No. 265 – Nigeria’s Debt Situation Doesn’t Feel Good

Bond Investors Are Rushing to Nigeria – I wrote a bit about Federal Reserve chair Jerome Powell’s 60 Minutes interview earlier this week. Another thing he mentioned in that conversation was that at some point, the US was going to have to deal with the rate at which its debt is growing relative to its growth. You can look at the chart above and see that it’s not sustainable. 

Policymakers in Nigeria have been trying to have that conversation for years now, but it’s like the country is in a vicious cycle of finding itself in situations where it needs to seek out more debt to finance its deficit. One hopefully long-term positive that has come out of this pandemic is that the government ended its practice of paying an oil subsidy in order to keep gas affordable. Those subsidies have been so expensive for the government. Imagine in 2011, the government spent $8B. The government’s budget for that year was over $11B. The country has a $27B budget this year, and the subsidy elimination saves the country at least $2B. The problem is that the government anticipates running nearly a $14B deficit.

As the country hopefully emerges from this COVID-19 situation sooner than later, how do the country’s leaders position it to foster really strong growth in order to chip away at the debt the country has taken on?

The Amazon-Berkshire-JPMorgan Health Venture Fails to Disrupt – A month or so ago, I was wondering what happened to the joint venture between JP Morgan, Berkshire Hathaway, and Amazon during this COVID-19 situation. The venture was supposed to change the game for what employer healthcare programs looked like. Well, apparently things weren’t going well. The CEO Atul Gawande resigned his post to focus on the pandemic. While he was at the helm, the company took more incremental steps towards figuring out how to develop a truly innovative employer healthcare program. That’s unfortunate, especially considering the number of people losing their jobs. A reimagined healthcare offering would have been real nice.


‘This Isn’t a Fad’: Three of Africa’s Biggest Stars on Making the Industry Come to Them – This is a great interview with Tiwa Savage, Mr. Eazi, and Davido, Nigerian artists have played important roles in elevating the profile of the music African artists put out. Real nice interview.

No. 93: 7 Tuesday PM Reads

1. Bree Newsome penned good words on the moral duty of disruption when oppression is the status quo. 

2. Deray McKesson wrote a good reflection on the significance of social media in pursuing justice.

3. Tolu Ogunlesi discusses the impact social media has had on governance in Nigeria. Similar to what Deray wrote, social media mitigates the censuring of voices in Nigeria.

Let me pause here for a bit. I am frustrated to see things heating up again in Ferguson. I’m still wrestling with the words Ta-Nehisi Coates wrote to his son. The racist system we live in is not a mirage. Note in Bree Newsome’s excerpt from Dr. King’s letter that he mentions the white power structure. We still have that today and I don’t want that to be the case when Anna Olivia is my age.

What Deray and Bree are doing is critical to this not being my daughter’s reality.We need folks disrupting from the outside and the inside. Being part of the power structure and holding the power structure accountable.

Regarding being part of the power structure, I would just love to see more black people running platforms like Twitter and Instagram in the US like 2go does in Nigeria. The impact of black people on platforms like Twitter and Instagram is tangible, so when an Instagram account like that of the Dream Defenders is deleted for a short period, I feel anxious. A feeling of being “allowed” exists, and that feels like a cap on the struggle we see going on in America.

The work of folks like Mellody Hobson and John Thompson is critical in getting to those and shaping decisions that impact millions.

Alright.

4. Google, Inc is now a subsidiary of Alphabet, Inc. I closed the post before I realized that this was huge. I look forward to hearing what Clayton Christensen has to say about what this means for disruptive innovation.

5. I’m nervous about governments and developers pumping hundreds of millions of dollars in developing Silicon Savannahs. Some are already being called potential white elephants. Two things come to mind. One. This is a long game. Silicon Valley came together over decades, the foundation of which arguably traces back nearly a century. The developments need to have a long term outlook. 100-years long. Which leads me to the second point. What crazy projects are African governments working on that don’t make sense today but could be commonplace fifty years from now? Silicon. Wi-Fi. GPS. Etc. If not at the governmental level, who’s doing this kind of work at the private sector level? That is a huge part of the foundation for a thriving future for the tech industry on the continent. 

6. This is a good piece on the danger of the big-man syndrome in the tech space and how there needs to be greater acknowledgement of the role government has played in technology. 

7. My face dropped when I saw the news or Berkshire Hathaway buying Precision Castparts for $37.2 billion. One of my uncles owns a company that makes parts for the federal government. We need to see about getting Buffett on the team!