‘The Well Off In Nigeria Are Doing Two Things… Forwarded

1. Pack your money in fcy and leisure around. N1bn will buy $1.1m in Jan 01, 2024. Assuming it’s not earning interest, it is now N1.9bn or 90% return. Exchange rate was actually N871 in January 2024 OR

2. Pack your money in 25% one year treasury note. N1bn will earn you N250m by YE

3. At 5% average return, if you build a house with best cost saving intentions for N1bn, you ll struggle to earn N50m per annum with plenty tenant wahala

4. ⁠if you are a manufacturer and you borrow N1bn from a bank, interest cost will set you back at least N350m if you have not gone burst. You ll need 2x your working capital to continue business in 2025 and who knows for the import content of your production you ll need as much as 3x WC to maintain same level of production. Common sense teach me that commercial papers in nigeria has become Ponzi scheme. You make money doing nothing. I hope money don’t fail but reasonably expect redenomination as inevitable with spiralling and out of control public sector debt. It’s a matter of time. Look at nigeria breweries and nestle food plc profitability for nine months

My head just dey gyrate with hindsight which could be useful for future decision

Reward Paradox for hard work in our society. GM. Merry Christmas

Olu Odugbemi FCA

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