Nigeria Can’t Borrow Anymore, Warns Adeosun

Kemi Adeosun

· Laments budget is too small to deliver essential services

· Acting President pledges economic turnaround in 18 months

· DMO targets foreign loan debt service of $483m in 10 years

Omololu Ogunmade in Abuja and Obinna Chima in Lagos

The Minister of Finance, Mrs. Kemi Adeosun, Tuesday warned that the country must not borrow more to fund its budget and should instead raise money internally to fund the budget.
This is just as Acting President Yemi Osinbajo also solicited the co-operation of the private sector in the federal government’s quest for a better country, assuring it that the government has the will to turn the country around within 18 months.

The remark by the minister was a pointer that the country might shelve its planned $2 billion loans from the World Bank, Reuters reported.
Africa’s largest economy is in its first recession in 25 years, and had planned to borrow extensively from overseas to fund a record budget aimed at helping the country spend its way out of its economic doldrums.

But plans for lenders like the World Bank and African Development Bank (AfDB) to loan at least $2 billion to Nigeria have been stalled for over a year, as international organisations’ frustrations mounted at the country’s refusal to impose key fiscal reforms such as allowing its foreign exchange rate to float freely.

Adeosun, who made the comments while speaking at the quarterly business forum held at the Banquet Hall of the Presidential Villa in Abuja, suggested that Nigeria will no longer seek such loans, or an additional $1.5 billion it had planned to raise from international debt markets.
“We cannot borrow anymore, we just have to generate funds domestically to fund our budget. Mobilise revenue to fund the necessary budget increase,” she said.

In May, the Director General of the Budget Office of the Federation, Mr. Ben Akabueze, had said the country has a shortfall of $7.5 billion for its 2017 budget expenditure, adding that this would be addressed with $3.5 billion from the aforementioned loans and debt.

The government also planned to raise $4 billion from the local debt market, he said at the time.
But Adeosun said the government’s medium-term plan was based strongly on increasing revenue mobilisation.
She stressed that increasing the country’s revenue was not something that could be attained instantly.
“For example, in some cases like tax collection we needed data, we needed to sign some treaties and we needed tax policy reforms. We have been working hard on these measures.

“Our focus on revenue is total. Revenue generation is not as rapid as raising debt but it is permanent. Increased revenue will ensure sustainability, will prevent us from falling into a debt trap and will reduce our debt service to revenue ratio,” the minister added.
Adeosun also expressed concern over the government’s inability to deliver essential services due to financial constraints, which she blamed on the nation’s small annual budget.
Putting the nation’s annual budget as a percentage of gross domestic product (GDP) at six per cent, she said this was significantly low, adding that it was the lowest in sub-Saharan Africa.

According to her, the situation was so precarious that salary payments take the largest chunk of the annual budget, explaining that the development was largely caused by non-payment of taxes by the Nigerian public.
She said the by-product of tax evasion was the incapacity of the federal government to deliver basic projects aimed at improving the living standards of the people, even as she emphasised the drive of the government to generate more revenue to alter the status quo.

“Our budget is significantly lower relative to GDP. We are currently at six per cent. It is lower than all our peers. We are currently at six per cent and that is the lowest in sub-Saharan Africa and one of the lowest in the world.
“Our budget size is too small and that means we can only pay salaries in some cases and we don’t have money to deliver essential services.

“There simply isn’t enough money in government to do what government wants to do. I am sure you will say that is because people are stealing or because you are wasting money, but I am saying even if you plug all the stealing and all the waste, the budget size is not big enough and that is because we are not paying enough in terms of taxes, or we are not collecting enough in terms of taxes.

“Statistics show our tax to GDP at 6 per cent, while the sub-Saharan Africa average is 17 per cent; Asia’s is 26 per cent. Most of the emerging markets and advanced countries are at 30-35 per cent.
“It is interesting, if you look at the statistics, there is no poor country that has a high tax to GDP ratio and there is no rich country with a lower one. And so, if we want to move with the prosperous countries, we have to do what they do.

“We will not achieve prosperity in Nigeria if we continue on the tax to GDP ratio that is in the peer group of Afghanistan. I’m sure none of us aspires for Nigeria to become like Afghanistan.
“We are trying to benchmark ourselves against more developed countries and we must address these problems in a more fundamental sense,” she submitted.

In his remarks at the business forum, Osinbajo solicited the co-operation of the private sector in the federal government’s quest for a better country, assuring it that the government has the will to turn the country around within 18 months.
“Day after day, night after night, we are working on these things. Practically every night we work on these issues. I believe very strongly that Nigeria will turn around.

“I have no doubt in my mind that if we are focused, even in the next 12 to 18 months, if we are focused, we will certainly see a turn around. And I really would ‎want you to join us in being able to ensure that this happens to the Nigerian economy,” he said.
The acting president, who reiterated the necessity for active private sector involvement in the development of the nation, recalled that 40 per cent of Indian companies generate their own power and thus help the country to make progress in the face of its challenges.

He insisted that the government has the requisite discipline and enabling environment to build a stable and dynamic economy, pointing out that the Economic Recovery and Growth Plan (EGRP) recently launched by President Muhammadu Buhari was an attestation to government’s commitment to build a vibrant and productive economy.
“When Mr. President launched the Economic Recovery and Growth Plan (EGRP) ‎sometime in April, one of the things that he emphasised was the fact that we have made up our minds as to where we are going.

“And I think that we have the discipline to be able to do so, but this is a complex environment. It is a complex economy. And I have said this repeatedly, that in some sense, we are fortunate to have a leader like the president who at least we know is straightforward and honest, and committed to ensuring that government expenditure is spent the way it should be spent, and that people don’t do what they like.
“To that extent, I think we have the right environment, at least in terms of government discipline and all of that, to be able to deliver on the promises that we have made.
“And all I will just want to say to the private sector is be sure that we have enough willing and able partners. There is no way we can ever be perfect.

“Government is a behemoth, where there are so many problems and issues. But do not doubt for one moment our commitment to ‎ensure that we are able to deliver on the promises that we have made,” Osinbajo stressed.
The Minister of Power, Works and Housing, Mr. Babatunde Fashola, while answering questions from journalists at the end of the meeting, said the federal government’s roadmap on electricity supply was predicated on “incremental power” as well as stable and uninterrupted power supply.

“But we are focusing on incremental power. Just yesterday, as one of our incremental power initiatives, we commissioned the Kukoba power substation to increase electricity supply to Abuja by another 120 megawatts (MW) carrying capacity.
“So, it involves not only transmission but also involves generation work, distribution work, enabling the distribution companies (DISCOs) to perform better; for the generation companies (GENCOs) to perform better and carrying out our own responsibility which is transmission.

“It is an ongoing undertaking, and as I said, you must measure what we have done from where we started.
“On May 29, 2015, the power from the grid was 2,690MW and we have kept it now relatively stable at about 4,000Mw. With that, it’s going to be the minimum except for occasions when we have mechanical and electrical outages and we fix them,” he explained.

On his face-off with the National Assembly, Fashola said it was wrong to view the development as a feud, describing it as a mere disagreement between himself and the lawmakers over project priorities in the 2017 budget.
“There is no problem between me as an individual and the National Assembly. And let me make that very clear, many of the senators and honourable members are my personal friends, and so you don’t fight your friends.

“But we have a disagreement. And the context of that disagreement is as follows: You will remember when President Muhammadu Buhari launched the Economic Recovery and Growth Plan, he had enormous support from the leadership of the National Assembly.
“So it means that we all agreed that there is a problem. Then there is also a disagreement which I don’t think should make us disagreeable about the best way to implement that plan and I think that is all there is to it,” he said.

$483m for Debt Service

Meanwhile, the Debt Management Office (DMO) has said it plans to use $483.4 million to service the nation’s foreign debt over a 10-year period and make repayments starting from next year as its dollar debts begin to mature.
The DMO, in its annual report, projected debt service payments to amount to a total of $4.47 billion to be made in 2018, 2021 and 2023.

Nigeria issued a debut Eurobond in 2011 with a follow up tranche in 2013. Between February and March the country also issued $1.5 billion due in 2032.
The DMO report said Nigeria’s debut $500 million bond will mature in 2021, while a $1 billion issue will be due next year.

  • MUkintu

    Nigerian leaders are a bunch of fools. Can one see how confused the finance minister is? Which Nigerians are you going to tax? Please tell Nigerians.

  • pius pumpum

    I wonder what have changed between now and few months ago,this is just the reality of Nigeria and her people we live a life of facade.It was this same government few months ago was claiming how beautify our balance sheet is all of a sudden the scales on their eyes have fallen off.

    This deceptive behavior also trickles down to private companies and individuals,This day news paper was not on the News stand yesterday obviously due to difficulties it is experiencing in carrying out its operations,which from the grave vine it is more of financial….unforturnately the chicken is coming home to roast because the proprietor has built his outfit on a sandy foundation rather than proper business indices,when there was free flow of corruption money ,the governors, Ministers,chief Executives were all falling over him for phantom awards,there were no short of sponsors for his music carnivals in return his pocket was being lined,octane lifestyle of private jets,permanent suites in the most genteel hotels and women of all kinds(married,single,engaged)were order of the day,however the new sheriff in town has abruptly without warning interjected on the party,the wind has blown open the backside of the chicken.And this is the metaphor of most of our so called high end forbe businessmen.We have also just witnessed the same in Etisallat which shamelessly the Chief Executive a serial deceptor has to resign and it dotted on our landscape.Luckily for us we have a president in Buhari with supposedly right attitude but unforturnately cannot live above his bias.

    Nigerians don’t take note of the trend of many so called High end CEOs we have around,they all have one thing in common no tenacity to real hardwork and they shouldn’t be blamed because you cannot give what you don’t have.Tenacity is acquired through training,hardwork and suffer,many of them acquire their wealth through family fortune or patronage from government,and all these are easy ways of acquiring wealth.So how can they understand the rudiments of sacrifice?Just like the one in the legislature angling to be president,in all honesty what can that guy offer?he has no colour,his color is only that that will guarantee his interest at any particular time.Look at this legislature since their inception and tell me one single thing they have done that is people oriented-if it is not repeal of CCT Act,it will be EFCC Magu,usurping of Executive responsibility on Budget proposition or the latest repeal of NPA Act and they are all for selfish reasons.The irony is that most of this guys are all intertwined,the facade businessmen and the hawk in the legislature that is angling for presidency …..Imagine what will be our faith if Nigeria is handed to this guys….what a combination.Nigerians should shine their eyes.

  • Dele Awogbeoba

    As I had consistently stated in articles and comments where you and your predecessor where going on a debt binge, Nigeria’s revenue to debt service levels had long become unsustainable. Both you and your predecessor had long placed emphasis on the debt to GDP level when the real focus should always be on the revenue to debt service levels as that is the only metric that indicates whether debt acquisition is viable or not. It was also disappointing to see in recent newspaper clippings what recent debt was spent on. The recently retired DG of the debt management office (Mr Abraham Nwankwo) wrote many articles pushing the position that the acquisition of debt made sense and harped (like Iweala) on debt to GDP levels.

    One can only assume that this now more realistic debt policy can be attributed to new and clearly more economically savy DG of the debt management office (Oliha) ensuring reason and common sense comes back to Nigeria.

    The current government has not helped itself either. It should have maintained a hiring freeze across all ministries in the country with the sole exception of the security services (police/ armed forces). Adeosun must take full responsibility here. Granted, Nigeria’s precarious economic situation needed stimulus (which is provided through govt spending on fiscal and recurrent means) but the debt levels had long become unsustainable when viewed against Nigeria’s revenue.

    • William Norris

      That is NOT entirely true, you continue to be biased against the Igbo supported former government.

      I myself deplored the (re-)accummulation of debt under Ngozi Iweala, but any close observer should know that it was part of a larger plan

      1. to broaden the tax base via privatization & deregulation

      2. reduce government expenditure
      (a) The Jan 2012 subsidy controversy is evidence and APC was part of the problem
      (b) CBN Gov Sanusi & Ngozi Iweala were demonized by the APC and NLC because they called for drastic reduction in the Federal work force.

      3. Increase savings via ECA and SWF, also opposed by APC and used as a campaign propaganda.

      All the above the government tried to do at a time of high revenues. That would have set Nigeria up for CONTINUATION of economic growth, but the APC convinced Nigerians that the best thing to do is force PDP to spend the money.

      The debt is now unsustainable because A MAJORITY OF NIGERIANS believed the APC campaign propaganda that there was enough money TO GIVE NIGERIANS EVERYTHING FOR FREE but the money was being stolen by PDP. The most outrageous instance of this was the $49 billion Big Lie. So they basically frustrated everything the PDP tried to do to improve the MACROECONOMIC situation of Nigeria.

      All you need is Google. You know all this. I’ll give you this though, you know how to twist a tale. You’re good.

      • Dele Awogbeoba

        By no stretch of the imagination can one logically argue that debt accumulated under GEJ was used to broaden Nigeria’s tax base via privatization or deregulation, reduce govt expenditure (as Govt expenditure increased year on year for every year NOI was finance minister) or increase savings in the ECA or SWF. Nigeria never borrowed money to invest in the SWF nor placed any borrowed funds in the ECA.

        I wrote an article in 2014, criticizing NOI’s approach and warning of the dangers to Nigeria from her policy of debt acquisition based on GDP as opposed to debt service levels to revenue.

        That said, I had also warned this government many times through articles that debt acquisition was definitely not the way to go.

        In both articles, I drew attention to the unsustainable levels of the revenue to debt service levels. Both NOI and Adeosun share the blame for this.

        If you are sensitive about criticisms about public office holders that happen to be igbo, please advice them not to hold public office.

        • William Norris

          There you go again:

          *By no stretch of the imagination can one logically argue that debt accumulated under GEJ was used to broaden Nigeria’s tax base via privatization or deregulation, reduce govt expenditure*

          But here is what I wrote:

          *I myself deplored the (re-)accummulation of debt under Ngozi Iweala, but any close observer should know that it was part of a larger plan*

          Basically, I’m saying the debt would have been affordable IF your APC heroes had allowed the government to do the OTHER REFORMS that were part of their program.

          It’s OK, demonization of Jonathan and the Igbo is your standard schtick, I’m done here. Carry on.

          • Dele Awogbeoba

            Dude….privatization or deregulation does not broaden the tax base. If anything it reduces the taxbase as those companies are likely to lay off excess staff. What it does is it reduces government expenditure as the government ceases to be responsible for the salaries or the day to day running of those erstwhile public companies. The possibility exists in the medium term for greater tax receipts if they become significantly more profitable not just by reducing stafff but by increasing revenues once privatized.

            Opposition does what oppositions do. It is for the FG to lead. No govt civilian or military have risked removing subsidy. Not sure what your point is here.

            On savings, the FG has no business forcing states to save money constitutionally belonging to the state government. The key here is what did the FG do with the 52% of money it is constitutionally entitled to and what percentage of that amount did it save?

            Not sure how the igbo came into this topic when my criticisms have clearly been directed at the former and present ministers of finance for the policy positions that they both have pursued. I think you have unresolved mental issues and a victimization complex. If your fragile constitution makes you unduly sensitive to criticism directed at public office holders for their policy positions then you should advice your kinsmen not to hold public office.

          • William Norris

            Privatization does broaden the tax base.

            NITEL never paid any tax or made profit.

            Private MTN and the other phone companies pay tax.

            If you don’t know that then you know nothing about economics. Goodness, what is this?

            And let me repeat in case you didn’t get it the first time, your tribal politics preclude any kind of objectivity.

            The Yoruba only supported Jonathan in 2011 in hopes that it would be business as usual, that the Nigerian Consensus of robbing & killing in the Niger Delta to pay for EVERYTHING would continue. The moment Jonathan indicated he would reform the system and make Nigerians work for some of their benefits like fuel, they withdrew their support. You know this.

          • Dele Awogbeoba

            Nitel had hundreds workers that were paid salaries of which tax were deducted from their salaries. Nitel did pay taxes on salaries given to hundreds of their workers.

            Not sure how the igbo came into this topic when my criticisms have clearly been directed at the former and present ministers of finance for the policy positions that they both have pursued. I think you have unresolved mental issues and a victimization complex. If your fragile constitution makes you unduly sensitive to criticism directed at public office holders for their policy positions then you should advice your kinsmen not to hold public office.

          • William Norris

            The same government that paid their salary also deducted taxes. It’s meaningless. Government employees don’t pay tax in the real sense.

            Aside that, just putting the employee issue ASIDE, the question here is whether privatization BROADENS the tax base.

            NITEL at least didn’t pay any CORPORATE TAX.

            MTN pays CORPORATE TAX.

            So the tax base is BROADER now with the privatization of telecoms.

            You’re being typically Nigerians in arguing against a plain and simple truth. Your contention that privatization doesn’t broaden the tax base is NONSENSICAL, please go and familiarize yourself with the subject. If you don’t know, just graciously say so.

            I encountered this same kind of ignorance with the other columnist named Magnus Onyibe, a former Delta State Commissioner, on the effects of interest rates and regulation on the US economy and on currencies.

            There’s a Nigerian professor at Vanderbilt University USA named Moses Ebe Ochonu who argued – very strongly too – that prices across borders don’t affect smuggling of fuel…can you believe that?

            Then of course Fashola claimed reduced crude oil prices should mean cheaper fuel in Nigeria, Buhari and Tam David West claimed there’s no subsidy, the lawyer Falana denying how Niger Republic built their refinery.

            Any wonder Nigeria is suffering with these kinds of people running their affairs?

            You’re a journalist right? Please go get informed before inflicting your views on the public. Damn !!!!

          • Dele Awogbeoba

            First of all , this is the first time you brought corporation taxes into the mix. You previously mentioned taxes in its broadest form. When one does that one has to compare what the govt losses from taxes on salaries due to lay offs with what it may gain from corporation taxes from taxes on profits (if indeed it makes a profit).

            Secondly, privatization in and of itself does not give rise to corporation taxes unless the new owners carry out drastic restructuring of the business and that restructuring pays off in the mid to longer term. Such restructuring includes laying off unproductive workers, operating more efficiently by reducing its non labour expenses, it balances its loss of state sponsored monopolistic position with a better service product that allows it to compete favourably with new entrants into the market place. Not sure the relevance for mentioning MTN when NITEL was handed over to NATCOM. I do not believe NATCOM is a major player in Nigeria’s telecommunications market at the present time. It is clearly not as dominant in Nigeria as NITEL was prior to privatization.

          • William Norris

            You’re just being obtuse. Very Nigerian.

            Privatization of government enterprises is the VERY DEFINITION of increasing the tax base.

            If Unilag is privatized today, the effect would be to broaden the tax base because at the very least, it would likely pay some form of corporate tax or land levy or property levies on cars, buses etc.

            You’re IGNORANT, again a very Nigerian trait. It’s so funny to read from so-called important personalities who have no idea what they’re talking about.

            Buzz off, you’re talking rubbish.

          • Dele Awogbeoba

            I will let the readers decide (as ever ) for themselves.

          • William Norris

            The majority of Nigerians will agree with you just like they agreed with APC in Jan 2012 and the elections of March 2015. The vast majority of Nigerians are stupid, greedy, craven and ignorant. My dogs are more intelligent than Nigerians.

          • obinnna77

            Look at what is happening now. With all of this carping, the Power sector has just been subsidised. Like Aviation, like Banking, like Oil, like the Naira. There is no hope for Niger-area, it seems.

          • William Norris

            Not only electricity, petrol is now effectively returned to subsidy regime and is a defacto government monopoly. There’s another “$49 billion” disaster percolating in NNPC right now because the company is forced to buy fuel at high price and sell low to Nigerians due to the messed up forex market. The losses are effectively a subsidy and NNPC according to one analyst is “warehousing” the losses on its books.

            I don’t get why Nigerians can’t be humble and accept what they don’t know. I just watched the testimony in Congress by the Chair of the US Federal Reserve, she said “I don’t know” and “we’ll study the effects of that” so many times. Ngozi Okonjo-Iweala tried to help and Nigerians voted for a party that demonized her.

            Nigerians, Enjoy The Change…..stupid Zombies in a Zoo.

  • William Norris

    I wrote this about a month ago:

    The reality is that there’s no free lunch. Total Combined Annual Revenue FOR ALL Local, State and Federal Governments in Nigeria since 1999 have NEVER been more than $70 billion. That’s for a population of 80 to 150 million, depending on your belief. Do the math…that’s about $800 per year per person using a population of 100 million.

    That’s the STARK TRUTH….Nigeria is POOR, it has ALWAYS been poor and the only way to change that is for Nigerians to become MORE PRODUCTIVE.


    This has been my refrain for over 15 years now. Nigeria has NEVER had much money and it is NOT because of CORRUPTION.

    The current economic crisis has been caused by THE NIGERIAN PEOPLE who believed in the campaign of cynicism and demonization by the APC. It was a campaign that focused on tarring their opponents as CORRUPT and promising to distribute recovered funds to the populace. The worst of it was the fuel subsidy controversy and the $49 billion Big Lie. It was a grand dececption and I’m vindicated, having spotted it right from the start.

    So here you are, The Hairdresser finally gets to the basic problem, in her own words:

    “Our budget size is too small and that means we can only pay salaries in some cases and we don’t have money to deliver essential services.

    “There simply isn’t enough money in government to do what government wants to do. I am sure you will say that is because people are stealing or because you are wasting money, but I am saying even if you plug all the stealing and all the waste, the budget size is not big enough and that is because we are not paying enough in terms of taxes, or we are not collecting enough in terms of taxes.”

    BEFORE THIS GOVERNMENT EMBARKS ON ANOTHER STUPID PURSUIT, let me warn them that increased tax collection will not solve the problem. The real solution is to ABOLISH ALL INCOME TAXES and implement a new tax system based on easily verifiable transactions and assets in the economy such as taxes on land ownership and trades, car ownership and trades, phone tarrifs and sales of handsets and computers, airline and other transport fares, road tolls, school fees, stock and share trades, dividend income and such.

    Income taxes will worsen the situation over the long term.

    That’s my piece, the stupid Zombie government can do what they wish. Nigerians deserve the government they’ve got, idiotic animals of a Zoo Republic.

    • jellybelly

      I just had this argument this very afternoon.
      We are 200 million people that – on aggregate – do little at all but expect development.

      Let the government simply step back and then step away from development

  • Henry Ohakwe

    Na proper baby minister be dis nah! When a Finance Minister of a country comes on air and tells the whole world “We cant borrow again”, what message is she sending? Panic

  • Orphic

    Madam, if you were a serious person, you wouldn’t have spent $5billion on deficit financing, instead in your first month in office you would spent a fraction of that amount planning, organising and implementing a tax data centre or a computerised tax data collection and processing facility for the country, even to the extent of using satellites for property assessments.

    You would have employed a phalanx of tax assessors and inspectors using NYSC as a supporting platform and sent them out to every nook and cranny of the country gathering tax data. You would have submitted bills to the NASS requiring parents, schools and universities to submit tax information before their wards could attend, you would have done the same for hospitals, passports or any interaction with government. In fact you would have created an environment that no Nigeria could ease themselves without your tax department assessing and billing them.

    You would have sent your tax assessors to any big house in the country to do tax audits and bill the owners in proportion to the assets they enjoyed. You would have – through legislation, required that banks, BDC and financial companies inform the tax authorities of depositors holding or depositing large sums and required that they be subjected to tax audits. You would have your tax inspectors at all car show rooms and travel agencies ready to assess those buying exotic cars and travelling abroad for tax payments.

    You would have legislated weighty fines – to the point of seizing assets of recalcitrant persons, for tax evasion, and tax lateness. Every corruption case would automatically alert your inspectors and a tax enquiry opened.

    This is what a serious person could have achieved in two years, instead all you do is complain. When you were appointed I was one of those that didn’t criticise your lightweight economic background compared to NOI. This was because I felt NOI was a big picture thinker who didn’t pay attention to accounting details and an accountant like your self would be at home with the details and bring the discipline of balancing accounts to government finances. Instead you have borrowed and unbalanced and beyond empty platitudes, ignored the importance of raising tax revenue. Madam you have failed, your government has less than 2 years – in reality one year, because the last year is always spent on electioneering.

    • William Norris

      Your criticism of NOI is very wrong headed. She wasn’t perfect, but she set out to do what was required at the time WHICH WAS PRECISELY TO FIX THE BIG PICTURE or what professionals call the MACROECONOMIC structure. That’s what debt forgiveness, banking reforms, removing fuel subsidy, ECA, fertilizer reforms, publishing State govt allocations and so on were about.

      She succeeded on most fronts and in those important areas where she failed, the fault rests squarely with THE NIGERIAN PEOPLE who buckled under the APC and NLC campaign of propaganda and LIES and outright terrorism using Boko Haram.

      The fuel subsidy reform would have saved Nigeria at the very least some $25 billion between Jan 2012 and Dec 2015 when there was plenty of money. Instead Nigerians insisted that the government should use it to buy fuel for them. They’re paying double the price now, have they died?

      If Nigerians had allowed NOI to fix the BIG PICTURE, the basic framework, the next Minister could then attend to the details. As of now the details can’t be done because the basic framework is in shambles.

      Ms Adeosun the Hairdresser has admitted it – CORRUPTION IS NOT THE PROBLEM, now she has admitted what some of us have been saying for at least 15 years. That’s a first step, let’s see her work out the proper solutions – and increased tax collection is NOT one of them, at least not for the long term.

      • Orphic

        My description of NOI is fair and correct. You misread my comment, calling her a big picture thinker is not a criticism. NOI and the Jonathan government had very little political capital towards the end of their tenure. They were unable to reform or launch widespread changes because they were not trusted i.e. they had little political capital.

        The Buhari government came in with a lot of political capital i.e. the goodwill of most Nigerians.
        It wasted this political capital because it had no plans no ideas on how to move forward.

        Even if you have the best intentions or plans, once you lack political capital people would not be patient to see your plans to fruition.

        My contrast of NOI with Adeosun stems from my knowledge of the characteristics of their various professions.

        The two disciplines of economics and accountancy offer its practitioners different mindsets. The accountant strives for accuracy on every minutiae, looking to reconcile accounting ledgers for inaccuracies. The economist thinks in terms of mathematical and statistical modelling looking at various relevant economic variables and attempting to assess their weights on policy decisions.

        The accountant thinks in every single kobo while the economist thinks in money supply variables of trillions of Naira.

        Finally I and many others disagree with your assertion that “increased tax collection” is not a solution. You may be speaking from your personal circumstances but most analysts of the Nigerian economy including NOI agree that the tax income of the FG is not commensurate with Nigeria’s size or economic ambitions.
        The correct way to improve Nigeria’s tax revenue and fiscal position is to improve tax collection irrespective of your personal opinions.

        • William Norris

          Buhari had ideas and he campaigned on them and Nigerians gave him their votes based on those plans.

          1. a stipend of 5,000 to all poor people
          2. a stipend to all unemployed grads.
          3. creating 3 million jobs in 1 year.
          4. Retaining fuel subsidies and reducing price to N40 per liter.
          5. Making the naira stronger than the N216 it was when he met it.
          6. Suppressing Boko Haram
          7. Increasing crude oil production by suppressing Niger Delta militancy
          8. Fighting corruption – THE BIGGEST PLAN but now his Finance Minister has agreed with people like me that CORRUPTION IS NOT THE PROBLEM.

          What do you mean he had no plans? He just had the wrong plans and the majority of the NIGERIAN PEOPLE too stupid to understand they were the WRONG kind of plans.

          • Orphic

            What you list are manifesto or political promises, they are not plans because how to achieve them is left unsaid. When I talk about plans I am talking about economic plans – how to maintain GDP growth, improve the governments fiscal position, combat inflation and unemployment, increase tax revenue etc – not the political nonsense that every politician promises.
            The article we are both writing under is an economic article not a political one, so when I refer to plans I refer to credible economic plans not the foolishness of political promises.

          • William Norris

            The economic plans must follow the path laid out by political manifestoes. When you promise free fuel, the people in government who implement the promises are then CONSTRAINED by that promise. That’s Nigeria.

            There’s a quote from Dec 2011 that I’ve often reproduced on my comments here, a news report on a speech given by Jonathan in which he predicted ECONOMIC DISASTER & COLLAPSE if Nigerians rejected the withdrawal of fuel subsidies. That’s a political manifesto that NOI tried to IMPLEMENT.

            APC promised that money recovered from corrupt officials would be enough to fund the budget. I mean, that’s reasonable since they told us that $49 billion was stolen by Jonathan, Diezani and NOI.

            That’s a plan….just a very bad one, based on false premises. Adeosun has tried to implement and found it IMPOSSIBLE despite all the political capital at her disposal from the Nigerian people. I mean, EVERY NIGERIAN is against corruption. So what’s your point?

          • Orphic

            You are making political statements and I’m not interested in a partisan political discussion. Politics as it is practised is always underpinned by ideology.
            In Nigeria this is not the case and empty promises are made that are incongruous with the nation’s economic circumstances. Promising one Naira to one dollar, cannot be achieved by a nobel prize winning economist let alone Adeosun.
            As to my point I don’t have one I’m just replying to your aggressive response to my initial comment.
            Judging by what you’ve written, you comment to score points for your political party. I comment because I enjoy economic – not political, commentary and would like to see Nigeria realise its true potential.
            I don’t care what party or personality is in power only that they perform and achieve results.

          • William Norris

            It’s not about party or partialilty or personality. It’s about what is RIGHT. I don’t support party, I support correct policy. When Fashola increased fees at LASU, basically withdrawing State government subsidies, I was cheered because it was right.

            PDP in general pursued the right ECONOMIC policy for Nigeria which is privatization and deregulation. You could call that their party ideology, it’s not just words because they actually put it in practice.

            THE NIGERIAN PEOPLE, the Animals of the Zoo, frustrated PDP. That’s the fact.

          • Orphic

            My friend you are looking for someone to engage you in adversarial political debate. I am not that person, I limit my discourse to economics. If you want to engage in an economic policy and prescription debate fine, if not, I have nothing else to add.

  • Judith

    With all due respect to the Minister who I am happy to see has stepped up her game with regards to her portfolio, she should be in the forefront of advocating that the salaries, allowances, perks and financially wasteful activities of the Legislative arm of government should be seriously reviewed downwards. This will have an impact on the budget.

    • Tea

      How about wastages in the exco, or haven’t you heard of the Oronsaye report on the over blotted public service workforce. Please harmony begins at home.

      • Judith

        I agree with you 110%!

  • Daniel Obior

    Nigeria cannot borrow anymore? Are you finally awake to reality, Madam? You and this incompetent Buhari government embarked on this madness of borrowing. Finally it is beginning to dawn on you that the dumb strategy is not sustainable. The government inherited a N4 trillion budget which everyone knew was heavily padded with fat. In the face of dwindling oil revenue, a prudent step would have been to cut out coat according to our cloth by cutting out the fat from the N4 trillion budget. This should have entailed downsizing government which consumes 70% of the budget, in recurrent costs. Rather than see our precarious economic situation as an emergency, calling for extraordinary action to downsize, Madam and Buhari’s government ballooned our budget to N7 trillion, with even more fat, stupidly relying on borrowing to fund the shortfall from our low revenue. The thought of the heavy repayment burden that will run into future generations was of no consequence to the madness. It appears reality is beginning to dawn rather late midstream in the madness, and Madam is now admitting we cannot borrow anymore. You must be joking, Madam.

    • John Obi

      I beg them don borrow the $30b ?

    • Samuel Okezie

      You borrow to sustain economic growth, thereby increasing revenue from taxes and creating wealth at the same time. You then use the taxes from increased productivity to pay back the loan or at least service it. In our case, there is no economy to grow nor are we expanding our tax base. We simply borrow and wait for crude oil prices to climb up so we can pay back or service our loan. We simply borrow to pay the salaries of an incompetent and inefficient civil service and the politicians. The number one plan in our plan to diversify should be the power section. We should concentrate all efforts, all talents, all passion , all the money, to successfully complete this possible task. The skills set can be imported after all we do same for Crude oil production.

      • William Norris

        1. Electricity is NOT the key to reviving the economy. Banks, cement companies, Indorama, NICON and other hotels, NLNG etc are all operating profitably on the current electricity network or situation. Ask yourself why they are able to do this and you have the key to Nigerian economic growth.

        2. No foreign or any other experts or investors will get any more involved in your electricity market until it is deregulated and maybe further privatized, but PRICE DEREGULATION is the key. Abolish all controls on the price of electricity tarrifs.

        I can’t be bothered to explain since I’ve done it elsewhere. The conventional wisdom that electricity is holding Nigeria down is rubbish analysis. It’s not the root cause.

        • Samuel Okezie

          I am not talking about reviving the economy. You are right about electricity not being a magic wand to revive the economy but the companies you gave as an example of successful businesses are quite few and have distinct qualities. An economy needs a vibrant SME and a decent manufacturing sector , Dangote doesn’t rely on the National grid, the banks are basically trading with government money with major clients in the oil sector or same government contractors. Electricity is not a magic wand but an important first step to grow the economy. Nigeria needs to start over again with cottage industries powered by cheap electricity. We need to make use of our cheap labour and out of control population or we are all doomed.

          • William Norris

            Sir an economy does not need a vibrant manufacturing sector or anything else. An economy needs to be given free rein to operate and find its best footing according to RATIONAL CHOICES made by the people who participate in it. That’s all.

            Dangote is not different, neither are banks or anything else. OK, compare TELECOMS with the two examples you gave. So?

            Take it to extremes. Supposing Nigerian movies get so popular that the world can’t get enough OR some plant that grows exclusively in some part of Nigeria turns out to contain the cure for cancer, hypertension & alzheimers. I bet you those two items alone could provide enough economic growth for Nigerians without manufacturing anything. Labor can be employed in many different ways. Note too that technology is leading to a decrease in manufacturing employment. The automobile factory of today doesn’t employ the quantum numbers that it would have in say 1965.

            I really hate to sound arrogant, but Nigerians give me every incentive to be so. These are simple realities. For some reason, from President down to the street hawker, there seems to be this inability to come to terms with things as they are, the people are enthralled with easy fantasies.

            May be related to Nigeria being the most religious people on earth according to some reputable surveys. Jesus is coming soon, yeah believe that too. Idiots.

          • Samuel Okezie

            Giving examples of the few businesses that have found a successful product and production model as the recipee for economic growth is a bit pedestrian. You can come up with a product the market demands but cannot develop a successful production model. A government can engineer it’s economy to spur more successful businesses and keep them competitive. I hope we are not debating unnecessarily.

          • William Norris

            Sir please stop this argument.

            You know where I got my idea that electricity is not important? From Chief Innocent Chukwuma, owner of Innoson Motors. He gave an interview to where the interviewer Mr Elombah asked him something like:

            ” Sir can you tell us the problems you have with electricity”.

            “We have no problem. Electricity is not a problem at all”

            Here is the interview link:

            Elombah was surprised.

            I got to thinking and did some research. I found that electricity is indeed NOT the problem, for any business whether big or small. India has an electricity grid that’s just a little better than Nigeria and yet all sorts of small industries and giant manufacturers thrive there. India supplies 60% of all pharmaceutical drugs used in the USA, it provides a huge part of software services to the West, Americans and Europeans go to India for medical care despite it being a Hindu country; you’d think Jesus could help Nigeria attain such feats. You should go to India and see for yourself. And most of their electricity problem is due to SUBSIDY.

            Coal is the main fuel for electricity in India and the country has hugh deposits of it, some of the largest in the world. All the coal miners are owned by GOVERNMENT, which sets prices and regulates and all that. Those coal companies can’t supply enough coal, to the extent that INDIA IMPORTS COAL to supply their power plants.

            What does that sound like in Nigeria? Ever heard of the shortages of gas in Nigeria when the country has the 3rd or 5th largest gas reserves in the world?

            I insist that you are PLAINLY AND SIMPLY WRONG. The problem with the Nigerian economy is GOVERNMENT OWNERSHIP & PRICE REGULATION, not electricity. Take the correction and move on.

          • jones ejembi

            Interesting arguments from Norris and Okezie. I think you both have valid arguments and would do better to see that you both are making significant contributions to the conversation. There’s no winner here. Just 2 sides of the same coin.

          • William Norris

            WRONG IS WRONG.

            Electricity is NOT the major cause of stagnation in the Nigerian economy; Okezie insists that it is and he is WRONG. Save the misplaced balance & polite commentary for those who care.

          • Samuel Okezie

            I sense some mild irritation, I will watch the video and respond later. You don’t have to keep responding.

          • William Norris

            Don’t bother replying….or even watching the video.

            You Nigerians are something else I swear. Carry on, don’t mind me.

          • Samuel Okezie

            I have finally listened to the interview and I am inclined to accuse you of writing lies. First of, my argument is that the power sector should be the first step in our plan to diversify. I have no problem if you argue deregulation or privitisation should be the first step but it is also ridiculous to claim that it is all you require. The video I watched records Innoson explaining how electricity supply increased from 30% to 70% and how government has been intervening to support the manufacturing sector. This goes against the free market capitalism you espouse probably unwittingly. More importantly, there is an optimal manufacturing capacity and an ideal product that gurantees a decent margin despite an environment with high operating costs(pure water factories). However, the importance of available and affordable electricity is that small medium enterprises are likely to spring up and thrive – they are very important for any economy be it developed or undeveloped.
            Finally India produces over 1000 Terawatts of electricity against our 3000 Megawatts. They also prioritise supply to their manufacturers. It is ridiculous arguing the importance of affordable electicity not to talk of where it is unavaliable for start ups.