S.K De First

I know Me!

[S.K De First @S_K_Foster]

@Blue_Footy Enzo wasn’t bought to play for Liam. Spit out your brain . …..

Tomorrow if the two clowns 🤡 appoint another rookie you’ll argue Palmer or Estavao aren’t vital for his football.

[S.K De First @S_K_Foster]

@Blue_Footy You want him to commit to a project that only you and the two SD pretend to understand???

[S.K De First @S_K_Foster]

@nyannthierry Arrest 😒😒

[S.K De First @S_K_Foster]

@Blue_Footy Go to the stadium …..

[Bright Simons @BBSimons]

1. I was recently talking about how the idea of an "African debt crisis" confuses the reality (see: https://t.co/W8oFIcfmLJ)
Nigeria offers us a spectacular case study

2. It is true that most African countries pay too much for debt, constraining devt. But that's not the same as saying that most African countries have been set on the path of debt distress by an unfair global financial system.

3. Rather, a very specific group of countries in Africa that I call the "distress-dynamos" (DD) are fiscal outliers for being high-potential economies with dynamic private sectors chronically on the verge of insolvency. For the most part, the cause is domestic, not global.

4. Nigeria (like Ghana, Malawi, Egypt etc.) belongs to the DD club. I want to illustrate one domestic factor behind its chronic debt problems: budgeting with the price of oil.

5. This week, Nigeria’s Senate has been at war with the lower house of Parliament over whether to set the average price of oil in 2026 at ~$65 or ~$60 for the purposes of govt revenue estimation in the national budget.

6. This is a big deal because as the attached charts show, oil revenue volatility is a major factor in Nigeria’s fiscal crises.

7. When oil revenues misbehave, the entire budget goes agog.

8. The govt resorts to central bank cash printing. In 2021, interest payments on Ways and Means alone amounted to approximately ~$3BN! That's serious!

9. The data indicate that Nigeria was de facto cash-flow insolvent in 2020. Debt service absorbed over 80 percent of federally retained revenue. For much of 2022, the number stayed above 90%. Nearly everything else was paid for with fresh debt - “borrowing to exist.”

10. Ordinarily, high oil price = fiscal surplus. Not in Nigeria. In 2022, as global oil prices surged (hitting $100/barrel), Nigeria should have seen a fiscal boon. Instead, oil production collapsed to a multi-decade low (~1.3 - 1.4 million barrels per day/mbpd). End result: revenue collapse.

11. The problem was made worse by Nigeria constantly overestimating oil production. E.g. in 2018, the govt projected 2.3 mbpd, despite widespread infrastructure degradation & multinational retreat. Thus, though oil prices hit $72.53 versus a $51 budget benchmark, production averaged 1.9 mbpd, ablating the windfall.

12. In 2024, the budget projected production of 1.78 mbpd. In the end, it was ~1.5 mbpd.

13. In short, the fight over the oil price benchmark when the volume benchmark is often the real problem is a sign of underestimating the problem.

14. What Nigeria and other DD countries need to do is move away from MTEF and other static projections and introduce full-blown scenarios planning for budgeting. The recalibration approach often pushed by the IMF is not viable given the political economy. Discretionary expenditure must be scenarios-based from the outset. Non-discretionary spending scenarios need a more creative treatment.

15. Pay close attention to the charts and you'll agree. (The transmission efficiency numbers are based on NEITI data. Still investigating why the ridiculously low 2023 figure.)

[Bright Simons @BBSimons]

1. The fiscal numbers coming out of Nigeria have set the hair of analysts on fire.

2. Think eyes bloodshot from intense rubbing. Short, sharp, breaths. Fit of gasping. Pencil eraser chewing. What!

3. I presume senior political principals got a summary on some dashboard like what I have attached.

4. Just servicing the national debt and paying salaries alone gobbled up nearly 105% of government revenues.

5. Half of government revenues depended on oil, and when prices went soft the entire budget went kaput. Less than HALF of the projected revenue came in.

6. Nigeria insists that it won't ask for an IMF bailout. It has taken some serious domestic measures like taming fuel subsidies. But at this rate, it isn't on course to a domestic correction.

7. And having taken painful political decisions already, it doesn't have other painful concessions to take to the IMF negotiation table. What a bind!

8. The bigger insight for me, though, goes back to the point I made in my recent essay on the debt crisis in Africa.

9. There is a small group of countries in Africa including Nigeria, Kenya, Ghana, Egypt, and Zambia - an outlier club of "distress dynamos" - that have bloated the debt-distress narrative. Senegal seems to have joined since 2020.

10. When you look carefully at the chronic fiscal deficits and "budget rigidities" propelling their debt distress, you will notice a peculiar crisscrossing pattern of domestic factors. Factors far stronger than anything to do with the global financial system generally.

11. What the global financial system can be blamed for is the high cost of capital for transformative infrastructure across Africa. That affects nearly all of Africa.

12. But that problem is secondary for the distress-dynamo countries. These countries are borrowing to fund an unsustainable government cost level, i.e. recurrent expenditure. Capex is a distant factor.

13. Why them, though?

14. Look carefully and you will also see that these are some of the most dynamic regional and continental anchors for things like startup venture capital booms, FDI variety and growth, and various exciting stuff.

15. The reason they are in such fiscal trouble is that they suffer from "premature sophistication". Their governments have been intoxicated by private sector dynamism (much of it driven by ingenious infrastructure workarounds in a highly informal economy context) and are overbuilding government structures to keep up.

16. Excessive government "formalisation" vs private sector "informal-bridging dynamism."

17. But these "formal" government structures are "veneer only." They don't uplift productivity. They are a drag, weighing down the economy as a whole.

18. In a future essay, we will flesh out the full diagnostic, and some policy recommendations (for e.g. sunsetting new commitment lines and "retiring" old bureaucracies whenever new reforms prompt new institution creation). For now, let's welcome to the Distress-Dynamo Club! (See some graphics attached.)

[S.K De First @S_K_Foster]

@CallmeAlfredo Is Goldbod selling the gold or BoG is the eventual seller ?

[S.K De First @S_K_Foster]

@Blue_Footy Should be his last game for the club!!! This guy is below average!!!!

[S.K De First @S_K_Foster]

@Blue_Footy Tall but can’t even win aerial duels….who scouted Tosin ?🤦🏾‍♂️🤦🏾‍♂️🤦🏾‍♂️

[S.K De First @S_K_Foster]

@Blue_Footy Fuxk!!! The team is playing rubbish. Leave the ref alone . The coach probably drunk from the weekend….

[S.K De First @S_K_Foster]

@GeorgeAnagli lol you probably watched second half of the game .

[S.K De First @S_K_Foster]

@akuahwritess 😂😂😂😂😂😂 everywhere

[S.K De First @S_K_Foster]

@Blue_Footy Sub off Joao Pedro 🤦🏾‍♂️🤦🏾‍♂️🤦🏾‍♂️🤦🏾‍♂️

[S.K De First @S_K_Foster]

@gyaigyimii Hiiiii

[Alfred @CallmeAlfredo]

So even when the minister says there will be a transparent and rigorous process before any state resources are committed, that still leaves a lot to be desired if the same GNPC is involved in that process. Based on the information Springfield put out in the media last year, the “appraisal” of the Afina discovery was successful. So why wasn’t the raw data from that successful appraisal provided to the independent consultant?

We want indigenous Ghanaian companies to do well and no one is against the state supporting indigenous companies. But the profits of private Ghanaian companies are not more important than the collective benefits of the Ghanaian public. It’s up to all of us to continue questioning deals that could cause financial loss to the state. More people should be interested in this potential state takeover of an oil block with questionable data.

This is how state enterprises continue to make losses while the private companies they deal with continue smiling to the bank.

[S.K De First @S_K_Foster]

😂😂😂😂😂😂 this guy

[𝐀𝐥𝐯𝐢ṋ 𝐊𝐚ṋ𝐢ṋ𝐝𝐨 @Alvin_Kanindo]

Aaah, neighbors, you really didn’t have to copy everything! This isn’t like you, or were you just pretending all along? 🙆‍♀️

[S.K De First @S_K_Foster]

@_James041 @TheAgyemangDuah

[S.K De First @S_K_Foster]

@Blue_Footy Played rubbish from beginning to end. No energy …..just strolling through from first minute to the last minute. This team has a long way to go …

[S.K De First @S_K_Foster]

@KwabenaOA 😂😂😂😂😂😂😂 valid concern …..God should clarify things fas fas

[S.K De First @S_K_Foster]

@MyLordBebo @TheAgyemangDuah this is what they’ll do to Africa eventually. !!!