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Soludo vs Emefiele: Pot calling kettle black

Professor Chukwumah Soludo, former Governor of the Central Bank, CBN, was in his elements a few weeks ago, when he declared that the current CBN Governor, Godwin Emefiele, turned the bank into an ATM machine for the Jonathan administration. The imports of that statement are numerous; but, two would have struck most readers who are no knowledgeable about the role of the central bank in any nation.

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Finally, FG addresses fiscal policy

Godwin Emefiele, the Governor of Central Bank of Nigeria, CBN, is one official who has my total sympathy. He is the victim of economic circumstances absolutely beyond his control, yet, he is looked upon to provide solutions to problems well outside the mandate of the CBN. Unjustifiably, he had become the target of attack from all sides – manufacturers, importers, exporters, BDCs, domiciliary account holders, banks, oil companies,

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Taraba enters age of aviation, tourism with Overland Airways

It is like a marriage made in Heaven which invariably produces great results. When Governor of Taraba State told me in November last year that his state capital, Jalingo, will in about three weeks, enjoy direct flight from Lagos, through Abuja, it sounded like one of those political promises “made to be broken” (apologies to Jonathan Swift, 1667-1745). Given the short period he had been in office, in one of the poorest states in the nation, and being distracted by his political adversaries, it would appear that sealing a deal with an airline to start operating a flight to Jalingo would be almost impossible.

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Expected lower aggregate consumption in 2016

When Morita wrote the article from which that statement was lifted in 1992, I was a Senior Lecturer/Consultant at the Nigerian Institute of Management, NIM, and an avid reader of the Harvard Business Review. That explains why the VBQ is filled with insights from the HBR. But, in 1992, Japan was the second largest economy in the world and the second biggest manufacturer; the USA was first in both. China was nowhere in sight and the VBQ was still fifteen years away from being published. But, I had started on it.

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Consequences of states reducing budgets for 2016

The most obstinate illusions are ultimately broken by facts.” Trevor Roper, in THE LAST DAYS OF HITLER. (VAGUARD BOOK OF QUOTATIONS, VBQ, p100). Roper, in one of the best books on the last days of the German leader wrote about how Hitler, deceived by his field commanders set about deploying imaginary troops in order to halt the advance of the Allied Forces into his country. It was comical and historical. It demonstrates how political leaders can turn to clowns when faced with realities which are too harsh to admit.

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Banking blues in 2016

When oil companies fail to pay, bankers are in a fix. But, not just bankers; we are all in a fix. Shareholders of Nigerian banks, already waving off a bad 2015, will again have to endure two economic woes – low or no dividends and plummeting share prices. Currently, only two banks shares are above N15 per share: ECOBANK and GTB. None of the others is above N6 per share.

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Why most states are on the verge of bankruptcy

In July 2014, the Federal Government allocated N630.32bn to all the three tiers of government – Federal, States and Local Governments. In August 2014, N601.65bn was allocated to the states. For September 2015 the figures just released indicate that a total of N389.936 was shared by all the tiers of government; representing drops of 35% and 38% from the August and July 2014 allocations. Yet, N601bn in August represented a sharp decline from the previous months in 2014. At the moment governments are sharing less than half of what was available in January 2014.

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Minimum wage and the inevitable bankruptcy of state governments

Another economic war is about to start in Nigeria. The war will be about Minimum Wage, MW. The states want to renegotiate it, meaning reduce it. Labor also wants to renegotiate it, meaning increase it. Renegotiation seems to be the only point of agreement; it is also the battle ground. On the face of it, one would assume that this is only “a matter of cash”. But, it is more than that. The very existence of states and local governments is threatened by this conflict.

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Can Nigeria states go bankrupt? (2)

Governor Aregbesola, went on to disclose to the people of the state, and Nigeria, that “Osun State received only N55m from the Federation Account for the month of September 2015.” For a state which had declared a monthly wage bill totaling N2.4 billion, this is not only frightening, it naturally leads to the question: from where will the state raise the funds to fulfill its obligations to its workers and others?

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Can Nigerian states go bankrupt? (1)

It is unthinkable that wisdom should ever be popular”, Johann Goethe, 1749- 1832, (VANGUARD BOOK OF QUOTATIONS, VBQ, p 275.) “The Chairman Fiscal Responsibility Commission, Chief Victor Murako, has warned of a possible shutdown by some states of the federation in the next six months unless they find creative ways of handling their dwindling allocations from the federation account.” PUNCH, November 24, 2015. You bet they can; and at least two are technically bankrupt now.

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