This response to Soludo essay ‘Buhari vs. Jonathan; let the real debate begins’ is based in large part on a response to Ernest Simeon Odior covering the chief problems of Nigerian economy and why the gaps in budget and financing will paper out differently with additional shedding of Crude oil price.
Charles Soludo’s recent paper has attracted all kinds of attention including indigent responses from Politicians who’s need to put the essay behind them or drive a force in considering the problems of current political dispensation. It would be important that Lamido Sanusi responded – at least based on those legitimately qualified with experience to do so – be he obviously can’t, he has a pontiff role to perform as the Emir of Kano and as such his comments will be consigned to general reassuring observation, like Shehu Shagari an original pontiff in his own right, the political wright (writ) and arguments from these icons of recent statesmanship and cadre may or may over shadow the thrust of Soludo’s arguments. While both leading parties of PDP and APC may speak volumes about new roads, fire and electricity, – and we have heard this before – airports, running water, and the new themes of Shipyards, Enugu dual bridges, Owello road, Kano and Kaduna dualization, the unfinishable Benin – Ore – Shagamu highway, NMBS and issue of housing authority, the Country really do not have the means and the resources for these projects. To even pursue some of the projects, it was borrow on top of the money it has always borrowed even when there is plenty to spend and when the budgets are ground breaking. This is the rea story, we have enjoyed a period of seeming prosperity not because of the competence of the current administration which he rated economically ‘f’ but because of the inability to meet the needs and promises at his beck and call and the relying on further borrowing may put Nigeria below (BB –) which Charles Soludo for the records achieved in office from D rating. On a purely academic process, we may or may acknowledge the fact the bust of Nigeria Asset class, loss of National property for instance crude oil to hungry idiots from elsewhere are part of the fundamental deals with FDI and long term investment, are insinuations that can be located in Soludo’s use of ‘conditionalities’, to an extent that a short fall in any real market structure; debt to ratio, debt servicing, and return rate due to porosity of currency rate and debasing of currency especially with the chief operating companies in Nigeria overweight on their investment capacitance and commodity, can wipe out in one year, a total life savings of a fixed income earner and benefactor of unemployment compensation including a favorable continued time artificializing of IRS. Many of the Short sales that arrived Nigeria from oversea and from Nigerians with more than one International Repos in Nigeria are like Nigerians themselves betting on the collapse of Nigerian stock exchange which stalled in the last few months and perhaps briefly lubricated with Presidential elections spending. But for how long and to what extent is the spending? Put it different, it leads from Soludo’s arguments and concerns that houses progress made conventionally and unconventionally in Lagos and Abuja is not so much sustainable, that it requires additional national spending to ensure its future, else these buildings will end up in hands of banks that has a stake in driving Nigerian Bond market reverted to project A such as Electricity and Energy supply which Aganga engineered with the help of Goldman Sachs.
To put it bluntly and using my own terms, Nigeria is basically a poor country that need real plans if has any future plans of surviving the current economic depression. In essence, relying too much on crude oil as the only cash crop is not without a finality which the easy money of the last decade leads from false economy to sponsor a future of prosperity even when this is not the case. The nominated projects including problems of housing in my beloved Riverine States, was not overcome during this administration with its easier monetary income. And to every extent, we can maintain our advocating for either essays of Soludo with a response to Odior and from that response to the article as from Soludo we may argue that we are suggesting that the article is not necessarily political, that given the economic conditions of the world presaging the article’s composition, possibly written in December 2014, are ingredients in the global markets such as crude oil price decline. The timing of the composition and publication suggest Soludo’s interest that is not far from politics especially the spent force and energy arguments of GEJ’s official accomplishment and recent linked-in pages.
Sailing above this politically of the responses to Soludo is the issue of the format and intellectual brocade over and around the Zeist of 2015. The critical format of Soludo’s argument and the man’S natural power of delivery is what seem to now divide the country, nesting between the legitimacy of GEJ’s return to office and the images of Buhari with austerity to reckon against backdrop of the end of Shaghari’s administration. The major punch line in his evolving essay and which can be argued from the position of an economist, is the comparison between the Shagari’s later day administration and the rise of crude oil prices which did not end very well with many States still starving and owed back to back salaries. He leaped frog into the problems of the current administration with the intervention of the military in 1983 and why there was the issue of Austerity. In some sense, there is a decline which he was perhaps indicating from the evocation of the 7 point policies of Obasanjo that seem to be a throwback to the past.
A summary of Charles Soludo’s essays is hard to box in, but he is essentially decrying,
(1) the lavish psychology of the country in the years of its boom and why there is need to look at what the country holds for you under the ‘f’ class economic class under these new bishops of Nigerian financial, warranting a reaction from Pat Utomi who went a shade away from ‘consumptive budget’ to questions of spending parallel to New Deal and his Lee Kwan Yew. Sometimes you wander if this man is playing the country towards a socialist ideology, and wonder how fittingly APC resembles socialism or was his endorsement due to Fashola who was proved a lightning rod for APC political stake in Nigeria.
(2) The second denomination of Soludo’s writing is the issue of solution to the problem, which he believe to be necessary given the debt Nigeria sank into when the government shifted from surplus and easy money of crude oil boom from late 70’s through to early 80’s and why Nigeria’s failure in preparing for a possible hard and difficult times is not met with serious and competent economic agenda.
The root problem it’s not the spending or the proposed spending by either parties, or the benevolence to expand the government, we can only guess even from Soludo’s piece that the main event is how to realize the money against the unbundling of new economic realities and demographic. He did not specify how basic economic changes can be reached and met, but seem to suggest that poor administration of the duties of financial ministers and the errors involved in federal accounting process is the major reasons why there is a problem primary to preparedness.
(3) The third principal issue raised by Soludo is the preparedness of both parties, although a response from Governor of Ekiti State Kayode Fayemi attempted to show the policies and plans of APC, Fayemi was ‘flying on engine’ with his comments, especially for a man who has never visited South East for a Start. Some of the APC programs including the promise of creating 20, 000 jobs in every states, are government problem item requiring still another round on spending. PDP to argue has the programs that covers new police equipment, border control and patrol for custom, reformation of the jails in Nigeria* (my favorite) and renovation for 120 Eminent School for high school education, grants, grid system electricity, rehabilitation of health, farm and agriculture, wildlife preservation and fish industries and hatcheries, detective for airports and port security, mines and national park programs, local intelligence corporation using high speed internet and crime support units, employment benefit and improved pension and back to incentives (another favorite), all of these can’t be a single parties cooperative agenda, it is part of the national planning which PDP cannot ameliorate.
(4) The other political item which need not to be rehearsed is the issue of local political bandwagon, with emphasis to arena where Charles Soludo once pursued political interest; Anambra, his commentary on Peter Obi, warranted a vacillating reaction from Anambra Peter Obi who is on his way out or so it seems in Anambra. This point he made in his essay warranted a reaction from Peter Obi’s media consultant Valentine Obienyem, and from this range of group of argument the more thorough issue of economic recovery and economic balance sheet which GEJ is wrestling to overcome showed up differently and remains part of the reactionary tendencies in other people who are looking to be heard.
(5) The problems of accountability where he questioned the missing 30 trillion naira from Nigeria and erroneous administrative measures implored Nigeria’s current finance and economic minister Ngozi Okonjo Iweala, who should or should not be blamed for some of the woes of the country which the ex-governor of CBN mentioned in his essays – perhaps committing in his second essays the same fallacies asLamido Sanusi that injured the operability of a CBN as grudgingly repaired by Godwin Emefiele.
We begin from the end, by citing the issue of corporate finances raised by the authors.
Should the finance and economic coordinator be blamed, the answer is no, not entirely. But it could however be said that specific areas of the economic monetary and capital flights in Nigeria under her administrative belt make her a scape goat and ultimately guilty for the poor and non-existing financial accounts of Nigeria. Perhaps a separation between Economic Coordination should be partition from Nigerian Finance, that both ministries in future should consider a difference between accounting procedures and price penetration of its investment categories.
With advent of military leadership in 1983 under very spurious and questionable circumstances of Buhari and Idiagbon we can enter some of the frayed arguments by Soludo as if from a vintage which only a few Nigerians can access. But this vintage in the years that Soludo was in Nigeria, may or may not have been so precise that Nigeria’s sophistry included the inoculations of Sanusi and at debasement impregnation of Nigeria by Oscar Onyema is a country that is shocking behind many nations of world, to a point that its lack of adjacent philosophical procedure and entailment of business logic, it’s a concern that must not be taken lightly on any account in the country.
Soludo was right that both parties looking to re-enter Nigerian politics were not prepared to deal with the problems that country is having. For sure, he couldn’t have known the difference between economic theories guiding the country if he was in Nigeria, his switch of official positon from neutral and pampering iconoclastic in Nigeria affairs including his reserves on some of his assumptions of future of the country assumed a tidal wave when he was moved to overseas and see what many of us have seen, a country far below its capacity level, and looking to be redeemed.
There is also the questionable character of the current Petroleum Chairperson, who as some people may or may not have known, its over-night one of the richest persons in Nigeria, worth in recent times, billions of dollars. The accounting strategies in Nigerian is way below standards, and the accounting procedure of the existing economic countries of Nigeria is so personal that it is impossible to outdo the Madam Iweala and minister of Petroleum as generally accountable to these problems in Nigerian finances. If one is willing to add….
Paul C Nwabuikwu speaking on behalf of Ngozi Okonjo Iweala, pointed out that during the period in question, Nollywood, Bank Development, NMRC (Nigerian Mortgage Refinance Corporation) were created including the 6 million farmers in Nigeria, all of which requiring government spending. In all reality we could suggest that part of the budget expansion of federal government and the provisions for these new but minor introductions of changes in Nigeria, but may be considered part of fiscal policy and expansion following the….has little or nothing to offer Nigerians and the President saving for issues of….
“On the issue of debt, Nigerians deserve to know the truth and we have said it before. The truth is that the government borrowed in 2010 to pay an unprecedented 53.7 percent wage increase to all categories of federal employees as demanded by labour unions. The total wage bill rose from N857 billion in 2009 to about N1.4 trillion in 2010, and as a result, domestic borrowing increased from N200 billion in 2007 to about N1.1 trillion in 2010 to meet the wage payments. Where was Soludo at the time? Why did he not react to the borrowing then? Was it because he wanted to pander to labour in preparation for his political career? (Nigerian Eye, January 28th, 2015) …..
In Madam Iweala’s words, “an embittered loser in the Nigerian political space” that is “so derailed” to “commit intellectual harakiri by deliberately misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job”. Whereas the madam cannot justify her position on Soludo on any count and for any reason, this position is ultimately wrong. She seems to fail to deal with some of the numbers in Soludo’s message than arguing from a general point of view. From a general point of view, the argument seems to give her general defense mechanism, yet in all, the mechanism she implies is faulty to a certain extent. For all we can suggest and speaking with her general point of view without in this case indulging Soludo’s point, we can point out that Soludo’s essays mentions that an increase of crude oil prices occurred between $40 a barrel during his time reaching $60, to a $100 a barrel until fairly recently.
He used a leverage to enter the argument of Shehu Shagari where he insisted that the boom in crude oil did not guarantee employment or full employment, and from all accounts, the problem of employment may be rooted in the disbursement process to these workers in the States whose wages were not paid in spite of the boom and as such fixed and resources allocation took a beaten and was not fully met and guaranteed. Shehu Shagari problems were not necessarily patriotic – he was and still one of the thoroughbred of Nigerian politics and Pan African West African – he’s was the problem of corruption hence a correlation between his administration and the current oil swelling and easy money administration of our current President Goodluck Jonathan. In Charles Soludo’s words,
“For comparisons, President Obasanjo met about $5 billion in foreign reserves, and the average monthly oil price for the 72 months he was in office was $38, and yet he left $43 billion in foreign reserves after paying $12 billion to write-off Nigeria’s external debt. In the last five years, the average monthly oil price has been over $100, and the quantity also higher but our foreign reserves have been declining and exchange rate depreciating.
“My calculation is that if the economy was better managed, our foreign reserves should have been between $102 –$118 billion and exchange rate around N112 before the fall in oil prices. As of now, the reserves should be around $90 billion and exchange rate no higher than N125 per dollar.”
We can loosely argue for and against both engineers of finance and two time GEJ cabal; Cabal Madam Okonjo Iweala and Bishop Charles Soludo who is defining the generic, the political dogma. These two may or may not have been primus inter pares of Nigerian economy, or political Irokos defining a party’s agenda, whereas a party is just a social and political gang engaged in civil party and leadership right, it is a back seat or so it seems for an oval office or political appointment of import.
The point is that quantity of currency or quantity of money in expansionary market policy seems to show that there is a deficiency gap in considering a digital money, slightly different from Credits cards and Debit cards, to psychologically discourage the tendency to spend or expenditures with respect to Robert Mundel and Harry Johnson, who see the relationship between purchase and balance sheet economic unraveling as similar to expenditure or study of expenditures, which are necessary for improving aggregate demands but do not have to toe the lines of John Keynes even though he should be absorbed of the comparison and shadowing in of his monetary policies by Harry Johnson who see Keynes as fatal example of old forms of economic theories. But in the context of quantity of money given the mindset of Fisher and his MV = PY, Friedman’s MV (f.) (Money velocity, compared to Friedman’s money supply, may show that the two angles on both equations should emphasis quantity of money where price theory is reversion to what we have. And in the programs endorsed by the Bishop Charles Soludo, Emir Lamido Sanusi, OBJ,Cabal Ngozi Okonjo-Iweala and GEJ, were leading expansionary government programs, need to emphasis the spurious impact on the country through its core inflation.
Madam Ngozi Iweala also made the comments that “Soludo has shamelessly pandered to so many past leaders that Nigerians are asking one more time – what position is Soludo gunning for now?”, the comments stem somewhat from elsewhere and in the middle of this somewhere it’s an unfinished affair of Soludo exiting from office, since the opening accounts of Soludo’s piece emphasis that he was not courting official position or seeking political office. His statement may be political tossed as a warranted disclaimer for reasons of ulterior motivations or foreseeing hints of political tuning, may also be considered a throw off and false advertising of some measure but the heat in the argument is in its seriousness….may be reduced to a form of adhominem which the statement essentially assumes to mitigate, for all intent of reason, the Madam had her reasons for inserting damaging castigations although as a noble intellect, but such castigating it’s like her serving a bad apple at the beginning of good buffet. Nigerians are starving believe or not does not mean Soludo’s argument is right, Nigeria may lack political agenda does not mean they are not essentially prepared. It is not the so called Federal Government to provision for the rest of the Country piecemeal to deliver an economy that protects all asunder, it is up to the country as a unit to development its financial and literary capacities and force a tentative change.
Madam Ngozi Iweala argued that, “There is definitely an issue of character with Prof. Charles Soludo and his desperate search for power and relevance in Nigeria. Nigerians should therefore beware of so-called intellectuals without character and wisdom because this combination is fatal,”, it is a fair and faraway argument which we can understand from a different premise, that Ravi (2007) delimited cycles of inflation “And of an economic slump is triggered by inflationary pressures, monetary expansion begets escalating inflation without curing the recession.”
“When interest rates fall, bond prices move in the opposite direction. So bond investors reaped huge gains. However, elderly retires suffered greatly, because many of them live on their interest incomes which plummeted.” Commodity futures… Investment as structure is not a new argument; it is a reasonable argument used by a Ravi to check of the Capitalist tendencies of actual world
For if this is true, we can see the difference between Friedman and Fisher, since Velocity argued from its impact on interest rate can be considered money, where interest rate which as Ben Bernanke mentioned is price, therefore interest rate and funds rate is rate of money and its velocity is concomitant to the argument about the supply of money – my demand cave – and probably attributable to the early levels or stage of the rates and flows of money in action, the M1, that at end of flow, there is a new level of quantity of money theory that straddle between M1 and M2, which is the path created by the expansion or contraction as the underlining securities and how well it stays with the return of money; the derivative, that the end of flow of rate of money, there is a diminishing of the correlation between the rate of money and velocity to the money in circulation which is not exactly knowable.
Therefore one function which Soludo’s argument did not perform is the rate of money and its relevance to price, beginning at the receiving end of the flow and velocity of bull-like easy money to a bear period with finagling and penchant for claw back. For if we consider that the scalar and vector quantity is added to the first rate of monetary expansion and the upside it’s in inflation, there is a tendency to mitigate inflation through a fund’s rate that can be achieved from interest rate preceding a future money actions by Federal Reserves or Central Bank, such that the conditions of money to expire its flow is Sound Money, whereas the flow measured from a period of spending may not necessary smoother out, it is Stable money.
The price of product or manufacturing than the quantity of money redeemed by inflation or inflationary pressure, although by price theory, these paths cross each other only if we explain it through M2 as equal to the supply of money, and by nominal interpretation will create a bad receipt for expansionary path of a final product increasing a central bank expansion, and the propensity to leverage a system ; that a such propensity increases derivatives and options as opposed to the path suffered from M2 in explicating velocity where sharp difference exist, which will argue that sensitive inflationary conditions nominally decreases a propensity to leverage an underlying security or cave a derivative.
What we may argue also is that the conception is only good on paper, since in real life, people tend to take more risk when there is little chance of profit and not the other way round. The only explanation to this is what I tend to offer, that as much fixed rates are in US linked to US Government bonds perhaps the case in Europe and housing numbers and mortgage linked to fixed income without necessarily torching permanent money.
It constitutes trade deficit which is just as similar and the same as car parts. The flooding of Nigerian economy and market with foreign paper, which were not redeemed through direct investment rather redeemed through public and private acquisition of shares, means by numbers you lock out the local investors who are still cheap, cherishing but perishing the new integration of their economy through the internet.
In the words of Soludo, we infer the following, “The economy roared to average yearly growth of 7% between 2003 and 2007 (although average monthly oil price under his regime was $38), and poverty dropped from estimated 70% in1999 to 54% in 2004. Obasanjo was his own coordinating minister of the economy and chairman of the economic management team— which he chaired for 90 minutes every week. I met with him daily. In other words, he did not outsource economic management.
We expected that the next government after Obasanjo would take the economy to the next level. So far, we have had two great slogans: the 7-point agenda and currently, the transformation agenda. They remain empty slogans without content or direction.”
Pat Utomi, (Feb 1st, 2015) compared Soludo’s argument to Deeprak Lal and between quantitative easing…“Soludo’s solutions sometimes sounded like Deepak Lal on the poverty of Development Economics. I think that if we see current oil price slum as an opportunity rather than a threat then we have to see a role for government in the way Lee Kuan Yew used state intervention when Singapore was prostrate in 1965, as Nigeria is today.” What Pat Utomi, Peter Obi, missed so far from his argument, is the comparison between the Obasanjo’s 7 point policies with IMF transition strategy from Government based production units to private business and by private handlers.
Break it down…
ECOWAS; Economic Community of West African States began it full swing in 1979, set against the cultural unity of Expo ’77, West Africa, braced the region for a future which includedsingle currency money – at the chief argument of the commentators and chosen heads from the exposition in TOGO, but did not incorporate the price of that economic banter, for instance, debt across the border, problems of credit and the issue of acceptance in the Global economy.
We need here to rehearse some of the teachings and assumptions in this piece that one, Nigerian Oil Subsidy,ECOWAS; Economic community of West African States, Government policies driving currencies, SAP; Structural adjustment programs, WAI; War against indiscipline, Better life Program, 1986 Austerity Measures, Privatization Scheme, Removal of Crude oil Subsidy have all come and gone but IMF has still tied the country’s future to these schemes and to Debt that don’t count as a credit and has forced Nigeria and some West African countries downward with its policies, policies that even a progressive third world economy like Nigeria, can no longer absorb.
In Nigeria and in West Africa these days, we hear of the ‘Millennium Development Goals’, ‘Privatization Schemes‘, ‘Balance of Payment’,‘Austerity Measures’ (removal of oil subsidy), ‘Foreign Direct Investment’,IDAs, FDI; Foreign Direct Investment’,‘Debt Crisis’, but all of these are IMF measures which Nigeria that is U.S centered has no real party. But these Schemes exist today and part of the Obasanjo’s 7 point policy and part of Nigerian politics and part of the Nigerian running of their plans for BETTER LIFE. It involves a kind of budget expansion which the switch in the process essentially combines for the best of the process or transition from the process.
The problem with this budget expansion is the issue of long term investment, the Vanilla for instance that Oscar Onyema was selling to Nigerian and Foreign Investors, and the attention to long term bond that NEPA, GEJ and Aganga (the other bishop) of GEJ’s financial starship were marketing to the world could not have survived the heavy and overlooked price pressure from bank stocks given the debt to investment which forex normally stall, or given the widening gap of Nigerian economic depression or newly privatized economy based on their local rate of return other than Gross Domestic Product which adds FDI to it as opposed to VAR and housing index.
The debt to investment will stall and will continue to widen and Nigeria will never get to it or get over it. To understand the problems of a third world transitional processes involving in leading a local economy from poor urban environment to a more technology based economy, we need to demarcate between the issues of GDP and GNP which due to additional foreign investment, widens, excretes good numbers to the rest of world, rebase, or debased processes, but above all, it is a paradox of the local economy….
This better life the case of Argentina and Mexico, like Brazil of the 70’s and Korea of 70’s will not be achieved under these programs that are run by IMF. Part of these measures is that it leads to something when benefitting, and we are tempted to ask how can a transition from one program to another take place, for it seems that the process of Free Trade agreement exercising itself in Europe and now the North America operates, usually leads to the lands of regional exchange and single currency. Not before the wasting and rubbishing of the local currency and economy making it easier to penetrate or exploit. In proper light, the measure at work is similar to EU, compared from every angle; it is similar to the future ideas of regional government and higher penetration of existing Companies.
Nigerians has been forced to blend in to the fact that there is a New World Money Order called Euro. There is nothing wrong in accepting the doctrines of European Union and it does not seem that the policies pursued by Europe are as bad and misleading policy. Yes, some versions of the policies are desperate conceived for Third World economies or whatever name that is applicable and in terms of the quality of European Economy and its no-grow economy, these IMF programs and loans are very not called for and are basically predisposed to debtors damages.
The trick of this process is that a poor execution procedure in narrating Harry Johnson’s account from the new reality of Mundell regional currencies, give and take on one critical aspect of all these schools and perhaps why the systematic argument of the quantity theorist may not fully apply unless as I mentioned from Western Union and Currency wars, that the a single in all its measure of economic value is also a market quantity.
Needless to say that their book raised several questions about the illusions of West Economic Society and NIE ‘New International Economic Order’ as derived from Europe, questions it did not answer, perhaps better explicated as questions which did not exactly converted for answers. But from the defense pact and from policies prodded by individual Government in West Africa, it seems common sense that the business structure between these West African countries was likely to change or expected to change, so also the structure and business of its local Community and Nigeria is not different. What have witnessed in the last decade or so is that the paper currency and the call for a new Nigeria and West Africa are actually hijacked by private interest from all and asunder.
A short précis of Pat Utomi and Madam Ngozi Nkonjo Iweala (II)
The economic fiber of Nigeria was rubbished by cell phone application of process, for if I for one, made the argument in New York in 1998 during a small NITEL meeting trying to attract business that the future of Nigeria was cell phone industries not land lines based on the report of cell phone successes in the Low lands of EUROPE or Nordic circle where land lines could reach. A new APP on Africa was also launched and it showed original studies on the need for high tech over low tech even for the once the locals couldn’t afford. It was therefore a waste of time to pursue land lines when the means of communication that made it possible its easier through cell phones. In addition to these ideas, Motorola was making its presence felt in Lagos and to some extent in many parts of Nigeria. Another unraveling of the new age economy of these Nigerians was their film industries which stunt in quality with a shift from….
The rest is history which is perhaps in-gathering like Weather Conditions, and many of us may wry a smile since the devastation did not leave us amused at the beginning and may be seen to have completely given the high price and pernicious prices Nigerians were forced to pay for a
I seem not to regret that the industries which are so emphasized will pose this unconventional inflationary pressure and problems in Nigeria. We may argue that the prices of cell phones are lower than ever, but Transcorp which Obasanjo and Iweala including Soludo brought to Nigeria, were so private and privatized that they are probably part if not majority owners of this International conglomerates that acquired NITEL for pennies. From Transcorp we indulge half the argument raised by Soludo and half the issue meted out by Iweala and from the sidewalk of price and price theory, it becomes easier to see why the problems a country like Nigeria is experiencing and why the world – or in this case Soludo should take note in estimating the effects of State imposed transition from State controlled production units to private hands and management in any local economy.
For if we apply some measure of financial processes to this example, we notice the irrational and the human side of money and self-preservation at the center of this privatization scheme. No true economic hitman or woman will fail wring the neck of these noise making Nigerians and without their knowing it if the seating Government such as Obasanjo and his compeers will be enticed to a 7 point strategy and they will fail. The dark side of such a scheme is that Upper House Theater is created, a vacuum system is generated and by selling a mere idea that moves business into your hands as the seating president or governor, will compel you and your company to defend this upper house problems of price theory. In terms of the rubbishing of Nigerian economy in the earlier years of the cell phone industries for a start, it is the price of supporting your lifestyle in Nigerian that suffered the most.
With direct protection of these areas of business which was part of the so called 7 point, you offer these mercenaries all the materials they need to essentially rob your country and fleece it dry. Look at differently and not to digress, many companies that made money from Nigerian Telephone industries moved their resources elsewhere almost every month. South Africans made more money from Nigerian cell phones that all the Nigerians companies put together, and these companies charged and bilked Nigerians rejoicing almost detrimentally of their new found connection that they forgot that the resources where already existing, the only that needed to be done, was authorized a protection by the federal government usually when a transfer of power from, military to democratically elected offices take place, and the rest of the reaping was a second matter.
We cannot push the indelicacy of this hit economy called Nigeria to Petroleum, for if we care to look at process involved in emasculating the OPEC out of its control of Nigerian Oil block, or the processes involved in breaking down some of the congestion with Shell which Halliburton did, leaving Exxon-mobile in charge of Nigerian resources many oil well South-South of the Country and the boundaries with Cameroons, we find that the profit which are touted from this process of resource allocation to federal purse, are no longer easy to demonstrate and are in fact out of control.
Recently, GEJ asked every group drilling and bunking crude oil from off the continental shelf of the Riverine areas to disembark their boats or have it blown to bits and he did. We measure however that even with the rise of the crude oil prices to 100 per barrel, and Nigeria removing itself cyclical crude oil subsidies; meaning, Government has to subsidies on the price of crude oil as a way to easy off the problems of inflation which a rise of crude oil prices or even a market level perorate prices entering public consumption creates the problem of continuous disequilibrium —-usually private decision function based on price theory—-but in time past, with hard and fast military whose corruption was not something dissimilar, the country was paying too much and essentially wasting it as opposed to saving some of the money for latter day or macro government (increasing consumption budget) by definition, which Madam Ngozi Okonjo Iweala, argued in the interest of Nigeria and fattening the saving purse of the treasury, which in the end, may lead to more government spending than the unconventional tactics of inflation control.
For a point, this subsidies are probably not necessary yet on the same point, removing the subsidies is torturing the bond market, which naturally offload investment from long term comfort and sustainability to short term – placing a separate funk on the Stock market, whereas momentum shift the emphasis of growth to paper currency, shadow banking and inflation in the country especially at the time of easy money. We may also come to understand the shift at this level occurs when a housing number shoots ahead other CPI measures in the country.
For if we care to look at the poverty level in the Nigeria, we may notice a bipolar trend, one, a shrink of populist idea of poverty; there are more Nigerians with houses than ever and more Nigerians with cars than and cell phone to booth, but the laxity of economy survey gives way to more problems overall economic growth which is implosion of Nigerian mid class and shocking debasing of its quality of life.
In some sense, most Nigerians are actually starving from even the most available of resources than ever before, yet compared to poor examples of market resources like we have in Lagos and we have in Abuja with oversea dumping of resources in Nigeria more than anytime, you are likely to accept there is emergence of a 1% population in Nigeria with all the money which will not buy much still, and the big gulf of proper and green market in Nigeria given the deepening crisis which is gradually coming.
In spite of the write off of Nigerian debt under Obasanjo which Soludo maintained in his essay, and the swelling of resource allocation and sovereign wealth, property from all asunder including the increases of crude oil prices swelled the chances of inflation. GEJ to be sure administration actually owes the world dangerous amount of money and in terms of Soludo argument, outside the issue of Sound money. In terms of NEPA which are said to be privatized very soon, who idea that was is not clear, the price of protecting the inflation and not the output of Electric energy, for they could not save enough or realize to even ensure the health of an economy, in spite of
The question is not transition from government owned industries to private business during which a country experiences its highest changes and churn off more business and economic harvest than ever. We take an instance the issue of privatization from many parts of the Global Macro applies also in Nigeria, may therefore be leading the suggestion that with the advent of free trade in some parts of the world for instance the NAFTA, allays the fears of Soludo assuming we bump him up on his argument, for when privatization in Europe and in North America reached a deciding and critical level, the new owners of the business gradually began to shift to debt and rate of return.
“Today, the combined domestic and external debt of the Federal Government is in excess of $40 billion. Add to this the fact that abandoned capital projects littered all over the country amount to over $50 billion. No word yet on other huge contingent liabilities. If oil prices continue to fall, I bet that Nigeria will soon have a heavy debt burden even with low debt to GDP ratio.
“His record on the economy is a clear ‘F’ grade”
“One of those present took the satire to some level by comparing Jonathan to the ‘performance’ of the former Governor of Anambra, Peter Obi. He noted that while Obi gloated about ‘savings’, there is no signature project to remember his regime except that his regime took the first position among all states in Nigeria in the democratization of poverty—- mass impoverishment of the people of Anambra. According to the National Bureau of Statistics, poverty rose under his watch in Anambra from 20% in 2004 (lowest in Nigeria then) to 68% in 2010 (a 238% deterioration!).
“This leads to another point I am not in agreement with Soludo on. He talks about cost of programs and the fact that low oil prices mean you cannot finance a big idea. In 1965 Singapore’s main revenues came from rent for the British Naval Base and the British had decided to shut all bases east of Eden. The decision of leaders of the United Malay, National Organizational (UMNO) to eject Singapore from the Federation that was thought to be the only hope left.”
“Let’s ask people, regarding incumbents, is your life better today than it was four years ago and to the challengers how can you make these same lives much better four years from now. (?)”
“To win elections from intimidation, a shower of insults and trying to diminish opponents rather than engage their minds can only produce Pyrrhic victory. The worst such “victory” would be to win an election and lose a nation through bitterness that makes it difficult to get people to work together to advance the shared good of the people. For people like me the public sphere is about the pursuit of the elevated immortality.” (Vanguard News February 1st, 2015)
The main event of the problems associated with the 1920’s and the Age of Depression is whether or not equilibrium is possible with the changes in GDP as opposed to having full employment, and can inflation occur when there is full employment? In one Nutshell, we can reduce the question to this standard Virginia University ‘Portable MBA’ asked a question, “Is it possible to have an equilibrium at some level of GDP other than full employment, and is it possible to have inflation at a level of GDP below full employment” Keynes argument that in order to ‘stimulate the economy’ there’s need for the government to intervene to improve aggregate demand through ‘expansionary’ fiscal and monetary policy, was derived from his thesis that depression in the world was due to insufficiency of Demand, that a sort of deflation essentially took place in U.S of the 30’s and such there’s need for more government spending.
But this theory mainly works in a nearly successful economy like U.S of the 20’s and 30’s, and Europe sometime later. In a country like Nigeria, a theory of munificence through spending has little or no merit unless we admit to ourselves that the country has been a Depression or simply a form of crisis. In fact it could be disastrous to prove will have the country towards a fulfilled future if does not. It is therefore economic bias to suppose that as such Government spending was a way to push towards full employment, which in turn improves the resources of the buying crowd.
It is true that Keynes Identified ‘insufficient demand’ as the reason why there was general fall in prices, wages, and it is quite clear that he may have identified a problem associated with the ‘demand’ hence the supply of financial resources if need be was important. Insufficient demand is not the problem in Nigeria. It is however possible that Keynes identified a problem and not the problem. If this theory applies to recovery, then recoveries involve useful government spending then, Keynes was mainly been notional about the macro implications of his theory. However separated from these theories is the plain fact of a single currency over a broadest possible extent, could it be that the changes that govern investment is left to the agreement possible demands or the largest portions of any society having some access to the
However, the theory of Aggregate Supply and Demand is a remedy for economic recovery and as such only ‘probably’ good for recovery – even though the theory is applied everywhere and for every occasion. What is the economic theory?
This theory does not help our understanding on how to grow in any economy; the most important aspect of any economy is growth. In essence we are left with what really happens when any nation on earth is meeting expectations but experiencing a growth problem like Europe? Or, when a country is not meeting expectation but also growing like in Nigeria. That latter is a sample of a sluggish economy and sluggish economy often lead to a breaking of economic structural and then a country leans to old and proven theories as a way to recover. There is the spending or the expansion of the Nigerian Government, and it is common sense that inflation and foreign direct investment gives the impression that you are growing, and a cut back on spending which usually follow, could be a symptom signaling a further dive into depression
In a separate treaty on the Nigerian economy by Ernest Simeon Odior and the dollarization of Nigerian naira look forward to role of foreign denominator in a local economy and how it promulgates inflationary pressure. Some of his outstanding examples can be said to have defined the premise that facts from examples as the examples between arguments made about the use of dollars or foreign currency such as the British pounds makes the formidable case that their presence in any and under any exercises of trade exchange, only led the buyer from the centrality of its unit of exchange to other market forces dictated by price and currency, enhancing the departures from currency or encouraging lack of confidence in major domains often create additional gaps in the money market spreads hence incur real inflation rate on the buyer and the economic disequilibrium.
In limelight, we might consider that speaking about manufacturing with the kurtosis of 0.5 or 0.05, is reasonably ambitious – may or may not necessarily apply to Soludo’s argument or inferred from the noise of expanded national budget or the decay and collapse of decision function of the individual buyer whose main strength is the currency, a case now deplorable given the copulation of Nigerian Naira to U.S dollars and to a large window, given the excision of these facts from other academic exercise on finance and money draw new bloods on the merits and demerits of having a naira in Nigerian denominator which hardly afford much in spite of the increased and improved GDP.
If we care to push the business beyond the corridors of Nigerian politics, there is something to learn from even the more careful cases of African American communities, that a possible colonization of Nigeria through financial resources when there are branching to the best of world and making China visible to US and the West is actually possible. A constant and gradual erosion of the local businesses especially in areas with the least attention, force progress to yield backwards and Nigeria may have its days reduced to financial accounting and debt servicing even when they are leading the world in West African market. It is a harsh reality that nearly took Mexico to a different in 1980’s through to the early parts of 2000’s, that even with new and enhance business from Mexico in United States, especially in California and Texas, there is a still serious gap, serious income gap between a FDI and local workers that perish at the treadmills at border crossing.
Do not say Nigeria is above it, it is a careful study of Mexico and its cultural hiatus from colonial arrival of Spaniard through the attempted destructions of these institutions by the Pancho Villa and the revolutionaries; Emil Zapata to mention, and new growth of Mexico has some changes been wrought on the old empire, yet the subsistence economy of the past is still very possible, whereas Nigeria which has been around as much old the continent under different names and languages may or may not have rooms anymore for such society, yet the price of free market comes with that the manufacturing is not the same as production is not small misplacement of Economics, that the initially position of the manufacturer or manufacturer index could indicate its origins by the levels of free trade between separate Nations of interest and perhaps nothing else.
The professor looks to show that CPI and interest rate may adequately help disequilibrium of private interest, but we are certain that this point is either too general to the land of reasonable point of view with bearing that the total view from the main point assayed by the author is leading but missing from his piece is that all financial products, all behavioral activity of the consumer are final products duct-tape to demand and hence price from disequilibrium, and not supply which is industries which is advantage from supply /pricing towards equilibrium. It is common sense that CPI cannot easily beset interest rate in spite of frisson effect, that Anambra’s poverty centrality may be a factor based on Asia influence than the problems of weak economic agenda in Nigeria.
It may seem that the ends of rates is to perform the buying functions of demand equations, ends, if not the whole essence of rates is therefore averse for offload unwanted momentum (propensity) from a stock of real interest and not through the classic variable on aggregate demands. As such the question and the issue of Soludo’snegative result from budget expansion is bipolar of its definition since Nigerians though struggling are also making some progress. On a more original contrarian position, which echoes the rest of the piece is that Nigeria asked to perform an equation almost too quickly. One of the few better things that Madam Ngozi Okonjo Iweala has manufactured as minister of finance is the issue of sovereign wealth fund investment, which took a while to enter into a process, it is a process that Nigerians would not have missed anywhere in the world.
Ernest Simeon Odior’s Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB) an Online International Monthly Journal (ISSN: 2306 367X) Volume: 1 No.5 May 2013. Citation from Ernest Simeon Odior – Dept. of Economics; University of Lagos, Akoka, Lagos NIGERIA ‘Macro-economic variable and the productivity of the manufacturing sector in Nigeria; A static analysis approach’ , where the focus of his writing it’s the story of Nigerian Industrial weight from 1975 through 2011 did not point to Crude oil as incentive, not that it mattered, did not indicate the number of industries in Nigeria from 1975 through to very recent times that needed efficient energy system or where enhanced with new realities of energy and crude oil.
“This implies that, the adjustment coefficient (ECM) or the speed of adjustment of MAP if deviated from its long run equilibrium is 0.04, while the intercept term still is positively related in the long run (13.10). Also the error correction estimate equation shows that the long run behavior of Exchange Rate (EXR), road Money Supply (M2) and Foreign Direct Investment (FDI) appear to have negative relationship in adjusting to long-run disequilibrium given the ECM value and that the long run behavior of Consumer Price Index (CPI), Interest Rate (INT), Credit to the Manufacturing Sector (CMS) appear to have positively relationship to the adjust to long-run disequilibrium given the ECM value. Since the magnitudes of some coefficients are large, these…..”
Robert E. Lucas, Jr. Prize Lecture, December 7, 1995, MONETARY NEUTRALITY, University of Chicago, USA, “The central predictions of the quantity theory are that, in the long run, money growth should be neutral in its effects on the growth rate of production and should affect the inflation rate on a one-for-one basis. The modifier “long run” is not free of ambiguity, but by any definition the use of data that are heavily averaged over time should isolate only long run effects. Figure 1, taken from McCandless and Weber (1995), plots 30 year (19601990) average annual inflation rates against average annual growth rates of M2 over the same 30 year period, for a total of 110 countries. One can see that the points lie roughly on the 45-degree line, as predicted by the quantity theory. The simple correlation between inflation and money growth is .95. The monetary aggregate used in constructing Figure 1 is M2, but nothing important depends on this choice. McCandless and Weber report a simple correlation of .96 if Ml is used, and .92 with M0 (the monetary base). They also report correlations for subsets of their 110 country data set: .96 (with M2) with only OECD countries; .99 with 14 Latin American Country.”
This argument on the neutrality of money shows a kind in economic synthesis that directly influenced by the quantity of money people, Friedman and Company, for a gentleman Lucas, Jr. who argued that maintaining Welfare society is much more expensive than sponsoring free trade and industries, it looks like the emphasis on 30 year was referencing a VAR housing numbers which does take into account the negative bias of inflation numbers, a smart argument and sensible, perhaps a correlation between Stanley Fisher, Ben Bernanke, Lawrence Summers, quantity without the endogenous and self-repairing economic factors which is free from resistance such as long term housing numbers affected by APR’s current rate, whereas Bank’s interest rate is not useful denominator and what was a better interpretation of Friedman.
This fact is excessive and the figures only highlights the seemingly obvious, that excessive presence of foreign denominator easily mitigates on any local market, and it looks to arrive its final impact on the buying power of any private (individual) or in disequilibrium, since it can only be the case from a negative balance sheet, that the final impact of social decision is depended on budget, perhaps meeting a rational economics which makes and breaks exogenous mode lines and endogenous exposition or shocks. For debt is generated endogenous from a system, but returns on investment is an exogenous shock. Between the essential variable of shocks and auto-repair regression or VAR which does not apply to housing.
The debt as investment becomes a different matter when it travels through a fiscal policy. The main is the execution of the process which is the cog in wheels of progress for many economic communities and Nigeria as well. A transformation of the infrastructure can be achieved through a yearly budget especially when the demand on cash crops in the International Market does not create…. Part of Krugman’s Great Unraveling is how the interruption of classic expansion through budget was mitigated by the exceptional aggregate propensity best informed from the arguments of Keynes concerning the very knack of US struggles for New Deal away from Walter Bagehot of the 1870’s. By premise if not by total recall, we are looking to advertise that the whole measure of regression used by the Odoir as from the original intent at marginal utility (‘Macro-economic variable and the productivity of the manufacturing sector in Nigeria; A static analysis approach’) measured or metered from any standard deviation of any industrial market(?), in this case Nigerian Industrial 1975 – 2011, looks to impose that a tipping point is visible through this period, where the behavior dynamics of consumption or consumptive behavior differs sharply enough ….Therefore speaking of credit to industries or credit to industries as a way to enhance manufacturing (?) we are not so general and comprehensible that individual interest in transform is easily incorporated into a general interest to national and overall interest by way of Banks.
“Credit to the manufacturing sector has the potential to increase the level of manufacturing output as long as the demand is targeted towards Nigerian manufactured goods as more money is made available to the industries to produce more. The policy implications is that there are basic structures that must be put in place for Nigerian manufacturing sector to obtain higher productivity, loans and advances has the capacity to sharply increase the level of production if only credit lines.”