By
Sampson I.M Onwuka
Mr. Valentine Obienyem (January 27th, 2015) responding to Soludo….
““Talking about signature project, Obi has them in abundance. He built over 30 bridges, built the State Secretariat, built the teaching hospital, built the permanent site of the Chukwuemeka Odumegwu-Ojukwu University, rebuilt Iyienu, Borromeo hospitals, Holy Rosary and St Joseph hospitals; and Our Lady of Lourdes among many hospitals with signature structures dotting them.
The re-denominating the Naira (even if it means removing a couple of Zeros of the Naira as Soludo suggested) is appropriate since the Nigerian Economic Structure, efficient money system is not well developed for that, Nigeria re-denominating its currency will propel itself into the future with the new resolve of creating a new economy from the old. It is not advisable to engage this exercise when your economy is doing badly, it is better when you are faring better than expected.
This is the whole meaning of St. Petersburg’s Paradox and ordinals of Daniel Bernoulli applied to Nigerian case study, that a man or system dynamic with a loaf of bread in on one hand, can only pick up another in the next round given what he or she already have. This paradox explains you build against the future collapse following a period of boom through saving and through other means like the story of Joseph and the Egyptians.
If you really have enough to spend, you are more likely to skew over any reckless spending given what you already have. Unless you don't have enough or able to save enough like Nigeria even at the time of plenty, did not save enough because of reckless exercise of process.....
In Soludo’s writing we also read that,
“I want to state for the record that the foundation for the current market economy we operate in Nigeria was laid by that regime (liberalization of markets including market determined exchange rate, private sector-led economy including licensing of private banks and insurance, de-regulation, privatization of public enterprises under TCPC, etc). Just abolishing the import licensing regime was a fundamental policy revolution. Despite the criticisms, these policy thrusts have remained the pillars of our deepening market economy, and the economy recovered from almost negative growth rate to average 5.5% during the regime and poverty incidence at 42% in 1992.
Responding to OBI and Obienyem
The exchange rate of this country can better enhance its business portfolio in the World Markets, assuming we fail to hint that this was Soludo's primary argument in 2007.
When Lehman Brothers in 2008 was looking for $20 billions to patch the plunk hole in the ailing financial balance, a move by Nigeria by themselves or a move by Nigeria along with banks from South Korea would have solution the problems for Lehman Brothers and Richard Fuld. The inability of CBN to take advantage of this offer and deal is not a historic error and false placement of resources attributed to Soludo.
There are others who didn't even see that a sharp decline of Fords shares and GMC in 2008 was a great opportunity for Nigerians or anyone who was interested in long term investment with over average return rate. The trick was explaining the markets and what was wrong with it, and it was Timothy Geithner who argued for the shifting dynamics against the dollar leading to normalcy at the market.
I for one mentioned this dollar and crashing issue from displaced currency basket, perhaps in keeping to Soludo's estimate of a Canary Wharf in Lagos which I for one considered unnecessary given the displacement of Breton wood international currency basket by the dollar. The Naira could not achieve that defacto exchange currency for West Africa if Lagos becomes a kind of currency Canary Wharf.
I for one mentioned this dollar and crashing issue from displaced currency basket, perhaps in keeping to Soludo's estimate of a Canary Wharf in Lagos which I for one considered unnecessary given the displacement of Breton wood international currency basket by the dollar. The Naira could not achieve that defacto exchange currency for West Africa if Lagos becomes a kind of currency Canary Wharf.
What we notice was a crash of systems in 2008, leading up to 2008 from 2000, and Soludo, one of the Chief advocate of Sovereign wealth investment fund decoupled with ECA account over $48 per barrel standard was not the problem with such U.S market opportunity which China who cannot account for their overnight surge in U.S paper wealth advertised and took advantage of. The opportunity would not have existed in the first place, did Nigerians not create the environment for savings from excess crude oil accounts.
As suggested by others, that the last two '00' of its current note be denominated away from its current hiatus could accommodate new noise from US Crude Oil markets or trade partners to Nigerian Interest rate.
Since the expensive the Naira is a currency that suffers in neglect due to competing attention and currencies in the world, it does help itself by sticking the policy of a floating currency. There are several countries that seek to regulate their currency and many of these countries are considered Developing Countries including a few of the BRIC nation.
Soludo's foresight was well horned from experiences coming elsewhere and from the emphasis on new economy which the expansion of Nigerian market will not
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 with major currencies of the world, although it left Nigeria a basket for international currency basket instead of replacing, there is easy telling that the Breton Wood lessons and the rise of US dollars aghast the decline of core capital competency in the world due to single money world or standard, may or may not have escaped Charles Soludo in proposing a Canary Wharf.
This spot and forward encourages a blow back on investment and 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 performance grade of many Nigerian financial institution, and the currency was changed under Soludo who also brought in the new State of the Art money printing house which helped the Comptroller of Currency to regulate money laundry and 419 ease of exploitation. It was initiated in Lagos under the aegis of Soludo but transformed with due respect to Sanusi.
Before Soludo, Bankers and financial Diet, were long preserved and exclusive privileged institution. It was Soludo that the diet official and helped to emphasis the needs for local growth of the economy. The financial diet became open and not closed or privileged meeting group in narrating the future estimates of the currency and country. It was a fitting glove for both the Nigerian banking institute and Nigerian Securities and Stock exchange.
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, course of action maintained by Sanusi and his group with due respect to Nigerian FDIC and founding of Debt Department within CBN and the Treasury.
Soludo was in the process of 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 was not to their benefit since they were already enjoying the benefit their joint venture mostly from a collating of precious materials and sale of commodities.
One of the few Northern Nigerians who has remained conspicuously silent in the political imaging of 2015 election is Aliko Dangote, himself a former Commodities traders and one of the premier large shareholders at Zenith Bank, can only explain his silence over the issue of CBN office and the role of Soludo in its transitive and transformation process.
Some of the process we notice under Sanusi as against Soludo’s era is the rise and return of Northern magnates some of whom are trading above the market, bypassing the shocks in the system with over 85% Bank stocks, and to a large extent, playing their norms as characteristic of debentures as opposed normal markets with degrees of risk expectations and tolerance.
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.
Should the President Jonathan be held responsible for the damages done to the economy and for large and obtrusive abuses of financial processes involved so far? The answer is yes. But where is the basis of the alternative to the actions he laid out so far, and does the country attempt to salvage what’s left of the remaining years of his office?
Or can we afford to put in office for another four years with the benefits of Crude oil at $90 per barrel disappeared and perhaps for good. This is the real problem. I think it is worthy of the economic argument some of the relevant economist and politicians including in some instances educated barristers of law respond to Soludo with equal and manifest rhetoric, but his concerns are problem not exactly political and criticisms were not however without hints of ridicule.
It will be far more meaningful to have his eminence, Lamido Sanusi (Mohammed Sanusi II, Emir of Kano and Sokoto Caliphate) make some commentary on this piece, but he is no longer available.
If some sense is nurtured in the whole episode, the so called acquired pomposity of his dissertation is not mitigate and mutated by some of the arguments and reactions from all asunder, for me and many others, there are no cases for such a thing, some of the reactions from Peter Obi as mouth-pieced by his media team in order of one ‘Obineyem’ is criss-cross of the deepening brain and competency training in Nigerian financial sector, that his position including those of Pat Utomi, are reassuring but never met the point.
Soludo essay is a process from a process, the first being the incident of crude oil, the other from the accumulated results of his years of experience and exile, itself executive with clarity that comes from objective observation when in London – far from day to day drudgery of Nigerian politics.
The Igbo proverb says a man who travels around gathers more knowledge than all the old and worthy wise, another proverb from a street opera states, when you are on high mountain (egbe ino n’elu) beat your chest , make some noise and let others hear…, am not Soludo is blowing his trumpet because he can but am sure the likes of Peter Obi, Mahammadu Buhari, who had their stay in office and who consequent economic theories of Austerity switch from Buhari to Babangida created the beginning of the end of Nigeria economic correlation to its chief source of export – Crude oil – and false economy of the 80’s, the full effect of these false economy reverted to debt servicing over their own crude oil compromised by the shortfalls in crude oil and bad premise of Shell Crude oil.
Put it clearly at no point did I for one, expect Madam Ngozi Okonjo Iweala or Ernest Simeon Odior to make any useful arguments about the role of Crude oil in attracting companies in Nigeria and the rate at which this occurred with respect to debt heaped on Nigerians or the connections between the removal of subsidies and unconventional taxes, which in my estimate is at least 20% increase.
As such the question of decades covering the rise and decline of crude oil prices which Soludo deputized on, with especial emphasis on Shagari era was clearly absent from the discussions and commentary on his piece? Soludo cannot be argued to have made direct arguments about the connections and parallels but we infer as much we infer different that the problems of income over the material issue of long term consumption with or without response to prices and the Nigerian crediting and its bond markets, ip so facto, are the primary reasons for it.
It may be argued in extensor that the rise and role of crude oil as an OPEC driven commodity strategically ended the role of Brent Wood in International Currency Basket given the rise of IMF instead and given the role of OPEC is diversifying the currency basket of the most legit economic community let off. These external factors or exogenous factors could contribute to sharp declines in production capacity in spite of human element and irrational swaps of political problems.
As such you can have the dummy variables that he used, bait it against final product of the period, but these final products may have started elsewhere and reached Nigeria for other reasons than profit through exchange or supply routes, but then an aggressive opposition against the structural force perhaps a consensus parallel to rate of economic growth.
Use of model of two increasing variable…with respect to resistance, consensus and final outcomes as a measure of real development or future development….Displacement, resistance, performance and a graph of displacement graphs…
The industries stayed the same, abbreviating separate production numbers and meaning, but were not totally relied upon for Nigerian Cultural and economic development. Credit as we have argued is not a manufacturing factor, credit is production, that Nigeria was running at 1.00 dollar to 0.84 Naira, is suggestive that industries at the level in Nigeria were not primary to the total development of the economy.
It was tying the economy to Nigeria to crude oil and the revenue it generated that made the difference. Another important dispatch from this period that Odior did not mention is the price of building industries in a Third World economy such as Nigeria. We look at the building of Refineries in Nigeria by Shell and Oil Companies, that with the fall of Shah in Iran in 1979, oil prices took on a noticed spank in world markets.
There was higher and higher demands of crude oil and countries such as Nigeria, Venezuela, Mexico, Indonesia, Philippines and some Asia Tigers such as Azerbaijan, UAE, Dubai, are wanted new facilities and new operation capacity. These new refineries required money and when built from credit awarded to them by Nigeria, a lot of these companies entered into questionable deals with the Government and when these Governments such as Nigeria did not perform their wish, they sponsored their persons of interest in the military took over the country.
The failure of Nigeria to service its debt may have started from resulted sudden short falls in crude oil prices, may be an example of the reasons why foreign investment tanked in the area of manufacturing in Nigeria, the locals couldn’t keep up with the debt and the rate of returns so tied to fixed income did not keep up with these defaults leading to a spike in forex exchange and the balkanization of Nigerian Naira.
Using Mexico as line of reasoning, we may compared from the information before the NAFTA….and the returns on investment…..reaching 1.7 trillion Dollars in 20013/14 from slightly over 300 Billion GNP in 1993, with 94 billion in debt….there are other things involved in the whole process. NAFTA….
Cities may arrive this measure of distributed development by avoiding pitfalls which the City of Chicago was opulent in the 1900-1920’s and the City of New York from the turn of the 1800 where 5th Avenue was one parallel long and dual dusty roads.
The Major development in New York came with the Gilded Age but in keeping to the future market of their present condition, they reverted to City level investment with a view of sponsoring a rate of return commensurate to local demand.
The Major development in New York came with the Gilded Age but in keeping to the future market of their present condition, they reverted to City level investment with a view of sponsoring a rate of return commensurate to local demand.
Visiting New York Library and Photo Archive division which these days you can view on line, you are likely to find a picture of Lagos at the turn of the 1900, it was a village with a few thatched houses, pictures drawn by visiting expert who was aware of this Lagos as a land of pirates, the names quite familiar in Nigeria
If the trick of rate of return and budget is the local market, it is a City’s opulence to trade agreement such as NAFTA or in terms of Lagos, ECOWAS or other International Business environment of the world, allows it to guide the International market, guarantees its staying power including a compliance of Bank denomination such NADBANK and lateral IBC, adding a small contingency of new created or older existing Banks with ALADI, CARICOME and perhaps MERCOSUR opulence.
Clearly stated, the role of US oil and investment options through established Intellectual Properties and Oil dependent States is what defines Houston. But to the extent that an index is a public property and incorporates material cases of signatories pushing the gutter-barrier of clearly defined amount may encourage more cooperate business resonance between a Bogota, Mexico City, and the central states within the older and more familiar franchise. Majority of these companies acting in these far reaching South and North American States are placed through Banks in New York, given them international exposure.
But there are other ways of defining a market which we cannot teach, for instance the short gap between NAFTA and the including proviso of a total North Atlantic Coalition means political future of more than stated in the 15 year NAFTA, leads to options of GATT, guarantees some chairs at NYC given the penetration of U.S Banks and Insurance companies, and provides the listed companies reasons to form estimates of the pricing – either Debt to earn ratio or the promise of future delivery within the lines of the CURB or a CBOE. What ended the problems of the Chicago was the stability that accompanied its CBOE and its overnight lending.
In the opulence of NAFTA that pursues a future, it is only possible if profit or gains does not marginalize on American businesses in California and in Texas, which from spike in housing essentially force these major power houses out of the manufacturing equation. It seems that Texas with over 2 trillion reverse net gains is higher pedestal than Mexico and that California is just higher.
It must nonetheless be mentioned that these gains are removed in dollar terms which is the operational single currency of the United States. It is not easy to explicate that Mexico on a whole may be doing better than either State but in so far as the economic future of both Mexico and the United States, there is exception to accountability which the Index can provision and when the questions of overnight lending may prove to perpetuate long term the varying no border rules for businesses taking advantage of Cheap labor.
Cities may arrive this measure of distributed development by avoiding pitfalls which the City of Chicago was opulent in the 1900-1920’s and the City of New York from the turn of the 1800 where 5th Avenue was one parallel long and dual dusty roads. The Major development in New York came with the Gilded Age but in keeping to the future market of their present condition, they reverted to City level investment with a view of sponsoring a rate of return commensurate to local demand.
Visiting New York Library and Photo Archive division which these days you can view on line, you are likely to find a picture of Lagos at the turn of the 1900, it was a village with a few thatched houses, pictures drawn by visiting expert who was aware of this Lagos as a land of pirates, the names quite familiar in Nigeria
If the trick of rate of return and budget is the local market, it is a City’s opulence to trade agreement such as NAFTA or in terms of Lagos, ECOWAS or other International Business environment of the world, allows it to guide the International market, guarantees its staying power including a compliance of Bank denomination such NADBANK and lateral IBC, adding a small contingency of new created or older existing Banks with ALADI, CARICOME and perhaps MERCOSUR opulence. Clearly stated, the role of US oil and investment options through established Intellectual Properties and Oil dependent States is what defines Houston.
But to the extent that an index is a public property and incorporates material cases of signatories pushing the gutter-barrier of clearly defined amount may encourage more cooperate business resonance between a Bogota, Mexico City, and the central states within the older and more familiar franchise. Majority of these companies acting in these far reaching South and North American States are placed through Banks in New York, given them international exposure.
But there are other ways of defining a market which we cannot teach, for instance the short gap between NAFTA and the including proviso of a total North Atlantic Coalition means political future of more than stated in the 15 year NAFTA, leads to options of GATT, guarantees some chairs at NYC given the penetration of U.S Banks and Insurance companies, and provides the listed companies reasons to form estimates of the pricing – either Debt to earn ratio or the promise of future delivery within the lines of the CURB or a CBOE.
What ended the problems of the Chicago was the stability that accompanied its CBOE and its overnight lending. In the opulence of NAFTA that pursues a future, it is only possible if profit or gains does not marginalize on American businesses in California and in Texas, which from spike in housing essentially force these major power houses out of the manufacturing equation. It seems that Texas with over 2 trillion reverse net gains is higher pedestal than Mexico and that California is just higher.
It must nonetheless be mentioned that these gains are removed in dollar terms which is the operational single currency of the United States. It is not easy to explicate that Mexico on a whole may be doing better than either State but in so far as the economic future of both Mexico and the United States, there is exception to accountability which the Index can provision and when the questions of overnight lending may prove to perpetuate long term the varying no border rules for businesses taking advantage of Cheap labor.
Friedman-Phelps analysis maintains that the stage of Philip Curve is at the level of unemployment that can be described as natural and non-accelerating unemployment, which Johan Van Overtveldt (2007) elegantly showed that “This natural rate is not an eternally constant number, but instead it refers to that rate of employment.”
He refused to toe the line of thinking available from Friedman-Phelps analysis by citing Milton Friedman (1976a, 228), “…is constant with existing real conditions in the labor market. It can lower by removing obstacles in the labor market by reducing friction. It can be raised by introducing additional obstacles. The purpose of the concept is to separate monetary from nonmonetary aspects of the employed situation.”
As such Credit from the beginning would never serve as the best informed process of determining the performances of the industries and manufacturing. It leaves us with the hook on exchange rate, and in this case, exchange rate allows the best of us to try our hands with turnkey investments. A turnkey investment is investment in industries that begins elsewhere but finds its way in an entirely different environment.
For instance the issue of factories and their production capacities can be moved from a dilapidated economic environment with lesser return rate to a lucrative labor driven environment like crossing over to Mexico from United States. The chief motivation is the cost of final products, largely due to labor but ultimately based on price either on the final products or the final destination of these products. Here, the total success that can be achieved in any environment base on price does not transfer to technological advances including the instances of assembly plant saving a question of time or the duration of these loans.
The only reason why company or any financial institute or system dynamic such as the Central Banks would be willing to release money is if there are adequate reasons to respond to the Government's original call for money. If that call for money is considered expansion, it is only expansion without jobs when it travels through credit, then some of Ernest Simeon Odior’s use of Samuelson’s adjustment theorem and applications may hold water when transferred to Dudley Fuller.
At least we have a recent example in the US recovery process which is considered job-less recovery, largely based on the intent on credit but may intentionally mean that the system after a period of depression can automatically repair with annualized injection of money which gives some weight to credit facilities but does not always transfer to manufacturing. This does not mean that the credit awarded to captains of industries such as GM and GE, were requisite for overall growth of the economy, or could it said that the success of these of the large conglomerate narrowed the gaps in trade deficit.
In fact, considerations of labor away from production is simply faulty, consideration of supply of money without mention of the event horizon is equally wrong, that the Government from debt through investment may decide to reach for money or ask the seating officials and delegates to authorize a borrowing – usually from Banks or central Banks, means that these bodies of interest who do not run the Government or the economy are given the wherewithal to buy all the Government securities which are redeemed facially through notes.
This call for money is seen through the nostrils of Fed Reserve as Money Supply (Milton Friedman), but in terms of the relationship of debt to investment, debt to earn as torching final prices on products is a form of debt by the federal government under the names of tearing price ceiling or tax-payers such as the tax-payers cartel; the treasury (Hicks).
In my view, final products and the demoted argument on the lax of interest rate correlations between the disequilibrium and personal consumptive behavior CPI – which he did not separate – to macro-economic consequences of Exchange Rates and Foreign Direct Investment, which he did not separate as pliable to both short term and long term indexing, further widens on the gaps in his argument that the premise of lending and the extension of credit to manufacturing and industries neglects the roles of ‘origination of loans’ which can only happen as we move from unemployment numbers to money supply, whereas the return rate may be tied to manufacturing and segmented in specific areas of the industries and specific eras, there are other events in the life of every business and any economy that should be accounted for in determining manufacturing success in any given period.
For instance the return rate on investment to an area struggling against older and mature cooperation creates the necessity to invest in key and specific areas of innovation, which for Nigeria 1930 – 1960, and 1960 – 1975, and 1975 through 2011, unlike many parts of the global business did not have enough home based innovation saving in rail roads. Besides, Nigeria had political problems of instability and poverty to warrant any form of index based accounting and measure of investment through manufacturing.
The whole basis of his essays seems to serve one example, that indexing from an era and one industry is specific to credit bases for manufacturing, whereas the Paradox of production to credit is that price is final value on any product therefore manufacturing index, whereas production is relatively driven towards full employment which an increase in commodity prices such as crude oil and its after piece such the price – even considering the shocks below and above $48 prepositional standard crude oil price – cannot achieve any kind of full employment.
Such situation is not an attack on Soludo – but understanding the shift from surplus to savings or permanent money does need Taylor's money capacity over storage or diffusion to the least possible; inflation targeting, it shows gaps in Odior’s papers and why Soludo may be asked to revise his thesis to shift from political neutrality with hints of academic pronouns to pure economic theory with or without flourishes and dramatis personae.
As such the critical tipping point in the survey over a period with perhaps one important measure in how the credit reflects the growth of business in Nigeria, not necessarily the availability of money.
There are points Odior raised in his critical essay which elements of itself in Soludo’s argument, it concerns the external shocks to a system but the point considered exogenous leads us away from the smart spending strategies of internal financial processes, which and without the external shocks of crude oil performances, can assuage this difficulty through an effective application of process and reduction ins pending through spending without losing the shift from paper currency to housing index which are the end of the flow and absorption of inflationary pressure with balanced CPI general theory (Equilibrium).
If we redefine it, we may suggest that disequilibrium is financially injured pro-piece and it lead to excessive emphasizes on Government which is its precipice, and from this collapse of individual choice, Government control leads to poor executive strategy of even the least national projects. Debts ill accumulate and you are running behind the schedule in spite of the easy money.
One of solution is offload the centralization of Nigerian economic balance sheet on the federal government, maintain and ensure the projects already started are getting there and these projects are capable of generating some means for taxes, for instance a shift to the right side of the Philip’s Curve, a trick to employment even within the first levels and the NAIRU.
Studies of industries and means of executing and meeting their labor demands can reduce to specific eras, and here the performances of these new companies and industries are correspondingly parallel to the rating, the injection or suspension of credit to these ventures becomes a different matter. A State by State consideration of these processes and a State by state process of the performances of these industries may reveal financial situations that are part of the underlying for securities and economic exchanges elsewhere.
One such case where actions from a different industry could have impact on actions on a wholly different situation is the example of Nigerian Industry; its food and drink manufacturing industries such the Golden Guinea Breweries, which for instance could be impacted by the problems of (1) Transportation Rail Road and road construction in terms of its distribution capacity but directly in terms of its production capable, it is energy for instance electric power from NEPA (Nigerian Electrical Power Authority) that mitigate on Nigerian productive industry.
The number of industries may be expected to perform X, Y, Z of export dependent economic vintage. The country through this period was experiencing new attitude from its convenient leisure class psychology but relied of new companies to enhance its production capacity due to higher demand.
There is energy that mitigates production for instance Crude oil production as a major source of income and alternate source of energy heralded a new era and encouraged foreign investment in Nigeria, but at the same time. Letting from deficit is an incremental shift to right of manufactured products, hence its definition.
II
The current minister for finance and economy, Ngozi Okonjo – Iweala (2012),mentioned that “In 1985-1985, when oil prices plunged to US $8-10 per barrel and Nigeria could no longer pay its bills, there was a brief attempt to reform the economy and change its direction.” It is not an isolated case despite the claims of refinery producing companies such as SHELL masturbating of new rigs in Nigeria in spite of the debt the host owed them, the refineries and their coming to Nigeria, the debt Nigerian owed the world, measures the rate of returns on the credit given to these operational groups in Nigeria, the debt given to the operational capacity of these oil rich countries which relied on the sale of crude oil to repay these loans, and the shortfalls driven by crude oil prices falling below estimate.
Other industries in Nigeria were also falling behind because of this, and Nigerian failure to capitalize on the new and sensitive cash crop through training and maintaining an elite engineering group, forced to shrink in attracting investment from oversea, obviously, these Nigerians were defaulting on their debt; the price of a barrel of crude oil dropped – almost unexpectedly as we notice in this 2014 end year.
“NEPA, the Nigerian Electric Power Authority – also said in Nigeria to stand for Never EXPECT Power Always – was a giant public utility responsible for generating, transmitting, and distributing electricity. It consistently delivered one of the lowest levels of average per capita electricity production in the world.” This could not mean implementing IMF programs in Nigeria was the right course of procedure, or entertains its plausibility that IMF encourages development of personal industries and so on, and it will be inappropriate to shifting from the immediate concerns of administration of industries to something else less specific.
A measure of a company’s specific development in Nigeria or a measure of a company’s specific development in Nigeria or in any industry was not treated in Nigeria, including in part, the Marshall partial and total recalls which we discovered in Europe and elsewhere.
“In 1999, when President Obasanjo took office, a review of the sector showed that no new plants had been built and no major overhauls of existing plants had taken place for a decade that only 19 of 79 generating units were in operation and that that no transmission lines had been built since in 1987. One fourth of the average start-up cost for a business was for private power generation and virtually all Nigerian manufacturing firms and small and medium size enterprises had back-up generator.”
Transferred to co-investment, public offer, and concession 10-25 years of investment, Asset Sales and liquidity commercialization are usually rounded to the last 9 years of era existence, I may seem that the real question of period in the other of the investment in Nigeria, should begin from 1975 through 1981, beginning perhaps 1982 through 1988, and from 1988 through to 1994, from 1994 through 2000, from 2000 through 2006, from 2006 through 2011 or 2012, etc.
The reasons why we place 1975 is a period of embarkation in studying Industrial development in Nigeria is because of the discovery of Crude oil in very large quantities in the former Eastern Nigeria, which places it at the end of repatriation from Eastern Nigeria following the end of the civil war, at the end of Gowon’s administration as the Head of States and commander in Chief of Armed forces, and the first installment of would be oil backed military juntas in Nigeria beginning with Muritala Muhammad, to his assassination sometimes later, till a new round of deals with refinery builders under Obasanjo which was viewed as a continuation of Murtala Muhammad, as such speak for the same era till the handover to civilians in 1979.
These conspicuous political and military departures may not have influenced monetary policy saving that credit from international baskets and Paris club which is perhaps earned from rates.
According to Soludo,
“The current system guarantees cycles of consumption loop and I cannot see sustainable long term prosperity without major systemic overhaul.
Under our democratic experience, President Obasanjo inherited a bankrupt economy (with the lost decade of the 1990’s GDP growth rate of 2.2% and hence zero per capita income growth for the decade). His regime consolidated and deepened the market economy structures (consolidation of the banking system which is powering the emergence of a new but truly private sector-led economy and simultaneously led to a new awareness and boom in the capital market;
Soludo’s, telecommunications revolution; new pension regime; debt relief which won for Nigeria policy independence from the World Bank and Paris Club; deepening of de-regulation and privatization including the unbundling of NEPA under PHCN for privatization; agricultural revolution that saw yearly growth rate of over 6% and remains unsurpassed ever since;
sound monetary and fiscal policy and growing foreign reserves that gave confidence to investors; establishment of the Africa Finance Corporation which is leading infrastructure finance in Africa; backward integration policy that saw the establishment and growth of Dangote cement and others; established ICPC and EFCC to fight corruption, etc).
Using the argument made by Charles Soludo, who wanted to restate his position on what was wrong with the elections and why the real issues were not discussed, re-affirm that “…the avoidance of doubt that I stand by every statement I made in the two articles viz: (1) “Buhari Vs Jonathan: Beyond the Elections”; and (2) “Ngozi Okonjo-Iweala and the Missing Trillions”.
In particular, I insist that over N30 trillion has either been stolen or unaccounted for, or grossly mismanaged over the last few years. This figure does not include the estimated $40.9 billion (N8.6 trillion at parallel market exchange rate or nearly two years’ Federal Government budget) which the African Union’s (AU) recent report claims to be “stolen” from Nigeria each year.”
In particular, I insist that over N30 trillion has either been stolen or unaccounted for, or grossly mismanaged over the last few years. This figure does not include the estimated $40.9 billion (N8.6 trillion at parallel market exchange rate or nearly two years’ Federal Government budget) which the African Union’s (AU) recent report claims to be “stolen” from Nigeria each year.”
In a letter written to Jonathan by Obasanjo, he made it clear that he was no longer comfortable with the levels of corruption in the country as at 2013. Apparently these information reached Nigerians through many sources, but published for reasons believed to be less political by Sahara – who are one of the leading opposition to Jonathan.
First and fore mostly, the 30 trillion naira which Soludo speaks about its not verified anywhere, however, such amount is actually possibly missing, entered into Nigerian Banks or other banks and went their way into IMF and World Bank. It leads to the center of the issue, Ngozi Okonji Iwola, who has not been able to account for much of the resources recovered from Crude oil in the last five years, and who has a lot to answer for in her conducted the business of finances and accounting in Nigeria.
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But at this period in the trade fare, we look at what happens to Nigeria and International Oil Rich countries when crude oil falls to $50 a barrel. With increases in interest rate and fund rate given the 1.1 trillion loans which are not service loans or loans to create money, we see an America that may have added a I trillion to its debt on one hand, but may be balancing its budget and trade deficit to somewhere below 2% from somewhere in 9%.
In the first two quarters of early 2015, there are possibly signs that US may be hitting a surplus, which makes the argument lame and clear, that perhaps, US stock market is not without buying interest especially the Crude Oil. I take it that countries such as Nigeria and say Mexico, part of the new kids on the block – may become new kids on the chopping block should they scale their interest rate to US given the gaps in economic maturity, and far from what is happening in West Africa with Nigeria as Satellite, it may have a later day solution from the hands of Concentric Circles. A concentric economic circle involves a corporation between several countries in the world that share similar economic outputs.
Let us reverse the mention of the BRICS countries is what is now happening to Crude oil which is subordinate to International guarantees and to BRIC countries, that for instance the free market entreaties of Russia or its return to prime time, then China remaining free from International contamination and so also India, Brazil and South Africa.
These nations are not strong consumption economies in spite of their size, that if look at the role of AIG in these countries parallel to what is available in the New group of MINT, which show life and dying attitude if not taken seriously. Of course, Indonesia like Mexico may not suffer from the problems that the BRICS may be bound to in the International market, but we can be sure that their lack of satellite placement and lack of comparative scaling for interest rate and rate of FDI is depended on how well it does with US.
These nations are not strong consumption economies in spite of their size, that if look at the role of AIG in these countries parallel to what is available in the New group of MINT, which show life and dying attitude if not taken seriously. Of course, Indonesia like Mexico may not suffer from the problems that the BRICS may be bound to in the International market, but we can be sure that their lack of satellite placement and lack of comparative scaling for interest rate and rate of FDI is depended on how well it does with US.
But Mexico is not US, and relapsing into US which torching on Canada or far away countries such as South Africa or Egypt or very cogent and realized bases, may be ridden to the permeable elements of inflation which are exported with a rise in US interest rate, that Mexico currencies will face the same faith in suffered in the past given its stand-alone structure to the US.
With a structure measured through similar progressive countries such as Brazil or South Africa or perhaps Indonesia or to a large extent Turkey, it will scale down its bifurcation to US and will add more green to US invested interest when it came share its inflationary pressure through an International market, for instance the MINT countries, Mexico, Indonesia, Nigeria and Turkey, that even to the extent of having similar currency may help to save them from a combined famine which an International market will experience under a rising US.
With a structure measured through similar progressive countries such as Brazil or South Africa or perhaps Indonesia or to a large extent Turkey, it will scale down its bifurcation to US and will add more green to US invested interest when it came share its inflationary pressure through an International market, for instance the MINT countries, Mexico, Indonesia, Nigeria and Turkey, that even to the extent of having similar currency may help to save them from a combined famine which an International market will experience under a rising US.
The first signs of some problems with 2015 are the shortfalls in Indonesian and rupiah selling at 1.9% below its market will bring to the table the problems of next year poised for interest rate. Carefully looking at the price Obama’s estimates are troubling, not that he is doing anything from his head, but going as late as 1970 when US was in this kind of situation, or middle rate as 1979, when crude oil prices reached a new premium, thing gradually fall apart as we entered in the earliest 80’s.
Indonesia, Turkey, China, Japan, Taiwan, Malaysia are element of business families that have graced the venturesome business partnership with Nigeria, all of these countries is the delineating years of Nigerian military administration itself a consequence and continuing evidence of a country or a nation in disarray or a showing of instability, from 70-75, 83-91, forcing Nigerian into long list of indebtedness tied to Oil companies and their spurious deals with OPEC oil International, whose final coming and repay scythe was a damage to the currency of these Nigerians.
Today we may speak of a new co-operative indicia of MINT Coined by Jim ; composing of Mexico, Indonesia, Nigeria and Turkey, a grouping that alarmed the best of us since we are certain that Nigeria is only half awake from almost two decades of military dictatorship. If these four countries aspire stability especially through the currency, which is very important it may be meeting to scale their interest rate along the participating countries with perhaps a side note on Crude Oil. These countries commercially generate over 1 trillion dollars in GNP with Mexico nearing 1.7 trillion year to year, several hundred million behind Texas alone not adding California with over 2.3 trillion GDP.
Nigerian from the list is lowest performing economy with only a few international measure of structural development to compare with Turkey and to some extent Mexico and Indonesia, where as Indonesia is clearly the largest market in the four in spite of its numbers. Mexico that is luckiest of all them suffers from similar high fate and ending, for if put the balkanization of Mexico Peso in the 1980’s and 90’s, we become weary if the new signs of depreciation will continue and for how long. Mexican Peso selling at 14.4 to 1 dollar is already showing signs of decay from just a decade and half since the inception of the new currency.
It looks like the correlation of Mexican peso to dollars was a function of the export market, with US being the Chief ends of these exports. The issue of cost labor proved too quick an advantage but in receding years from 1993, the currency has gradually slipped to original challenges.
But we are forgetting someone very important in this picture, a person many of us who petitioned the government for investigations into Sanusi accounting and business dealing at the Central Bank and with Federal Sovereign Wealth were both taken lightly and maligned for exhibiting paws of tribalism. But Sanusi was not as honest as Nigerians believed him to be, that we can maintain the last missing 10 billion dollars of the two part estimated 20 billion dollars which were not phishing scam by some South Africans or others in Europe as people feared may be linked to him, that part of the money can be located in the accountable bump of resources by some eminent Northern Nigerians.
I can mention that it was Lamido Sanusi who needed to be look into more closely than Olusegun Aganga and Ngozi Iwola. The last of two are easier to question especially their comprehensive failures in administrative of financial process. Part of the trillions we are speaking about here, may have reached or arrived at center piece of Nigerian economy through the auspices of the newly created ministrations. For instance the pension fund enrichment, took Nigerian resources to 1.5 trillion embarkations from less than 700 billion naira terms. The creation of MBS with respect to the Central Bank and the Treasury it’s a source of expansion that it not administratively managed and checkered through possible kinds of spare problems.
These marginal problems of resource allocation, especially the case of instability and foreign interferences place too much burden on the Nigerian Standard Accounting procedure and the States can appoint chairpersons of interest and senior to consider monitoring the resources in their States and not through chartered federal accounts.
We may point out that women naturally are not known to be totally corrupt, but they are historically just as ruthless and just as corrupt as their men, and are morally self-pioneering, self-propagating. There are younger Nigerian women as well their men, and most men with experience who need to switch gears and who need to be invited to the Nigerian Treasury or the Debt Department, which has shown some incompetence in handling Nigeria’s expense and recovery requirement and the Department should be transferred to Poverty Institute.
Having said that, the total idea of letting individual States in Nigeria handle their resources and tax reforms are articles of history requiring the better minds in accounting and congregation of expert of Nigerian finance industries, especially those with trained background in Banking and Business. No doubt corruption is the bane of Nigerian society and no small measures will effectively handle the issue saving for deciding issues of accountability and the provisions of enough wealth and resources with St. Peter Paradox as I for one, explicated against the normative of Olive Twist. More reduces the temptation to exploit, the wisdom is guaranteed from something else which at this point, time and longevity of office is the primary administrative persuasion.
Of course, Soludo’s position on these matters may not fail to be considered a political item given the timing and audacity of his argument. It does not matter either that his actions are preeminently superfluxes given the more aggrieving matter of security concerns and instability which reign-in these fears to flight. There are other material issues of Nigerian banks which are missing in the fight against corruption and the absence of Nigerian Banks in United States and Europe allows better enforcement of the accountability and money movement between Nigerian and the rest of world.
The issue of balance of payment do not have to be handled by the State Government or by the Federal government, but with effective Nigerian banks in several states in United States and in Europe, and in part of Asia, they will mow down some of the problems of Shadow banking and capital flight system associated with hot money such as Nigeria in the last 6 years. It is not a silver bullet but when there are nowhere to run but to the end of world where there are reprieve groups from Nigeria and banks will further discourage financial excursion, capital flights, and poor business transition between the countries. Excessive emphasis on foreign currency most probably the dollars is serious excursion and capital flight instrument.
The only to counter it through the re-basing Nigeria Currency like Ghana in recent years, which has seen the comparative but false exchange rate advantage reduce some of the mindset in terms of United States, Canada, Europe and South America.
In essence the highest percentage penetration of businesses from West Africa in the last 10 years has arrived through Ghana and then lately, Kenya, challenging both Morocco and South Africa. Nigeria however leads the way in Europe and particularly in Britain, but the total resources from Britain is not enough to transition some of the mid-cap investment into bigger comparative industries in these United Kingdom.
Of course instability it’s the chief problem of any motivation to corruption and lack of administrative of process within the appointed veils of the industries and Federal Ministry, but these instability rooted lately in insurgence has more than added weight to issues of security and furtherance of Nigerian welfare in all classes of respect and decorum who are usually caught between uncertainty and time in office.
Whereas an administrative format that operate in the system between non-profit, tax systems and treasury, none of which may be incorporated by have less temptation of phishing the currency and the resources, and may enjoy the long term comfort of establishing market based friction between the Nigerian Naira and the United State dollars, which must prove itself to deflate the problems of over-value. Of course, the interest of Brazilians in Nigerians is not stymied at all or misleading, some of the recent breakthroughs in the Brazil and some of recent breakthrough in Nigerian housing market and in business were perpetrated by Brazilians and they are expanding to Abuja and to the North.
For all we can argue based in many ways than on the premise of monetary injection into United States or elsewhere, through public as well private means, is perhaps an academic consensus of opinion which adds up the role of financial institutions and sums the limits and exercises of their due diligence finance network, will be meeting criteria for Nigerians looking to overcome the problems of corruption stemming from instability.
Creating better business practice begins with attitude of financial administrative structure and in the end; it leads to other areas of business in the country.
Another way of knocking down some of the problems of corruption is through the creation of regional reserve banks, RRB, perhaps a regional reserve investment bank, may seem too pristine and too unique to be anything less than budget and politically motivated expansion of government and credit. But when in Nigeria we have a case of debt running ahead of investment, we are spectators to one more problem Nigerians are facing, those of rate of return.
A policy that permission new IPO to enter the Nigerian Stock Exchange even at 1 million naira financial underlying account received, allows more companies to enter the large industries, may expose these companies to the Nigerians at large, to perhaps poaching but new model for banking and banking acts based on national pyramids and perhaps a regional banks, will micro-manage the problems of poaching at IPO given the familiar waters of regional guarantee of resource allocation. Pushing Nigerian it to 1 trillion dollar market as Bloomberg Financial estimated for 2015 will probably not happen under the current arrangement.
For instance, South-South Nigeria is the highest grossing region of Nigeria economy, between Akwa-ibom, Rivers, Cross-Rivers, Bayelsa, and perhaps on the same pedestal as South-east which includes Abia, Enugu, Imo, Anambra, Ebonyi, Delta, the error has been to add Delta to South-South, but in all, these mentioned states in Nigeria are all crude oil producing, and in re-based revenue domestic grossing especially for new Crude oil magnets such as Imo, Enugu and Anambra, there are more resources from this part of the Country more than anywhere in Nigeria and West Africa.
If for instance, Delta State reigns in 19 billion dollars from crude oil on behalf of Nigeria alone, Rivers put in 21 billion from 28 billion given the formalized ceding of Ukwa Region back to Abia State bumping Abia to 15 billion, it compares backwards from Sokoto with less than 10 billion and Bauchi with only 3 billion dollars into the Nigerian coffers. The amount of money combined from Abia State and Imo State as part of the old Imo State is larger than Lagos State at 30 billion and in 2014, 33 billion dollars. Some of these are mainly from Crude oil let alone other resources from South EAST and from off-shore drilling in Riverine Nigeria which does not make it to Federal Accounts.
Lagos in spite of Fashola does not contribute 90 billion to Nigerian economy; it has from clearly stated CIA resources, IBD and European Intelligence, somewhere between 30 billion to 33 billion even as at 2012. Much of the money generated through Federal Chartered industries, especially the Internal Revenue and Foreign Direct Investment pour into Lagos and do not constitute State property.
The new found crude oil section of the country also adds to the State of Lagos but the net worth of the State and GDP income is not up to 50 billion yet until the Lekki refineries are fully functional, let alone the claim of 74 billion which does not come close even with the appropriation of Nollywood business which originated in Aba and Onitsha whereas the Industries is based in Enugu not Lagos.
Aba and Onitsha does not have the infrastructure to sustain the business but it was Lagos however the chief market was and eventually began to attract public attention to the film industries. The best it’s yet to come as far Lagos is concerned, but a total attention a state could receive is a diminishing of other areas of growth in Nigeria and this is why there are gaps in GEJ’s administration. It does not have the resources yet and mineral components.
Consider also that the greatest headache of Nigeria in the last few years have come from Bauchi with a meagre amount of 3 billion dollars, in essence, Bauchi cannot even support the primary basis on the employer in their region and in their economy, and with the problems of insurgency, Nigeria is basically wasting their money in a State that is sponsoring terrorism. The retribution of money as I see in Nigeria can be compared to what is experienced in United States and in many parts of world, for instance pension and permanent injection of money through a re-distributive process such income tax returns and social security are chief concerns of the States such as Nigeria and United States.
Corruption gradually enfeebles these Nigerians managing long chain of resources and accounting standards when they make it to National level, or Federal accounts. But at the chief industries of the country expands through for instance Nigerian Stock Exchange and its adverted debasing of its currency through continues injection of foreign investment, we are looking at a country that has a recovery problem long term with a debt bias that is uncomfortable for the economy in general.
At such instance the issue of Lagos playing center and forward on Nigerian economy widens the issue of inflation and with expanse driven economy free from competition from the rest of the state, it is false economy and market to emphasis Lagos as the signs of economy growth when it is not. Yet some equilibrium is possible and better than one sided economic growth, when each of the regional states should give account of its resources on a national level, control its destiny and further the role of these States in their regional development with contribution to national security, national income and treasury balance sheet and increases in taxes as a means of guaranteeing continues injection of money.
A regional banking act for the six regions in Nigeria may help encourage the issue of salable interest between these working groups and regions, and intra-state relationship between say Rivers and Abia State, or between Rivers and Akwa-ibom or Abia to Imo which are landlocked anywhere. These other neighboring interactive do not have to waste their energies on national guarantee of redistribution of a national level. As long as money flows into National coffers in pretext of distribution, there will always be some magnet and chieftain from all corners of the country seeking balloon their private piggy with what the so called Federal Accounts has to suffer.
Africans were killed in large numbers in Sudan and so killed that Darfur became a portrait of a continent raped and mutilated by Asia, Arabs, and Europe. The Americans are just as guilty but the issue of common genocide inside and now land grabbing by Arabs in the name of God, would or would not have ended without the rise to power of the President of America, Barak Obama and efforts of George Clooney who America into a different and dream lay pedestal.
With the coming of Obama, all these genocidal headaches of the Sudanese by Arab and Janjaweeds, and the murderous European adventures in Congo came to an end months before his inauguration. It is the President of a great nation such as America or any useful European country that make it possible. If such an individual was black or at least missed, the land and life of these Africans can be restored or retracted. Yet they stagger or perhaps stumble from their own lack of faith, for we know that our faith in a country driven purely and ultimately by merit could not have possible in Nigeria given the 'malignant cancer of tribalism' from its early.
Strangely enough, Nigerian Airways is turf on the new and newly renovated Airports and are managing the long queues with only 8 operational Air Ports and 2 Heliports, and for the records only 3 of these Air ports are International and they guzzle their passengers with price. But under this pattern, the long horn emphasis on others to develop Nigeria or add to its green will not paper out the demands on the grounds. In essence, it mean seem realistic that the country can only care for its citizenry by the provisional resource allocation of the new operational groups interest banks are kin on achieving, but a new currency challenged from 100 paces to 1, there is room to allocate foreign interest nations willing and able to penetrate the market, and further extend the frontiers of market strategy already approaching its apex in US and EU and the consumer economies.
These sectors that need more social programs, or would require government expansion and active supervision to re-open will have to wait unless a new round development begins. It however makes for a second kind of argument that if we are talking of employment opportunities, we cannot use Lagos or Abuja to draw conclusion on the rest of the country- It is poor estimate and is occasion for poor and uneven market…, we must, in particular Mental Health of the patients and doctors or nurses supervision to expansion of Benefits.
A grid system in terms of the Nigerian Social Service and State I.D or number is another means of ensuring that newly graduated Nigeria or fairly new Nigerians are successfully - if not dutifully employed, and these measures if have applied or pursued by the seating government will help to track down violent activities in any one simple part of the country and will also speed up the hunt for loose cannon groups anywhere in the country and in West Africa. The Grid System is security deposit on the future of any economy's widening demographic and will create means that will promote jobs now and for the future. Such grid system or social identity is not an academic exercise, is far from just a symptom of what Nigerians have learned over the years in places such as Canada or what some of us can still state accurately about the highly coveted and challenged U.S health care industry, rather it is a process of creating work and employment.
Debt and Investing
We may also point to the issue of Time Series, that from the point of view of the changes that can take in any market and any time, there are business cycles and seasons which nearly all economist agree is evident, to the point that others who successfully removed house investment numbers from VAR, site that shocks in the market or any market, can either be endogenous or exogenous.
The general theory of the older principles of economies at least preceding Keynes, or what a certain Robert Gordon called pre-Keynes economics emphasized the agglomeration of numbers from an economy, embracing mainly the Internal working dynamics.
It is the common argument that these so called internal dynamics of any economic was based of ……but there was another of Economist who say it differently, that the problems of any economy, is a problem associated with mainly external influences, that is the influences were from the Keynes school of money a problem that due to aggregate demand and all ultimately human problems. This school in our time is called ‘Irrational’ economists and like the many theories associated with Keynes, they cite the importance of the Government in resource allocation.
It is the common argument that these so called internal dynamics of any economic was based of ……but there was another of Economist who say it differently, that the problems of any economy, is a problem associated with mainly external influences, that is the influences were from the Keynes school of money a problem that due to aggregate demand and all ultimately human problems. This school in our time is called ‘Irrational’ economists and like the many theories associated with Keynes, they cite the importance of the Government in resource allocation.
For that attention has been placed on the shocks in the systems that are the problem acting outside the normal bias of self-regulating linear systems of Paul Samuelson, which as mentioned that J.R Hicks and Gordon argued independently to be relying mainly on ‘capacity ceilings’ or ‘capital replacement’ to estimate amplitude. It is not impossible to narrate that the rational school of economics when from the propagation of income or the ratio of government reaction to changes in any industry to diminishes, as also represented in Samuelson’s multiplier/accelerator model which tend involves equations that will tend to absorb bumps, fluctuation and shocks as they arise, and would be required to self-generate the exogenous shocks needed.
The changes he mentioned resulted from series bearing the results from early stages which compared with other models, which can be compared to latter stages or applicable to ‘later periods’. The interesting connection between the limited resources of man as Bawerk mentioned and the problems of infinite propagation, proved a problem for Samuelson’s linear dynamics and the multiplier effects, and following the arguments of Hicks about capacity ceiling, the connection between the time frame and Time series or duration as Bawerk argued for and the series involving a test of D1 D2 as Frank Knight indicated, proves that this group of economics many of whom are regarded as econometric of rational economist, are probably no different from their ancestors and other classical theories, many of whom of Austria descent argued from their perspective and from the vistas of Adam Smith, that the market was self-regulated.
Between Friedman money supply (demand cave-in) and Keynes aggregate demand solution (supply chain or burst), there is a question of investment and growth, which is both from a manufacturing perspective and production perspective. In respect to supply side economics which is not exactly the theory of Surplus, we may see that investment from surplus as a sign of growth only triggers or converges to CPI behavior which champions the family investment and CPI and household economies or Margaret Reid and balances the recession from shortfalls in houses and near to long term results in the economy.
Unlike for instance the 2008, the housing numbers were outside the balancing comfort of CPI, and the short views were so catastrophic that it created a panic requiring the Feds to deal both the long term market structure and short term. We may indicate that Friedman’s idea of investment from debt – which I think it’s the actual future money from negative barriers, trumps on Hyman Minsky’s shadow boxing on this idea of investment from debt by pointing to surplus from stage of the unknown does not warrant a system which in his it’s not guaranteed, but in terms of surpluses, there is always a new investment as a way to guarantee its future returns even if meant expediting the risk factors through assorted investment basket.
But from money we don’t already have, the tendency to alter a bull market is only through trading inside or within the institutions which requires a large percentage borrowing. New comers are likely to be poached if their investing with their new earned resources or new dividend as we shift from mutual funds and house indexes to saving loans for flows already achieved,
Here, attention on exchange rate is missing from the corner stone of the argument, although it is listed as a deviation or a measured redeemed of deviation of less 0.5 capable of hurting the consumer, that is, it has impact on the disequilibrium or individual and house hold management largely on the poverty of the transition strategy involved in industrial businesses which long term assures the success of policies given how many new economic groups and individuals are entering the market and how well that stand against established corporation.
Exchange rate considered from manufactured is obviously a giveaway that some markets are better placed to mitigate on each over the issue of comparative advantage, that in so far as Nigeria is concerned, Nigerian up to 2011, this comparative advantage especially the primary citizens consumptive behavior is largely responsible for any useful advancement that has been scored through manufacturing, some of which are assembly plants with indexing based elsewhere and therefore outside the accounting in a country like Nigeria from 1975 through 2011.
Here’s are some examples, a Toyota Japanese automobile plant is found all over North American, especially the United States, and a Samsung assembly plant is found allover United States and North America but the receipts of transaction, quotes, and profit margins, are not quoted in Nasdaq for Samsung, Toshiba, and variety of Sony products, but are quoted elsewhere. Although some pairing is done through NASDAQ via the Vanguard but the primary quotes are done through Tokyo. In US, the Spider Index 500 or S&P 500 is primary established for companies and business based in United States. But we compare the US manufacturing since NAFTA and CAFTA, some of the Assembly plants and mills in Mexico are now present in United States.
It is the manufacture of any product largely for reasons of profit that the exchange rate assumes a different form, and for exchange rate assuming from the title is derived from debt, which are forms of investment and not necessarily credit. Here the damage to exchange rate is determined from debt and are injuries from repayment of loans or rate of repay of loans like Nigeria owning the Paris club, and Nigerian owning Shell and Crude oil companies tied to Dutch System and foreign littoral of Bank currency.
We state that the damage from the debt with or without respect to investment can either transform the buying power of a local currency hence widen on its ability to create money without the Government – that is allowing the general public to be part of the system - or exchange rate can degrade the local production or by market definition manufacturing, by creating or becoming financial nuisance in the names of long term investment whereas the system however exogenous suffers in quality of currency rotation.
Here, exchange at the receding ends of a culture or a nation without exchange banter for instance a crude oil banter such as Nigeria whose interest rate is not scalable due to other West Africa countries, or equal to those who mismanage this cash crop or one cash crop given events horizons within the endogenous events in the system dynamic may be considered shocks, may seek the presence of the government to further create money through call for cash (M2) or through breaking new price ceiling (final effects) that the existing market and financial institutions such as the Banks would have to release more money in forms of expansion – as if in depression or recession – and would in the end, create a balance sheet problem for disequilibrium individuals who may be struggling against the convulsion of a new velocity rendered through private corporations and industries.
In essence, the release of credit in this case as unopposed to the author’s intent, is an after effect, not a prolong to manufacturing indexing, or based on the concept of receipt of interesting information provided through macroeconomics that the laudable practice of structural reforms as elsewhere argued by Paul Krugman can be achieved through national budget as part of a general stimulus.
This does not call for additional credit through Banks or special concession saving for profit or advertised interest or gains, in so far that the expansion of the Government and its willingness to structural reform is concerned, or in so far as the transformation any economy can be measured – not necessarily achieved – estimates through industries and their manufacturing indexes are largely dissociate from numbers. For other reasons other money policy, there are reasons why the budget from the beginning and these may be achieved through budget planning and fiscal policy.
