CFEI. Author, Making Money,Economy and Personal Finance easy to understand Podcast:https://t.co/wcsPZSBO2e
51 subscribed
Feb 5 • 16 tweets • 3 min read
On Domm Accounts, Please Cease and Desist
In May 1998, The Government of Pakistan froze all foreign currency accounts (FCA) estimated to hold $7.56b in an emergency action declared to protect the economy.
The Government of Pakistan instructed banks to pay Pakistanis receiving $ salaries from offshore companies in local currency at inter-bank rates. All dollar assets were converted to the local currency.
The effect of these actions was devastating to the economy of Pakistan.
1. Nigeria needs forex to settle her FX obligations including an outstanding obligation of over $7b; thus, the NNPC arranged a $3.3b emergency loan from AFRIEXIMBANK (AFEX) on behalf of the Federal Government of Nigeria.
2. The loan structure involves the NNPC Limited receiving cash today via an SPV called Project Gazelle Funding Limited, sponsored by the NNPC Limited. The NNPC promises to repay AFEX with crude oil, equivalent to the principal borrowed plus an interest element of 11.85% APY.
Jan 2 • 31 tweets • 5 min read
Let us talk about inflation and my small town in a Local Government Area called Ohafia in Abia State.
My Town In Ohafia
In my town, there is one big shop. It's got everything: groceries and also a fridge. In the evenings, locals gather for a cold beer in front of the shop.
It's the "mall", the centre of entertainment.
In regular times, prices in that shop reflect prices in Nigeria with a bit of margin for the cost of transportation. My town is an agrarian community with little disposable income.
Jun 21, 2023 • 4 tweets • 1 min read
Urban Myths
1. Local refining will reduce the cost of local PMS. FALSE. PMS pricing is based primarily on the cost of crude priced in $, not the cost of refining
2. Currency float will make $ flow in. FALSE. A float is a necessary but not sufficient measure to attract $ inflow
3. A strong currency translates to a strong economy. FALSE. A Strong currency means exports from that county are not competitive. Exports boost GDP and a weak currency makes exports competitive.
South Korea and Japan have weak currencies
Jun 19, 2023 • 5 tweets • 1 min read
What most have missed is the peg, they see only the devaluation
Peg removal means the Naira can go to $1:1000 or $1:300
It's now based on Supply of $.
If remittance people vex and send $25b in August alone then $1: becomes N300
If it devalues, it means it can appreciate.
The difference is in the past CBN tried to make it appreciate by restricting demand, thus your naira card stopped working
Now the strategy is to focus on Supply (SS) by incentivizing holders of $ to inflow to Nigerian banks at the market rate
It won't happen in 1 month
Jun 16, 2023 • 5 tweets • 1 min read
1. CBN removes peg, so CBN rate is market driven
2. CBN is not the "market" , FMDQ/banks/BDC are the market, the determine prices via demand and supply
3. You want $, you go to your bank, you bank gives you bid and offer based on their $ supply, that's the bank rate.
4. Your bank card will work IF your bank has sufficient credit to fund your card. Its no longer CBN funding, it's banks/BDC buying and selling
5. CBN is publishing the "average" of what the banks and BDCs sell. It won't reflect equally immediately, supply is lagging
May 31, 2023 • 13 tweets • 3 min read
1. Should the PMS subsidy go? 2. Yes. Why? 3. It's a waste of resources. In economics, there is always a scale of preference. "Cheap" PMS is good but not as important as health care or education. Currently, Nigeria spends more on PMS subsidies than on health
4. So to be clear, it's not a waste to subsidize PMS cost but as per scale of preference it's not top
5. PMS subsidy is currently more than the combined budget allocation to health & education. Removing subsidies means Nigerians pay market prices for PMS.
May 29, 2023 • 5 tweets • 1 min read
Economic points in Abia State Governor inauguration speech
"Our government shall be 100% pro-business. Government shall not be in competition with the private sector. It shall instead remain a facilitator"
Good baseline focus on PPP
"Our government shall, launch a N10b MSME financing scheme, which will comprise conditional business grants and low interest loans to support a minimum of 20,000 MSMEs over the next 2 years and generate 100,000 direct jobs and another 200,000 indirect employments in the State"
May 29, 2023 • 8 tweets • 2 min read
Economic points in speech.
"The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment & jobs that power the real economy"
A devaluation of the Naira to remove arbitrage in works
"Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level"
Interest rates react to inflation and growth. To reduce by FIAT is possible, but more "cheap" funds must be absorbed via output or inflation
May 14, 2023 • 7 tweets • 2 min read
In Genesis 25:29, we learn deferred compensation
In Jewish tradition, the first son receives a double portion of his father's estate.
Esau was the first son of his father, yet, he failed to understand the intrinsic value of his position (first son) & sold it.
#ChurchOfMoney
Esau was granted stock options that would vest to him later. He sold those options to Jacob, stating in Gen 25;32 "What use to me are my right as the firstborn"
Esau then attempted to retain the future dividends of that sold position by not disclosing he sold them.
May 7, 2023 • 8 tweets • 3 min read
In Genesis 23, the Bible teaches how to negotiate business contracts to buy an asset
Abraham's wife Sarah has died in a foreign land, and Abraham decides to bury her there; thus, he needs land. As a foreigner, Abraham had no claim to any land; he decided to buy
#churchofmoney
In Genesis 23:3, Abraham goes to the elders at the gate where contracts are made & offers to buy land; he is counter-offered to take any grave for free.
Abraham insists on paying for land (not a grave) & eventually is given land for free. Abraham persists in paying & does
May 4, 2023 • 4 tweets • 1 min read
Comparing Zenith Bank's 2023 YTD performance with the Nigerian ETF "NGE". Diversification paying off
Comparing Zenith price movement to GTCO (GT Bank)
GT in orange
May 3, 2023 • 9 tweets • 2 min read
I remember being in Abuja when a President allowed corruption to reign because they wanted to "get" someone.
It was open stealing.
An MDA got their budget allocation; the entire Capital and Recurrent budget allocation was divided as cash and shared according to rank.
I was not yet in Abuja when the Military decided to have Military men as Senators. Yes, The Army, Navy and Airforce would nominate serving officers as Senators.
The office, cash, and cars were shared according to rank when that crumbled. Its Government money
May 2, 2023 • 4 tweets • 1 min read
You can build infrastructure and reduce extreme poverty; these objectives are not mutually exclusive.
China did it. Nigeria can and should learn from China.
We will do more this Saturday on Spaces.
Source: Four Decades of poverty reduction in China by the World Bank.
What China did is unprecedented in the history of humanity; so many were taken away from extreme poverty.
May 1, 2023 • 13 tweets • 4 min read
In Genesis 41:1, the pharaoh had two strange dreams, he knew they were important, but no one could explain the meaning of the dreams, not even his highly-paid advisers. Finally, the Pharoah was advised about your man in jail who could help.
A man in jail? #churchofmoney
In Gen 41:25, Joseph was able to interpret the dream of the Pharoah, and through that integration and recommendations to the pharaoh he became the Prime Minister of Egypt....from Jail
Apr 23, 2023 • 8 tweets • 4 min read
Solomon was one of the richest men on earth.
The Bible says Solomon earned 22 tonnes of gold annually; that's $1.22b yearly.
There was so much gold in Israel, while Solomon ruled that Silver, another precious commodity, was regarded as having "little value."
#Churchofmoney
So how did Solomon get so rich? Did God give him the gold? Well, not exactly; let's explore how
1. Sales Taxes, Customs Duties and Assessments; Solomon got the gold from taxing his distant income-earning subsidiaries. This is passive income. 1 King 10.15
98% of Nigerian women were left out of the formal credit market, unable to secure loans from formal financial institutions like banks. Women's lack of borrowing power was largely attributed to low education and limited decision-making power.
Young women aged between 18 & 25 performed better than their male counterparts on various indicators, including account activity and borrowing. In 2021, the percentage of Nigerian women with a financial account in any formal institution rose to 35%, the highest in 10 years.
Apr 9, 2023 • 9 tweets • 3 min read
The term sacrifice is a universal concept.
Anyone that does a sacrifice gets a reward. Note Anyone.
For instance, you sacrifice eating sweets or cholesterol-filled tasty fries to gain a healthy lifestyle
#ChurchofMoney
The law of sacrifice is also progressive, the more you sacrifice, the more you get.
Messi sacrificed his youthful years kicking a football around, he got better, now he is a world champion.
Same with doctors, they sacrifice partying to read, then get a "Dr." and earn big bucks
Apr 3, 2023 • 13 tweets • 3 min read
The concept of reserve currency is new & alien to the world of commerce
Global trade was always by barter, cows from Argentina are traded for cotton from the UK or both nations used a precious durable commodity like silver
The Betton Woods changed that and replaced gold with $
The idea was simple.
$ is Gold.
"Italy" after WW2 had no gold, the US had gold. The US can't allow Italy to starve (and fall into the soviet sphere)
Thus US lends $ (gold) to Italy to import US goods
This works because It's a closed loop and US had net exports to "Italy"
Apr 2, 2023 • 7 tweets • 4 min read
In 2 Kings 4:1, a "pastor" dies in debt. His assets, specifically his children were to be sold as payment for the debt.
His widow asks Elisha for help.
Elisha asks. "Do you have any equity" (Equity meaning cash or any assets to repay the loan )
#ChurchofMoney
The widow says "No, all I have is the small jar of oil"
The story continues with Elisha asking her to go "borrow" vessels, not cash but the means to make cash...
Let's analyze what we know from just these two verses
The West locked the African continent in a debt trap
Nigeria as of 2012 borrowed less than $5b, owed over $44b based on late fees, interest on interest
China comes, gives Nigeria loans at 2% for 30 years with a moratorium to build infrastructure
But your problem is China
If a sovereign nation can't deploy a 30 year loan at 2% APR with a payment moratorium to create wealth, why blame the lender?