By Sampson Iroabuchi Onwuka
For every money hard working Nigerians send in USD, Euro, Pounds Sterling, and so on to Nigeria, and received by Nigerians in Nigeria in USD, Euro, Pounds Sterling, the Naira suffer in value and quality. Naira’s usability depreciate with every currency you release in Nigeria other Naira. Consider an instance of transfer border trade. When as Alfred Marshall argued that one country invest in another country, the point will reach such that the investing country will earn gradually on the host because of the unit of exchange and trade exchange.
Of course the whole philosophy of the ‘competitive advantage of nations’ of Michael Porter and Krugman is not that dissimilar from this case saving for the fact that what happens in terms of commodity and in terms of new found gold mines, is closer at home to currency and transportation of hard and super currency to Nigeria via Naira only. Nigerians abroad is like that form of investment strategy and when they rover their currency from US into Nigeria, and from Europe to Nigeria, they trade in on the Naira.
Nigerian Naira currency rate to USD is 1 to 150. For every 1 USD we receive we exchange for 150 of our own. Think about it for a moment. A man in US has a house and you have 150 houses, and according to exchange rate, you will lose your 150 houses to gain 1 house. Perhaps we can cite a different example by suggesting that every American child is worth 150 fifty Nigerian kids. The above example cannot work for Nigerian market, the conditions are that different and there is rate at which each is determined. But the balkanization of Naira on a continuous time since 80’s means that other issues are at work. Either external debt to the rest of the world which took place under the last administrators or the current issue of excess currency importation in Nigeria
The problem becomes a question of original investment in the Hard currency. When there is investment on any local economy, there is a chance of growth of that economy. But the problem comes when investors want to repatriate the Hard currency from their local economy. But nothing crashes any market especially a third world economy than capitulation, recapitulation, and above all, repatriation of hard currency from the local economy.
If the information reaching us that credit is responding is true, then there is a possibility that Nigerian credit market has taken a given look. But who is quoting who? Accessibility of credit is only profits for banking as far as small businesses are concerned. The difference between a third world economy and first world is that one places too much emphasis one product and the other many multiple products with a view for small business.
But nothing is far from the compelling view that Nigeria is only waking up to the demands of the society which may only be viewed from bottom to the top by a statutory weight of the local unit of exchange - the Naira.
There is a possibility that perhaps a case for Nigerian Federal reserve system can be made via the 6 parts of the country to absolve future CBN chairpersons of the responsibility of running the economy and waging on price simultaneously.
Popular Posts
-
dynamic Throw to Mr. Sampson Onwuka...
-
1.4 trillion ? DON'T let mutants in....herbivores for Camera....
-
dynamic Hotel is not your headache, but it is bad to ask others... Clear 70 extras at dis-corridor to hotels in R.R and Texas.... Arr...
-
Full Life Reflections at Ninety Author - Jimmy Carter All Rights Reserved Published by Simon and Schuster @ 2015 P...
-
By Sampson I.M Onwuka European Parliament wanted to break up Microsoft, wanted to break up Walmart, wanted to ban Wikipedia over so...
-
Bernanke, in Europe, defends Federal Reserve's latest effort to stimulate U.S. economy - latimes.comBernanke, in Europe, defends Federal Reserve's latest effort to stimulate U.S. economy - latimes.com
-
Treasury 30-Year Bonds Tumble as Fed Purchases Other Securities - Bloomberg
-
Pambazuka - Land-grabbing in Africa: The why and the how
-
Biofuels for Europe driving land grabbing in Africa — Friends of the Earth International
-
Fire fighting RAE TO meet Onwuka @ wan nu (City Hall, Austin 8;00am --- 9;00am Please be on time be advised that Manuel is on tha...
Saturday, July 31, 2010
Friday, July 30, 2010
Mispricing China (I)
By Sampson Iroabuchi Onwuka
As August approaches, there is the question of what is really happening on the ground in Nigeria. Chinese oil companies already in Nigerian are probably reaching in via connection, to enhance their portfolio by August in Nigeria. They are doing so in dollars, which makes it difficult for anyone to see any clear difference between a company like Shell, Exxon Mobile, Texaco, and a company such Sinopec and Petro China. They may have the barge of Chinese outfit and so on, but their profit is noted internationally in dollar terms and they are therefore not Chinese Companies in market terms.
The other Crude oil companies that come from Asia, especially China, seem to have originated from Hong Kong, whose stock exchange and companies are quite expensive given their imitation of dollars as in Hong Kong dollars. Much of the companies instituted through Hong Kong are the product of UK and many European countries, so having Chinese looking people and faces in Nigeria, does not mean that these people are Chinese in just about everything and at least in paycheck. So they can wear the face of China and bring down the assumption that they are the cheaper and in money terms better alternatives, but these are European companies in Asian disguise.
In common sense, it is the exchange rate that makes economy of China look a better alternative to dollar-driven companies of UK and US. If that it is taken away, there is nothing cheap about any of these Asian and Chinese companies, and therefore a serious case of mispricing of Nigerian Investment Category crop such as Crude is very evident. And that fact is all too clear from the high up here, since Shell would not have died a natural death in Nigeria without an outpost, and since Shell had been a serious component of major Hong Kong oil producing companies. Whatever we remember about China, it should not exclude that they have a growing markets that retains wage and price and the rate of the Sovereign Wealth. There are also similar outfits for Exxon Mobile.
As August approaches, there is the question of what is really happening on the ground in Nigeria. Chinese oil companies already in Nigerian are probably reaching in via connection, to enhance their portfolio by August in Nigeria. They are doing so in dollars, which makes it difficult for anyone to see any clear difference between a company like Shell, Exxon Mobile, Texaco, and a company such Sinopec and Petro China. They may have the barge of Chinese outfit and so on, but their profit is noted internationally in dollar terms and they are therefore not Chinese Companies in market terms.
The other Crude oil companies that come from Asia, especially China, seem to have originated from Hong Kong, whose stock exchange and companies are quite expensive given their imitation of dollars as in Hong Kong dollars. Much of the companies instituted through Hong Kong are the product of UK and many European countries, so having Chinese looking people and faces in Nigeria, does not mean that these people are Chinese in just about everything and at least in paycheck. So they can wear the face of China and bring down the assumption that they are the cheaper and in money terms better alternatives, but these are European companies in Asian disguise.
In common sense, it is the exchange rate that makes economy of China look a better alternative to dollar-driven companies of UK and US. If that it is taken away, there is nothing cheap about any of these Asian and Chinese companies, and therefore a serious case of mispricing of Nigerian Investment Category crop such as Crude is very evident. And that fact is all too clear from the high up here, since Shell would not have died a natural death in Nigeria without an outpost, and since Shell had been a serious component of major Hong Kong oil producing companies. Whatever we remember about China, it should not exclude that they have a growing markets that retains wage and price and the rate of the Sovereign Wealth. There are also similar outfits for Exxon Mobile.
Thursday, July 29, 2010
Nigerian Budget Deficit and the Crude oil (II)
By sampson Iroabuchi Onwuka
Olusegun Aganga, the Nigerian finance minister, explained that the delay was due to the drop from $80 dollars a barrel to $70 in earnings which forced the hands of the government to withdraw. The explanation is not acceptable since Crude oil prices this year have jumped from 57 dollars a barrel to $70 a barrel and up, before correction. But we are still far from where we started. As such the price effect is already factored in. If there were new facilities in the budget, there was no reason for the delay.
But how this year’s balancing of Nigerian Budget is suddenly central to crude oil auction this August is quite amazing. It seems certain that such plans will go on given the pressure from top and below concerning the budget. Nigerians are however saying that FGN should not under any illusion attempt to patch the hole in the budget with money from this auction. It will only make the problem worse and not better. The Finance minister needs to also explain the very basis of the 500 million dollar bond.
Above all, there is the new issue of ECA ‘Excess Crude Account’ converted to Sovereign Wealth. In the course of the passing the bill, Sanusi preached a ‘quick take off’. The potential damage this could do Nigerian economy has not been discussed. The greater difficulty is raising a bond in international market with USD as bait.
If there is some truth about Remi Babalola comments last week about the bankruptcy status of NNPC, then his claim that NNPC could not pay Nigerian government’s 3.8 billion dollars worth owed to Shell can only question the reason for additional debt from Oil companies and from European banks. To make the issue that clear, Olusegun Aganga and Dora Akunyili, both dismissed the claim, citing that it is NNPC that is owed 1.1 trillion Naira, about 73.3 billion dollars. Olusegun Aganga did not indicate the debtors. I hope we are all on the same page.
Olusegun Aganga, the Nigerian finance minister, explained that the delay was due to the drop from $80 dollars a barrel to $70 in earnings which forced the hands of the government to withdraw. The explanation is not acceptable since Crude oil prices this year have jumped from 57 dollars a barrel to $70 a barrel and up, before correction. But we are still far from where we started. As such the price effect is already factored in. If there were new facilities in the budget, there was no reason for the delay.
But how this year’s balancing of Nigerian Budget is suddenly central to crude oil auction this August is quite amazing. It seems certain that such plans will go on given the pressure from top and below concerning the budget. Nigerians are however saying that FGN should not under any illusion attempt to patch the hole in the budget with money from this auction. It will only make the problem worse and not better. The Finance minister needs to also explain the very basis of the 500 million dollar bond.
Above all, there is the new issue of ECA ‘Excess Crude Account’ converted to Sovereign Wealth. In the course of the passing the bill, Sanusi preached a ‘quick take off’. The potential damage this could do Nigerian economy has not been discussed. The greater difficulty is raising a bond in international market with USD as bait.
If there is some truth about Remi Babalola comments last week about the bankruptcy status of NNPC, then his claim that NNPC could not pay Nigerian government’s 3.8 billion dollars worth owed to Shell can only question the reason for additional debt from Oil companies and from European banks. To make the issue that clear, Olusegun Aganga and Dora Akunyili, both dismissed the claim, citing that it is NNPC that is owed 1.1 trillion Naira, about 73.3 billion dollars. Olusegun Aganga did not indicate the debtors. I hope we are all on the same page.
Naira Depression and What Sanusi Can Do (III)c
By Sampson Iroabuchi Onwuka
....Needs be said that US Dollars in Nigeria has no value but its exchange rate has a lot to do with its dominance in Nigerian local market. Pounds, Euro have no value in Nigeria at all saving for what the locals could gain when they exchange for Naira at local Bureau of Exchange. The issue of parallel market and parallel economy so often a lightning rod in Nigerian market has not been dealt with by Sanusi and his Cabal. The impact of sure market strategy and the bloodletting of the Nigerian black markets also encourage heavy money laundry, all of which do not help Nigeria Naira war against the USD, the Pounds Sterling, the Euro, etc, by day and by night, a war it must at least engage to its end…until perhaps Equilibrium which is not certain is attempted, achieved.
Currency is a unit of exchange that defines the economic performance of any country in the world. Price is a function of the market, which is how much you can pay for a product in a given market environment. They constitute a credit economy. Managing a credit economy is a big issue and in terms of the credit, we shift our intellectual pole of ‘credit’ to include paper money and securities which is not paper currency at all but fortune. The more we capitulate on the Naira, either by exchange batten or barter, we erroneously destroy the credibility of Nigerian Naira. In essence, Naira capitulation is bad credit rating of the local currency by locals.
Constant depreciation of the Naira may result in high employment. High employment is cancer for poverty and high inflationary pressure discourages any kind of growth. Many countries break this cycle through money injection and through freezing of credit to avoid new debt problems and re-issue of bank. But inflation is also an issue when you are constantly sinking, when there is monopoly in business, when there is raking in the mono-cultural economy.But the inflation which deepens the further depreciation of the Nigerian currency can be helped by capping the source of raking in Nigerian economy, which sometimes brings with it a counter argument, an argument that may not apply to our third world economy.
....Needs be said that US Dollars in Nigeria has no value but its exchange rate has a lot to do with its dominance in Nigerian local market. Pounds, Euro have no value in Nigeria at all saving for what the locals could gain when they exchange for Naira at local Bureau of Exchange. The issue of parallel market and parallel economy so often a lightning rod in Nigerian market has not been dealt with by Sanusi and his Cabal. The impact of sure market strategy and the bloodletting of the Nigerian black markets also encourage heavy money laundry, all of which do not help Nigeria Naira war against the USD, the Pounds Sterling, the Euro, etc, by day and by night, a war it must at least engage to its end…until perhaps Equilibrium which is not certain is attempted, achieved.
Currency is a unit of exchange that defines the economic performance of any country in the world. Price is a function of the market, which is how much you can pay for a product in a given market environment. They constitute a credit economy. Managing a credit economy is a big issue and in terms of the credit, we shift our intellectual pole of ‘credit’ to include paper money and securities which is not paper currency at all but fortune. The more we capitulate on the Naira, either by exchange batten or barter, we erroneously destroy the credibility of Nigerian Naira. In essence, Naira capitulation is bad credit rating of the local currency by locals.
Constant depreciation of the Naira may result in high employment. High employment is cancer for poverty and high inflationary pressure discourages any kind of growth. Many countries break this cycle through money injection and through freezing of credit to avoid new debt problems and re-issue of bank. But inflation is also an issue when you are constantly sinking, when there is monopoly in business, when there is raking in the mono-cultural economy.But the inflation which deepens the further depreciation of the Nigerian currency can be helped by capping the source of raking in Nigerian economy, which sometimes brings with it a counter argument, an argument that may not apply to our third world economy.
Naira Depression and What Sanusi Can Do (III)b
By Sampson Iroabuchi Onwuka
Bill Lipschutz, the great currency trader, once said that ‘even if you can’t hedge in the forward market, you can create the position through an interest rate swap. However, in the case of sterling dollars, which has a very liquid term forward market, there was certainly a market for at least ten years.” He goes on to illustrate how for instance the sale of pounds on a forward market “converts half that position into a proxy.” Then he argued “that you put on the British pounds, while the original is a call position”. Thus, “half the position is call, the other a put.” A put option is equal to profitable returns on portfolio summary. In terms of market and in terms of currency, there is room to gain on a particular currency.
Well the relevance of that quote from a popular book ‘Market Wizards’ by Jack D. Schwager would not seem very clear unless we add in the contesting difference between US bond markets and European Bond markets, or the American Style of option which can exercised anytime before expiry date and European style of option which can only be exercised on expiry. These two bond and forms of option is quite revealing in coming to grasp with what happens in any markets of the world, given the continuous currency rotation in a time and time decay. For here, the difficulty of Keynes’ ‘equilibrium’ of money and bond become a secondary matter.
This idea of some countries of the world been perpetually poor at the success of bigger economies such as US was hinted on by John Maynard Keynes and perhaps others. But Keynes remedy for regional currency and leveling of price was an economic blunder which Nigeria and West Africa need not imitate. Keynes may have been right that lack of Government activity in the 30’s in creating jobs could have contributed to rate of unemployment, but he is wrong in regional currency which Robert Mundell took over and which is current incarnation of what is now Euro. When you regionalize the money, you flatten the market.
Bill Lipschutz, the great currency trader, once said that ‘even if you can’t hedge in the forward market, you can create the position through an interest rate swap. However, in the case of sterling dollars, which has a very liquid term forward market, there was certainly a market for at least ten years.” He goes on to illustrate how for instance the sale of pounds on a forward market “converts half that position into a proxy.” Then he argued “that you put on the British pounds, while the original is a call position”. Thus, “half the position is call, the other a put.” A put option is equal to profitable returns on portfolio summary. In terms of market and in terms of currency, there is room to gain on a particular currency.
Well the relevance of that quote from a popular book ‘Market Wizards’ by Jack D. Schwager would not seem very clear unless we add in the contesting difference between US bond markets and European Bond markets, or the American Style of option which can exercised anytime before expiry date and European style of option which can only be exercised on expiry. These two bond and forms of option is quite revealing in coming to grasp with what happens in any markets of the world, given the continuous currency rotation in a time and time decay. For here, the difficulty of Keynes’ ‘equilibrium’ of money and bond become a secondary matter.
This idea of some countries of the world been perpetually poor at the success of bigger economies such as US was hinted on by John Maynard Keynes and perhaps others. But Keynes remedy for regional currency and leveling of price was an economic blunder which Nigeria and West Africa need not imitate. Keynes may have been right that lack of Government activity in the 30’s in creating jobs could have contributed to rate of unemployment, but he is wrong in regional currency which Robert Mundell took over and which is current incarnation of what is now Euro. When you regionalize the money, you flatten the market.
Wednesday, July 28, 2010
Nigerian Budget Deficit and the Crude oil (I)
By Sampson Iroabuchi Onwuka
Several Journalists reporting from Abuja mentioned that Nigerian Federal Government may be in dire need of balancing the National budget of 500 million dollar plunk. The DMO ‘Debt Management Office’ of Nigeria has raised official curtain about its intent on seeking this 500 million dollars through Euro Bond. In the initial budget passed in April 2010, the 500 million dollars was set to be raised internationally and the new issue of auction in Nigeria may serve the purpose.
In an article by Adejuwa Tsun titled ‘2010 – budget – ‘Reps for Show down with Executive’ made out the issue that the President’s revisionary position on the budget and his citations of “shortfalls in the projected revenue” this year, may have resulted from the ‘N507.12 billion Naira addition in the supplementary budget for recurrent expenditure’, which the initial projected earnings provided for.
In terms of 283 .32 billion for ‘wage adjustment’ there is 100 billion set for increase in civil servants wages with direct reference to tertiary Schools in Nigeria. It is difficult to understand why these numbers are tossed around so much that Nigerians don’t even know what is actually going on.
But the National budget for 2010 is already signed by the President, and Members of the house of Rep question the delay. In fact a new row of confrontation with the executive branch is actually expected given the unusual infringement and tendency of FGN to deal break. There is a call that the budget should be dealt with ‘as is’ basis, since promises to LGA were already factored into the budget for the year.
Several Journalists reporting from Abuja mentioned that Nigerian Federal Government may be in dire need of balancing the National budget of 500 million dollar plunk. The DMO ‘Debt Management Office’ of Nigeria has raised official curtain about its intent on seeking this 500 million dollars through Euro Bond. In the initial budget passed in April 2010, the 500 million dollars was set to be raised internationally and the new issue of auction in Nigeria may serve the purpose.
In an article by Adejuwa Tsun titled ‘2010 – budget – ‘Reps for Show down with Executive’ made out the issue that the President’s revisionary position on the budget and his citations of “shortfalls in the projected revenue” this year, may have resulted from the ‘N507.12 billion Naira addition in the supplementary budget for recurrent expenditure’, which the initial projected earnings provided for.
In terms of 283 .32 billion for ‘wage adjustment’ there is 100 billion set for increase in civil servants wages with direct reference to tertiary Schools in Nigeria. It is difficult to understand why these numbers are tossed around so much that Nigerians don’t even know what is actually going on.
But the National budget for 2010 is already signed by the President, and Members of the house of Rep question the delay. In fact a new row of confrontation with the executive branch is actually expected given the unusual infringement and tendency of FGN to deal break. There is a call that the budget should be dealt with ‘as is’ basis, since promises to LGA were already factored into the budget for the year.
Naira Depression and What Sanusi Can Do (III)a
By
Sampson Iroabuchi Onwuka
....Before Soludo was a different Sanusi by name Joseph Sanusi, who entirely blocked the capitulation of Naira in Nigeria and within the interim, Naira stabilized but then he was engineered out of office as CBN Chairman in matter of months. Joseph Sanusi was not without traces of corruption, but from a market perspective, his financial ‘doctors’ were well aware of the situation in Nigeria and helped burnish to his view about the cryptic money transfer to Nigeria to redeem in dollars and pounds sterling instead on Naira, which was endemically squeezing life out of the local unit of exchange, the Naira.
So how do we solve the problem of the depreciating Nigerian Naira short term? We can solve the problem through a coordinated embargo on foreign currency on any Nigerian or non Nigerian living abroad, sending money to Nigeria to receive in any other currency other than Naira. That they, including their business men must by matter of rule redeem the money through the Naira. Acquiring the foreign currency from Nigeria can then be achieved as it is from direct Auction and direct currency exchange executed on line and by CBN.
Secondly the issue of parallel market which still exists in various forms should be done away with completely even it means re-educating Nigerians, including the Mallamia, and other Northerners on the act of currency trade on line, which does not mean that they will be damned by the acts. No, they can’t, since Nigerians and other visitors are making it to the country daily through dollars. But as far quoting on top of exchange rate, there is need for redemption. 3, there is a need for currency board in most countries for ‘Currency board’ which entirely regulates the availability of foreign currency in any country, which should include Nigeria. There is also the issue of currency hedging which must concern Nigerians and those who have the special angle of managing their wage and price.
Sampson Iroabuchi Onwuka
....Before Soludo was a different Sanusi by name Joseph Sanusi, who entirely blocked the capitulation of Naira in Nigeria and within the interim, Naira stabilized but then he was engineered out of office as CBN Chairman in matter of months. Joseph Sanusi was not without traces of corruption, but from a market perspective, his financial ‘doctors’ were well aware of the situation in Nigeria and helped burnish to his view about the cryptic money transfer to Nigeria to redeem in dollars and pounds sterling instead on Naira, which was endemically squeezing life out of the local unit of exchange, the Naira.
So how do we solve the problem of the depreciating Nigerian Naira short term? We can solve the problem through a coordinated embargo on foreign currency on any Nigerian or non Nigerian living abroad, sending money to Nigeria to receive in any other currency other than Naira. That they, including their business men must by matter of rule redeem the money through the Naira. Acquiring the foreign currency from Nigeria can then be achieved as it is from direct Auction and direct currency exchange executed on line and by CBN.
Secondly the issue of parallel market which still exists in various forms should be done away with completely even it means re-educating Nigerians, including the Mallamia, and other Northerners on the act of currency trade on line, which does not mean that they will be damned by the acts. No, they can’t, since Nigerians and other visitors are making it to the country daily through dollars. But as far quoting on top of exchange rate, there is need for redemption. 3, there is a need for currency board in most countries for ‘Currency board’ which entirely regulates the availability of foreign currency in any country, which should include Nigeria. There is also the issue of currency hedging which must concern Nigerians and those who have the special angle of managing their wage and price.
Tuesday, July 27, 2010
Naira Depression and What Sanusi Can Do (II)c
By
Sampson Iroabuchi Onwuka
....There was also the issue of too much cash recurring from the 420 billion Naira injections to Nigerian banks and Muktar’s billions of dollars in expenses in months after the crash. Nobody gives account to the Federal Government and I mean these Northerners are becoming too reckless to be questioned on the allocation of federal resources. Such procedure however made the available bond that expensive and required short time decay to enable useful profit, which would only lead Naira to higher price level and not lower. That will also bring Naira closer to dollars in international markets and in spite of Nigeria performing with its international debts and obligations the Naira will continue a spiral downwards, and like what we have seen so far there will be redemption through Crude oil dollars to encourage stability. But Sanusi needn’t buy out the Naira at all he can block the recapitulation in dollars or any foreign company through Nigerian banks and he can correlate the rate of repatriation of foreign currency to be equal to currency rotation outside the inception, relative to money through crude oil. There is also the case of Crude oil dollars. There are other forms of soft conversion that should ease the fears with companies uncomfortable with long term investment in Nigeria. Case in point is what happened during Soludo’s administration when we owed the world nothing. The Naira was still doing badly leading Soludo to buy over 500 million dollars worth of Nigerian Naira at a time. But the downwards spiral continued. The reason he eventually figured out was the hemorrhaging was through foreign currency rotation in Nigeria. Soludo’s leniency was towards high dollar repository in Nigeria and its CBN, with a view of attracting businesses from around the world needing repatriation in dollars as necessary condition for investing in Nigeria, a path which denied the Naira a home court advantage…essentially lampooned on the Naira which could not take the ‘strain’. Secondly, there was no real measure to gauge the Naira independently and no real structure to block the flow of dollars and other foreign papers which made difficult understanding the warning signs. As such his first move was naturally to get rid of the parallel market. The exiting parallel market in Nigeria began to experience all kinds of trouble and resistance, and in the end, it was a case used by certain people against Soludo who attempted to replace the parallel market with direct auction, to curb the speculative bubble and foreign currency over price. Hence, there was an inflationary pressure on the Nigerian Naira, driven by the necessity to sale to a higher bidder. There was also the round table device which armed bankers with damaging ammunition to speculate freely, recklessly as become the case. Soludo was arguably forced out of office on this account and the issue of recapitulation.
1 posted on 07-19-2010, 05:41:07 AM Kaparak Re: Naira Depreciation And What Sanusi Can Do (ii) Mr. Iroabuchu, why waste paper and ink on this University of Khartoum (top-ten worst Universities in the world) alumnus who is totally clueless on what his role is. I mean, Nigeria cannot afford on-the-job-training for this kind of position. I have just read Sanusi's political diatribe he authored "POWER-SHIFT AND ROTATION: BETWEEN EMANCIPATION AND OBFUSCATION" in which he concluded, I quote “…Nigerians have be parasiting for three decades….” among chockfull of other grammatical errors. That amateurish article is totally lacking of original ideas that even a C- average primary school kid with access to a library of Nigerian newspapers could easily compile better “What I did during my School Break” essay. Perhaps we should send Sanusi back to school to learn not only how to construct logical sentences, spell correctly but most importantly, how to focus on his job in which he is scoring a solid F, at best. Professor Kperogi, where are you? Come and train one of your students on syntax, grammar, spelling, especially economics – we cannot take this anymore. posted on 07-19-2010, 10:26:31 AM Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) Kaparak...
Sampson Onwuka's response
We are friends of Sanusi and the good Naira...there is need to continue to exchange ideas of what we can do to help our country. This is one easy way to accomplish it. There is a chinese saying...'big problem small solution' and we must take it very seriously that much of our economic problems in the ten years or so...is not without the capitulation on the Nigerian Naira.
Cheers...
Posted on 07-19-2010, 10:30:49 AM Oyeols Re: Naira Depreciation And What Sanusi Can Do (ii) This is an article that will work on the largely uneducated masses, but not on those of us who are well educated in finance and international economics. I am not here to defend anyone, but I think its unfair to blatantly mis-represent facts to the public. First of all the Naira has not spiralled downwards since Sanusi took over. This is a blatant untruth!! The naira has been stable at about $/N150 for about a year now. The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports. This was evident in 2007-2009, when as a result of huge inflows to invest in the stock market and bank re-capitalisation, most banks didn't even need to go to CBN for auction. Therefore the price went down and the exact reverse was the case when all the money went out again at the beginning of the recession. SIMPLE!! posted on 07-19-2010, 11:55:13 AM
Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) @Oyeols.
...completely untrue. Naira will not gain nothing if there is higher importance of hard capital in the country. For christ that's the whole purpose of currency board...even here in US. That is to forstall unnecessary importation of currency to US.
Secondly...the Naira did not gain anything in 2007-2009, I mean it did not. I was very active up to 2008 and I can assure you that stabilization of Naira in those Soludo years was due to the falling price of USD. Most countries of the world...including Caribbean received a boost on their currency with a dampning of US dollars.
thirdly...there was the issue of the Oil price as convertible for Euro and inverse of dollars. Remember that oil rocked 150 dollars pe barrel before reverting to 40 dollars per barrel. Why did we experience such change in dollars price..at first Euro did very well and then went quite high because of huge repostory of Arab dollars from high earn oil.
There was availability of dollars in Nigeria up to 2008 due to its cheap assorted class of USD...which does not mean that huge dollars in Nigeria led to stability of Naira. The lack or 'plenitude' of dollars in any economy has no marginal effect of the local currency...it is the repository and the issue of rotation that independently determine the value of any currency in the world. Other issue of trade deficit and trade and so on, are means to enhancing the 'exchange rate' of the given currency out of which the value is hue.
You mentioned 2007-2009...I think it is very late case in the matters affecting Niara. I take 2007-2008 as pivotal case study...you must remember that the issue of world order through those was quite eminent, so eminent that Gold dealers were pretending at calling for a change in world money order. The Euro was a good candidate.
The casaulity of the short window was dollars...largely because the profit from crude oil at 150 dollars a barrel was offshored to Euro...in a sense the Euro perculated at the rise of crude oil and it at whinning down on dollars. Nigeria is oil producing economy and its currency was pegged to dollars... enjoyed brief period of stability because of earnings which ended in the pockets of derivitive Nigerian petrol managers and yet Nigeria made a lot of money from Crude leaving excess of dollars in rotation and of the ECA....
But then Crude oil prices dropped precipititiously from 150 to 40 dollars leading to a crisis of Naira at the tail end of Soludo years...Naira crisis due to the issue of strong and peculating dollars which forced US feds to lower Interest rate up to O%.
Assuming you argument had any use, what is the reason why the Naira did so badly in those 2008/2009 years, inspite of the very availability of the dollars.
Fourthly, you seem to discount the issue of a rising interest rate to Naira. Naira depreciation will fast forward when US interest start counting beyond the 1%. I hope you added that in your commentary on how Nigeria will do in terms of regaining US dollars. Don't think the shift from 148 to 150 this year alone is due to anything magic about CBN.
Even when the US went 0% interest...I am personally aware of the fact that CBN did not hedge at all. So what the point of the commentary.
Buying into the Naira in plain hard currency is largely inadequate to helm the skid of Nigerian Naira. It is an old practice that is not without effect but what makeS you think Nigeria is the only country doing it. More like someone reserving a typical point in the tick (?) and wait for the market to tick in from vanishing point yesterday. Of course others are doing the same thing and nothing that magic about it.
I did see anything you wrote about how the 'no' ball movement of world currency and interest rate is not directly responsible for Naira balancing effect.... posted on 07-19-2010, 19:34:35 PM Kaparak Re: Naira Depreciation And What Sanusi Can Do (ii) @Iroabuchi, the best way to support Sanusi, and by extension Nigeria, is to advise this “razzmatazz mambo-pambo-ride-the-Whitehorse” to keep his poker nose off politics and focus, solely, on economic theories to see if he could grasp the elementary fundamentals of monetary and fiscal policies that every 1st year MBA students learn in 4 weeks of Finance 101 to accomplish what he was appointed to do at the CBN. Until then, I am not sending my hard-earned dollars to Nigeria for him to negligently fritter away to the more astute foreign bankers who only dwell, 24/7, on how to improve the financial performance of their respective economies & leave politics to the politicians. If Sanusi cannot do that, then he should be merciful enough to quit for elective office, and let someone else that is more qualified and dedicated to finance & economics fill the spot. posted on 07-20-2010, 14:17:28 PM Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) kaparak,
My fellow NVS...why don't you hammer out your argument on this Naira thing so that we crack the hole wide open. You write very well. I will like to read about new markets and economic theories...I mean reviewing Pat Utomi for the rest of us is a good way to start, given his interest in the Presidency...although there is not original about the economist. BUt he is from markets.
And not only him, there is need to review the chattered papers of Fashola on 'Agriculture' and the relevance of his article to Nigeria. Some of these people running for any useful office should have a platform from which to make their claims...given our status as a commercial economy
Cheers posted on 07-21-2010, 04:03:34 AM Oyeols Re: Naira Depreciation And What Sanusi Can Do (ii) @ Iroabuchi,
You have said a lot in your response, but you failed to answer my main issue for replying in the first place, which was my issue with your saying that "But since his inception, Naira has been on a down ward spiral". Sanusi was appointed CBN governor on June 3rd 2009. The CBN central rate as at JANUARY 14th 2009 (before Sanusi was appointed) was $/N149.5. As at JULY19th 2010 it is $/N148.2, so where is the downward spiral?????. The downward spiral occurred between NOVEMBER 28th 2008 $/N116.12 and JANUARY14th 2009 $/N149.5 when Soludo was in charge. And like I said that was caused by the massive outflux of forex when the worldwide recession started. Simple demand and supply!! In our case demand exceeded supply at that point so I don't understand what you mean by "Assuming you argument had any use, what is the reason why the Naira did so badly in those 2008/2009 years, inspite of the very availability of the dollars"? Which very availability are you referring to?
While I don't doubt that interest rates and international cross rates have an effect on the $/N rate, their impact is not as huge as the impact of demand and supply. Even abroad any currency trader will tell you of the impact of the "earnings season", where foreign companies (usually american)repratriate their profits home. At such times, due to the demand for dollars by say General Electric in Japan, you will see the Dollar/Yen rate go from say USD/JPY 107 to USD/JPY 115 as the dollar gains value. This is a clear example of the law of demand and supply on exchange rates!!
You also mentioned that " ...in view that Nigerian banking as they claim was a formerly corrupted house until Sanusi arriving". You make it sound as though the view that our banks are indeed not corrupt is incorrect! Trust me, they were very corrupt before Sanusi and they still are now, though probably less so. I used to work in a bank and in currency trading, so I know a thing or two about what goes on in there.
Anyway, this should not be an unnecessary back and forth. I just did not like your choice of words which misrepresented some facts about Sanusi. No doubt you are well educated, but that does not mean you are not wrong about certain things. No one knows it all. The important thing is that one is objective enough to see obvious errors and admit them. I don't know it all either. Economics is a diverse subject and if solutions were so obvious, all economists would have the same ideas and approach, but of course we know they never do, even in very intellectual societies like America. posted on 07-21-2010, 12:28:05 PM Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) Oyeols...
You use the term 'blatant untruth'...about the down ward spiral on the Naira...Naira to dollars was at 148 at last year end and is today 150...what the 'blatant untruth'
Your initial reply...said
"This is an article that will work on the largely uneducated masses, but not on those of us who are well educated in finance and international economics. I am not here to defend anyone, but I think its unfair to blatantly mis-represent facts to the public. First of all the Naira has not spiralled downwards since Sanusi took over. This is a blatant untruth!! The naira has been stable at about $/N150 for about a year now. The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports. This was evident in 2007-2009, when as a result of huge inflows to invest in the stock market and bank re-capitalisation, most banks didn't even need to go to CBN for auction. Therefore the price went down and the exact reverse was the case when all the money went out again at the beginning of the recession. SIMPLE!!"
"The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports."
null
Am not what you mean by that.
In your next commentary we read...
"You have said a lot in your response, but you failed to answer my main issue for replying in the first place, which was my issue with your saying that "But since his inception, Naira has been on a down ward spiral". Sanusi was appointed CBN governor on June 3rd 2009. The CBN central rate as at JANUARY 14th 2009 (before Sanusi was appointed) was $/N149.5. As at JULY19th 2010 it is $/N148.2, so where is the downward spiral?????. The downward spiral occurred between NOVEMBER 28th 2008 $/N116.12 and JANUARY14th 2009 $/N149.5 when Soludo was in charge".
Can you explain why?
"And like I said that was caused by the massive outflux of forex when the worldwide recession started. Simple demand and supply!!"
Can correlate that with your initial commentary...and explain demand and supply in Currency terms.
"In our case demand exceeded supply at that point so I don't understand what you mean by "Assuming you argument had any use, what is the reason why the Naira did so badly in those 2008/2009 years, inspite of the very availability of the dollars"? Which very availability are you referring to?"
Am sure in your first commentary you mentioned the following
"The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports. This was evident in 2007-2009, when as a result of huge inflows to invest in the stock market and bank re-capitalisation, most banks didn't even need to go to CBN for auction. Therefore the price went down and the exact reverse was the case when all the money went out again at the beginning of the recession. SIMPLE!!"
We take it from this comment that availability of dollars equals depreciation of Naira or is it the reverse that you had in mind
Commentary 2
"While I don't doubt that interest rates and international cross rates have an effect on the $/N rate, their impact is not as huge as the impact of demand and supply. Even abroad any currency trader will tell you of the impact of the "earnings season", where foreign companies (usually american)repratriate their profits home. At such times, due to the demand for dollars by say General Electric in Japan, you will see the Dollar/Yen rate go from say USD/JPY 107 to USD/JPY 115 as the dollar gains value. This is a clear example of the law of demand and supply on exchange rates!!"
Clearly we can make the argument that demand and supply is the deciding quantity in Currency valuation. Now I wanna ask you clearly and concise to make a simple case about the Naira depreciation between 2008 and 2009...especially the Soludo years.
Your commentary 2.
"You also mentioned that " ...in view that Nigerian banking as they claim was a formerly corrupted house until Sanusi arriving". You make it sound as though the view that our banks are indeed not corrupt is incorrect! Trust me, they were very corrupt before Sanusi and they still are now, though probably less so. I used to work in a bank and in currency trading, so I know a thing or two about what goes on in there."
...well the issue of the statement 'as' 'they' 'claim' should mean entirely that it was 'as they claim' . What's hard to undertstand about that.
"Anyway, this should not be an unnecessary back and forth. I just did not like your choice of words which misrepresented some facts about Sanusi. No doubt you are well educated, but that does not mean you are not wrong about certain things."
clearly the issue is not about Sanusi's academic ability...the issue is not 'back and forth', the issue is a matter of coming to grasp with Sanusi...paying more attention to managerial function than Naira. Naira stabilizing DOES NOT MEAN that Naira is gaining.
If Sanusi has paid pivotal attention to the Naira, the currency would have taken a very positive appreciation given the current stagnation of US dollars. Naira stabilizing, does not in anyway mean that Nigerian CBN is doing anything exceptional. The oil since Sanusi's inception to office has appreciated. Is Nigeria Naira correlated to the dollars
"No one knows it all. The important thing is that one is objective enough to see obvious errors and admit them. I don't know it all either. Economics is a diverse subject and if solutions were so obvious, all economists would have the same ideas and approach, but of course we know they never do, even in very intellectual societies like America"
clearly there is a gap between the twof us. Largely enough...demand and supply has nothing to do with currency. Currency is a different economic dimension. Is like a third dimension which Americans and the English mastered a long time ago. Pounds, Dollars, and so on have no inherit value...pounds is also earned and therefore has no inherit bais.
In fact the shift from dollar correlation to gold to pure paper is the work of Arthur Burns lifting pages from John Maynard Keynes. Maynard Keynes arguments if followed carefully did not quite avoid Gold as 'junk'. Keynes never quite make the argument that the relationship between gold and money is negligible.
IOU is probably what you had in mind and of course its relationship to Junk bonds....It has potential value like Euro...which is not real currency. Like Chinese and Brazilian currencies which are 'pre-value' and set, which are intended to preserve wage and price and which are not real time currency. They do not float
But legal tender such as pounds and dollars and Nigerian Naira are the world greatest example of free market system. They float freely...they are currency per excellent. Their value and value alone is so kinetic, so dependent on usability that every move that dollars makes, must affect the Naira and the pounds. Every move that Naira makes must apply to USD.
If the Naira is stabilizing...it is not gaining, it is 'loosing' in future since the stability means that other factors 'will' affect the currency and positively USD is then negatively Nigerian Naira. Naira is at war with dollars, pounds, and so on and it must win them every day...every second, it must gain.
Moving currency to Nigeria via Western Union and company to pick up dollars and pounds in Nigeria, is Naira capitulation (which is also where you may be coming from supply demand paradigm) and is a losing positive on the Naira. We don't have to wait for a strong dollars through interest rate spike of the US Feds to understand that there is no hedge on the currency...the naira.
Naira is equal to the Euro, equal to the dollars, equal to the cedis and equal to any currency in the world. But their exchange rate - the 3rd dimension of market - make all the difference. The difference (we can compute the differentials) if so stretched is a summary of the deciding economic strategies of these countries.
So Oyeols...why don't to fire off on how to position
Sampson Iroabuchi Onwuka
....There was also the issue of too much cash recurring from the 420 billion Naira injections to Nigerian banks and Muktar’s billions of dollars in expenses in months after the crash. Nobody gives account to the Federal Government and I mean these Northerners are becoming too reckless to be questioned on the allocation of federal resources. Such procedure however made the available bond that expensive and required short time decay to enable useful profit, which would only lead Naira to higher price level and not lower. That will also bring Naira closer to dollars in international markets and in spite of Nigeria performing with its international debts and obligations the Naira will continue a spiral downwards, and like what we have seen so far there will be redemption through Crude oil dollars to encourage stability. But Sanusi needn’t buy out the Naira at all he can block the recapitulation in dollars or any foreign company through Nigerian banks and he can correlate the rate of repatriation of foreign currency to be equal to currency rotation outside the inception, relative to money through crude oil. There is also the case of Crude oil dollars. There are other forms of soft conversion that should ease the fears with companies uncomfortable with long term investment in Nigeria. Case in point is what happened during Soludo’s administration when we owed the world nothing. The Naira was still doing badly leading Soludo to buy over 500 million dollars worth of Nigerian Naira at a time. But the downwards spiral continued. The reason he eventually figured out was the hemorrhaging was through foreign currency rotation in Nigeria. Soludo’s leniency was towards high dollar repository in Nigeria and its CBN, with a view of attracting businesses from around the world needing repatriation in dollars as necessary condition for investing in Nigeria, a path which denied the Naira a home court advantage…essentially lampooned on the Naira which could not take the ‘strain’. Secondly, there was no real measure to gauge the Naira independently and no real structure to block the flow of dollars and other foreign papers which made difficult understanding the warning signs. As such his first move was naturally to get rid of the parallel market. The exiting parallel market in Nigeria began to experience all kinds of trouble and resistance, and in the end, it was a case used by certain people against Soludo who attempted to replace the parallel market with direct auction, to curb the speculative bubble and foreign currency over price. Hence, there was an inflationary pressure on the Nigerian Naira, driven by the necessity to sale to a higher bidder. There was also the round table device which armed bankers with damaging ammunition to speculate freely, recklessly as become the case. Soludo was arguably forced out of office on this account and the issue of recapitulation.
1 posted on 07-19-2010, 05:41:07 AM Kaparak Re: Naira Depreciation And What Sanusi Can Do (ii) Mr. Iroabuchu, why waste paper and ink on this University of Khartoum (top-ten worst Universities in the world) alumnus who is totally clueless on what his role is. I mean, Nigeria cannot afford on-the-job-training for this kind of position. I have just read Sanusi's political diatribe he authored "POWER-SHIFT AND ROTATION: BETWEEN EMANCIPATION AND OBFUSCATION" in which he concluded, I quote “…Nigerians have be parasiting for three decades….” among chockfull of other grammatical errors. That amateurish article is totally lacking of original ideas that even a C- average primary school kid with access to a library of Nigerian newspapers could easily compile better “What I did during my School Break” essay. Perhaps we should send Sanusi back to school to learn not only how to construct logical sentences, spell correctly but most importantly, how to focus on his job in which he is scoring a solid F, at best. Professor Kperogi, where are you? Come and train one of your students on syntax, grammar, spelling, especially economics – we cannot take this anymore. posted on 07-19-2010, 10:26:31 AM Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) Kaparak...
Sampson Onwuka's response
We are friends of Sanusi and the good Naira...there is need to continue to exchange ideas of what we can do to help our country. This is one easy way to accomplish it. There is a chinese saying...'big problem small solution' and we must take it very seriously that much of our economic problems in the ten years or so...is not without the capitulation on the Nigerian Naira.
Cheers...
Posted on 07-19-2010, 10:30:49 AM Oyeols Re: Naira Depreciation And What Sanusi Can Do (ii) This is an article that will work on the largely uneducated masses, but not on those of us who are well educated in finance and international economics. I am not here to defend anyone, but I think its unfair to blatantly mis-represent facts to the public. First of all the Naira has not spiralled downwards since Sanusi took over. This is a blatant untruth!! The naira has been stable at about $/N150 for about a year now. The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports. This was evident in 2007-2009, when as a result of huge inflows to invest in the stock market and bank re-capitalisation, most banks didn't even need to go to CBN for auction. Therefore the price went down and the exact reverse was the case when all the money went out again at the beginning of the recession. SIMPLE!! posted on 07-19-2010, 11:55:13 AM
Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) @Oyeols.
...completely untrue. Naira will not gain nothing if there is higher importance of hard capital in the country. For christ that's the whole purpose of currency board...even here in US. That is to forstall unnecessary importation of currency to US.
Secondly...the Naira did not gain anything in 2007-2009, I mean it did not. I was very active up to 2008 and I can assure you that stabilization of Naira in those Soludo years was due to the falling price of USD. Most countries of the world...including Caribbean received a boost on their currency with a dampning of US dollars.
thirdly...there was the issue of the Oil price as convertible for Euro and inverse of dollars. Remember that oil rocked 150 dollars pe barrel before reverting to 40 dollars per barrel. Why did we experience such change in dollars price..at first Euro did very well and then went quite high because of huge repostory of Arab dollars from high earn oil.
There was availability of dollars in Nigeria up to 2008 due to its cheap assorted class of USD...which does not mean that huge dollars in Nigeria led to stability of Naira. The lack or 'plenitude' of dollars in any economy has no marginal effect of the local currency...it is the repository and the issue of rotation that independently determine the value of any currency in the world. Other issue of trade deficit and trade and so on, are means to enhancing the 'exchange rate' of the given currency out of which the value is hue.
You mentioned 2007-2009...I think it is very late case in the matters affecting Niara. I take 2007-2008 as pivotal case study...you must remember that the issue of world order through those was quite eminent, so eminent that Gold dealers were pretending at calling for a change in world money order. The Euro was a good candidate.
The casaulity of the short window was dollars...largely because the profit from crude oil at 150 dollars a barrel was offshored to Euro...in a sense the Euro perculated at the rise of crude oil and it at whinning down on dollars. Nigeria is oil producing economy and its currency was pegged to dollars... enjoyed brief period of stability because of earnings which ended in the pockets of derivitive Nigerian petrol managers and yet Nigeria made a lot of money from Crude leaving excess of dollars in rotation and of the ECA....
But then Crude oil prices dropped precipititiously from 150 to 40 dollars leading to a crisis of Naira at the tail end of Soludo years...Naira crisis due to the issue of strong and peculating dollars which forced US feds to lower Interest rate up to O%.
Assuming you argument had any use, what is the reason why the Naira did so badly in those 2008/2009 years, inspite of the very availability of the dollars.
Fourthly, you seem to discount the issue of a rising interest rate to Naira. Naira depreciation will fast forward when US interest start counting beyond the 1%. I hope you added that in your commentary on how Nigeria will do in terms of regaining US dollars. Don't think the shift from 148 to 150 this year alone is due to anything magic about CBN.
Even when the US went 0% interest...I am personally aware of the fact that CBN did not hedge at all. So what the point of the commentary.
Buying into the Naira in plain hard currency is largely inadequate to helm the skid of Nigerian Naira. It is an old practice that is not without effect but what makeS you think Nigeria is the only country doing it. More like someone reserving a typical point in the tick (?) and wait for the market to tick in from vanishing point yesterday. Of course others are doing the same thing and nothing that magic about it.
I did see anything you wrote about how the 'no' ball movement of world currency and interest rate is not directly responsible for Naira balancing effect.... posted on 07-19-2010, 19:34:35 PM Kaparak Re: Naira Depreciation And What Sanusi Can Do (ii) @Iroabuchi, the best way to support Sanusi, and by extension Nigeria, is to advise this “razzmatazz mambo-pambo-ride-the-Whitehorse” to keep his poker nose off politics and focus, solely, on economic theories to see if he could grasp the elementary fundamentals of monetary and fiscal policies that every 1st year MBA students learn in 4 weeks of Finance 101 to accomplish what he was appointed to do at the CBN. Until then, I am not sending my hard-earned dollars to Nigeria for him to negligently fritter away to the more astute foreign bankers who only dwell, 24/7, on how to improve the financial performance of their respective economies & leave politics to the politicians. If Sanusi cannot do that, then he should be merciful enough to quit for elective office, and let someone else that is more qualified and dedicated to finance & economics fill the spot. posted on 07-20-2010, 14:17:28 PM Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) kaparak,
My fellow NVS...why don't you hammer out your argument on this Naira thing so that we crack the hole wide open. You write very well. I will like to read about new markets and economic theories...I mean reviewing Pat Utomi for the rest of us is a good way to start, given his interest in the Presidency...although there is not original about the economist. BUt he is from markets.
And not only him, there is need to review the chattered papers of Fashola on 'Agriculture' and the relevance of his article to Nigeria. Some of these people running for any useful office should have a platform from which to make their claims...given our status as a commercial economy
Cheers posted on 07-21-2010, 04:03:34 AM Oyeols Re: Naira Depreciation And What Sanusi Can Do (ii) @ Iroabuchi,
You have said a lot in your response, but you failed to answer my main issue for replying in the first place, which was my issue with your saying that "But since his inception, Naira has been on a down ward spiral". Sanusi was appointed CBN governor on June 3rd 2009. The CBN central rate as at JANUARY 14th 2009 (before Sanusi was appointed) was $/N149.5. As at JULY19th 2010 it is $/N148.2, so where is the downward spiral?????. The downward spiral occurred between NOVEMBER 28th 2008 $/N116.12 and JANUARY14th 2009 $/N149.5 when Soludo was in charge. And like I said that was caused by the massive outflux of forex when the worldwide recession started. Simple demand and supply!! In our case demand exceeded supply at that point so I don't understand what you mean by "Assuming you argument had any use, what is the reason why the Naira did so badly in those 2008/2009 years, inspite of the very availability of the dollars"? Which very availability are you referring to?
While I don't doubt that interest rates and international cross rates have an effect on the $/N rate, their impact is not as huge as the impact of demand and supply. Even abroad any currency trader will tell you of the impact of the "earnings season", where foreign companies (usually american)repratriate their profits home. At such times, due to the demand for dollars by say General Electric in Japan, you will see the Dollar/Yen rate go from say USD/JPY 107 to USD/JPY 115 as the dollar gains value. This is a clear example of the law of demand and supply on exchange rates!!
You also mentioned that " ...in view that Nigerian banking as they claim was a formerly corrupted house until Sanusi arriving". You make it sound as though the view that our banks are indeed not corrupt is incorrect! Trust me, they were very corrupt before Sanusi and they still are now, though probably less so. I used to work in a bank and in currency trading, so I know a thing or two about what goes on in there.
Anyway, this should not be an unnecessary back and forth. I just did not like your choice of words which misrepresented some facts about Sanusi. No doubt you are well educated, but that does not mean you are not wrong about certain things. No one knows it all. The important thing is that one is objective enough to see obvious errors and admit them. I don't know it all either. Economics is a diverse subject and if solutions were so obvious, all economists would have the same ideas and approach, but of course we know they never do, even in very intellectual societies like America. posted on 07-21-2010, 12:28:05 PM Sampson onwuka iroabuchi Re: Naira Depreciation And What Sanusi Can Do (ii) Oyeols...
You use the term 'blatant untruth'...about the down ward spiral on the Naira...Naira to dollars was at 148 at last year end and is today 150...what the 'blatant untruth'
Your initial reply...said
"This is an article that will work on the largely uneducated masses, but not on those of us who are well educated in finance and international economics. I am not here to defend anyone, but I think its unfair to blatantly mis-represent facts to the public. First of all the Naira has not spiralled downwards since Sanusi took over. This is a blatant untruth!! The naira has been stable at about $/N150 for about a year now. The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports. This was evident in 2007-2009, when as a result of huge inflows to invest in the stock market and bank re-capitalisation, most banks didn't even need to go to CBN for auction. Therefore the price went down and the exact reverse was the case when all the money went out again at the beginning of the recession. SIMPLE!!"
"The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports."
null
Am not what you mean by that.
In your next commentary we read...
"You have said a lot in your response, but you failed to answer my main issue for replying in the first place, which was my issue with your saying that "But since his inception, Naira has been on a down ward spiral". Sanusi was appointed CBN governor on June 3rd 2009. The CBN central rate as at JANUARY 14th 2009 (before Sanusi was appointed) was $/N149.5. As at JULY19th 2010 it is $/N148.2, so where is the downward spiral?????. The downward spiral occurred between NOVEMBER 28th 2008 $/N116.12 and JANUARY14th 2009 $/N149.5 when Soludo was in charge".
Can you explain why?
"And like I said that was caused by the massive outflux of forex when the worldwide recession started. Simple demand and supply!!"
Can correlate that with your initial commentary...and explain demand and supply in Currency terms.
"In our case demand exceeded supply at that point so I don't understand what you mean by "Assuming you argument had any use, what is the reason why the Naira did so badly in those 2008/2009 years, inspite of the very availability of the dollars"? Which very availability are you referring to?"
Am sure in your first commentary you mentioned the following
"The Naira will gain once we begin to earn more dollas as a country via exports than we require to finance our imports. This was evident in 2007-2009, when as a result of huge inflows to invest in the stock market and bank re-capitalisation, most banks didn't even need to go to CBN for auction. Therefore the price went down and the exact reverse was the case when all the money went out again at the beginning of the recession. SIMPLE!!"
We take it from this comment that availability of dollars equals depreciation of Naira or is it the reverse that you had in mind
Commentary 2
"While I don't doubt that interest rates and international cross rates have an effect on the $/N rate, their impact is not as huge as the impact of demand and supply. Even abroad any currency trader will tell you of the impact of the "earnings season", where foreign companies (usually american)repratriate their profits home. At such times, due to the demand for dollars by say General Electric in Japan, you will see the Dollar/Yen rate go from say USD/JPY 107 to USD/JPY 115 as the dollar gains value. This is a clear example of the law of demand and supply on exchange rates!!"
Clearly we can make the argument that demand and supply is the deciding quantity in Currency valuation. Now I wanna ask you clearly and concise to make a simple case about the Naira depreciation between 2008 and 2009...especially the Soludo years.
Your commentary 2.
"You also mentioned that " ...in view that Nigerian banking as they claim was a formerly corrupted house until Sanusi arriving". You make it sound as though the view that our banks are indeed not corrupt is incorrect! Trust me, they were very corrupt before Sanusi and they still are now, though probably less so. I used to work in a bank and in currency trading, so I know a thing or two about what goes on in there."
...well the issue of the statement 'as' 'they' 'claim' should mean entirely that it was 'as they claim' . What's hard to undertstand about that.
"Anyway, this should not be an unnecessary back and forth. I just did not like your choice of words which misrepresented some facts about Sanusi. No doubt you are well educated, but that does not mean you are not wrong about certain things."
clearly the issue is not about Sanusi's academic ability...the issue is not 'back and forth', the issue is a matter of coming to grasp with Sanusi...paying more attention to managerial function than Naira. Naira stabilizing DOES NOT MEAN that Naira is gaining.
If Sanusi has paid pivotal attention to the Naira, the currency would have taken a very positive appreciation given the current stagnation of US dollars. Naira stabilizing, does not in anyway mean that Nigerian CBN is doing anything exceptional. The oil since Sanusi's inception to office has appreciated. Is Nigeria Naira correlated to the dollars
"No one knows it all. The important thing is that one is objective enough to see obvious errors and admit them. I don't know it all either. Economics is a diverse subject and if solutions were so obvious, all economists would have the same ideas and approach, but of course we know they never do, even in very intellectual societies like America"
clearly there is a gap between the twof us. Largely enough...demand and supply has nothing to do with currency. Currency is a different economic dimension. Is like a third dimension which Americans and the English mastered a long time ago. Pounds, Dollars, and so on have no inherit value...pounds is also earned and therefore has no inherit bais.
In fact the shift from dollar correlation to gold to pure paper is the work of Arthur Burns lifting pages from John Maynard Keynes. Maynard Keynes arguments if followed carefully did not quite avoid Gold as 'junk'. Keynes never quite make the argument that the relationship between gold and money is negligible.
IOU is probably what you had in mind and of course its relationship to Junk bonds....It has potential value like Euro...which is not real currency. Like Chinese and Brazilian currencies which are 'pre-value' and set, which are intended to preserve wage and price and which are not real time currency. They do not float
But legal tender such as pounds and dollars and Nigerian Naira are the world greatest example of free market system. They float freely...they are currency per excellent. Their value and value alone is so kinetic, so dependent on usability that every move that dollars makes, must affect the Naira and the pounds. Every move that Naira makes must apply to USD.
If the Naira is stabilizing...it is not gaining, it is 'loosing' in future since the stability means that other factors 'will' affect the currency and positively USD is then negatively Nigerian Naira. Naira is at war with dollars, pounds, and so on and it must win them every day...every second, it must gain.
Moving currency to Nigeria via Western Union and company to pick up dollars and pounds in Nigeria, is Naira capitulation (which is also where you may be coming from supply demand paradigm) and is a losing positive on the Naira. We don't have to wait for a strong dollars through interest rate spike of the US Feds to understand that there is no hedge on the currency...the naira.
Naira is equal to the Euro, equal to the dollars, equal to the cedis and equal to any currency in the world. But their exchange rate - the 3rd dimension of market - make all the difference. The difference (we can compute the differentials) if so stretched is a summary of the deciding economic strategies of these countries.
So Oyeols...why don't to fire off on how to position
Monday, July 26, 2010
Naira Depression and What Sanusi Can Do (II)b
By
Sampson Iroabuchi Onwuka
....That Nigerian Naira has remained relatively stable for 6 weeks now means that CBN is buying into the Naira through a super currency such as dollars. But what is the idea behind this? The idea behind this is that a given currency ought to be used at all the time, ought to be counted and used in all global markets in order to enhance its value. Currencies of the world must defeat each other in such a way that the success of one currency is the detriment of the other. A tradeoff between NGR Naira and US dollars is what occurs every day in the markets, such that every backdrop of Nigeria Naira, the dollar inch on. If the physical characteristics are brought in to play, then the correlation between dollars and oil become a speculative preference but in terms of what happens to Naira and why is falling, it is because the US dollars and the Euro are rising.
These two shortfalls in pricing are the decisive roots of preferential value of US economy to Nigeria. US economy is not that superior to Nigeria, but as long a serious ‘misprice’ is concerned the Nigeria economy is entirely lousy to US. Much of that weakness comes from weak executive strategy of the part of CBN. It is common knowledge that those who benefit from these trades or other trade off between currencies of the world are known as currency traders. But the speculative preference of one currency over the other depends on people waging war against the success of one currency over the other. Among these people are the CBNs of the world and Federal Reserves. What happens inside a given economy is so decided by the weight of the currency, that neglecting the perform rate of a unit exchange is bad business for the general economy. What happens to a currency at any time affect business attitude within the country and that business attitude with the rest of the world is a ‘strain’ on their trade deficit and trans-border trade. The ‘stress’ is probably a popular way to study the impact of trade deficit on a given currency, but it is approaching the problem from the ‘other’ side, not that one side is the side. But by blocking capitulation in Nigeria other Naira, you directly buy into the Naira via the exchange 7 billion dollars and you will not have spend a dime redeeming a currency you already own. Western Union, Vigo, Eastern Union, and so on that conduct these foreign currencies and the banks that back them, are to be stopped from such behaviors in spite of what we think about price ceiling and about making Nigeria the largest depository of foreign currency, which was Soludo’s blunder. Sanusi can continue from where Soludo stopped by doing away with parallel market completely in Nigeria, assuming Sanusi is called patriotic. It is his wading though the waters of the parallel markets against a dyke of his mainly Northerners that must determine Sanusi’s so called ‘patriotic’ elasticity. The impact of this auction system is hard to illustrate in terms of everyday market but the grasp of the nature of conflicting data and instability of the Naira is one reason why Nigerian banking agenda must include the issue of parallel market and currency and its impact in the rest of the world. His effective administrative audacity has done little to helm the hemorrhaging Nigeria economy.
Sanusi cannot pretend that attempts at stabilizing the currency; his chief essence, has not since his inception taken a back seat. But the new attempt at encoding the Nigerian resource in terms of ECA transfer to ‘Sovereign wealth account’ relieves the attention of how to position Nigerian Naira. Whether or not the currency repository and bait on US dollars is that different from other attempt to help the Naira is not very clear. What is however compelling is that the shift in spite on what it portends, is a welcome departure from Michael Porter’s shallow view of ‘competitive advantage’ to quasi Robert Mundell, a condition which bring up the issue of ‘coupling and decoupling’. Coupling is best used as a form of scaling. In essence fluctuations of Naira by gauge would maintain the facts of ‘disregard’ given the conflicting Nigerian bond model for pounds or in terms of dollars the fluctuation is in force that Naira would be of ‘regard’ given the losing tendency to the US dollars. Currency parity is closer to been successful if the two economies and market are closer in form, in function, and in interest rate grade. The widening gap between USD and Naira as Nigerian Naira But the ‘schools’ are not that fitting for an overheated Nigerian economy at this point. The problem is not with what goes into making the case that coupling Naira to dollars - assuming that’s what the CBN Governor and Finance minister is trying to do - will open the Naira to all forms of speculative advantage and trade. Such move will only deepen Nigerian cascade since the dollar when the interest climbs is likely to hang in there longer than Naira, therefore Naira is losing positive. In essence Naira having anchor in terms of dollars and Sovereign weight, may improve its rating internationally but may not however help the Nigerian currency in the end. If the converted sovereign wealth is the Euro or the Pounds, there is a chance that floatation of the Naira - assuming point and forward on pound sterling - will also lead to constant mobility of Naira which may not help the Nigerian bond market given the modeling after Europe and UK
Sampson Iroabuchi Onwuka
....That Nigerian Naira has remained relatively stable for 6 weeks now means that CBN is buying into the Naira through a super currency such as dollars. But what is the idea behind this? The idea behind this is that a given currency ought to be used at all the time, ought to be counted and used in all global markets in order to enhance its value. Currencies of the world must defeat each other in such a way that the success of one currency is the detriment of the other. A tradeoff between NGR Naira and US dollars is what occurs every day in the markets, such that every backdrop of Nigeria Naira, the dollar inch on. If the physical characteristics are brought in to play, then the correlation between dollars and oil become a speculative preference but in terms of what happens to Naira and why is falling, it is because the US dollars and the Euro are rising.
These two shortfalls in pricing are the decisive roots of preferential value of US economy to Nigeria. US economy is not that superior to Nigeria, but as long a serious ‘misprice’ is concerned the Nigeria economy is entirely lousy to US. Much of that weakness comes from weak executive strategy of the part of CBN. It is common knowledge that those who benefit from these trades or other trade off between currencies of the world are known as currency traders. But the speculative preference of one currency over the other depends on people waging war against the success of one currency over the other. Among these people are the CBNs of the world and Federal Reserves. What happens inside a given economy is so decided by the weight of the currency, that neglecting the perform rate of a unit exchange is bad business for the general economy. What happens to a currency at any time affect business attitude within the country and that business attitude with the rest of the world is a ‘strain’ on their trade deficit and trans-border trade. The ‘stress’ is probably a popular way to study the impact of trade deficit on a given currency, but it is approaching the problem from the ‘other’ side, not that one side is the side. But by blocking capitulation in Nigeria other Naira, you directly buy into the Naira via the exchange 7 billion dollars and you will not have spend a dime redeeming a currency you already own. Western Union, Vigo, Eastern Union, and so on that conduct these foreign currencies and the banks that back them, are to be stopped from such behaviors in spite of what we think about price ceiling and about making Nigeria the largest depository of foreign currency, which was Soludo’s blunder. Sanusi can continue from where Soludo stopped by doing away with parallel market completely in Nigeria, assuming Sanusi is called patriotic. It is his wading though the waters of the parallel markets against a dyke of his mainly Northerners that must determine Sanusi’s so called ‘patriotic’ elasticity. The impact of this auction system is hard to illustrate in terms of everyday market but the grasp of the nature of conflicting data and instability of the Naira is one reason why Nigerian banking agenda must include the issue of parallel market and currency and its impact in the rest of the world. His effective administrative audacity has done little to helm the hemorrhaging Nigeria economy.
Sanusi cannot pretend that attempts at stabilizing the currency; his chief essence, has not since his inception taken a back seat. But the new attempt at encoding the Nigerian resource in terms of ECA transfer to ‘Sovereign wealth account’ relieves the attention of how to position Nigerian Naira. Whether or not the currency repository and bait on US dollars is that different from other attempt to help the Naira is not very clear. What is however compelling is that the shift in spite on what it portends, is a welcome departure from Michael Porter’s shallow view of ‘competitive advantage’ to quasi Robert Mundell, a condition which bring up the issue of ‘coupling and decoupling’. Coupling is best used as a form of scaling. In essence fluctuations of Naira by gauge would maintain the facts of ‘disregard’ given the conflicting Nigerian bond model for pounds or in terms of dollars the fluctuation is in force that Naira would be of ‘regard’ given the losing tendency to the US dollars. Currency parity is closer to been successful if the two economies and market are closer in form, in function, and in interest rate grade. The widening gap between USD and Naira as Nigerian Naira But the ‘schools’ are not that fitting for an overheated Nigerian economy at this point. The problem is not with what goes into making the case that coupling Naira to dollars - assuming that’s what the CBN Governor and Finance minister is trying to do - will open the Naira to all forms of speculative advantage and trade. Such move will only deepen Nigerian cascade since the dollar when the interest climbs is likely to hang in there longer than Naira, therefore Naira is losing positive. In essence Naira having anchor in terms of dollars and Sovereign weight, may improve its rating internationally but may not however help the Nigerian currency in the end. If the converted sovereign wealth is the Euro or the Pounds, there is a chance that floatation of the Naira - assuming point and forward on pound sterling - will also lead to constant mobility of Naira which may not help the Nigerian bond market given the modeling after Europe and UK
Saturday, July 24, 2010
Naira Depression and What Sanusi Can Do (II)a
By
Sampson Iroabuchi Onwuka
The job of Sanusi as Central Bank Chairman is moderating price and wages. In essence, he is the moderator, the interventionist, the referee, the practical See if not the brain behind the Nigerian banking system and the one that proclaims the agreement of the banking institution. He has direct emphasis on wages and price and from these economic standpoint, we must understand his role as a Governor. The functional dynamics of wage and price as part of his job is tied to the Naira. In everywhere, the balkanization of the Naira is the man’s chief concern.
He has prodded on the bankers and banking institution but his attention should be not misplaced as a man in charge of what happens to the Nigeria credit facility and the very unit of exchange. The continuous time depreciation of Nigerian Naira means that Sanusi is failing in his primary duty as Governor, or at least, he is losing the war on his primary duty which is the stability of the Naira. But of course, the banking institution had other problems before his inception in office, and Sanusi’s argument is that he had to deal on the condition, perhaps before turning his attention to the currency, the buying power. But the current argument that Sanusi’s credit as a banker is appreciably fair in terms of his administration reform (? ) may be taken seriously by view of what a stronger administrative cohesion will do for the later part of the economy.
But the tight rope around the banking institution may yet prove too strong for civilian participation and may show signs of wearing since the CEOs of Banks are no longer trusted. Bank Supervision in terms of Sanusi can mainly yield a lack of faith in the industry and then failure for Banks to perform. I have argued that some of his actions are not based on any real saving a string of pre-conceived notion. However, Sanusi’s has also won the admiration of some Nigerians, and lately at NVS, he was even diagnosed by Azu Mary of being a ‘misunderstood patriot’. Some question the meaning of the praises on him on account of what is missing from the general economy and others accept it, in view that Nigerian banking as they claim was a formerly corrupted house until Sanusi arriving. But since his inception, Naira has been a down ward spiral and it is on this public evidence can be begin to remind ourselves that the Nigerian society is often obtuse on more critical issues since partisanship exist in the many rungs of the society, including Banking
Sampson Iroabuchi Onwuka
The job of Sanusi as Central Bank Chairman is moderating price and wages. In essence, he is the moderator, the interventionist, the referee, the practical See if not the brain behind the Nigerian banking system and the one that proclaims the agreement of the banking institution. He has direct emphasis on wages and price and from these economic standpoint, we must understand his role as a Governor. The functional dynamics of wage and price as part of his job is tied to the Naira. In everywhere, the balkanization of the Naira is the man’s chief concern.
He has prodded on the bankers and banking institution but his attention should be not misplaced as a man in charge of what happens to the Nigeria credit facility and the very unit of exchange. The continuous time depreciation of Nigerian Naira means that Sanusi is failing in his primary duty as Governor, or at least, he is losing the war on his primary duty which is the stability of the Naira. But of course, the banking institution had other problems before his inception in office, and Sanusi’s argument is that he had to deal on the condition, perhaps before turning his attention to the currency, the buying power. But the current argument that Sanusi’s credit as a banker is appreciably fair in terms of his administration reform (? ) may be taken seriously by view of what a stronger administrative cohesion will do for the later part of the economy.
But the tight rope around the banking institution may yet prove too strong for civilian participation and may show signs of wearing since the CEOs of Banks are no longer trusted. Bank Supervision in terms of Sanusi can mainly yield a lack of faith in the industry and then failure for Banks to perform. I have argued that some of his actions are not based on any real saving a string of pre-conceived notion. However, Sanusi’s has also won the admiration of some Nigerians, and lately at NVS, he was even diagnosed by Azu Mary of being a ‘misunderstood patriot’. Some question the meaning of the praises on him on account of what is missing from the general economy and others accept it, in view that Nigerian banking as they claim was a formerly corrupted house until Sanusi arriving. But since his inception, Naira has been a down ward spiral and it is on this public evidence can be begin to remind ourselves that the Nigerian society is often obtuse on more critical issues since partisanship exist in the many rungs of the society, including Banking
Friday, July 23, 2010
Naira Depression and What Sanusi Can Do (I)c
The question is also the answer since ‘currency’ by its definition means rotation by any means of exchange. As such the paper fortune of currency is the simple fact of its usability. The example is to be appreciated if we are to understand why the role of Western Union, Vigo, Eastern conducting dollars and Euro to Nigeria without buying into the Naira. In essence, they force Nigerians who conduct over 7 billion dollars every year from different part of the world to use the dollar in Nigeria are the expense of Naira.
The usability of any currency of the world infers its demand and the demand for any currency in the world determines its value. Is like a tug of war between internet carrier systems such as Google, Aol, Yahoo, Bing etc, or pure plays such Face book, Twitter, Feboz, and like cell phones, where the more you use them the bigger they are, currencies of the world are like that. The more you use the dollars at the expense of Naira the bigger the Dollars, Euro, Pounds, etc, and the weaker the Naira. So those who ask you to send money in dollars from US or Europe and receive dollars, pounds, and Euro in Nigeria at a lower transmission price are betting on the collapse of your economy and a depreciation of your currency.
The soft and hard question is why…why would you send dollars to Nigeria and pick dollars at a lower price than pick up in Naira? By Rights, Western Union, Eastern Union and Vigo, are supposed to buy into the Naira as part of its faith in the economy. But they are evading the currency. By buying into the Naira would mean that these companies should conduct your 7 billion into Nigeria through their naira bait on the local banks.
The usability of any currency of the world infers its demand and the demand for any currency in the world determines its value. Is like a tug of war between internet carrier systems such as Google, Aol, Yahoo, Bing etc, or pure plays such Face book, Twitter, Feboz, and like cell phones, where the more you use them the bigger they are, currencies of the world are like that. The more you use the dollars at the expense of Naira the bigger the Dollars, Euro, Pounds, etc, and the weaker the Naira. So those who ask you to send money in dollars from US or Europe and receive dollars, pounds, and Euro in Nigeria at a lower transmission price are betting on the collapse of your economy and a depreciation of your currency.
The soft and hard question is why…why would you send dollars to Nigeria and pick dollars at a lower price than pick up in Naira? By Rights, Western Union, Eastern Union and Vigo, are supposed to buy into the Naira as part of its faith in the economy. But they are evading the currency. By buying into the Naira would mean that these companies should conduct your 7 billion into Nigeria through their naira bait on the local banks.
Wednesday, July 21, 2010
Naira Depression and What Sanusi Can Do (I)b
By
Sampson iroabuchi Onwuka
The depreciation of any currency in the world with huge foreign investment like Nigeria is almost a guarantee that the country will default on its foreign debt. Case in point is Sinopec, the Chinese outfit, who were said to have signed a MOU with Nigeria about its 23 billion dollar investment in the country. Second case in point is the accrued repository for a second bridge over the river Niger and widening the road between Nigerian and Cameroun. This will mean that Sinopec will build three oil drilling factories and agro-chemical industries in presorted areas. The backdrop to this is that Sinopec proves itself a ‘Bond’ for the general public and lien for credit swaps. That is a form of guarantee that Sinopec will revert to bank coverage should business fails.
But the group did not at anytime mention the role of Western Union, Vigo, Eastern Union, etc, companies providing international services without buying into the local currency in damaging the Nigerian Naira. Neither did the group raise the attention of Sanusi neglecting his role as the real manager of Nigerian Naira which has gotten bad publicity.
The chosen question for many countries of the world is how to make their currency much more competitive, to essentially withstand the strain of hard currency penetration. Since the perform grade of any economy is ultimately noted by its currency, the challenge faced many Central Banks is how to develop a working dynamic for their unit of exchange, how to create a form of price and wage control.
Sampson iroabuchi Onwuka
The depreciation of any currency in the world with huge foreign investment like Nigeria is almost a guarantee that the country will default on its foreign debt. Case in point is Sinopec, the Chinese outfit, who were said to have signed a MOU with Nigeria about its 23 billion dollar investment in the country. Second case in point is the accrued repository for a second bridge over the river Niger and widening the road between Nigerian and Cameroun. This will mean that Sinopec will build three oil drilling factories and agro-chemical industries in presorted areas. The backdrop to this is that Sinopec proves itself a ‘Bond’ for the general public and lien for credit swaps. That is a form of guarantee that Sinopec will revert to bank coverage should business fails.
But the group did not at anytime mention the role of Western Union, Vigo, Eastern Union, etc, companies providing international services without buying into the local currency in damaging the Nigerian Naira. Neither did the group raise the attention of Sanusi neglecting his role as the real manager of Nigerian Naira which has gotten bad publicity.
The chosen question for many countries of the world is how to make their currency much more competitive, to essentially withstand the strain of hard currency penetration. Since the perform grade of any economy is ultimately noted by its currency, the challenge faced many Central Banks is how to develop a working dynamic for their unit of exchange, how to create a form of price and wage control.
Tuesday, July 20, 2010
Naira Depression and What Sanusi Can Do (I)a
On May 30th 2010, a group of financial engineers collectively called NEMT pulled their attention together to hear out finance Minister. This group includes ministers of Agriculture, commerce, and industry, power, Transport, works, and National planning. There were trying to solve the problems of the economy, they were confronted with issue of current exchange rate which was then and now 150 Naira for a dollar.
This of course has nothing to do with inflationary pressure from High Tariff, the group argued that certain product considered embargo should be exited from federal customs and taxed in many right ways. The question that remains to be answered is whether the NEMT did not know how to solve the problems of the depreciating Naira, and if they didn’t know how, we question their silence on the matter.
If we slash Tariff across the board by 49% on a one time ‘three month’ agility for deeper 26%, then the next step will be curbing the depreciation through blocking super currency importation to Nigerian through Western Union, Vigo, and of Eastern Union others. These steps will in one hand flood the commodity markets and on the other hand, put a brake on notional windfall of the Naira. They will be shortage of certain currency which Crude oil and direct Auction instead of parallel market should more than provision for.
This of course has nothing to do with inflationary pressure from High Tariff, the group argued that certain product considered embargo should be exited from federal customs and taxed in many right ways. The question that remains to be answered is whether the NEMT did not know how to solve the problems of the depreciating Naira, and if they didn’t know how, we question their silence on the matter.
If we slash Tariff across the board by 49% on a one time ‘three month’ agility for deeper 26%, then the next step will be curbing the depreciation through blocking super currency importation to Nigerian through Western Union, Vigo, and of Eastern Union others. These steps will in one hand flood the commodity markets and on the other hand, put a brake on notional windfall of the Naira. They will be shortage of certain currency which Crude oil and direct Auction instead of parallel market should more than provision for.
Monday, July 19, 2010
A Market Advice for President Jonathan Goodluck (IX) by Iroabuchi Onwuka
By
Sampson Iroabuchi Onwuka
Yet again, the monopoly of these companies nearly ‘bleached’ the country dry through the hands off approach to cell phone industry, a condition that remained the backbone of Obasanjo’s disastrous privatization scheme until fairly recently. But of course such companies in Nigeria like the Indian outfit hugging all the actions with the metal industry in Nigeria and raising the price Sky high, would do little to improve their company in Nigeria and much more in creating foreign rates in Nigeria. They are not seriously challenged or dogged in the Nigerian market by others in Nigeria. This is a vacuum process. And this vacuum process swallow whole on all avenues of commerce, it indirectly creates a legal case of monopoly and the end result is just high cost in virtually any source of living.
Sampson Iroabuchi Onwuka
Yet again, the monopoly of these companies nearly ‘bleached’ the country dry through the hands off approach to cell phone industry, a condition that remained the backbone of Obasanjo’s disastrous privatization scheme until fairly recently. But of course such companies in Nigeria like the Indian outfit hugging all the actions with the metal industry in Nigeria and raising the price Sky high, would do little to improve their company in Nigeria and much more in creating foreign rates in Nigeria. They are not seriously challenged or dogged in the Nigerian market by others in Nigeria. This is a vacuum process. And this vacuum process swallow whole on all avenues of commerce, it indirectly creates a legal case of monopoly and the end result is just high cost in virtually any source of living.
Sunday, July 18, 2010
A Market Advice for President Jonathan Goodluck (VIII) by Iroabuchi Onwuka
....incentive is that necessary if we are to grasp with what happens with small businesses transitioning to mid management. In many ways, most third world economies grind themselves to a halt with false attention on foreign investor seeking to enhance the growth through special privileges. These special privileges create inflationary pressure which rest in peace of the buying power. In the name of economic growth, these third world economies when engaged forget the bullish market side of business and the power of self interest, making silly Tariffs that go the distance ruining the benefits of privatization.
The trouble begins when we have little or no success in privatization and when a country like Nigeria turn to foreign investors who for the fact of being outsiders need guarantees of return from their investment. The problem becomes worse when these foreign investors begin to look for repatriation in super currency for instance dollars. Repatriation in dollars from Nigeria Naira is such a market crash that the 1/150 rate of exchange is the only way to understand price appreciation through market Nigeria.
To say that Globacom and MTN are not very good companies in Nigeria is to raise all kinds of objection. Unqualified reports may be made about them but measured against Oando oil, a Nigerian oil company involved in merit search for newly coveted oil fields, the two companies above may actually rank lower. Many Nigerians may revile against the indictment but it is actually true. Going as far as US example of high rated companies in Thomas Register, Donnelly List, Standard and Pour on Industries, and the 9 US census bureau, these companies will be at the bottom of the list. But there are other more disaffecting list and ranking system. On the whole, these two companies ‘MTN and Globacom’ do not at least come up with any new product and soft ware for general use, as such they merely copy existing products, manufacture prototypes and much of their profit go into expansion and staff provision, mainly.
The trouble begins when we have little or no success in privatization and when a country like Nigeria turn to foreign investors who for the fact of being outsiders need guarantees of return from their investment. The problem becomes worse when these foreign investors begin to look for repatriation in super currency for instance dollars. Repatriation in dollars from Nigeria Naira is such a market crash that the 1/150 rate of exchange is the only way to understand price appreciation through market Nigeria.
To say that Globacom and MTN are not very good companies in Nigeria is to raise all kinds of objection. Unqualified reports may be made about them but measured against Oando oil, a Nigerian oil company involved in merit search for newly coveted oil fields, the two companies above may actually rank lower. Many Nigerians may revile against the indictment but it is actually true. Going as far as US example of high rated companies in Thomas Register, Donnelly List, Standard and Pour on Industries, and the 9 US census bureau, these companies will be at the bottom of the list. But there are other more disaffecting list and ranking system. On the whole, these two companies ‘MTN and Globacom’ do not at least come up with any new product and soft ware for general use, as such they merely copy existing products, manufacture prototypes and much of their profit go into expansion and staff provision, mainly.
Saturday, July 17, 2010
A Market Advice for President Jonathan Goodluck (VII) by Iroabuchi Onwuka
Iroabuchi Onwuka
...such incentive is that necessary if we are to grasp with what happens with small businesses transitioning to mid management. In many ways, most third world economies grind themselves to a halt with false attention on foreign investor seeking to enhance the growth through special privileges. These special privileges create inflationary pressure which rest in peace of the buying power. In the name of economic growth, these third world economies when engaged forget the bullish market side of business and the power of self interest, making silly Tariffs that go the distance ruining the benefits of privatization.
The trouble begins when we have little or no success in privatization and when a country like Nigeria turn to foreign investors who for the fact of being outsiders need guarantees of return from their investment. The problem becomes worse when these foreign investors begin to look for repatriation in super currency for instance dollars. Repatriation in dollars from Nigeria Naira is such a market crash that the 1/150 rate of exchange is the only way to understand price appreciation through market Nigeria.
To say that Globacom and MTN are not very good companies in Nigeria is to raise all kinds of objection. Unqualified reports may be made about them but measured against Oando oil, a Nigerian oil company involved in merit search for newly coveted oil fields, the two companies above may actually rank lower. Many Nigerians may revile against the indictment but it is actually true. Going as far as US example of high rated companies in Thomas Register, Donnelly List, Standard and Pour on Industries, and the 9 US census bureau, these companies will be at the bottom of the list. But there are other more disaffecting list and ranking system. On the whole, these two companies ‘MTN and Globacom’ do not at least come up with any new product and soft ware for general use, as such they merely copy existing products, manufacture prototypes and much of their profit go into expansion and staff provision, mainly.
...such incentive is that necessary if we are to grasp with what happens with small businesses transitioning to mid management. In many ways, most third world economies grind themselves to a halt with false attention on foreign investor seeking to enhance the growth through special privileges. These special privileges create inflationary pressure which rest in peace of the buying power. In the name of economic growth, these third world economies when engaged forget the bullish market side of business and the power of self interest, making silly Tariffs that go the distance ruining the benefits of privatization.
The trouble begins when we have little or no success in privatization and when a country like Nigeria turn to foreign investors who for the fact of being outsiders need guarantees of return from their investment. The problem becomes worse when these foreign investors begin to look for repatriation in super currency for instance dollars. Repatriation in dollars from Nigeria Naira is such a market crash that the 1/150 rate of exchange is the only way to understand price appreciation through market Nigeria.
To say that Globacom and MTN are not very good companies in Nigeria is to raise all kinds of objection. Unqualified reports may be made about them but measured against Oando oil, a Nigerian oil company involved in merit search for newly coveted oil fields, the two companies above may actually rank lower. Many Nigerians may revile against the indictment but it is actually true. Going as far as US example of high rated companies in Thomas Register, Donnelly List, Standard and Pour on Industries, and the 9 US census bureau, these companies will be at the bottom of the list. But there are other more disaffecting list and ranking system. On the whole, these two companies ‘MTN and Globacom’ do not at least come up with any new product and soft ware for general use, as such they merely copy existing products, manufacture prototypes and much of their profit go into expansion and staff provision, mainly.
Friday, July 16, 2010
A Market Advice for President Jonathan Goodluck (VI) by Iroabuchi Onwuka
Sampson Iroabuchi Onwuka
But during transitioning strategy, there are always the issue of very few Manufacture companies to start with and fewer locals capable of making competitive investment, hence a third world economy. In such circumstances, this is where the Banks come in. In Nigeria, the recent experimentation with credit yielded a harvest of debt as such a slowdown in representation. China however solved the problem with Development banks and they remain slightly ahead of manufacture curve of many countries largely on defense of their premier wage and price control on the working and middle class China republic. In essence the rate of growth of Chinese influence in recent years has everything to do with inflation control, a dynamic, that is less wicked for Nigeria whose Naira is not even fixed. But China is a quasi communist economy and as such their price and wage control cannot apply in Nigeria or any third world economy.
I mean Nigeria should look at fixing the currency if such high protective and structured Tariffs will be allowed to continue. Else the NEMT should understand they are fretting the economy away to the cheapest merchants of the world. Merchants when not managed only leave a pill of dumps in any country of their wake. In essence, the wider the chance you give these people, the more they clean the markets.
In terms of Privatization from Government ownership, countries such as Nigeria will only be expected to struggle with successful privatization given above all the fact that they are time constrained to produce more of the same or different goods for their ever expanding demographics
But during transitioning strategy, there are always the issue of very few Manufacture companies to start with and fewer locals capable of making competitive investment, hence a third world economy. In such circumstances, this is where the Banks come in. In Nigeria, the recent experimentation with credit yielded a harvest of debt as such a slowdown in representation. China however solved the problem with Development banks and they remain slightly ahead of manufacture curve of many countries largely on defense of their premier wage and price control on the working and middle class China republic. In essence the rate of growth of Chinese influence in recent years has everything to do with inflation control, a dynamic, that is less wicked for Nigeria whose Naira is not even fixed. But China is a quasi communist economy and as such their price and wage control cannot apply in Nigeria or any third world economy.
I mean Nigeria should look at fixing the currency if such high protective and structured Tariffs will be allowed to continue. Else the NEMT should understand they are fretting the economy away to the cheapest merchants of the world. Merchants when not managed only leave a pill of dumps in any country of their wake. In essence, the wider the chance you give these people, the more they clean the markets.
In terms of Privatization from Government ownership, countries such as Nigeria will only be expected to struggle with successful privatization given above all the fact that they are time constrained to produce more of the same or different goods for their ever expanding demographics
Thursday, July 15, 2010
A Market Advice for President Jonathan Goodluck (V) by Iroabuchi Onwuka
The evolution of markets, the very wealth of nations, especially in its infant period, sometimes represents a sought of gauge on the country’s commercial character and usually help to study missed set of opportunities. For any country in the world where there is any form of stock market, the purpose has always been to help encourage investment, especially foreign investment. Monopoly which guarantees their survival snails the process but the question naturally arises as to how to form a kind of equilibrium between importation of goods we don’t already have in Nigeria and protection of local markets from harassment.
That must stretch to greatest moments of most third world countries which occur when there is a transfer of production capacities like manufacture from Government owned to private. Privatization scheme is a paradigm shift from the Government owned to private, but from the early days of that transition strategy onwards, countries with weak markets dynamics always encounter the problem of monopoly and high Tariffs.
For instance, the current issue of stake holders of NERC and MYTO (Multi Year Tariff Order) which matter arising from Government attempt at removing subsidy at current per unit use of 6.00Kw to 7.00Kw and would likely rise to 10.0Kw. The Electricity Tariff has risen up to 30% in a matter of months and is expected to compete with challenge the ridiculous 90% Tariff imposed on GSM products by Ernest Ndukwe of N.C.C. until Natcoms (National Association of Telecoms subscribers) managed to force a jettison on the back breaking and somewhat illegal tariffs. If this High Electricity Tariff should ‘retention’ then the fixed income earners would simply toe the line of Nigerian Medical doctors now on strike. There is no way to pretend that China’s mispriced interest in Niger Delta Electric Power Supply is not a stimulus for this. There is no pretending that this is a step in the right direction but the difference between a Redchip still falling in price and a ADR China Bluechip still rising are to be understood if we can hope to demonstrate that the unnamed companied interested in Nigerian power supply is one too few and will import foreign rates that hold no prisoners about very fixed rate in Nigeria…a case of Alfred Marshal partial parity and in many counts, the roots of high inflation in the country.
That must stretch to greatest moments of most third world countries which occur when there is a transfer of production capacities like manufacture from Government owned to private. Privatization scheme is a paradigm shift from the Government owned to private, but from the early days of that transition strategy onwards, countries with weak markets dynamics always encounter the problem of monopoly and high Tariffs.
For instance, the current issue of stake holders of NERC and MYTO (Multi Year Tariff Order) which matter arising from Government attempt at removing subsidy at current per unit use of 6.00Kw to 7.00Kw and would likely rise to 10.0Kw. The Electricity Tariff has risen up to 30% in a matter of months and is expected to compete with challenge the ridiculous 90% Tariff imposed on GSM products by Ernest Ndukwe of N.C.C. until Natcoms (National Association of Telecoms subscribers) managed to force a jettison on the back breaking and somewhat illegal tariffs. If this High Electricity Tariff should ‘retention’ then the fixed income earners would simply toe the line of Nigerian Medical doctors now on strike. There is no way to pretend that China’s mispriced interest in Niger Delta Electric Power Supply is not a stimulus for this. There is no pretending that this is a step in the right direction but the difference between a Redchip still falling in price and a ADR China Bluechip still rising are to be understood if we can hope to demonstrate that the unnamed companied interested in Nigerian power supply is one too few and will import foreign rates that hold no prisoners about very fixed rate in Nigeria…a case of Alfred Marshal partial parity and in many counts, the roots of high inflation in the country.
Wednesday, July 14, 2010
A Market Advice for President Jonathan Goodluck (IV)
But this is a bad economic idea whatever the reasons are. For a rising period of importation of tires from has increased in worth and in natural condition, the industry has now attracted the greedy nose and eyes of French companies. In many ways, a member of Nigerian ministry cannot make so public a statement had efforts not been made to lure the commercial Actors towards an informal alignment with Michelin and Dunlop. Of course the foreign companies have no interest for long term investment and if they did, they wanted local currency for such support. The only way to control so vast a Nigerian market was naturally through High Tariffs, tariffs so high. With high Tariff structure, there will redemption through sales and then there will be inflationary pressure from need to profit and cost, then the domino effect.
But if John Maynard Keyes opens ‘The General Theory’ with opposition to Say’s Law that “supply creates its own demand” is does not at anytime mean that he was talking from market perspective which was Says. In market reality, supply does create its own market and for that, penetration of goods and availability of market can make a difference in terms of public trust. But on the upside view Keynes made that it was demand that created supply, hence attention on production, we see the inverse relationship between political economics and market economy. One key in the argument is that one side of the case involves the spending government and the other side involves the sales district, markets actually. Surely we wouldn’t need James Buchanan idea of public choice which inveighed and remained critical of Keynes, in which he suggested that public choice is vulnerable to market condition. This is easily achieved through High Tariffs which is anti competitive and which can be of some benefit to the country and no.
The case in point will be the outbreak of 19th century Irish corn and potato embargo which Thomas Malthus argued that local prices had to appreciate first and formally to gauge the rate of importation of corn from Ireland. It was a wrong and right argument. Wrong because of the rent issue and the case of subsistent wage, right because of diminishing returns with view of relatively matching number of small scale English Agriculturist in the 19th century English population. Of course William Jevon from sales and pure market perspective challenged Malthus and his point on total and marginal utility apply in Nigeria since utility must compensate wage, a classic Betham on Utilitarian economy (on what we need, including industries and stadium) with the twist on labor and wage increase.
But if John Maynard Keyes opens ‘The General Theory’ with opposition to Say’s Law that “supply creates its own demand” is does not at anytime mean that he was talking from market perspective which was Says. In market reality, supply does create its own market and for that, penetration of goods and availability of market can make a difference in terms of public trust. But on the upside view Keynes made that it was demand that created supply, hence attention on production, we see the inverse relationship between political economics and market economy. One key in the argument is that one side of the case involves the spending government and the other side involves the sales district, markets actually. Surely we wouldn’t need James Buchanan idea of public choice which inveighed and remained critical of Keynes, in which he suggested that public choice is vulnerable to market condition. This is easily achieved through High Tariffs which is anti competitive and which can be of some benefit to the country and no.
The case in point will be the outbreak of 19th century Irish corn and potato embargo which Thomas Malthus argued that local prices had to appreciate first and formally to gauge the rate of importation of corn from Ireland. It was a wrong and right argument. Wrong because of the rent issue and the case of subsistent wage, right because of diminishing returns with view of relatively matching number of small scale English Agriculturist in the 19th century English population. Of course William Jevon from sales and pure market perspective challenged Malthus and his point on total and marginal utility apply in Nigeria since utility must compensate wage, a classic Betham on Utilitarian economy (on what we need, including industries and stadium) with the twist on labor and wage increase.
Tuesday, July 13, 2010
A Market Advice for President Jonathan Goodluck (III)
In many parts of Nigerian manufacturing department, we find a virtual absence of local investment or the presence of newer companies. The reasons are not farfetched, for we know that Nigerian companies in dollars terms will never compete with turnkey investment from God know where. These other companies in the guise of foreign investment in a big Nigerian market will talk up the Nigerian Commerce ministry and make high pitch for monopoly on any selling industry in Nigeria. In the name of supporting local economy and improving home supply they blind the department from seeing the size of damage that a few unrestrained companies can do in Nigeria.
Such move will always take place in Nigeria since we know that it will almost naturally cripple any form of competition from local Nigerians interested in the same business. The Bull side of this market is that a guarantee for steady profit on shortest possible period is certain even if means doing away with Nigerians entirely. The Bear side is however dead, so dead that the minimum government intervention which occasional burst inflationary prices is back sated in green of the argument that High Tariff was a way of protecting local manufacture. The bear side of the market which is noted for its role in preserving fixed income earning, and civil servant, may have given way to the facts of self interest involved in unprotected markets. This vacuum system is responsible for just about everything. It is a looting system accomplished through high tariff on just about any profit driven entity is inflationary pressure on Short term, to which the local are party to. The long term view that prices will fall will never happen given the Balkanization of Nigerian Naira. Remember income on general term, is largely fixed.
Last Tuesday 7th of July, Deputy Chairman of Nigerian Commerce Ministry, Mr. Ibukun Akindudu with the Support of Senator Jabric Markins –Kuye, publicly expressed his wishes for the return of Michelin and Dunlop to Nigeria. It was a tire business which will naturally require a form of high Tariff protection in order to allow these companies to make it to Nigeria following their successful talks with Akindudu. But is the choice of the public served here, for if the public is not served then self interest is the drive in. By the very office, the public is not protected and the inflation is not managed at all.
Such move will always take place in Nigeria since we know that it will almost naturally cripple any form of competition from local Nigerians interested in the same business. The Bull side of this market is that a guarantee for steady profit on shortest possible period is certain even if means doing away with Nigerians entirely. The Bear side is however dead, so dead that the minimum government intervention which occasional burst inflationary prices is back sated in green of the argument that High Tariff was a way of protecting local manufacture. The bear side of the market which is noted for its role in preserving fixed income earning, and civil servant, may have given way to the facts of self interest involved in unprotected markets. This vacuum system is responsible for just about everything. It is a looting system accomplished through high tariff on just about any profit driven entity is inflationary pressure on Short term, to which the local are party to. The long term view that prices will fall will never happen given the Balkanization of Nigerian Naira. Remember income on general term, is largely fixed.
Last Tuesday 7th of July, Deputy Chairman of Nigerian Commerce Ministry, Mr. Ibukun Akindudu with the Support of Senator Jabric Markins –Kuye, publicly expressed his wishes for the return of Michelin and Dunlop to Nigeria. It was a tire business which will naturally require a form of high Tariff protection in order to allow these companies to make it to Nigeria following their successful talks with Akindudu. But is the choice of the public served here, for if the public is not served then self interest is the drive in. By the very office, the public is not protected and the inflation is not managed at all.
Monday, July 12, 2010
A Market Advice for President Jonathan Goodluck (II)
Given the inflationary pressure from High Tariff and high unemployment in many parts of the country, given the little or no credit from Banks, the country cannot escape slow or insignificant growth for small businesses. Given the high numbers of unemployment in Nigeria and estranged condition of the Nigerian fixed income earners, there is no telling how disaffected and disfranchised Nigerian Laborers are and whether they can survive the unconditional vacuum system. There is ‘vacuum system’ of course in Nigeria, a process which involves protection of certain rights with high tariffs, which inadvertently destroy any comfort for long term investment and therefore cur for inflationary pressures.
For instance, when Nigerians pay so much for GSM products, for SMS connection or software, it reverts to overall high price which injure the local fixed income earners. High price market is seriously expensive for local businesses but cheap for foreign investors many of them demand repatriation in Dollars for profit made through the profit. So this is where the pun begins in Nigeria, we need cell phones but not have to any price for it. Above all, we should not have to take the rate that is only commensurate with dollar minded market. Given the dependency ratio of Nigerians on cell phones and the problems of fixed income of the many Nigerians, It is save to conclude that against a depreciating Nigerian Naira, Nigerians are paying far too much for the ordinary cell phone use, irrespective of the reduction in Tariff. It also makes Nigeria a very expensive cell phone industry….one of the most expensive in the world.
We can estimate the market demand of real effect of high phone call in Nigeria, the use of cell phones in Nigeria make cell phone call a derivative of the general pull on demand. Demand may by itself be a sensitive barometer in testing the range of pressure to buy a product that we don’t already have, but it is steady bait against. This can easily result in paying too much for essential needs of the society. You can it a ‘Want’ category, a market of self interest, and the product under this condition drives the market.
For instance, when Nigerians pay so much for GSM products, for SMS connection or software, it reverts to overall high price which injure the local fixed income earners. High price market is seriously expensive for local businesses but cheap for foreign investors many of them demand repatriation in Dollars for profit made through the profit. So this is where the pun begins in Nigeria, we need cell phones but not have to any price for it. Above all, we should not have to take the rate that is only commensurate with dollar minded market. Given the dependency ratio of Nigerians on cell phones and the problems of fixed income of the many Nigerians, It is save to conclude that against a depreciating Nigerian Naira, Nigerians are paying far too much for the ordinary cell phone use, irrespective of the reduction in Tariff. It also makes Nigeria a very expensive cell phone industry….one of the most expensive in the world.
We can estimate the market demand of real effect of high phone call in Nigeria, the use of cell phones in Nigeria make cell phone call a derivative of the general pull on demand. Demand may by itself be a sensitive barometer in testing the range of pressure to buy a product that we don’t already have, but it is steady bait against. This can easily result in paying too much for essential needs of the society. You can it a ‘Want’ category, a market of self interest, and the product under this condition drives the market.
Saturday, July 10, 2010
Inflationary Pressure from High Tariff (VI)
By
Sampson Iroabuchi Onwuka
The trouble begins when we have little or no success in privatization and when a country like Nigeria turn to foreign investors who for the fact of being outsiders need guarantees of return from their investment. The problem becomes worse when these foreign investors begin to look for repatriation in super currency for instance dollars. Repatriation in dollars from Nigeria Naira is such a market crash that the 1/150 rate of exchange is the only way to understand price appreciation through market Nigeria.
To say that Globacom and MTN are not very good companies in Nigeria is to raise all kinds of objection. Unqualified reports may be made about them but measured against Oando oil, a Nigerian oil company involved in merit search for newly coveted oil fields, the two companies above may actually rank lower. Many Nigerians may revile against the indictment but it is actually true. Going as far as US example of high rated companies in Thomas Register, Donnelly List, Standard and Pour on Industries, and the 9 US census bureau, these companies will be at the bottom of the list. But there are other more disaffecting list and ranking system. On the whole, these two companies ‘MTN and Globacom’ do not at least come up with any new product and soft ware for general use, as such they merely copy existing products, manufacture prototypes and much of their profit go into expansion and staff provision, mainly.
Yet again, the monopoly of these companies nearly ‘bleached’ the country dry through the hands off approach to cell phone industry, a condition that remained the backbone of Obasanjo’s disastrous privatization scheme until fairly recently. But of course such companies in Nigeria like the Indian outfit hugging all the actions with the metal industry in Nigeria and raising the price Sky high, would do little to improve their company in Nigeria and much more in creating foreign rates in Nigeria. They are not seriously challenged or dogged in the Nigerian market by others in Nigeria.
This is a vacuum process in Nigerian markets and this vacuum process swallow whole on all avenues of commerce, it indirectly creates a legal case of monopoly and the end result is just high cost in virtually any source of living.
Read full thread
Sampson Iroabuchi Onwuka
The trouble begins when we have little or no success in privatization and when a country like Nigeria turn to foreign investors who for the fact of being outsiders need guarantees of return from their investment. The problem becomes worse when these foreign investors begin to look for repatriation in super currency for instance dollars. Repatriation in dollars from Nigeria Naira is such a market crash that the 1/150 rate of exchange is the only way to understand price appreciation through market Nigeria.
To say that Globacom and MTN are not very good companies in Nigeria is to raise all kinds of objection. Unqualified reports may be made about them but measured against Oando oil, a Nigerian oil company involved in merit search for newly coveted oil fields, the two companies above may actually rank lower. Many Nigerians may revile against the indictment but it is actually true. Going as far as US example of high rated companies in Thomas Register, Donnelly List, Standard and Pour on Industries, and the 9 US census bureau, these companies will be at the bottom of the list. But there are other more disaffecting list and ranking system. On the whole, these two companies ‘MTN and Globacom’ do not at least come up with any new product and soft ware for general use, as such they merely copy existing products, manufacture prototypes and much of their profit go into expansion and staff provision, mainly.
Yet again, the monopoly of these companies nearly ‘bleached’ the country dry through the hands off approach to cell phone industry, a condition that remained the backbone of Obasanjo’s disastrous privatization scheme until fairly recently. But of course such companies in Nigeria like the Indian outfit hugging all the actions with the metal industry in Nigeria and raising the price Sky high, would do little to improve their company in Nigeria and much more in creating foreign rates in Nigeria. They are not seriously challenged or dogged in the Nigerian market by others in Nigeria.
This is a vacuum process in Nigerian markets and this vacuum process swallow whole on all avenues of commerce, it indirectly creates a legal case of monopoly and the end result is just high cost in virtually any source of living.
Read full thread
Friday, July 9, 2010
Inflationary Pressure from High Tariff (V)
By Iroabuchi Onwuka
But during transitioning strategy, there are always the issue of very few Manufacture companies to start with and fewer locals capable of making competitive investment, hence a third world economy. In such circumstances, this is where the Banks come in. In Nigeria, the recent experimentation with credit yielded a harvest of debt as such a slowdown in representation.
China however solved the problem with Development banks and they remain slightly ahead of manufacture curve of many countries largely on defense of their premier wage and price control on the working and middle class China republic. In essence the rate of growth of Chinese influence in recent years has everything to do with inflation control, a dynamic, that is less wicked for Nigeria whose Naira is not even fixed. But China is a quasi communist economy and as such their price and wage control cannot apply in Nigeria or any third world economy.
I mean Nigeria should look at fixing the currency if such high protective and structured Tariffs will be allowed to continue. Else the NEMT should understand they are fretting the economy away to the cheapest merchants of the world. Merchants when not managed only leave a pill of dumps in any country of their wake. In essence, the wider the chance you give these people, the more they clean the markets.
In terms of Privatization from Government ownership, countries such as Nigeria will only be expected to struggle with successful privatization given above all the fact that they are time constrained to produce more of the same or different goods for their ever expanding demographics.
The same incentive is that necessary if we are to grasp with what happens with small businesses transitioning to mid management. In many ways, most third world economies grind themselves to a halt with false attention on foreign investor seeking to enhance the growth through special privileges. These special privileges create inflationary pressure which rest in peace of the buying power. In the name of economic growth, these third world economies when engaged forget the bullish market side of business and the power of self interest, making silly Tariffs that go the distance ruining the benefits of privatization.
But during transitioning strategy, there are always the issue of very few Manufacture companies to start with and fewer locals capable of making competitive investment, hence a third world economy. In such circumstances, this is where the Banks come in. In Nigeria, the recent experimentation with credit yielded a harvest of debt as such a slowdown in representation.
China however solved the problem with Development banks and they remain slightly ahead of manufacture curve of many countries largely on defense of their premier wage and price control on the working and middle class China republic. In essence the rate of growth of Chinese influence in recent years has everything to do with inflation control, a dynamic, that is less wicked for Nigeria whose Naira is not even fixed. But China is a quasi communist economy and as such their price and wage control cannot apply in Nigeria or any third world economy.
I mean Nigeria should look at fixing the currency if such high protective and structured Tariffs will be allowed to continue. Else the NEMT should understand they are fretting the economy away to the cheapest merchants of the world. Merchants when not managed only leave a pill of dumps in any country of their wake. In essence, the wider the chance you give these people, the more they clean the markets.
In terms of Privatization from Government ownership, countries such as Nigeria will only be expected to struggle with successful privatization given above all the fact that they are time constrained to produce more of the same or different goods for their ever expanding demographics.
The same incentive is that necessary if we are to grasp with what happens with small businesses transitioning to mid management. In many ways, most third world economies grind themselves to a halt with false attention on foreign investor seeking to enhance the growth through special privileges. These special privileges create inflationary pressure which rest in peace of the buying power. In the name of economic growth, these third world economies when engaged forget the bullish market side of business and the power of self interest, making silly Tariffs that go the distance ruining the benefits of privatization.
Thursday, July 8, 2010
Inflationary Pressure from High Tariff (IV)
By
Sampson Iroabuchi Onwuka
The case in point will be the outbreak of 19th century Irish corn and potato embargo which Thomas Malthus argued that local prices had to appreciate first and formally to gauge the rate of importation of corn from Ireland. It was a wrong and right argument. Wrong because of the rent issue and the case of subsistent wage, right because of diminishing returns with view of relatively matching number of small scale English Agriculturist in the 19th century English population. Of course William Jevon from sales and pure market perspective challenged Malthus and his point on total and marginal utility apply in Nigeria since utility must compensate wage, a classic Betham on Utilitarian economy (on what we need, including industries and stadium) with the twist on labor and wage increase.
The evolution of markets, the very wealth of nations, especially in its infant period, sometimes represents a sought of gauge on the country’s commercial character and usually help to study missed set of opportunities. For any country in the world where there is any form of stock market, the purpose has always been to help encourage investment, especially foreign investment. Monopoly which guarantees their survival snails the process but the question naturally arises as to how to form a kind of equilibrium between importation of goods we don’t already have in Nigeria and protection of local markets from harassment.
That must stretch to greatest moments of most third world countries which occur when there is a transfer of production capacities like manufacture from Government owned to private. Privatization scheme is a paradigm shift from the Government owned to private, but from the early days of that transition strategy onwards, countries with weak markets dynamics always encounter the problem of monopoly and high Tariffs.
For instance, the current issue of stake holders of NERC and MYTO (Multi Year Tariff Order) which matter arising from Government attempt at removing subsidy at current per unit use of 6.00Kw to 7.00Kw and would likely rise to 10.0Kw. The Electricity Tariff has risen up to 30% in a matter of months and is expected to compete with challenge the ridiculous 90% Tariff imposed on GSM products by Ernest Ndukwe of N.C.C. until Natcoms (National Association of Telecoms subscribers) managed to force a jettison on the back breaking and somewhat illegal tariffs.
If this High Electricity Tariff should ‘retention’ then the fixed income earners would simply toe the line of Nigerian Medical doctors now on strike. There is no way to pretend that China’s mispriced interest in Niger Delta Electric Power Supply is not a stimulus for this. There is no pretending that this is a step in the right direction but the difference between a Redchip still falling in price and a ADR China Bluechip still rising are to be understood if we can hope to demonstrate that the unnamed companied interested in Nigerian power supply is one too few and will import foreign rates that hold no prisoners about very fixed rate in Nigeria…a case of Alfred Marshal partial parity and in many counts, the roots of high inflation in the country
Sampson Iroabuchi Onwuka
The case in point will be the outbreak of 19th century Irish corn and potato embargo which Thomas Malthus argued that local prices had to appreciate first and formally to gauge the rate of importation of corn from Ireland. It was a wrong and right argument. Wrong because of the rent issue and the case of subsistent wage, right because of diminishing returns with view of relatively matching number of small scale English Agriculturist in the 19th century English population. Of course William Jevon from sales and pure market perspective challenged Malthus and his point on total and marginal utility apply in Nigeria since utility must compensate wage, a classic Betham on Utilitarian economy (on what we need, including industries and stadium) with the twist on labor and wage increase.
The evolution of markets, the very wealth of nations, especially in its infant period, sometimes represents a sought of gauge on the country’s commercial character and usually help to study missed set of opportunities. For any country in the world where there is any form of stock market, the purpose has always been to help encourage investment, especially foreign investment. Monopoly which guarantees their survival snails the process but the question naturally arises as to how to form a kind of equilibrium between importation of goods we don’t already have in Nigeria and protection of local markets from harassment.
That must stretch to greatest moments of most third world countries which occur when there is a transfer of production capacities like manufacture from Government owned to private. Privatization scheme is a paradigm shift from the Government owned to private, but from the early days of that transition strategy onwards, countries with weak markets dynamics always encounter the problem of monopoly and high Tariffs.
For instance, the current issue of stake holders of NERC and MYTO (Multi Year Tariff Order) which matter arising from Government attempt at removing subsidy at current per unit use of 6.00Kw to 7.00Kw and would likely rise to 10.0Kw. The Electricity Tariff has risen up to 30% in a matter of months and is expected to compete with challenge the ridiculous 90% Tariff imposed on GSM products by Ernest Ndukwe of N.C.C. until Natcoms (National Association of Telecoms subscribers) managed to force a jettison on the back breaking and somewhat illegal tariffs.
If this High Electricity Tariff should ‘retention’ then the fixed income earners would simply toe the line of Nigerian Medical doctors now on strike. There is no way to pretend that China’s mispriced interest in Niger Delta Electric Power Supply is not a stimulus for this. There is no pretending that this is a step in the right direction but the difference between a Redchip still falling in price and a ADR China Bluechip still rising are to be understood if we can hope to demonstrate that the unnamed companied interested in Nigerian power supply is one too few and will import foreign rates that hold no prisoners about very fixed rate in Nigeria…a case of Alfred Marshal partial parity and in many counts, the roots of high inflation in the country
Wednesday, July 7, 2010
Inflationary Pressure from High Tariff (III)
By
Sampson I Onwuka
Last Tuesday 7th of July, Deputy Chairman of Nigerian Commerce Ministry, Mr. Ibukun Akindudu with the Support of Senator Jabric Markins –Kuye, publicly expressed his wishes for the return of Michelin and Dunlop to Nigeria. It was a tire business which will naturally require a form of high Tariff protection in order to allow these companies to make it to Nigeria following their successful talks with Akindudu. But is the choice of the public served here, for if the public is not served then self interest is the drive in. By the very office, the public is not protected and the inflation is not managed at all.
But this is a bad economic idea whatever the reasons are. For a rising period of importation of tires from has increased in worth and in natural condition, the industry has now attracted the greedy nose and eyes of French companies. In many ways, a member of Nigerian ministry cannot make so public a statement had efforts not been made to lure the commercial Actors towards an informal alignment with Michelin and Dunlop. Of course the foreign companies have no interest for long term investment and if they did, they wanted local currency for such support. The only way to control so vast a Nigerian market was naturally through High Tariffs, tariffs so high. With high Tariff structure, there will redemption through sales and then there will be inflationary pressure from need to profit and cost, then the domino effect.
But if John Maynard Keyes opens ‘The General Theory’ with opposition to Say’s Law that “supply creates its own demand” is does not at anytime mean that he was talking from market perspective which was Says. In market reality, supply does create its own market and for that, penetration of goods and availability of market can make a difference in terms of public trust. But on the upside view Keynes made that it was demand that created supply, hence attention on production, we see the inverse relationship between political economics and market economy. One key in the argument is that one side of the case involves the spending government and the other side involves the sales district, markets actually. Surely we wouldn’t need James Buchanan idea of public choice which inveighed and remained critical of Keynes, in which he suggested that public choice is vulnerable to market condition. This is easily achieved through High Tariffs which is anti competitive and which can be of some benefit to the country and no.
Sampson I Onwuka
Last Tuesday 7th of July, Deputy Chairman of Nigerian Commerce Ministry, Mr. Ibukun Akindudu with the Support of Senator Jabric Markins –Kuye, publicly expressed his wishes for the return of Michelin and Dunlop to Nigeria. It was a tire business which will naturally require a form of high Tariff protection in order to allow these companies to make it to Nigeria following their successful talks with Akindudu. But is the choice of the public served here, for if the public is not served then self interest is the drive in. By the very office, the public is not protected and the inflation is not managed at all.
But this is a bad economic idea whatever the reasons are. For a rising period of importation of tires from has increased in worth and in natural condition, the industry has now attracted the greedy nose and eyes of French companies. In many ways, a member of Nigerian ministry cannot make so public a statement had efforts not been made to lure the commercial Actors towards an informal alignment with Michelin and Dunlop. Of course the foreign companies have no interest for long term investment and if they did, they wanted local currency for such support. The only way to control so vast a Nigerian market was naturally through High Tariffs, tariffs so high. With high Tariff structure, there will redemption through sales and then there will be inflationary pressure from need to profit and cost, then the domino effect.
But if John Maynard Keyes opens ‘The General Theory’ with opposition to Say’s Law that “supply creates its own demand” is does not at anytime mean that he was talking from market perspective which was Says. In market reality, supply does create its own market and for that, penetration of goods and availability of market can make a difference in terms of public trust. But on the upside view Keynes made that it was demand that created supply, hence attention on production, we see the inverse relationship between political economics and market economy. One key in the argument is that one side of the case involves the spending government and the other side involves the sales district, markets actually. Surely we wouldn’t need James Buchanan idea of public choice which inveighed and remained critical of Keynes, in which he suggested that public choice is vulnerable to market condition. This is easily achieved through High Tariffs which is anti competitive and which can be of some benefit to the country and no.
Tuesday, July 6, 2010
Inflationary Pressure from High Tariff (II)
By
Sampson Iroabuchi Onwuka
For instance, when Nigerians pay so much for GSM products, for SMS connection or software, it reverts to overall high price which injure the local fixed income earners. High price market is seriously expensive for local businesses but cheap for foreign investors many of them demand repatriation in Dollars for profit made through the profit. So this is where the pun begins in Nigeria, we need cell phones but not have to any price for it. Above all, we should not have to take the rate that is only commensurate with dollar minded market. Given the dependency ratio of Nigerians on cell phones and the problems of fixed income of the many Nigerians, It is save to conclude that against a depreciating Nigerian Naira, Nigerians are paying far too much for the ordinary cell phone use, irrespective of the reduction in Tariff. It also makes Nigeria a very expensive cell phone industry….one of the most expensive in the world.
We can estimate the market demand of real effect of high phone call in Nigeria, the use of cell phones in Nigeria make cell phone call a derivative of the general pull on demand. Demand may by itself be a sensitive barometer in testing the range of pressure to buy a product that we don’t already have, but it is steady bait against. This can easily result in paying too much for essential needs of the society. You can it a ‘Want’ category, a market of self interest, and the product under this condition drives the market.
In many parts of Nigerian manufacturing department, we find a virtual absence of local investment or the presence of newer companies. The reasons are not farfetched, for we know that Nigerian companies in dollars terms will never compete with turnkey investment from God know where. These other companies in the guise of foreign investment in a big Nigerian market will talk up the Nigerian Commerce ministry and make high pitch for monopoly on any selling industry in Nigeria. In the name of supporting local economy and improving home supply they blind the department from seeing the size of damage that a few unrestrained companies can do in Nigeria.
Such move will always take place in Nigeria since we know that it will almost naturally cripple any form of competition from local Nigerians interested in the same business. The Bull side of this market is that a guarantee for steady profit on shortest possible period is certain even if means doing away with Nigerians entirely. The Bear side is however dead, so dead that the minimum government intervention which occasional burst inflationary prices is back sated in green of the argument that High Tariff was a way of protecting local manufacture. The bear side of the market which is noted for its role in preserving fixed income earning, and civil servant, may have given way to the facts of self interest involved in unprotected markets.
This vacuum system is responsible for just about everything. It is a looting system accomplished through high tariff on just about any profit driven entity is inflationary pressure on Short term, to which the local are party to. The long term view that prices will fall will never happen given the Balkanization of Nigerian Naira. Remember income on general term, is largely fixed.
Sampson Iroabuchi Onwuka
For instance, when Nigerians pay so much for GSM products, for SMS connection or software, it reverts to overall high price which injure the local fixed income earners. High price market is seriously expensive for local businesses but cheap for foreign investors many of them demand repatriation in Dollars for profit made through the profit. So this is where the pun begins in Nigeria, we need cell phones but not have to any price for it. Above all, we should not have to take the rate that is only commensurate with dollar minded market. Given the dependency ratio of Nigerians on cell phones and the problems of fixed income of the many Nigerians, It is save to conclude that against a depreciating Nigerian Naira, Nigerians are paying far too much for the ordinary cell phone use, irrespective of the reduction in Tariff. It also makes Nigeria a very expensive cell phone industry….one of the most expensive in the world.
We can estimate the market demand of real effect of high phone call in Nigeria, the use of cell phones in Nigeria make cell phone call a derivative of the general pull on demand. Demand may by itself be a sensitive barometer in testing the range of pressure to buy a product that we don’t already have, but it is steady bait against. This can easily result in paying too much for essential needs of the society. You can it a ‘Want’ category, a market of self interest, and the product under this condition drives the market.
In many parts of Nigerian manufacturing department, we find a virtual absence of local investment or the presence of newer companies. The reasons are not farfetched, for we know that Nigerian companies in dollars terms will never compete with turnkey investment from God know where. These other companies in the guise of foreign investment in a big Nigerian market will talk up the Nigerian Commerce ministry and make high pitch for monopoly on any selling industry in Nigeria. In the name of supporting local economy and improving home supply they blind the department from seeing the size of damage that a few unrestrained companies can do in Nigeria.
Such move will always take place in Nigeria since we know that it will almost naturally cripple any form of competition from local Nigerians interested in the same business. The Bull side of this market is that a guarantee for steady profit on shortest possible period is certain even if means doing away with Nigerians entirely. The Bear side is however dead, so dead that the minimum government intervention which occasional burst inflationary prices is back sated in green of the argument that High Tariff was a way of protecting local manufacture. The bear side of the market which is noted for its role in preserving fixed income earning, and civil servant, may have given way to the facts of self interest involved in unprotected markets.
This vacuum system is responsible for just about everything. It is a looting system accomplished through high tariff on just about any profit driven entity is inflationary pressure on Short term, to which the local are party to. The long term view that prices will fall will never happen given the Balkanization of Nigerian Naira. Remember income on general term, is largely fixed.
Monday, July 5, 2010
Inflationary Pressure from High Tariff (I)
By
Sampson Iroabuchi Onwuka
High Tariffs in any industry in Nigeria inadvertently trigger high cost of products in many parts of the local economy. The pressure to sale at a higher return is due to the cost of getting the products to the market place in first place. There is a ‘vacuum system’ in the country that makes it difficult for small business to make vital gains in Nigeria. This vacuum system revolves around the Ports authority, the monopoly of certain good through exorbitant high tariff which extend from the docking areas through Customs to business to business and then the general public who must pay despite the fixed income. The direct control of key industries in Nigeria by strikingly few merchants, force an unnecessary price escalation - a classic case on Adam Smith on Nigerian depression economy.
The Nigerian President, Jonathan Goodluck, should look to slashing high Tariff - I mean all forms of Tariff incentive by at least 49% on year end. He should set up a simple committee to see this happen in matter of weeks. Should such Customs’ Act fail to pass in the coming months, the country should brace for extended occasions of strike if not for high inflationary pressure from newer Tariffs but for political reasons commensurate to elections 2011.
Nigerian is a ‘one crop economy’. Crude oil is Nigeria’s only bait in the world markets and in terms of import making a noise for the country, the country is struggling ‘Third’ at it. World Bank called Nigeria the most expensive business community largely due to the price on Tariff alone. The argument that certain embargo will help local production does not take into account the ever expanding Nigerian demographics. With the depreciating Nigerian power of purchase baited against the wholesale failures of small business in states other than Lagos and Abuja-there are serious depression economy indicators which the Nigerian President should take seriously. For nothing could add to this problem than a rising and very exorbitant cost of what we need.
Given the inflationary pressure from High Tariff and high unemployment in many parts of the country, given the little or no credit from Banks, the country cannot escape slow or insignificant growth for small businesses. Given the high numbers of unemployment in Nigeria and estranged condition of the Nigerian fixed income earners, there is no telling how disaffected and disfranchised Nigerian Laborers are and whether they can survive the unconditional vacuum system. There is ‘vacuum system’ of course in Nigeria, a process which involves protection of certain rights with high tariffs, which inadvertently destroy any comfort for long term investment and therefore cur for inflationary pressures.
Sampson Iroabuchi Onwuka
High Tariffs in any industry in Nigeria inadvertently trigger high cost of products in many parts of the local economy. The pressure to sale at a higher return is due to the cost of getting the products to the market place in first place. There is a ‘vacuum system’ in the country that makes it difficult for small business to make vital gains in Nigeria. This vacuum system revolves around the Ports authority, the monopoly of certain good through exorbitant high tariff which extend from the docking areas through Customs to business to business and then the general public who must pay despite the fixed income. The direct control of key industries in Nigeria by strikingly few merchants, force an unnecessary price escalation - a classic case on Adam Smith on Nigerian depression economy.
The Nigerian President, Jonathan Goodluck, should look to slashing high Tariff - I mean all forms of Tariff incentive by at least 49% on year end. He should set up a simple committee to see this happen in matter of weeks. Should such Customs’ Act fail to pass in the coming months, the country should brace for extended occasions of strike if not for high inflationary pressure from newer Tariffs but for political reasons commensurate to elections 2011.
Nigerian is a ‘one crop economy’. Crude oil is Nigeria’s only bait in the world markets and in terms of import making a noise for the country, the country is struggling ‘Third’ at it. World Bank called Nigeria the most expensive business community largely due to the price on Tariff alone. The argument that certain embargo will help local production does not take into account the ever expanding Nigerian demographics. With the depreciating Nigerian power of purchase baited against the wholesale failures of small business in states other than Lagos and Abuja-there are serious depression economy indicators which the Nigerian President should take seriously. For nothing could add to this problem than a rising and very exorbitant cost of what we need.
Given the inflationary pressure from High Tariff and high unemployment in many parts of the country, given the little or no credit from Banks, the country cannot escape slow or insignificant growth for small businesses. Given the high numbers of unemployment in Nigeria and estranged condition of the Nigerian fixed income earners, there is no telling how disaffected and disfranchised Nigerian Laborers are and whether they can survive the unconditional vacuum system. There is ‘vacuum system’ of course in Nigeria, a process which involves protection of certain rights with high tariffs, which inadvertently destroy any comfort for long term investment and therefore cur for inflationary pressures.
Sunday, July 4, 2010
A Reaction to Tunde Fagbenle on His view on Sanusi Lamido (X) by Iroabuchi Onwuka
By
Sampson Iroabuchi Onwuka
....Tunde Fagbele said that
“Some had private planes ggrandi those owned by some of the world’s richest persons. Some of these CEOs were worth trillions of naira; some were as rich as some state governments! It made Lamido believe that only the gallows was good enough for anyone who could be so perverse”.
Such prolix indignation, such callow ruminative on Nigerian banking, as if we shy from a halitosis of the others who the author may only met.
If this author, Tunde Fagbenle, had known that Sanusi is in all respect an Islamic Banker, he would have put on a break before his indictment. For Muslims “corruption is a White man phenomenon” and Christians are not entirely worthy. Christianity, to certain Sufi brotherhood of Islam is the Cavalcade that parries the goons. These Christians of the East in spite of the starving death of the Nigerian civil war era are the current patios for recklessness, not entitled to anything and are met with double standard which they are no pretenses in the above paragraph. The author Fagbenle, seems as if these CEOs went into the money houses and began to offload money in trucks. If the author had known that Muslims from Northern Nigeria and some from Christian West had emptied the very coffins of Nigeria to negative 30 billion before Soludo and company, perhaps he would been more careful on so discrediting a barrage. If the author had known that the man who changed the money printing house in Nigeria was this Soludo and his Christian others, perhaps he would avoided to place so lame a mock on these bankers…assuming his insinuations fly-escapade are not insinuation. These couldn’t have done anymore than cast humorous on ‘the envy’ of just about anyone who is not part of them.
“But the horrors that Lamido Sanusi discovered was not merely one of aggrandizement and self-enrichment, no, it was one that threatened the very fabric of the banking system. The level of exposure of some of the banks to margin loans and the oil and gas sector had rendered them almost insolvent and their capacity to continue as viable concerns very doubtful”
If only Mr Fagbenle could stop, for we are supposed to participate in such moral obesity because the judgment is based on something as substance as air. He is concerned about his goodness and all of a sudden concerned about Banking. If there is chronology of speech, the deciding lines somewhat disappoint. How can a man make magic an outcome of Nigerian banks which was no more than what it was, a part of the larger wheels. How can we decide to make rain and then turn around and say the rain is fell on those people makes them guilty.
Advance psychology of money is one that compels us to try our hands with the mindset of Sanusi, the CBN Chair. From enhanced understanding of Islamic banking system, Sanusi the man in question, in many ways a Muslim banker may not have wondered at the ruins of his actions. For how could he have? Yet we can say that it is not necessary to rehearse the fact that bankers without Islamic foundation in 2008 financial debacle were ultimately labeled corrupt. It is also wrong to have only indicated that the likes of Cecilia Ibru for her sins whatever they were is taken as exemplary when there was in the main.
The poverty of the North was even, all Sanusi is wont at achieving was compels from others to shield him from obvious political daggers, for by acting in sluices of The oil issue the author is referring to has very little logical back ground. For one thing, the man in charge of ruining much of the little wealth we obtained from oil until 2008 was no other than
But this is not about Soludo. It is about Sanusi Lamido Sanusi and one year of him as the Governor of CBN.
Lamido Sanusi came upon the scene literally on a white charger, fuming with righteous indignation. Rightly so. Unlike his predecessor who was plucked from the academia, completely green in practical banking, SLS combines both intellectualism and practical knowledge of banking, especially of risk management. Before becoming the governor of CBN he already knew half of the shenanigans going on in the banking industry and he was unimpressed by the affluence being flaunted by his colleagues in the banks. As CEO of First Bank, brief as it was, he felt even affronted by the vain and inglorious display of materialism and mediocrity by some of his peers. Then fate worked in his favour and he became governor of CBN overnight.
It is often intent of producing a class of people who use the religions as bait to perpetuate such class, a class that has no merit even in Islamic society. Of course it is little wonder that late Yar’duwa, Lukman Rilwanu former oil minister, Sanusi and his family, are part of this new attempt at producing a class of Muslims leaders who fester to the Nigerian oil and then banks.
“But is Lamido Sanusi the messiah he wants us to believe he is? He has made enemies for himself, powerful enemies. Those billionaires, nay trillionaires, he has ridiculed and de-robed are unforgiving. Those with vested interest in the banks he has dealt with are up in arms to get back at him”.
“But one year on, Sanusi has earned the respect and trust of the international banking publics. None of his critics have so far been able to unearth any misdemeanour or professional misconduct against him in his banking career. His indignation is righteous then, even if frightfully unmeasured”.
So far he has ruined Nigerian International reputation in Banking given the unorthodox style of execution. It is not the acclaim that he receives from his cheer leaders that is important but on how he is to be perceived from elsewhere. Sanusi may be seen as a man of action by his group, but in terms of what he is faced to accomplish, he has in many ways left several victims. Needless to point out that his victims do not include members of the Shariah Advisory Committee. His victims include those who in times past may have also suffered the intolerance of others. When we look at Banking as a feeder for the country, we understand why Sanusi was citing a case for North that was so supposedly neglected but the poverty of the North is more like the problem of one group controlling many of the wealth and those who rely on them feed around them and sometimes do nothing. They are very certain that if it goes bad someone will use the diversionary means employed by Sanusi to strip certain others of their hard earned largesse and they call ‘them’ corrupted while envy will silence the most obdurate of them all.
“There are new and qualitative policies being introduced by Sanusi’s CBN to bring sanity and stability to the banking industry and growth to the real economy. Effective debt recovery measures have been introduced in the banks, and they are now mandated to make full disclosures in their reports just as harmonisation of their accounting period is prescribed”.
The 13 point policy introduced in banking was not Sanusi’s invention rather Soludo’s, the 400 possible changes that can take in banking in Nigeria was partly pioneered by Soludo. Nigerian hedging technology is point and forward on the Spot which Koran opposes under Sanusi. I million over the counter depository was prohibited by Soludo. Modern Nigerian banking through electronic system was fully initiated by Soludo. The stress and transparency test for TBF banks was begun by Soludo. The stress was in its preliminary stages before his removal from office. The eFass was introduced by Soludo to gauge perform grade of many Nigerian financial institution, and the currency was changed under Soludo and the State of the Art money printing house which helped the Comptroller of Currency was initiated in Lagos under the aegis of Soludo. Diet was open and not presorted under Soludo. Under Soludo, there was a bait of Nigeria currency in the international world and its drive on the investment grade. Banks and Insurance companies were regularly checked under Soludo irrespective of what Sanusi and his group are going around saying. Sanusi’s angst may be based on a hint of jealousy over the whole process. But it is his attempt to dastardly Soludo’s record that marked him as unfair, uncivil, and yes probably dishonest. Soludo was under way in initiating an Open Market Operation where private buyers will be capable of purchasing government securities instead on banks only and no Northerner will say that it did was there to benefit their joint venture. Stock buyback was initiated through a renascent NDIC under Soludo. The non performing debt or obese account were to be checked and dealt on, but it was Soludo who began to raise the concern for removing CEOs who conducted lending on thin accounts. But I fault Soludo on removing the price ceiling and shunning convertible since inflationary pressure and consumer prices are one of the same.
“Strong and effective corporate governance is being enforced through the overhaul of the system of board appointments, tenure, and the requirement for responsible and efficient management. An asset management company (AMCON) has been established as a resolution vehicle to assist in the recapitalisation of the banks that have required CBN intervention”.
Mr Sanusi Islamic Banking has its moments it is of some success in many parts of the world, like in South East Asia. In Nigeria, we are very good people and we can allow our Muslim brothers to bring the best part of their banking, and no group is that tolerable more than the East. Inviting 5 Islamic countries to buy Nigerian banks or at least become majority stakes isn’t funny, but that’s exactly what Sanusi did. These days, Muslim countries and their societies are not doing very badly and they include Muslim Community Co-operative of Australia, Indonesia, Brunei, and so on, that render services and advisory to Islam loyalist. These days we have all kinds of financial product like Islamic Financial Services, Muslim E trade, ‘Muslim Yahoo Finance (Islamic Q)’. And then there are Arabic Banks that played a serious hand in the spike of oil prices from 2001 – 2008, raising their ante against the West economic society and its paean ancillary. It seem as if it is a hidden war to which Nigerians are forced to participate either/or.
Tunde Fagbenle said
The publics, local and international, are watching and hoping that with one year of angry intervention behind him, Sanusi would now calm down to ensuring a more moderate and collective approach. More importantly, it is hoped that President Goodluck Jonathan will not hearken to the pressure of those who love Nigeria less and are only hurt by Sanusi’s cleansing.
I think the cleansing is not complete since there some Igbos and others from East who are still bank managers in Nigeria. I mean Sanusi should have gone the same distance as did Awolowo and ban all Igbo and Easterners from owing anything in country. And not a single drop of oiI is by the way found in the North. I mean in the last ten years, places like Aba, Onitsha, and some other commercial nerves of the country have gone from bad to worse. It was estimated that during Obasanjo’s administration alone, Aba and Onitsha lost 16 billion worth of investment. Many of these confiscated goods by Obasanjo’s administration were sold to these same Fulani Emirs and chiefs of Hausa. And if there is poverty everywhere people can think of is corruption. There is nothing to expect from someone Sanusi capable of enacting harmful and vilifying rules in banking when he should have embraced these new economy seeing the verities of their invention and tech-knowhow.
Tunde Fagbenle concluded in his article that
“The system needs stability and integrity and I believe Jonathan should give Sanusi the room to make his rescue an enduring one”.
But Islamic Banking is not for every society. It is not for many cultures of the world including certain Muslim society. Nigerian society and banking institution which Sanusi is Chairman cannot be fitted through the hour glass of the Shariah. Sanusi’s likable personality has nothing to do with the wrongs he has done to others, nor could it heal the wounds of disgrace nor amend the damages to the system. Even if the Shariah is only an actuary prism, it would only injure on the Nigerians and their society. No society is prone to the vices of Shariah than Nigerian society since the society is parity from the religious institutions that go back to the times of Almoravids when Islam reached the Northern part of Nigeria.
The International school of Islam in Sudan was established in 1988 to enable the range of connection between African and Muslims. Though the teachings of the School need reform given its severity to Arabic, we can mainly appreciate such effort to revitalize African Islamic history through the right Historian process. We can also commend that the impact of Berbers of pure antique as they say, Africans entirely, and Africans in all things should be noted in this article, should be taught in Nigerian schools, as mainly a comparative history and not replacement. It is however not the presence of these Berbers in North African history that is important, rather, it is now their absence that may have bedeviled the nature of Islam in old Marakesh and in Sudan. From such fracas between these groups, Islamic Banking has become a victim’s game.
But not many will deny the issue of Islam civil war in Sudan today between Arab of African descent and Muslims of direct Africa, a case in point that has left many Africans of other tribes badly burned from the outrages of Arabic – Khartoum administration. That Sanusi obtained his degree at the same time that certain tribes of Sudan burned does not mean he is absolved on their difficulty, not does it mean that he supported the burning of the ‘Criminal’ others. It means what it spells, that he is not without the influence of Sudan style Shariah, not unlike those passed through a religious institution.
It is true that many Islamic countries of West Africa such Chad, Burkina Faso, Cameroun, Gambia, Guinea, Mali, Morocco, Niger, Senegal, Tunisia, Djibouti, etc, are using Islamic banking, and given the expansionary sweep of Islam in West Africa through Fulani of the 18c by way of Usman Danfodio, Umar Jibril, Mohammed Bello (son of Danfodio) and Hajj Umar Tall, there is no doubt that the home of the Fulanis in the last 200 years, would likely begin to force the issue of Islamic Banking.
But these countries taken together do not amount to Nigeria.
Sampson Iroabuchi Onwuka
....Tunde Fagbele said that
“Some had private planes ggrandi those owned by some of the world’s richest persons. Some of these CEOs were worth trillions of naira; some were as rich as some state governments! It made Lamido believe that only the gallows was good enough for anyone who could be so perverse”.
Such prolix indignation, such callow ruminative on Nigerian banking, as if we shy from a halitosis of the others who the author may only met.
If this author, Tunde Fagbenle, had known that Sanusi is in all respect an Islamic Banker, he would have put on a break before his indictment. For Muslims “corruption is a White man phenomenon” and Christians are not entirely worthy. Christianity, to certain Sufi brotherhood of Islam is the Cavalcade that parries the goons. These Christians of the East in spite of the starving death of the Nigerian civil war era are the current patios for recklessness, not entitled to anything and are met with double standard which they are no pretenses in the above paragraph. The author Fagbenle, seems as if these CEOs went into the money houses and began to offload money in trucks. If the author had known that Muslims from Northern Nigeria and some from Christian West had emptied the very coffins of Nigeria to negative 30 billion before Soludo and company, perhaps he would been more careful on so discrediting a barrage. If the author had known that the man who changed the money printing house in Nigeria was this Soludo and his Christian others, perhaps he would avoided to place so lame a mock on these bankers…assuming his insinuations fly-escapade are not insinuation. These couldn’t have done anymore than cast humorous on ‘the envy’ of just about anyone who is not part of them.
“But the horrors that Lamido Sanusi discovered was not merely one of aggrandizement and self-enrichment, no, it was one that threatened the very fabric of the banking system. The level of exposure of some of the banks to margin loans and the oil and gas sector had rendered them almost insolvent and their capacity to continue as viable concerns very doubtful”
If only Mr Fagbenle could stop, for we are supposed to participate in such moral obesity because the judgment is based on something as substance as air. He is concerned about his goodness and all of a sudden concerned about Banking. If there is chronology of speech, the deciding lines somewhat disappoint. How can a man make magic an outcome of Nigerian banks which was no more than what it was, a part of the larger wheels. How can we decide to make rain and then turn around and say the rain is fell on those people makes them guilty.
Advance psychology of money is one that compels us to try our hands with the mindset of Sanusi, the CBN Chair. From enhanced understanding of Islamic banking system, Sanusi the man in question, in many ways a Muslim banker may not have wondered at the ruins of his actions. For how could he have? Yet we can say that it is not necessary to rehearse the fact that bankers without Islamic foundation in 2008 financial debacle were ultimately labeled corrupt. It is also wrong to have only indicated that the likes of Cecilia Ibru for her sins whatever they were is taken as exemplary when there was in the main.
The poverty of the North was even, all Sanusi is wont at achieving was compels from others to shield him from obvious political daggers, for by acting in sluices of The oil issue the author is referring to has very little logical back ground. For one thing, the man in charge of ruining much of the little wealth we obtained from oil until 2008 was no other than
But this is not about Soludo. It is about Sanusi Lamido Sanusi and one year of him as the Governor of CBN.
Lamido Sanusi came upon the scene literally on a white charger, fuming with righteous indignation. Rightly so. Unlike his predecessor who was plucked from the academia, completely green in practical banking, SLS combines both intellectualism and practical knowledge of banking, especially of risk management. Before becoming the governor of CBN he already knew half of the shenanigans going on in the banking industry and he was unimpressed by the affluence being flaunted by his colleagues in the banks. As CEO of First Bank, brief as it was, he felt even affronted by the vain and inglorious display of materialism and mediocrity by some of his peers. Then fate worked in his favour and he became governor of CBN overnight.
It is often intent of producing a class of people who use the religions as bait to perpetuate such class, a class that has no merit even in Islamic society. Of course it is little wonder that late Yar’duwa, Lukman Rilwanu former oil minister, Sanusi and his family, are part of this new attempt at producing a class of Muslims leaders who fester to the Nigerian oil and then banks.
“But is Lamido Sanusi the messiah he wants us to believe he is? He has made enemies for himself, powerful enemies. Those billionaires, nay trillionaires, he has ridiculed and de-robed are unforgiving. Those with vested interest in the banks he has dealt with are up in arms to get back at him”.
“But one year on, Sanusi has earned the respect and trust of the international banking publics. None of his critics have so far been able to unearth any misdemeanour or professional misconduct against him in his banking career. His indignation is righteous then, even if frightfully unmeasured”.
So far he has ruined Nigerian International reputation in Banking given the unorthodox style of execution. It is not the acclaim that he receives from his cheer leaders that is important but on how he is to be perceived from elsewhere. Sanusi may be seen as a man of action by his group, but in terms of what he is faced to accomplish, he has in many ways left several victims. Needless to point out that his victims do not include members of the Shariah Advisory Committee. His victims include those who in times past may have also suffered the intolerance of others. When we look at Banking as a feeder for the country, we understand why Sanusi was citing a case for North that was so supposedly neglected but the poverty of the North is more like the problem of one group controlling many of the wealth and those who rely on them feed around them and sometimes do nothing. They are very certain that if it goes bad someone will use the diversionary means employed by Sanusi to strip certain others of their hard earned largesse and they call ‘them’ corrupted while envy will silence the most obdurate of them all.
“There are new and qualitative policies being introduced by Sanusi’s CBN to bring sanity and stability to the banking industry and growth to the real economy. Effective debt recovery measures have been introduced in the banks, and they are now mandated to make full disclosures in their reports just as harmonisation of their accounting period is prescribed”.
The 13 point policy introduced in banking was not Sanusi’s invention rather Soludo’s, the 400 possible changes that can take in banking in Nigeria was partly pioneered by Soludo. Nigerian hedging technology is point and forward on the Spot which Koran opposes under Sanusi. I million over the counter depository was prohibited by Soludo. Modern Nigerian banking through electronic system was fully initiated by Soludo. The stress and transparency test for TBF banks was begun by Soludo. The stress was in its preliminary stages before his removal from office. The eFass was introduced by Soludo to gauge perform grade of many Nigerian financial institution, and the currency was changed under Soludo and the State of the Art money printing house which helped the Comptroller of Currency was initiated in Lagos under the aegis of Soludo. Diet was open and not presorted under Soludo. Under Soludo, there was a bait of Nigeria currency in the international world and its drive on the investment grade. Banks and Insurance companies were regularly checked under Soludo irrespective of what Sanusi and his group are going around saying. Sanusi’s angst may be based on a hint of jealousy over the whole process. But it is his attempt to dastardly Soludo’s record that marked him as unfair, uncivil, and yes probably dishonest. Soludo was under way in initiating an Open Market Operation where private buyers will be capable of purchasing government securities instead on banks only and no Northerner will say that it did was there to benefit their joint venture. Stock buyback was initiated through a renascent NDIC under Soludo. The non performing debt or obese account were to be checked and dealt on, but it was Soludo who began to raise the concern for removing CEOs who conducted lending on thin accounts. But I fault Soludo on removing the price ceiling and shunning convertible since inflationary pressure and consumer prices are one of the same.
“Strong and effective corporate governance is being enforced through the overhaul of the system of board appointments, tenure, and the requirement for responsible and efficient management. An asset management company (AMCON) has been established as a resolution vehicle to assist in the recapitalisation of the banks that have required CBN intervention”.
Mr Sanusi Islamic Banking has its moments it is of some success in many parts of the world, like in South East Asia. In Nigeria, we are very good people and we can allow our Muslim brothers to bring the best part of their banking, and no group is that tolerable more than the East. Inviting 5 Islamic countries to buy Nigerian banks or at least become majority stakes isn’t funny, but that’s exactly what Sanusi did. These days, Muslim countries and their societies are not doing very badly and they include Muslim Community Co-operative of Australia, Indonesia, Brunei, and so on, that render services and advisory to Islam loyalist. These days we have all kinds of financial product like Islamic Financial Services, Muslim E trade, ‘Muslim Yahoo Finance (Islamic Q)’. And then there are Arabic Banks that played a serious hand in the spike of oil prices from 2001 – 2008, raising their ante against the West economic society and its paean ancillary. It seem as if it is a hidden war to which Nigerians are forced to participate either/or.
Tunde Fagbenle said
The publics, local and international, are watching and hoping that with one year of angry intervention behind him, Sanusi would now calm down to ensuring a more moderate and collective approach. More importantly, it is hoped that President Goodluck Jonathan will not hearken to the pressure of those who love Nigeria less and are only hurt by Sanusi’s cleansing.
I think the cleansing is not complete since there some Igbos and others from East who are still bank managers in Nigeria. I mean Sanusi should have gone the same distance as did Awolowo and ban all Igbo and Easterners from owing anything in country. And not a single drop of oiI is by the way found in the North. I mean in the last ten years, places like Aba, Onitsha, and some other commercial nerves of the country have gone from bad to worse. It was estimated that during Obasanjo’s administration alone, Aba and Onitsha lost 16 billion worth of investment. Many of these confiscated goods by Obasanjo’s administration were sold to these same Fulani Emirs and chiefs of Hausa. And if there is poverty everywhere people can think of is corruption. There is nothing to expect from someone Sanusi capable of enacting harmful and vilifying rules in banking when he should have embraced these new economy seeing the verities of their invention and tech-knowhow.
Tunde Fagbenle concluded in his article that
“The system needs stability and integrity and I believe Jonathan should give Sanusi the room to make his rescue an enduring one”.
But Islamic Banking is not for every society. It is not for many cultures of the world including certain Muslim society. Nigerian society and banking institution which Sanusi is Chairman cannot be fitted through the hour glass of the Shariah. Sanusi’s likable personality has nothing to do with the wrongs he has done to others, nor could it heal the wounds of disgrace nor amend the damages to the system. Even if the Shariah is only an actuary prism, it would only injure on the Nigerians and their society. No society is prone to the vices of Shariah than Nigerian society since the society is parity from the religious institutions that go back to the times of Almoravids when Islam reached the Northern part of Nigeria.
The International school of Islam in Sudan was established in 1988 to enable the range of connection between African and Muslims. Though the teachings of the School need reform given its severity to Arabic, we can mainly appreciate such effort to revitalize African Islamic history through the right Historian process. We can also commend that the impact of Berbers of pure antique as they say, Africans entirely, and Africans in all things should be noted in this article, should be taught in Nigerian schools, as mainly a comparative history and not replacement. It is however not the presence of these Berbers in North African history that is important, rather, it is now their absence that may have bedeviled the nature of Islam in old Marakesh and in Sudan. From such fracas between these groups, Islamic Banking has become a victim’s game.
But not many will deny the issue of Islam civil war in Sudan today between Arab of African descent and Muslims of direct Africa, a case in point that has left many Africans of other tribes badly burned from the outrages of Arabic – Khartoum administration. That Sanusi obtained his degree at the same time that certain tribes of Sudan burned does not mean he is absolved on their difficulty, not does it mean that he supported the burning of the ‘Criminal’ others. It means what it spells, that he is not without the influence of Sudan style Shariah, not unlike those passed through a religious institution.
It is true that many Islamic countries of West Africa such Chad, Burkina Faso, Cameroun, Gambia, Guinea, Mali, Morocco, Niger, Senegal, Tunisia, Djibouti, etc, are using Islamic banking, and given the expansionary sweep of Islam in West Africa through Fulani of the 18c by way of Usman Danfodio, Umar Jibril, Mohammed Bello (son of Danfodio) and Hajj Umar Tall, there is no doubt that the home of the Fulanis in the last 200 years, would likely begin to force the issue of Islamic Banking.
But these countries taken together do not amount to Nigeria.
A Reaction to Tunde Fagbenle on His view on Sanusi Lamido (IX) By Iroabuchi Onwuka
By Sampson Iroabuchi Onwuka
For one thing, Islam forbids lending of any kind with interest and in terms of Muslims of the same religion, Islam, condemns lending with interest to fellow Muslims (Haram). In many ways this poses a problem of equity in Mean sense of the word given the necessity to flip on real estate in secular societies. Islam under the Sharia however allows a form of deferred loan which they say is ‘benevolent loan’ (al-qard, al hasan). Angelo Vernados in his book ‘Islamic Banking and Finance in South East Asia’, suggested that the deferred loan therefore “has more relevance in relationship to the social welfare economy, or where there are social ramifications to a transaction as in the case of contracts involving the government, rather than in the private or commercial sectors”
Given perhaps the social leniency of the good will lending permitted by Islam and Sharia, which is by the way 2% of interest rate - fixed and unchanging - we may see the goods of Sanusi’s 2% recent discourses and experimentation as a social program, as opposed to secular banking which must survive by Investment and Commercial lending. In essence, you kill the market with a 2% flat, and when it remains fixed you never make a Taylor’s rule of nearly 4%. Above all, the misery index in bait of inflationary Chicago is neither ‘precipitation’ nor assumes the curve for ‘soft landing’ from facts of unemployment rate.
That is we are talking about Government project with beneficiary goods, a sort of class action that will perpetually benefit a collage of sorted class, who will likely invent a class society still alive in the North. This not unlike what we have in Arabic society, and the oil business is mainly derived from the set pieces of 2% interest on the Benefit’. In terms of international business and in terms of FASB - Financial Accounting Standards - and IAS International Accounting Standards, Nigerian Banking would now be forced to come up with its own measure.
To obtain the exact width of this very ill advised banking philosophy, we must look at what was happening in the years leading to Sanusi appointment. The former permanent Minster of secretary, Rilwanu Lukman, who was once a secretary of OPEC, carried an official atmosphere of someone outside the working dynamics of the Government.
Islamic debt financing contract, its Joint venture and so called profit sharing is useful for large conglomerates in control of many portions of Nigerian banks, many of which go as far as the National budget.
A society of religious others where banking activity would be judged by Islamic Koran may not work and is not likely acceptable. A civil society where banker’s conduct are judged by Shariah Advisory Board on banking in Nigeria - some of whom known only so much - is not likely to be fair, for how could others, of non Muslim background be considered anything but Criminal. But besides the culpability of the Bankers of non Muslim background, it will seem that we have run into a wall in Nigerian society that many would not have believed existed. This wall makes it difficult for either of the two groups to have a conversation that could benefit the society, each driven by their own background and each intending on seeing goodness through its own prism. This kind of separation always has its victims and in many parts of the same story these victims witnessed the improbable in 2008.
It goes without saying that Acts of Sanusi demanded casualties. The first of these casualties are those who held the other end of the knife from the Nigerian Civil War. Largely enough, the conditions of the war and its troubles after, allowed premier access of big bank to kowtow to Northern and Western Nigeria. The impact of those years led to major banks as part of the older economy, all in the years leading to extra-ordinary years of 80’s. These banks took on the extra weight on those years into the 90’s which saw the evolution of Investment Banks of all kinds. The speed of business growth in the 90’s and 2000s, made these banks highly kinetic in profit. Many of them very thin on the ground went down as well.
The nomination of Soludo and its direct impact on these local banks allowed the new economy banks to survive away from the old. Their smaller appendix in terms of loses and their overall aggregate through smaller investment and through trans-border trade especially in Ghana and in many parts of the world, gave them an opulence that could not have been explicated that easy. The profit also came through secularization which the man Sanusi had inveighed against, for it may yet be denied that Sanusi may not have swathed that direction, a fact of denying which may only be proved as accurate if Shariah approve of risk hedging and secularization. The Shariah do not. If the Shariah did not support ‘currency hedging’ that is by fact profiting from other people’s “uncertainty”, it may seen to explicate why frisson effect in Nigerian market was not the primary concern of Sanusi. He could create panic if he wanted and he did since his appointment and it marred our businesses abroad. With Sanusi it is impossible to see how Nigeria will eliminate the parallel economy which is one of the thorniest aspects of Nigerian currency market and one of the root causes of balkanization of the local currency, one which saw Soludo out of office.
The Acts of Sanusi as a CBN Governor are merely the doctrines of Islam unsuitable for a highly secular Nigerian society. Lamido Sanusi is called hero only because we assume our knowledge zero on his motivation and influences. Sanusi is called revolutionary as Soludo who began it all is become a villain. Sanusi may cream the popular front of the social media house and may have unqualified reviews about him, but he is to be noted for his action through a whole year and not in more candied months. Above all, we can say that in terms of Tunde Fagbenle, Sanusi is retained by the protean view of Messiah as if they exists a comparison to savior of Nigerian banking. But unlike the dying Messiah, this one has many casualties and victims, carry instruments of deliverance, of fire brigadier when there was nonesuch fire, of hero firing in all places which were mainly wrong. His Acts has all the whole make-up of a great soldier. Yet such activity may be right only if we are dealing on the Social and governmental activity, for such action exhibited by Sanusi is thoroughly governmental, thoroughly executive, and thoroughly messianic, altogether right for political office, but in banking we can say that the heroic Acts of Sanusi however righteous could only be wrong.
Nigeria as a country suffers from all kinds of sickness, much of it is psychological. The psychological problem of Nigeria and Nigerians is a hard case given the very history of the country in its formation years. It is fair to say that you can be right in the country if only you are wrong by identity. It is necessary that I build an argument on this matter since many will not see my indictments as objective. There will always be the issue of tribes, the issue of culture, the issue of parties and the issue of religion of Nigeria. But that is how we grow up, for we know that we are been women from day, children of our past, but childish behaviors and childish things are expected to be done away with.
For that, enough attention must be placed on what is factual and actual in matters of federal character, and on what is permissible within village square, and what is Law. That is not the whole reason behind my narrative of the undue influence of the Federal chartered office in the vise of Sanusi. The whole attitude of judgment without adequate facility of facts, and the commentary so far however subjective and however valid, or the more grasping matters of personal persuasion, should be discouraged and eschewed. As much as everyone is entitled to their opinion, it is only Nigerian to base the opinion on very concrete facts.
Tunde Fagbenle has hinted on a certain man who saw “the extent of rot within the system and the gargantuan corruption, nay evil, perpetuated by chief executives of some of the leading banks in the country, particularly Oceanic’s Cecelia Ibru and Intercontinental’s Erastus Akingbola, broke down in tears.”
What is wrong with the above statement is that the author, Fagbenle, began his essay by absolving the young man of public discloser, suggestive to rest of us that the young man in question is a mere declension, a generative so to speak and imaginative invention of Fagbenle, who supposedly cried at the debility of Nigerian Banking. This young man’s name is so worthy of exclusion, so worthy of curry favor that the author must include Oceanic’ Cecilia Ibru and Intercontinental’s Erastus Akingbola to demonstrate how guilty his accused are. There is no need to suggest that the first paragraph condemns the author for it seems clear that he is intent on passing a moral judgment as opposed to Banking, a moral judgment that is ripe from impressions of Nigerian society when we are dealing with secondary institution that is entirely earned through ranks of public.
The author from the above quoted lines, created an impression of an angry youth, a case that pales itself in plain comparison to the person/s of the author, for Mr. Tunde Fagbenle by his picture seem older, perhaps in imitation of his younger charisma whose more likely to know only so much. The greater chance that this invisible young man probably do not exist, does not necessarily mean that the author’s article seem extremely prejudicial, nor does it mean that the author is not aware of his invented persuasions. There is a chance that we are no longer looking at the article from banking perspective and from the angle on the one year anniversary of Sanusi as head of CBN, we are forced to bear in mind the faces of angry youth, who become entirely physical and evident in Fagbenle’s article as the young man. The young man theme is a form of parataxis that animate on emotion, the sentiment rather than logic.
It is well to however bear in mind that such impression may or may not have existed in the way we are led on. If we can say that there is no person called the young man, we can say that the improvising in the guise of the weeping young man bring in the fact he is probably not from banking based on declension.
What Tunde Fagbenle said about the young man that “Lamido took out his handkerchief and began to wipe the tears rolling down his eyes. He was shaking his head and you could see he was sobbing inside. It was a most sobering sight.”
The one punch verb sight, and the line ‘it was a most sobering sight’ seem to me an Ellipsis, for after the line, we are longer sure what the tears was about, the Aspect theory is here a misguide. So what are we led to accept by this? We are driven to buy the fact that Nigerian banking society had a problem of administration and trust, which forces us to accept that bad management of banks in Nigeria, led to fiscal irresponsibility and bad loans. For that to be true, Sanusi’ problem with debt recovery would have to be misleading, for now the whole argument is destined to sour since it is merely an issue of rectitude in Nigerian Banking rather the financial kamikaze leading to epic of 2008 financial.
Tunde Fagbenle said in his article that
“Sanusi could just not believe how any normal human being in whom the public reposed trust, could abuse such trust so wantonly and so inhumanly. He cried for Nigeria. At that point SLS swore with stern resolve that for as long as he remained the Governor of CBN, even if it would cost him his life, he would not relent until the culprits were brought to justice”.
There is pomposity is this paragraph I confess, a hint that perjure on what was entirely decadent with Nigerian banking, and what indignant propagation of the righteous ones will mainly do. Mr. Fagbenle composes lectionary on banking holiness that does not accord the reader with many matters significant on the ground in Nigeria. For the idea of attitude in terms of banking and morality of judgment is mainly of domesticated partisan in banking, peeping through the darkly stain of the always translucent money house which was would used process to kill more than one purpose. We are forced to accept quiquinine that a hero corpus that must rise to undo the damages done to the house of money.
What SLS found was simply unimaginable. And weeks and months down the line, even more and more revelations tumbled out. The banking system that hitherto was seen as the hallowed citadel of integrity and rectitude had been taken over by Lucifer and had become the cesspit of corruption. The identified CEOs had corruptly enriched themselves to inordinate levels, with choice mansions in the choicest cities of the world traced to them individually or their proxies.
The first line sets up the stage, like shrapnel, Fagbenle goes his distance in making it clear that the problems of banking in Nigeria was already known, that Sanusi knew who they were and he was going to bring justice to very noted ‘Lucifer’ of Nigerian Banking. Clearly we are so sold by the condemn motif since the title of Fagbenle’s article speculate on the left and right of messianic type, who only a year ago was a mange in the skins of just about everyone excluding his own. Sanusi is now he to be absorbed of the damages to many people which reflect a hint of recklessness on his past and a fickle of misjudgment on the part Tunde Fagbenle, for his praises of Sanusi is not that appropriate and entirely exaggerated. Is like the man Sanusi wanted to be disliked, if not hated, and that he was intent on actuary given his preconceived notion of ‘bomb and the bread’ clever mechanics on the divided Nigerian society.
The second paragraph betrays the author’s intent, for here a man who has never been heard before, was all of a sudden wonting to bring justice to the to the institution of banking. I shall say that if this was only true, there is no need to have written the article but we are reminded by our misunderstanding of the villainy of the man who was to appear before us a Justified in his deed even though they may or may not be wrong.
For one thing, Islam forbids lending of any kind with interest and in terms of Muslims of the same religion, Islam, condemns lending with interest to fellow Muslims (Haram). In many ways this poses a problem of equity in Mean sense of the word given the necessity to flip on real estate in secular societies. Islam under the Sharia however allows a form of deferred loan which they say is ‘benevolent loan’ (al-qard, al hasan). Angelo Vernados in his book ‘Islamic Banking and Finance in South East Asia’, suggested that the deferred loan therefore “has more relevance in relationship to the social welfare economy, or where there are social ramifications to a transaction as in the case of contracts involving the government, rather than in the private or commercial sectors”
Given perhaps the social leniency of the good will lending permitted by Islam and Sharia, which is by the way 2% of interest rate - fixed and unchanging - we may see the goods of Sanusi’s 2% recent discourses and experimentation as a social program, as opposed to secular banking which must survive by Investment and Commercial lending. In essence, you kill the market with a 2% flat, and when it remains fixed you never make a Taylor’s rule of nearly 4%. Above all, the misery index in bait of inflationary Chicago is neither ‘precipitation’ nor assumes the curve for ‘soft landing’ from facts of unemployment rate.
That is we are talking about Government project with beneficiary goods, a sort of class action that will perpetually benefit a collage of sorted class, who will likely invent a class society still alive in the North. This not unlike what we have in Arabic society, and the oil business is mainly derived from the set pieces of 2% interest on the Benefit’. In terms of international business and in terms of FASB - Financial Accounting Standards - and IAS International Accounting Standards, Nigerian Banking would now be forced to come up with its own measure.
To obtain the exact width of this very ill advised banking philosophy, we must look at what was happening in the years leading to Sanusi appointment. The former permanent Minster of secretary, Rilwanu Lukman, who was once a secretary of OPEC, carried an official atmosphere of someone outside the working dynamics of the Government.
Islamic debt financing contract, its Joint venture and so called profit sharing is useful for large conglomerates in control of many portions of Nigerian banks, many of which go as far as the National budget.
A society of religious others where banking activity would be judged by Islamic Koran may not work and is not likely acceptable. A civil society where banker’s conduct are judged by Shariah Advisory Board on banking in Nigeria - some of whom known only so much - is not likely to be fair, for how could others, of non Muslim background be considered anything but Criminal. But besides the culpability of the Bankers of non Muslim background, it will seem that we have run into a wall in Nigerian society that many would not have believed existed. This wall makes it difficult for either of the two groups to have a conversation that could benefit the society, each driven by their own background and each intending on seeing goodness through its own prism. This kind of separation always has its victims and in many parts of the same story these victims witnessed the improbable in 2008.
It goes without saying that Acts of Sanusi demanded casualties. The first of these casualties are those who held the other end of the knife from the Nigerian Civil War. Largely enough, the conditions of the war and its troubles after, allowed premier access of big bank to kowtow to Northern and Western Nigeria. The impact of those years led to major banks as part of the older economy, all in the years leading to extra-ordinary years of 80’s. These banks took on the extra weight on those years into the 90’s which saw the evolution of Investment Banks of all kinds. The speed of business growth in the 90’s and 2000s, made these banks highly kinetic in profit. Many of them very thin on the ground went down as well.
The nomination of Soludo and its direct impact on these local banks allowed the new economy banks to survive away from the old. Their smaller appendix in terms of loses and their overall aggregate through smaller investment and through trans-border trade especially in Ghana and in many parts of the world, gave them an opulence that could not have been explicated that easy. The profit also came through secularization which the man Sanusi had inveighed against, for it may yet be denied that Sanusi may not have swathed that direction, a fact of denying which may only be proved as accurate if Shariah approve of risk hedging and secularization. The Shariah do not. If the Shariah did not support ‘currency hedging’ that is by fact profiting from other people’s “uncertainty”, it may seen to explicate why frisson effect in Nigerian market was not the primary concern of Sanusi. He could create panic if he wanted and he did since his appointment and it marred our businesses abroad. With Sanusi it is impossible to see how Nigeria will eliminate the parallel economy which is one of the thorniest aspects of Nigerian currency market and one of the root causes of balkanization of the local currency, one which saw Soludo out of office.
The Acts of Sanusi as a CBN Governor are merely the doctrines of Islam unsuitable for a highly secular Nigerian society. Lamido Sanusi is called hero only because we assume our knowledge zero on his motivation and influences. Sanusi is called revolutionary as Soludo who began it all is become a villain. Sanusi may cream the popular front of the social media house and may have unqualified reviews about him, but he is to be noted for his action through a whole year and not in more candied months. Above all, we can say that in terms of Tunde Fagbenle, Sanusi is retained by the protean view of Messiah as if they exists a comparison to savior of Nigerian banking. But unlike the dying Messiah, this one has many casualties and victims, carry instruments of deliverance, of fire brigadier when there was nonesuch fire, of hero firing in all places which were mainly wrong. His Acts has all the whole make-up of a great soldier. Yet such activity may be right only if we are dealing on the Social and governmental activity, for such action exhibited by Sanusi is thoroughly governmental, thoroughly executive, and thoroughly messianic, altogether right for political office, but in banking we can say that the heroic Acts of Sanusi however righteous could only be wrong.
Nigeria as a country suffers from all kinds of sickness, much of it is psychological. The psychological problem of Nigeria and Nigerians is a hard case given the very history of the country in its formation years. It is fair to say that you can be right in the country if only you are wrong by identity. It is necessary that I build an argument on this matter since many will not see my indictments as objective. There will always be the issue of tribes, the issue of culture, the issue of parties and the issue of religion of Nigeria. But that is how we grow up, for we know that we are been women from day, children of our past, but childish behaviors and childish things are expected to be done away with.
For that, enough attention must be placed on what is factual and actual in matters of federal character, and on what is permissible within village square, and what is Law. That is not the whole reason behind my narrative of the undue influence of the Federal chartered office in the vise of Sanusi. The whole attitude of judgment without adequate facility of facts, and the commentary so far however subjective and however valid, or the more grasping matters of personal persuasion, should be discouraged and eschewed. As much as everyone is entitled to their opinion, it is only Nigerian to base the opinion on very concrete facts.
Tunde Fagbenle has hinted on a certain man who saw “the extent of rot within the system and the gargantuan corruption, nay evil, perpetuated by chief executives of some of the leading banks in the country, particularly Oceanic’s Cecelia Ibru and Intercontinental’s Erastus Akingbola, broke down in tears.”
What is wrong with the above statement is that the author, Fagbenle, began his essay by absolving the young man of public discloser, suggestive to rest of us that the young man in question is a mere declension, a generative so to speak and imaginative invention of Fagbenle, who supposedly cried at the debility of Nigerian Banking. This young man’s name is so worthy of exclusion, so worthy of curry favor that the author must include Oceanic’ Cecilia Ibru and Intercontinental’s Erastus Akingbola to demonstrate how guilty his accused are. There is no need to suggest that the first paragraph condemns the author for it seems clear that he is intent on passing a moral judgment as opposed to Banking, a moral judgment that is ripe from impressions of Nigerian society when we are dealing with secondary institution that is entirely earned through ranks of public.
The author from the above quoted lines, created an impression of an angry youth, a case that pales itself in plain comparison to the person/s of the author, for Mr. Tunde Fagbenle by his picture seem older, perhaps in imitation of his younger charisma whose more likely to know only so much. The greater chance that this invisible young man probably do not exist, does not necessarily mean that the author’s article seem extremely prejudicial, nor does it mean that the author is not aware of his invented persuasions. There is a chance that we are no longer looking at the article from banking perspective and from the angle on the one year anniversary of Sanusi as head of CBN, we are forced to bear in mind the faces of angry youth, who become entirely physical and evident in Fagbenle’s article as the young man. The young man theme is a form of parataxis that animate on emotion, the sentiment rather than logic.
It is well to however bear in mind that such impression may or may not have existed in the way we are led on. If we can say that there is no person called the young man, we can say that the improvising in the guise of the weeping young man bring in the fact he is probably not from banking based on declension.
What Tunde Fagbenle said about the young man that “Lamido took out his handkerchief and began to wipe the tears rolling down his eyes. He was shaking his head and you could see he was sobbing inside. It was a most sobering sight.”
The one punch verb sight, and the line ‘it was a most sobering sight’ seem to me an Ellipsis, for after the line, we are longer sure what the tears was about, the Aspect theory is here a misguide. So what are we led to accept by this? We are driven to buy the fact that Nigerian banking society had a problem of administration and trust, which forces us to accept that bad management of banks in Nigeria, led to fiscal irresponsibility and bad loans. For that to be true, Sanusi’ problem with debt recovery would have to be misleading, for now the whole argument is destined to sour since it is merely an issue of rectitude in Nigerian Banking rather the financial kamikaze leading to epic of 2008 financial.
Tunde Fagbenle said in his article that
“Sanusi could just not believe how any normal human being in whom the public reposed trust, could abuse such trust so wantonly and so inhumanly. He cried for Nigeria. At that point SLS swore with stern resolve that for as long as he remained the Governor of CBN, even if it would cost him his life, he would not relent until the culprits were brought to justice”.
There is pomposity is this paragraph I confess, a hint that perjure on what was entirely decadent with Nigerian banking, and what indignant propagation of the righteous ones will mainly do. Mr. Fagbenle composes lectionary on banking holiness that does not accord the reader with many matters significant on the ground in Nigeria. For the idea of attitude in terms of banking and morality of judgment is mainly of domesticated partisan in banking, peeping through the darkly stain of the always translucent money house which was would used process to kill more than one purpose. We are forced to accept quiquinine that a hero corpus that must rise to undo the damages done to the house of money.
What SLS found was simply unimaginable. And weeks and months down the line, even more and more revelations tumbled out. The banking system that hitherto was seen as the hallowed citadel of integrity and rectitude had been taken over by Lucifer and had become the cesspit of corruption. The identified CEOs had corruptly enriched themselves to inordinate levels, with choice mansions in the choicest cities of the world traced to them individually or their proxies.
The first line sets up the stage, like shrapnel, Fagbenle goes his distance in making it clear that the problems of banking in Nigeria was already known, that Sanusi knew who they were and he was going to bring justice to very noted ‘Lucifer’ of Nigerian Banking. Clearly we are so sold by the condemn motif since the title of Fagbenle’s article speculate on the left and right of messianic type, who only a year ago was a mange in the skins of just about everyone excluding his own. Sanusi is now he to be absorbed of the damages to many people which reflect a hint of recklessness on his past and a fickle of misjudgment on the part Tunde Fagbenle, for his praises of Sanusi is not that appropriate and entirely exaggerated. Is like the man Sanusi wanted to be disliked, if not hated, and that he was intent on actuary given his preconceived notion of ‘bomb and the bread’ clever mechanics on the divided Nigerian society.
The second paragraph betrays the author’s intent, for here a man who has never been heard before, was all of a sudden wonting to bring justice to the to the institution of banking. I shall say that if this was only true, there is no need to have written the article but we are reminded by our misunderstanding of the villainy of the man who was to appear before us a Justified in his deed even though they may or may not be wrong.
Subscribe to:
Posts (Atom)