Only 3 States Can Survive Financial Crises As ECA Now $4.8bn - Nigerian Village Square

Only 3 States Can Survive Financial Crises As ECA Now $4.8bn - Nigerian Village Square

Olusegun Aganga, Goldman Sachs outfit, and the Nigerian economy II By Iroabuchi Onwuka

There is nothing wrong for the newly appointed Nigerian minister of finance, Olusegun Aganga, to sound familiar notes from Piguo on ‘financial stability’. There is nothing particularly wrong in indicating the need to inject 500 billion Naira into the international fund market. There is nothing wrong in staying awake to the deficit in Nigerian budget, a budget that was only passed a few weeks ago. But there is something wrong with Aganga providing no alternative to this ‘Well’ of economic ideas that do not necessarily apply in times like this. There is something wrong with a Finance Minister talking about 15% deficit in the 2010 Nigerian Budget. The question that remain to be answered is where could the Finance Boss get the number and how did he arrive at the conclusion? Barely a few weeks ago, Nigerian Senators were still haggling over the issue of appropriation, and Senate President David Mark was still observing the clause by clause analysis of the budget. If Olusegun Aganga is any current with Nigeria economy and condition of its operation, he should have acquiesced on the nature Nigerian budget, let alone laud the society of 15% deficit. This commentary by the newly appointed Finance head explains the mind construction of the young man, for it seems that he is intent on using familiar lines from his years at Goldman Sachs to explain the condition of your economy. In essence, he embodies what I might call Goldman Sachs’ ‘financial pneumonia’ for high rates, exploiting their financial products for the benefit and detriment of every business institution whatsoever. This fever seethes with attitude over new Nigerian economy, for the Nigerian National Assembly only passed the 2010 budget during the last week of March and first week of April 2010. Am yet to understand the source of the quotation of 15% deficit. The number and the percentage in many ways has a way of repeating itself in many businesses of the world and this issue of deficit only lead to financing from other International Sources include Goldman Sachs.



The Nigerian budget and financial analysis came down 4, 080 trillion to 4, 416 trillion, several trillions away from what it was a few years ago. Joint Venture cash calls came to 7 billion, Gross Domestic product is 5.47%, Sales of public and government property is about 9 billion naira and need for privatization causes received 107.208 billion and consolidation program came down to 309.13 billion and Consolidated Reserve Fund N4, 608, 616, 278, 213 only of which 10, 279, 158 . All of these came down to a supposedly inflation rate calculated at 11.2%. Given the Continuous time slide of the Nigerian Naira, there is a possibility that the % rate of Nigerian Inflation is much more than that. The budget also retained other figures like Domestic borrowing, provisioned for 897.3 billion and International investment around 500 millions. We have not started yet with the expenditure and as such the retained figures bring in the aggregate expenditure and retained revenue from last year. Perhaps the issue of the 15% deficit would have been arrived at from the mispricing of Nigerian crude oil or the expected returns from the overall National venture. Retained Revenue and aggregate expenditure comes down to 3.086 trillion. Aggregate expenditure (4.608 trillion), statutory transfers (180.2 billion) Debt service (497 billion) and non debt recurrent (2.077 trillion) and capital expenditure (1.853 trillion) and deficit/surplus (1.521 trillion). These figures were lifted from several sources including a recent article by Nzeshi Onwuka and by BBC Vendor; Monitoring Africa. The staggering size of the figure quoted hear is considered unprecedented given the new fonts of the national project in the works of the many Nigerians.



The debt structure and restructure which Nigeria under this International title awarded to Aganga are forced to acquire is nothing else than Bank Securities for International countries, where IMF ‘International Monetary Fund’ Bank Securities and International Credit facility is just another term for lending to International markets like Nigeria. This gift is usually from a large deposit of empty pause…a way of authorizing your Investment action with the backing of your government and their financial power houses or institution. Yet it must be said that the profit from this kind of relationship is usually in terms of baiting, where a thing or two about trading and short selling explains baiting a ammunition for collapse and for failure to maintain your obligation. It must be said that Hedge fund management and company that are counting on this your demise are usually part of the International Business Community. They will deliver Short Term but they are certain that Long Term, you will default on your obligation and the functional value emerging from CDO’s will gradually implode.



Nigeria’s Sovereign Wealth is supposed to have dwindled to $46 billion from 60billion and when defaults begin to mount in the country, these funds will disappear. Short term borrowing equal high risk environment and such environment have their major benefactors which include Goldman Sachs. In other words ‘you suckers’ and your Naira will only experience one movement and one movement only in the International markets, a downwards movement only due to International competition Nigerian economy now assume. On the other hand, US dollars or the European Euro – the ‘Gatorade’ of World bank and IMF will only experience one thing in Nigeria and one thing only, real time appreciation of their unit of trade fair. Nigerian economy is too weak to produce almost anything, the economy in terms of productivity and business community is not even a blip on International Radar. Nigeria is by percentage not the most industrialized in West Africa let alone Africa, and by percentage, Nigeria is not the real symbol of West Africa market. Therefore, Nigeria domestic markets cannot dog the challenge from Europe, and as far as IMF is still intent on dividing Africa into blocks of trade, Nigeria on the West Side of the fence has little chance to escape. In the international markets, Nigeria therefore serve as ‘lamb to the slaughter’ a fact that is made more sinister by the new burden of International recognition and exposure of Olusegun Aganga.



Nigerian interests rate differential with major economies of the world is not that certain, and comparison is not that easy to achieve and as such little can be expected by way of growth of the Nigerian unit of exchange; the Naira. Many Nigerians may or may not be aware that the nominal Inflation of the country is well over 12%, a percentage rate by itself a colossal disaster given the seriously nonexistent Hedge for the Nigerian Naira. The capital appreciation of businesses doing business in Nigeria is beyond available econometrics, and those seeking to introduce themselves in Nigeria cannot be counted upon as a tool for gauging investment rate. For that we can only expect internal restructure of Nigerian market dynamics as the only protective device and for financing the minimalist return rate in domestic market which is only Long Term reverting. By this we mean that long term escape route in Nigeria is to be hijacked by International powers, for it seems that the IMF and World Bank are likely to assure that much of the continuous time profit from Nigerian Interest rate is soaked in the Nigerian debt repayment. The wider the gap between Nigeria and a Super Currency such as the US, the wider the percentage required to service the loans. The end result of this International indebtedness is the lack of alternative of financial institution, which is more than likely to lead to a choke in profit transfer. By that we lean too close to the probably theory of ‘sudden death’ syndrome of Nigerian Banking society, a very likely condition given the inevitability of non performing long term debt already evident in the country. Non performing debt as far as long foreign rates apply is a very likely scenario for Nigeria. Nigerian’s hedge and defensive strategy will gradually self destruct by ‘short waves’ of Inflations, a causality mainly due to International rates applying to Nigerian market directly and indirectly. These foreign rates, earn their way through any economy in the world and force its unit of exchange on such host, to undisputable degree that only cripple and clutch the Nigerian domestic unit of exchange.



Eventually Nigeria will pay a much huger price and will have to give up on any structured debt financing since the ‘actual’ rate - usually International in tedium - will like exceed the ‘conceptual’ rate of the economy which is usually Domestic. Short term note, Aganga’s appointment may be looked as an asset to the society but long term, this appointment of Aganga and his association with Gold Sachs outfit will damage domestic businesses. Judging from the perspective of a market research expert, I could say that the market factors currently available in Nigeria and the school of thought that Aganga is representing lead to one probable conclusion and one conclusion only, that Nigeria’s long term association with Goldman Sachs, World Bank, and IMF will not benefit Nigerian business society and economy. Whatever may be the interpretation for this elevation of the man Aganga, whatever may be the expected hedge for Nigerian Naira, we can be certain that Aganga’s promotion and decoration is not without consequences and reason, and his role as the polar tug of the Nigerian financial Cabal is not without International dragnet and puppetry.



Aganga Olusegun references about Nigerian economy which we have cited, which does not exclude Nigerian economy needing ‘resource allocation’, fans flames of a man wonder with little more than his training at Goldman Sachs. We are therefore expected to be weary of what the man thinks of his role and position. We are expected to say that man parries himself as an advisory to the Fragile Union with no real long term strategy for the country’s domestic market. We are expected to say that his current tilt obliges the interest of Goldman Sachs so to speak. Therefore his commentary is probably a ‘put up’ by his compeers and perhaps indirectly so given the training at Goldman Sachs. He was called by many Nigerians an economic czar and a progressive which may all be the case, but from what he had said so far he is probable a lingering novice at the edge of the world financing or an economic Hit man from the stables of Goldman Sachs. I am certain that unless adaptability is part of Aganga’s hidden ingredient, he is not that credible and attention on the probability of disappointing Nigerians is very possible. I sound out my warning on the vise of his lapses evident in his public statement, lapses which we can be summarized as a first level money market econometrics, lapses which he should amend and lapses not there to tear him down. I sound out this warning since experience with ‘epic of financial’ in 2008, where many of us were not loud enough in getting the attention of Nigerians and of CBN chair in matters arising from the Nigerian Stock market, especially in the year leading to the crash of financial economy. Nigerian domestic markets under the heavy weight condition of a Goldman Sachs will remain crippled long term. In a sense, drawing too close to a Goldman Sachs outfit is not a very easy engagement without serious network solution at home. If this concern is no avail, we should be worthy of the point that Nigerian Interest rate differential with respect to Europe will even at this point remain a problem for most businesses.



If capital appreciation of Nigerian unit of exchange is only inverse of a ‘super currency’ such as the dollars, ‘you suckers’ should disabuse your mind about any lingering hint of attracting or retaining foreign investors. Capital appreciation to the benefit of this host nation is not possible without interest rate differential pegged to the major currencies. For the real war of International Banks is to be measured by the ‘decision function’ of existing financial institution and from many market statistics most elemental of which is the interest rate. Capital appreciation if perforce through policies like Sanusi’s recent engagement will lead to a Robert Shilling’s ‘Irrational exuberance’ of Nigerian financial. In one sweep of market language, Nigerian economy will only point to an ‘extreme’ in the runway of Global macro. Such improbability of an ‘extreme’ may prove Nigeria a ‘maximum risk’ environment and as such unattractive to investors comfortable with long term investment. But spin off of asset attract International Vultures, spin off assets attract short sellers in the guise of International financiers, all of whom may short list themselves as lenders in the open Long term window but gradually permitting a short term borrowing that will cripple the long term view of the country or the long term borrowers. That’s to say that IMF and World Bank are baiting on the collapse on Nigerian economy in the years that the debt will last.



Credit facilities in Nigeria is very weak and almost nonexistent. Local Security Underwriters will therefore be forced in the ‘Long Term’ to confront the issue of super currency which Aganga now heads. In markets if not in financing, ‘Actual Capacitor’ for long term financing of major projects in any economy, for instance in Nigeria, should ram on the existing Stock markets and market direction, and when this is not the case, it gives away the indirect fact that ‘foreign capacitors’ and rate are currently overweight in such economy like Nigeria. As rate count on rate, we view the whole appointment and decoration from the ‘negative’ probability stand point, that Aganga Olusegun may be a Nigerian, and may be the Financial Minister and a good fellow but ultimately, he is a ‘negative externality’ to Nigerian economy. On this inability to spot and forward on Nigerian Naira, Market Nigeria will continuously ‘defy all principles of economics’.

Olusegun Aganga, Goldman Sachs outfit, and the Nigerian economy By Sampson Iroabuchi Onwuka

By Iroabuchi onwuka

Aganga Olusegun is the new Finance minister and Chairman of the Board of World Bank? I can’t explain it. He has the best wishes of the country but there is need to be ‘cautiously optimistic’ with this new man on the block.



The appointment of Olusegun Aganga as Finance minister and Chairman of the Board of World Bank and IMF was hailed by Nigerians as a step forward in the attempt to redress Nigerian Financial image. Olusegun Aganga with all due respect to his fans seem to be relatively unknown. The man is a largely unknown quantity so to speak, a fact that is complicated by his recent honorary as Chairman of the Board of World Bank and IMF. It is not to be said that the new title is expected to enlarge his International weight, for it seems that he was a very light quantity. The much of what we know of the man is that he helped to negotiate a 4 billion dollar rescue package for certain Nigerian Banks sometime last year, details of which were not very clear. It is now speculative that Goldman Sachs was probably the Jack in the box and given the new details of Goldman Sachs and it chicanery on CDO, we should have course for concern. If however such isolated incident is enough to penetrate the ranks of the Nigerian financial institution, Aganga is perhaps more than welcome to work for the country in terms like this and we wish him the best.



The intention of those who awarded Olusegun Aganga the Robe at the World bank is very clear that Nigeria as a country is to be given a larger role in Africa and perhaps the world. Nigerian economy is currently straddled in its cusp between the dark embrace of 2008 ‘epic of financial’ whose victims included Soludo and the hope of its financial survival under the aegis of Sanusi. In many ways and for what it’s worth, the country needs to welcome the man and his Alma mater, and for the sake of this trust, Nigeria need to be cautiously optimistic given the additional importance attached to the man and about the robe that was vested on him. From the nature of the unprecedented promotion, it will seem to suggest that Aganga Olusegun’s appointment is ‘Custodian’ in the ‘Hedge Fund’ traditional sense of word, for we know that the post is nothing else than an ‘empty suit’ of recognition, a recognition which explains the ranks of Investment Banks who engineered his decoration at World Bank. This appointment alone should have sent out the right signal to Nigerians and to Nigerian media, that something is wrong with the set up, that some is wrong with a Finance Minister caught between two opposing interest, his loyalty to Goldman Sachs and his interest in serving his country. Whereas, Americans would tilt to challenge the other titles, our talk active Nigeria seem to acquiesce. But this is not the first time.



It is expected that the Nigerian finance Minister, Aganga, is perhaps meant to serve as the primary relief pitch for CBN chairman Mallam Sanusi Lamido. The CBN chairman’s reactionary tendency towards his fellow bankers proved detrimental to the International rating of Nigerian Banks. It may not have seem clear to the ‘unsuspecting’ Nigerians that but Sanusi’s personalized view of Nigerian banking society and funds of funds management was far too radical for a Central Bank Chairman. The role of the Central Bank Chairman in price moderation is Interventional, perhaps adjudicative but at no point is it Executive. Price is a quantity of ‘economic statistics snapshot’ and as such Price is normal market condition is expected to determine its own range in any market. It is however this price in terms on Nigerian market and in terms of Naira that now serve as our primary concern in accepting Aganga under the canopy of Sanusi. Sanusi’s quick fix actions inadvertently injured the international reputation of Nigerian financial products, a case in command that many people will still argue. But Sanusi’s policies without the international ‘anchor’ of IMF were only destined to hurt, a fact which Sanusi himself may have noted given his final tilt towards Universal Banking. He was trying to amend the Nigerian International reputation through Universal Banking. This idea of Universal Banking open us to the reasons behind Aganga nomination for he will be redeeming grace of such ineluctable error. Aganga serves as a formal rejoinder of Nigerian Banking society to the rest of world.



What is however not formal is the financial war which has broken up between Nigeria and the rest of the world. In short view, Aganga’s appointment as the Chairman of the Board of World Bank - days after his conformation - is only a form of death sentence of Nigerian domestic market and probably a trap. This Aganga’s decoration therefore conceals everything and nothing, for we are now left to entertain the question of Nigerian preparedness for such financial endorsement and trade fair. My candid view and answer is that Nigeria is not ready for this big time engagement, for the country’s domestic economy is seriously weak and uncompetitive. Nigeria is sucked into an al warfare from which the certainty is further collapse due to very weak Internal market dynamics. But this war is not like any war known to us, and the end of the war is close to what we find in today’s Greece. The war between Nigeria and the rest of Super Currency world its clearly monetary, clearly statistical, clearly digital warfare of market statistic. Nigeria will eventually be needing such thing as implied debt and rate, forced through the international rate pendulum of ‘super currency’, a rate that swings in one direction and by its energy, an International rate that wreck the domestic rate. This is where the issue lies since Nigerian economy and its Naira has become absorbed into the equation of International financial body. By entering into the same ring as these BIG others, the economic value of Nigeria no longer apply. Then, will apply the inherit problem of debt due to decline in debt management, a condition ultimately expected to be redeemed by a coalition of good fellows; Investment Banks.



Olusegun Aganga in his opening statement after confirmation sounded off the issue of Power Supply in Nigeria as a top priority and last week the Nigerian president Goodluck Jonathan promised Niger Delta a total solution to its power supply. It is clear that we are witnessing a classic motif of Goldman Sachs in Public financing. Such motif of Goldman Sachs in Aganga statements are comments about the general assumption of debt, debt in the guise of pay package and for balancing the budget. All, and much of these traits add up to long term financial of these banks and form part of the portfolio strategy of Investment banks dealing with relatively weaker economies. In a sense, Goldman Sachs’ financial product for nations include debt structure and need to bail out failing institutions, for all these points to the essence of International Monetary Fund which is rubric of Aganga commentary.



But the IMF is not a voluntary organization, it is an assortment of Banks and one Bank. In many ways, the new International responsibilities of the ‘New Nigerian’ in office compel the ‘See’ of International financial society such as IMF on Nigerian market. This oversight is uncalled for and unlikely to pay, for how could Nigerian economy compel itself to suffer the rates of International markets. This can only mean one thing and one thing only that International standards will now apply to the Nigerian market. But this is not good at all, not that foreign ‘see’ is not necessarily a bad interference but IMF and World Bank are just a bunch of International financial organization owned by Investment Banks. These banks include the likes of Gold Sachs. The Investment Bank in question bring with it a ‘Negative externality’ that usually impact on a third world performance in Real Time money market. Such bad performance is almost a guarantee for profit for these Banks doing business in Third world economies. The profit is at best a symptom of weak domestic third markets, a condition that will become weaker as Investment Banks such as Goldman Sachs offer their debt structure. In that guise much of the current affiliation with IMF and World Bank with Nigeria is not that useful for they operate with as much agenda as the Investment banks of US before the 2008 collapse. These foreign donors apply the same rule of profiteering and commercial engineering bereft of the defunct US Investment Banks and only ‘suckers’ like our good Nigerian are likely to believe that IMF and World Banks are International helpmate for their prospective economic venture.



In the argument, we can remind ourselves that in any business of the world, there are always ‘losers’ or ‘suckers’, and there are those who profit from the rest of them. In essence, there is no probable hiding place for the Nigerian economy from this time onwards, no room to secure its economic growth away from the International Society. This does not take anything away from the baiting in itself which is set for and against International Power banks and for their super currency. There is then a probable need to be cautiously optimistic of this Aganga’s new marriage with the world as captain of two ship. There is no point to pretend that the outcome of this new marriage and ship is detrimental, since it is very clear that the only ship that is likely to sink downwards is the very Nigerian Ship. The marriage of Nigerian financial to the rest of the world is exposed to accommodate opportunity for the fledgling economy, and in IMF and World Bank, they stand the chance of such opportunity. But this may not be the case, this is so far from the case that it is safe to assert that IMF and World Bank are only intent on making their profit from your prospective countries and not the other way round. This view is so complete in its downwards spiral that we can equally assert that national loses to the Banks are by several examples entirely inevitable going at least by the example of Greece and European Financial debacle. In blunt view, it is safe to cite that there is no need to expect any useful deals with these Banks, no need to promote these banks on any plausible grounds except one of loses and indebtedness. This problem of debt and debt structure, always put a funk on the stability of most countries of world, and instability occur because these countries are more than likely unable to pay the huge spike in debt. From such spike, CDO ‘Collateralized Debt Obligation’ essentially thaw, and the rest is just history as usual.



Greece financial debacle did not happen overnight. The compromising exposure of the Greek economy to the International rates at the expense of her economy and domestic market is for a million page the detriment of the country. Long Term Greece may have arranged big time deals with power house corporation for official public works much like ‘Nigerian Power Supply’ in Niger Delta, or in their case Olympics. Greece may have acquired or attracted International Hedge Funds management to give stability to its financial engagements, and like all businesses involving International markets, it was meant to be Long Term. But all Long Term engagement are economically noted by shorts. Short Term the Greeks inability to maintain its debt structure (which is only expected to be the case due to capital appreciation of the Super currency and its investment grade) forced the country to succumb to the tenets of the debt obligation and then failures of businesses naturally occur by way of capital depreciation.



Investment Bank’s strategy such as Goldman Sachs are not too far from these bunch of lenders and are not too far from spotting deficits in your National budget. These Investment Banks always lend to business outfits, always lend to financial institution, to Hedge Funds and always tend especially to oil countries for long term purposes. Goldman Sachs like other Investment Banks always engage the real estate of stable economies of the world. Always engage the stock market of most countries of the world, especially countries where IPOS are monitored. Goldman Sachs always slush funds in many of their ‘shady deals’, all in such a way that the host country and investment grade will sour so high, so fast on the ‘long term greedy’ of a Gus Levy (which is an indirect snob on the greedy going long) that any crack on the rate of expected returns will shatter any business community. In Markets if not Banking and Financing, ‘Excess Returns’ is more or less equal to the Anomaly of Risk. Illiquidity as we find Greece today and in Nigeria 2008, is not without the influence of bad mathematics and manipulation. These market, Greece and Nigeria are high risk markets only useful for shorts. Greece today defaulted on number of real time ‘Expected Returns’ and with that came the instability of the their financial market. This financial failure could have only been the expected and now actual yield from Greece, for it seems clear to many economics that Greece neglected their Domestic Market when it accepted the International barometer for Euro membership. Greece, in accepting the custodian of European membership inadvertently choked the price movement or their local markets and in the end, they were destined to reap the grapes of debacle. In private investment from Europe and US, Greece was expected to grow like others, to practiced eyes that was only unlikely the case, as such the sudden nose of the Greek domestic market, collapsed with it the International investment and bond market, all of which were no surprises.

Olusegun Aganga, Goldman Sachs Outfit, And The Nigerian Economy - Nigerian Village Square

Olusegun Aganga, Goldman Sachs Outfit, And The Nigerian Economy - Nigerian Village Square

Olusegun Aganga, Goldman Sachs outfit, and the Nigerian economy (I)d

By Iroabuchi Onwuka

In the argument, we can remind ourselves that in any business of the world, there are always ‘losers’ or ‘suckers’, and there are those who profit from the rest of them. In essence, there is no probable hiding place for the Nigerian economy from this time onwards, no room to secure its economic growth away from the International Society. This does not take anything away from the baiting in itself which is set for and against International Power banks and for their super currency. There is then a probable need to be cautiously optimistic of this Aganga’s new marriage with the world as captain of two ship. There is no point to pretend that the outcome of this new marriage and ship is detrimental, since it is very clear that the only ship that is likely to sink downwards is the very Nigerian Ship. The marriage of Nigerian financial to the rest of the world is exposed to accommodate opportunity for the fledgling economy, and in IMF and World Bank, they stand the chance of such opportunity. But this may not be the case, this is so far from the case that it is safe to assert that IMF and World Bank are only intent on making their profit from your prospective countries and not the other way round. This view is so complete in its downwards spiral that we can equally assert that national loses to the Banks are by several examples entirely inevitable going at least by the example of Greece and European Financial debacle. In blunt view, it is safe to cite that there is no need to expect any useful deals with these Banks, no need to promote these banks on any plausible grounds except one of loses and indebtedness. This problem of debt and debt structure, always put a funk on the stability of most countries of world, and instability occur because these countries are more than likely unable to pay the huge spike in debt. From such spike, CDO ‘Collateralized Debt Obligation’ essentially thaw, and the rest is just history as usual.



Greece financial debacle did not happen overnight. The compromising exposure of the Greek economy to the International rates at the expense of her economy and domestic market is for a million page the detriment of the country. Long Term Greece may have arranged big time deals with power house corporation for official public works much like ‘Nigerian Power Supply’ in Niger Delta, or in their case Olympics. Greece may have acquired or attracted International Hedge Funds management to give stability to its financial engagements, and like all businesses involving International markets, it was meant to be Long Term. But all Long Term engagement are economically noted by shorts. Short Term the Greeks inability to maintain its debt structure (which is only expected to be the case due to capital appreciation of the Super currency and its investment grade) forced the country to succumb to the tenets of the debt obligation and then failures of businesses naturally occur by way of capital depreciation.

Facebook | Sampson Onwuka Iroabuchi

Facebook | Sampson Onwuka Iroabuchi