerable and manageable, with treasury bills accounting for about 60% at over N800bn, while treasury bonds accounted for about N430 billion.

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Balance budget as the responsible platform for MTEF

  /   in Rational Perspectives 12:10 am   /   Comments

Okonjo-Iweala

The Debt Management Office recently indicated on its website that Nigeria’s total debt is currently about N7.93tn ($50.92bn); domestic debt accounts for almost $44bn, while external debt just falls short of US$7bn. Thus, our consolidated national debt may currently exceed N13tn (i.e. about $80bn), if AMCON’s proxy debt of about N5.7tn is also captured.

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The avoidable oppressive burden of fuel subsidy

  /   in Rational Perspectives 12:01 am   /   Comments

cartoon

The social trauma induced by the unexpected fuel price hike of January 1, 2012 seems to have put further discussions on appropriate pricing of Premium Motor Spirit (PMS) in the cooler. Meanwhile, government’s attempt to cleanse the Augean stable of fuel subsidy scams seems to have had little or no effect on the humongous value of subsidy paid to oil marketers.

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The Blessing of Oil : A peculiar mess

  /   in Rational Perspectives 12:12 am   /   Comments

Engineers at drilling rig

Our parlous economic predicament is generally regarded as a “resource curse”, a phenomenon, which the free encyclopedia defines as a paradox of plenty, in which countries with abundant revenue from mineral resources show less economic growth with a beleaguered manufacturing sector when compared with other countries with less resource endowments.

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Oduahgate: Who will cast the first stone?

  /   in Rational Perspectives 12:01 am   /   Comments

Stella Oduah

The frenzy of opinions, allegations and counter allegations on the NCAA’s ill-advised purchase of two armoured vehicles has been sustained in the media in the last few weeks. The revelations may have foreshadowed erstwhile favourable public perception of the otherwise optically credible reconstruction of several airport terminals nationwide.

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Negative income from PHCN sale

  /   in Rational Perspectives 12:30 am   /   Comments

File: Jonathan, Sambo and new PHCN owners

Public expectation for adequate and stable power supply may have been heightened when President Goodluck Jonathan handed over share certificates to the private investors in five generation companies (GENCOs) and 10 distribution companies (DISCOs) created from the unbundled Power Holding Company of Nigeria (PHCN).

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Where do the brightest and fittest go?

  /   in Rational Perspectives 12:08 am   /   Comments

In this image released by the US Navy, migrants are gathered on the deck of a Malta Armed Forced ship as they depart the amphibious transport dock ship USS San Antonio on October 17, 2013. The San Antonio rescued 128 men adrift from an inflatable raft that was threatening to capsize in rough seas in the Mediterraneanan on October 16 after responding to a call by the Maltese Government. "AFP PHOTO

By Les Leba “Africans in the prime of their lives were forcibly plucked from their homes and families, bundled tortuously under deck and transported as human cargoes to be sold as slaves to plantation owners in the Americas and the West Indies about 200 years ago.  Regrettably, in recent times, there is an unexpected twist

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Where Is Our Money?

  /   in Business, Finance, Rational Perspectives 12:01 am   /   Comments

cartoonq

In a recent media interaction, Governor Emmanuel Uduaghan of Delta State expressed deep concern at the inability of the NNPC to fund the federation account and facilitate payment of monthly allocations to the three tiers of government, especially when crude oil has consistently sold for over $100/barrel in place of the budget benchmark of $79/barrel!

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Guess who is dollarising the economy

  /   in Rational Perspectives 12:10 am   /   Comments

naira-Dollar

Any patron of Bureau de Change may find that a difference of about N10 per dollar now exists between the official rates of N155 per dollar ex-Central Bank, and about N165/dollar in the open market. This is in place of the permitted 1 per cent markup officially allowed to commercial banks on dollar purchases ex-CBN.

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14 Nigerian banks to enjoy $7bn reserve

  /   in Rational Perspectives 12:11 am   /   Comments

CBN Governor, Sanusi Lamido Sanusi

“The report of the 14 Nigerian banks which had been 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 apex bank’s share of foreign reserves estimated at about $38bn had been released to the consortium of bankers, according to the CBN Head of Corporate Affairs, Mr. Festus Odoko”.

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Parable of the fool and his money…

  /   in Finance, Rational Perspectives 12:35 am   /   Comments

Sanusi Lamido Sanusi and Okonjo-Iweala

The other day, a friend narrated a story, which I found stranger than fiction; the story related to the travails of a family who lost a successful and illustrious breadwinner, who, incidentally, died without a Will. The family’s elders were consequently entrusted with the responsibility of efficiently managing the estate of the deceased.

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CBN’s management of surplus cash as economic sabotage

  /   in Rational Perspectives 12:41 am   /   Comments

Lamido Sanusi

It is bad enough to ever be in a position where one borrows one’s money back, but for our Central Bank to have done so for so many years at rates of between 13 and 14 per cent, as admitted recently by Governor Lamido Sanusi, can at best be described as an unfortunate moral hazard, which may border on economic sabotage.

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Is poverty the ultimate reward for pension contributors?

  /   in Rational Perspectives 12:10 am   /   Comments

Nigerian elder statesmen on the queue  during Pension verification exercise.

The consciousness of sensitive Nigerians is often assailed by the undignifying sight of senior citizens and other such retirees, who wearily wait in distress for verification of their identity or eventual payment of pension entitlements from government agencies responsible for disbursement. The unsightly juxtaposition of such horrid spectacle against the background of impunity in the misapplication of pension funds is obviously also lost on our current political leadership; worse still, in spite of the reforms enacted in the 2004 Pension Act, there has been no single conviction of anyone for the reckless looting of pension funds.

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CBN as misguided Father Christmas

  /   in Rational Perspectives 12:00 am   /   Comments

The Central Bank of Nigeria head office  in Abuja.

In view of the apparently ‘boundless’ funds at the disposal of Nigeria’s Central Bank for its independent interventions, observers, including the National Assembly have frowned at the proprietary and the shrouded protocol surrounding the values and the choice of beneficiaries of the apex bank’s bonanza.

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Okonjo-Iweala perplexed by high interest rates

  /   in Rational Perspectives 12:00 am   /   Comments

*Finance Minister, Ngozi Okonjo-Iweala

“The first thing I have to say is that we have a central bank that is autonomous and it is the best practice to make these decisions. We may not be happy about it and I am bold to say we are not happy about high interest rates! As I said before, it is tough for our entrepreneurs to function. Even before the withdrawal of this liquidity, they were already charging over 20% interest rates and I think that is alarming. …we need to interrogate why. Structurally, what is the issue? And we are not willing to ask our banks that question.

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Heavens save us from our economic (mis)management team

  /   in Rational Perspectives 12:10 am   /   Comments

The Central Bank of Nigeria head office  in Abuja.

In recent times, one of the causes of malfunctions in the Nigerian financial system is the paradox of substantial government deposits in Deposit Money Banks (DMBs) and high government borrowings from the deposit money banks; as at June 13, 2013, the three tiers of government had N2.384tn in the DMBs out of which about 90% are in zero interest-bearing Current Accounts. To mop up the liquidity at 14% will cost N301.33bn, which is more than the annual budgets of most states….

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Nigera’s Economic Destiny: Trapped

  /   in Rational Perspectives 8:33 pm   /   Comments

metro-market

In a recent interactive section with the House of Representatives Committee on Banking and Currency, the Governor of the Central Bank, Lamido Sanusi, noted that if the plan to redesign naira notes last year was successful, “it would have made it impossible for counterfeiters to cook”. He further noted that best practice currency management is that “Within a period of 5 – 8 years, you redesign the currency, after which counterfeiters tend to catch up with you”.

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Naira: redesign, redenomination or revaluation?

  /   in Rational Perspectives 12:40 am   /   Comments

1000-naira-notes

In a recent interactive section with the House of Representatives Committee on Banking and Currency, the Governor of the Central Bank, Lamido Sanusi, noted that if the plan to redesign naira notes last year was successful, “it would have made it impossible for counterfeiters to cook”. He further noted that best practice currency management is that “Within a period of 5 – 8 years, you redesign the currency, after which counterfeiters tend to catch up with you”.

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How banks make free money from government funds, by CBN governor

  /   in Rational Perspectives 12:41 am   /   Comments

*File Photo

“First of all, you have got liquidity surplus in the banking industry; … there is over N1.3tn or so sitting in banks and belonging to government agencies. Now basically, they (these funds) are at zero percent interest and the banks are lending about N2tn to the government and charging 13 to 14%! Now, that is a very good business model, isn’t it? Give me your money for free and I lend it to you at 14%; so why would I go and lend to anyone?”

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