grandstar:


I hope you realize that Blue3k read economics, and probably abroad? He and Omohayek are square pegs in square holes when it comes to the subject. There's also 4 play but he's not very active.

From what I've seen so far, you and Blue3k are both wasting your time trying to get this person to see reason. Some people simply aren't mentally equipped to understand certain ideas, and the end result is that you are led into an endless cycle of giving ever more detailed answers only to be met with the exact same ridiculous questions as before.

The only silver lining here is that hopefully others who are reading this will finally see why the Idi Amin School of Economic Theory - aka "print more money" - is a fool's errand. I doubt that there is any person alive who could get the point across to the person you've been trying to educate.

omohayek:

From what I've seen so far, you and Blue3k are both wasting your time trying to get this person to see reason. Some people simply aren't mentally equipped to understand certain ideas, and the end result is that you are led into an endless cycle of giving ever more detailed answers only to be met with the exact same ridiculous questions as before.

The only silver lining here is that hopefully others who are reading this will finally see why the Idi Amin School of Economic Theory - aka "print more money" - is a fool's errand. I doubt that there is any person alive who could get the point across to the person you've been trying to educate.

You're right. Someone else warned me about the obstinate nature of lexy 2014. He seems like a born denialist.

All such people want is for Tinubu wake up 30 days before elections and shout: "I made a mistake. There never ever a subsidy. I will bring the price down to even 100 per litre. It was my bad advisers that misled me." And you'll see these ones erupting with joy on the street, telling us "we told you so."

As a scammer said "People believe what they want to believe." If there are people who deny the Holocaust or the Armenian genocide, the fuel subsidy is child's play.

Everyone agrees that this is a bad move, right?
pro-subsidy removal and anti-subsidy removal, pro-taxing the rich and anti-taxing the rich. We are all on the same page that this is a bad policy, right?
What should Nigeria do from this point to improve its economy? This is what we need to focus on. In clear terms, what steps are needed to be taken?
I have Ideas which have been roundly rejected by many.

cc Omohayek, grandstar, blue3k.

Tianamen1:
Everyone agrees that this is a bad move, right?
pro-subsidy removal and anti-subsidy removal, pro-taxing the rich and anti-taxing the rich. We are all on the same page that this is a bad policy, right?
What should Nigeria do from this point to improve its economy? This is what we need to focus on. In clear terms, what steps are needed to be taken?
I have Ideas which have been roundly rejected by many.

cc Omohayek, grandstar, blue3k.

Appoint well respected and competent technocrats to head the CBN and the ministry of finance. The new appointee for tax was points on.

I would suggest slash corporate taxes to 15% or less. This will boost foreign investment

The government should work hard towards achieving top 50 bracket in the Ease of Doing Business

The Dollar parts of the monthly allocations should be "given" to the 3 tiers of government in dollars which can be sold on the forex market. This will not only deepen inflow, but boost the value of the currency and reduce inflation, enabling the CBN to cut interest rates.

Privatize all government parastatals, sell off the refineries, commercialize the 4 biggest international airports, sell Nigeria's joint venture stake with the oil majors, sell off seaports and so on.

There's a lot to do.

Tianamen1:
Everyone agrees that this is a bad move, right?
pro-subsidy removal and anti-subsidy removal, pro-taxing the rich and anti-taxing the rich. We are all on the same page that this is a bad policy, right?
What should Nigeria do from this point to improve its economy? This is what we need to focus on. In clear terms, what steps are needed to be taken?
I have Ideas which have been roundly rejected by many.

1. Get Inflation under control with nterest rates hikes it will hurt.
2. Continue market friendly policies. There power market is one industry that has price controls on it restricting its profits.
3. Hiring freeze on government jobs. Alot if these jobs are duplicates
4. Ease of doing business could be better.
5. Infrastructure spending on transmission and rails.
6. Remove trade bans that so price of goods can come down. Let's take cement for example the import ban on cement makes construction artificially high. If Nigeria want cheaper food they could simply have a tariffs on meat instead of just banning.


There's probably something I'm missing but that's what I can think on the fly.

Blue3k:


1. Get Inflation under control with nterest rates hikes it will hurt.
2. Continue market friendly policies. There power market is one industry that has price controls on it restricting its profits.
3. Hiring freeze on government jobs. Alot if these jobs are duplicates
4. Ease of doing business could be better.
5. Infrastructure spending on transmission and rails.
6. Remove trade bans that so price of goods can come down. Let's take cement for example the import ban on cement makes construction artificially high. If Nigeria want cheaper food they could simply have a tariffs on meat instead of just banning.


There's probably something I'm missing but that's what I can think on the fly.

You wrote well. Unfortunately, Nigeria is addicted to protectionism. Let us see if Tinubu will follow those steps as his daughter is the Iyaloja of Nigeria. I though think the ban on cement import might be lifted. Were the economy to suddenly take off, cement supply won't keep up and prices will shoot to the moon. Tinubu isn't OBJ that will be sold bullshit!

A tariff on meat would be a fantastic idea. I feel the same should be done for chicken. I was shocked to discover a kilo of frozen chicken bought wholesale in France was only N350 when converted. I am sure if the ban on its importation was lifted, and a 20% import duty placed on it, it should reach the consumer at around N1,800 if not cheaper.

Yes, many rich countries subsidize poultry so it feels like unfair competition. I researched Brazil and doubt they subsidize theirs and their prices are very competitive. Exports even increased by 8% last year. With or without subsidies, 350 is still a competitive and fair price.

Both of you agree on several policies, and from your responses, you both feel Nigeria's economy is salvageable. What practices would you both suggest to improve the ease of doing business?

I believe this government will implement your ideas, so time will tell how effective there are. I also like the Tax guy. Time will tell

Tianamen1:
Everyone agrees that this is a bad move, right?
pro-subsidy removal and anti-subsidy removal, pro-taxing the rich and anti-taxing the rich. We are all on the same page that this is a bad policy, right?
What should Nigeria do from this point to improve its economy? This is what we need to focus on. In clear terms, what steps are needed to be taken?
I have Ideas which have been roundly rejected by many.

cc Omohayek, grandstar, blue3k.

Others have already mentioned the main items, but it's worth repeating even so.

1. Find a new CBN governor with the know-how and track-record to inspire confidence in the international financial markets. This needs to be someone who has a demonstrable understanding of economics, and the backbone to put the position's statutory independence to use, by doing whatever it takes to bring down Nigeria's runaway inflation to low single digits, politicians and rabble-rousing unions be damned.

2. Sell off all the money-sucking government parastatals and so called "assets" which cost more to run than they bring in every year. It isn't the government's job to be engaging in activities which the private sector can do just as well, and anything government-owned in this country just turns into a vehicle for looting and handing out patronage through the creation of pretend "jobs" to relatives and on-hangers.

3. Drastically reduce tariffs and abolish non-tariff trade barriers such as import/export licensing requirements. The Nigerian mindset that "imports are bad" is idiotic, as the entire point of exporting anything at all is to earn money to buy imports, just as the entire point of earning a wage is to be able to buy things with it. Cheaper imports boost the earning power of the domestic population, and are a much better "palliative" than any paltry sums the FG could afford to hand out in direct payments. Besides, lots of exports require imports of primary materials: to take one example, no Nigerians would be able to export their skills in programming without first having imported the computers on which they will practice their craft, yet the software sector has vastly more earning potential than the oil on which Nigerians have fixated on for the last 50 years.

4. Establish a proper land registry and abolish the Land Use Act, as first steps in enacting proper rights of private ownership over land (and everything under it). Without strong private property rights, the agricultural sector will continue to stagnate, as banks will not be willing to lend money to subsistence farmers with no credit histories and no collateral to offer. The lack of strong private property rights is also behind the minimal exploitation of all known mineral reserves outside of the oil sector - had oil not been discovered just before the British left, and were it not so easy to drill and extract for vast quantities of it, the oil sector too would have languished thanks to the insistence that all land ultimately belongs to the government.

5. Radically reform the power sector by simultaneously loosening the restraints on power distribution - even if that means the private sector builds out multiple competing distribution networks - and allowing the power companies to choose who their customers are, and to offer their services at rates which will be attractive enough to draw foreign investment. The current situation, under which the DISCOs must sell power below cost to "buyers" who refuse to pay their bills half the time, is a recipe for long-term collapse of the entire sector. At the very least, the DISCOs should be allowed to charge larger businesses whatever they like, and to immediately cut off the ones who refuse to pay without ceremony: the amount they DISCOs could charge would still have to be lower than the cost of running diesel generators all the time, which is the status quo today.

Please sir, I want to change my username on here, can I get some help?

Seun:
Dear Nairalanders,

I regret to inform you that the Central Bank of Nigeria printed an alarming quantity of money electronically in June 2023 (source).

They increased the supply of narrow money aka M1 - which includes cash and money in bank accounts that can be spent immediately, from ₦22.47 trillion to ₦24.49 trillion, which means they printed ₦2.03 trillion, increasing the narrow money supply by a whopping 9.03% in one month - June. 🙆‍♂️

They increased the supply of broad money M3, which includes all money in the country, from ₦55.8 trillion to ₦64.9 trillion, which means they printed ₦9.1 trillion naira, increasing broad money supply by 16.31%, in one month. In other words, what they printed in June is 16.31% of all the money that the CBN had printed since independence. 🙆‍♂️

What does this mean? According to the CBN itself, "there is excess money supply when the amount of money in circulation is higher than the level of total output of the economy. When money supply exceeds the level the economy can efficiently absorb, it dislodges the stability of the price system, leading to inflation or higher prices of goods."

It also impacts the exchange rate; when more of a currency is printed, each unit of the currency becomes less valuable. A source I spoke to said that he suspects that the government has borrowed more money from the CBN. Trillions of naira. Inflation is 📈, naira is 📉.