How will #Atikuplan finance its infrastructure plan?
Oil? Loan? Internally generated revenue?
Atiku did not elaborate on how this will be accomplished so I decided to do some digging by looking at the 2018 budget as a guide to the future.
issa thread
Oil? Loan? Internally generated revenue?
Atiku did not elaborate on how this will be accomplished so I decided to do some digging by looking at the 2018 budget as a guide to the future.
issa thread
What is the total government expenditure & revenue for 2018?
Debt service nko?
Is crude oil revenue and IGR enough to pay for a $90b infrastructure spending?
What is the cost of the loan?
Can we afford to service $500 debt?
Debt service nko?
Is crude oil revenue and IGR enough to pay for a $90b infrastructure spending?
What is the cost of the loan?
Can we afford to service $500 debt?
The 2018 FGN budget is estimated to be N9.12 trillion (≈$30b). #Atikuplan wants to spend thrice the nation's budget on infrastructure two years from now. That is the first sign that that number is not rooted in reality. Perhaps revenue will justify a $90b spending plan 
The appropriation act of 2018 shows that the govt expected to spend N2.2trilion ($7.2B) on debt servicing for both domestic and foreign debt. This amounts to ≈24% of the total budget and 31% of total revenue of N7.12trilion
CBN uses 1$=N305 for the budget
CBN uses 1$=N305 for the budget
It is impossible to grow the revenue from N7.12 tril ($30b) in 2018 to over N70 tril ($200b+) in 2020 when Atikuplan would have kicked fully kicked in. Without significantly growing the revenue, it is impossible to invest $90 annually. Thus #Atikuplan has a math problem
Perhaps Oil revenue will provide the annual $90b needed for #Atikuplan. Not so fast.
Only about N3 tril ($10b) of oil revenue was available for fed budget in 2018 so it is hard to see how the share of fed oil revenue will jump to $90 in two years. Oil no go do am o.
Only about N3 tril ($10b) of oil revenue was available for fed budget in 2018 so it is hard to see how the share of fed oil revenue will jump to $90 in two years. Oil no go do am o.
Total oil revenue is not even up to the #Atikuplan $90 infrastructure investment.
Internally Generated revenue is also nothing to write home about. N1.2 tril won't cut it.
It is so small that I won't even waste time on it.
Internally Generated revenue is also nothing to write home about. N1.2 tril won't cut it.
It is so small that I won't even waste time on it.
The only way to invest $90b annually as promised by #Atikuplan is to go on a borrowing spree. Our debt service ratio is already too high at 31% with the attendant inability to rapidly raise revenue, if debt balloons to $500b, debt service will be greater than total revenue.
When debt service is greater than revenue, we should expect govt to default on all loans with a catastrophic effect on the value of the ₦ and eventually on the economy. I am not even sure economists reviewed this part of #Atikuplan before it was released.
Let's assume that this campaign promise is true and somehow #Atikuplan actually builds infrastructure with about $450b, it would have increased our debt to over $500b which will result in ≈ $28b in debt servicing bill. An amount that almost equals fed govt total revenue. Oh boy
Just ask Mexico 1995 and Argentina 2001 what happens when they were unable to pay their bills. Many people woke up one morning to discover that the funds they stashed away in banks are worthless. Banks in Argentina literally stopped honouring checks to stem the rush on banks.
Next, I will do a thread on the plan to grow the GDP to $900b.
Let's scrutinize the plans of all the candidates so that nobody will say they aren't aware that the plans are not attainable.
Let's scrutinize the plans of all the candidates so that nobody will say they aren't aware that the plans are not attainable.
typo "to over N60 tril ($200b+)"
