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WHEN SOME FAT YEARS COME AFTER SO MUCH LEAN YEARS, WOULD YOU SUDDENLY GROW FAT OR STILL STAY LEAN? PART 1


Can you perceive the legs of the praying mantis? Credit:Zoofari/commons.wikimedia.org.



If you were used to the monthly salary you earn, and suddenly your boss gives you more than fifty percent (50%) bonus, what would you do with it? It’s an unexpected bonus! So many of us would embark on a wild spending spree, buy all the luxuries that we were hungry for but could not afford, then save the rest when the urge to spend wildly has been satisfied.

You never know when another bonus will be coming.

IT HAPPENED TO ME.

I faced a similar situation recently. I surf the Internet using a WIMAX USB card. This week, Monday precisely, I was surprised to log onto my account and find that my network service provider* gave me some unexpected bonus. I was beyond joy. I decided to download all the pdf ebooks and open source softwares that were accumulating in my download manager which were being saved for the neighborhood cybercafé. But my data gulping urge had its limits. Up to that limit, I saved the rest of the bonus data for the usual surfing activity: fifteen megabytes (15MB) per hour, while restraining every activity to at least fifty megabytes (50MB) per day.

I believe that I acted like every other human being who wants to save for the rainy day. We all spend from our income based on a pattern that has been established for months, even years. You know Mr. Boss is always reluctant to approve that little raise, no matter how little. So we try to count how much we spend of our monthly salaries, acquire a pattern and then stick to that pattern.

SAVINGS COME AFTER YOU’VE CLEARED YOUR DEBTS

Even when we have an unexpected bonus. Yes, even for a fifty percent (50%) bonus. I bet you’d calculate all the debts you owe from so many years – to your shoemaker, your banker, to the supermarket for that LCD screen you wanted and craved – to a certain extent. The extent of how much satisfaction you think you derive from that bonus faced with whether the bonus will come again.

Bonuses are random events. I’d never place a bet on a consecutive unexpected bonus. So, I’d be wise and prudent like before and keep a major fraction of the bonus, after satisfying a wild buying spree, in a bank account.

MONETARY OR NOT, OUR BEHAVIOR FOLLOW THE SAME PRINCIPLES

Now, the bonus was not monetary, just some data. The astonishing part of what happened that Monday morning and before I sent a “Thank You” letter to network service provider’s customer service mailbox was that my behavior followed just what has been documented for so many household spending patterns, whether the household income is high or low.

I hate being another statistic. If I had known better, I wouldn’t have gone through the data gulping spree but would rather have done something else – maybe reject the data bonus? Some joke!

Because we all want to be rational, wise and satisfied humans – of the homo sapiens genre, I mean – that Google knows that some algorithm would find me out and ask me to spend that extra data searching for some ebook which would eventually lead me to a malware dishing site and eventually crash my Firefox browser. I was warned.

* network service provider name is withheld because of privacy concerns.

The second part of the blog or part 2.


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CASHLESS OR CASHLITE: HOW MUCH WILL WE LOSE IF TO SOLVE A NAGGING PROBLEM WE DISTORT THE MARKET IN QUESTIONABLE WAYS.


Those who are conversant with the news from the Central Bank of Nigeria (CBN) know that one major headache it has is that there are too much cash in the hands of the public. I keep wondering how the CBN intends solving that generational problem.

The recent move to indirectly tax the rich by placing limits on cash withdrawals might result in unforeseen effects for the government that were not predicted.

THE TASTE OF THE PUDDING IS…

The demand for cash will not increase inexorably if substitutes exist. If we compare the opportunity cost of the touted substitutes with that of cash, which will be higher, for transactional and debt payment purposes? Laughable!

I do not see POSes all over satellite town where I live. ATM usage is increasing but should I have to walk to a bank every time I want to collect money, when I was doing that with cash? Where are the ecommerce websites? Even if you want to pay for services and products abroad, some banks still ask for domiciliary account.

Rather than place a hidden tax on cash, would it not be better the CBN carries out this experiment on themselves, with banks and other financial institutions rather than the non-banking public?

How? It should start a process of curtailing or rationing the amount of cash every bank and branch can release to the public. Above that limit, any customer would be made to realize that, “there are substitutes out there, why not use them?” Rather than force customers to bear the burden, we want the banks and the CBN to show they are sincere in its assertion that the substitutes are cheaper and easier.

If cash are rationed such that substitutes seem cheaper, would we see a queue behind ATM machines? That is the test. Would my mobile money account reflect my new bank balances, where I am forced to use them because “cash is not enough at the counter?” That is the test of the exercise. As people say, the taste of the pudding is in the eating.

Take away the cost from the customer and bear the cost, mighty CBN, so that the better bank will win and the loser banks will be at your doorsteps for carrying out a program that crippled its business.

FREEDOM TO CHOOSE IS CENTRAL TO THE SUCCESS OF A CAPITALIST ECONOMIC SYSTEM

If the Government and CBN fail to realize that freedom to choose is key to the success of a capitalist economic system, then it is playing a game which secondary effects we might never know until we are back to level zero. By taxing them from the word go, the people are not free to choose what payment method they want – cash or the touted substitutes.

Placing a limit on withdrawals affects no other sector but the public consuming sectors. Why not the banking sector?

Placing a price on withdrawals affects no other sector but the public consuming sectors. Why not the banking sector?

I wonder why the CBN should not bear the responsibility and burden for a program it wants and dearly seeks to solve; why throw it onto the public. Because she is afraid it might fail?

Fear thee not, CBN. Phase out the long drawn talk about cashless or cash-lite, give us substitutes and make them cheaper than cash. We’ve had enough burdens for one quarter.

Note before: I have not read the CBN document on cashless and think it is a waste of time. Six months from now, I might download it for reading.


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I HAVE FOUND THE PRINTER AND IT IS SITTING IN MY ROOM


I tweeted yesterday that I bought a printer from Ikeja and on the way lost it. Sounds crazy right?

The situation was nerve-wracking and I spent quite a lot of money trying to figure out where on the way from Ikeja to Satellite town I left it on a bus.

How on earth could a man with a printer forget it on a bus?

Some of those reasons are: I had lots of luggage and lots of load on my head. It’s not easy trying to start up a small business in Lagos. The weight of trying to calculate how much it would take to buy a printer, buy stationary, do this and that – it just isn’t easy at all!

Thumbs up to all those who are running successful small businesses in Lagos. Hectic lagos!

But the story turned out well. The men at the Ikeja park, from Ikeja to Mile 2 were honest to a fault. Just hours after I reported my loss, I was calmed to -5 degrees centigrade. If the printer loss was on one of their buses and a passenger in the bus was not smarter than the driver, then I’ll have the printer the next day.

The next day is today and the crazy printer is sitting in my room.

I really do not know how to say “Thank you” to those God-fearing men at Ikeja. I think there are men we can trusteven though so much news from the political scene are disheartening. By the way, who cares about politics?


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