As expected, there is a convergence in the market system, and whenever that happens, changes must take place for new equilibriums to emerge. In Nigeria, we cannot rely on Goldman Sachs and other big American banks to fund our national budgets, even if we want to sign off crude oil and natural gas deliveries, primarily because the interest rate regime in America is now out of the roof.
The minister echoed the words: “Clearly, the environment that we have now, internationally as well as nationally, we are in no position to rely on borrowing.”
Consequently, like they say in the Igbo Nation, you do not tell a deaf person that war has broken out, because when wars begin, everyone knows, including the deaf. The credit system in the Western world has changed and even with crude oil and natural gas serving as collaterals, it makes no sense to borrow, since if you take that loan at those high rates, the unborn tomorrow would have been dead yesterday.
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What is the plan? Do what nations do to thrive: Merit-based system, Pragmatic Innovation, and Honest Leadership. Nigeria must meet those three elements before we can advance; no short-cut! I have a plot of 2,000 years of gross world product and all the nations I examined for that piece in the Harvard Business Review, these three elements elevated them into abundance and prosperity.
“They are in the process, sacrificing that immediate goal for compacting their economies, or at least contracting the money supplies and pushing up the interest rates and of course, high-interest rates and investments don’t go together.
“What is left for us to access those funds are expensive so it is the last thing that we must rely on. As we know we have all the figures and debt servicing and cushioning 98 per cent of government revenue.
“The last thing you can think of is to pike on more debts. The government needs to not just maintain its activity, it needs to spend more. If you look at government spending, if you look at the budget as a percentage of GDP, ours is one of the lowest being 10%, even Ghana is at 25%, and rich ones they are 50%.”
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