The revelation: JP Morgan posits that Nigeria’s FX Reserve to be in the neighbourhood of $3.7 billion instead of the $30 billion everyone has been using in reports. Why? Nigeria borrowed money on this reserve and has yet to return the money. In other words, when most fund managers refused to lend to us, we ransacked the reserve.

Nigeria’s bad – Net FX reserves are “significantly lower” than previously estimated, according to a recent analysis by JPMorgan. The American multinational financial firm said the new information is based on partial information from the audited financial accounts of the Central Bank of Nigeria.

“We estimate that CBN’s net FX reserves were around US$3.7bn at the end of last year, from US$14.0bn at end-2021,” JPMorgan said.

Investors have expressed concern that Nigeria’s external reserve is far lower than what the central bank is presenting, referencing the apex bank’s inability to fulfill many of its financial obligations.

Nigeria’s central bank said the country’s foreign reserves stood at $37.09bn as at December 2022, and at $40.52bn as at the end of December 31, 2021

But information from the recent CBN audit reveals that Nigeria’s foreign reserves are far below what the central bank has been publishing for months because much of it has been used to securitize lending from foreign banks.

This now explains why the government is largely probing the Central Bank of Nigeria (CBN). I hope they make the outcome public for We The People.

In the bank’s report – “Nigeria: Reform pause rather than fatigue” – you get a conflicting message from what other big banks have written, indicating that everyone is still trying to figure things out.

Good People, as that probe goes on, expect more revelations with cross-border implications. Everyone is going to publish a report because the searchlight is coming. Question: if this was not disclosed, what was the money used for? “Also, the CBN owes JP Morgan and Goldman Sachs a combined sum of $7.5bn as of the financial year ended December 2022. Included as part of its liabilities is another $6.3bn owned in foreign currency forwards.” – from CBN recent statement

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Comment 1: I don’t understand much in economics but it means that naira will drop furthermore?

My Response: Not really immediately since Afreximbank gave us a loan ($3B) to support Naira in the export import window. That money should be enough for 30 days. So, there is nothing to worry about for the next 30 days. What happens after that time will decide the near-term trajectory of Naira

The revelation: JP Morgan posits that Nigeria’s FX Reserve to be in the neighbourhood of $3.7 billion instead of the $30 billion everyone has been using in reports. Why? Nigeria borrowed money on this reserve and has yet to return the money. In other words, when most fund… pic.twitter.com/bazS32Uahu

— Ndubuisi Ekekwe (@ndekekwe) August 21, 2023

“Threads was released in early July, and within five days, became the fastest app to reach 100 million downloads — but it has since lost about 85% of its daily active users, said digital analytics firm SimilarWeb. Threads now has fewer than 10 million daily active users; in contrast, X had nearly 238 million daily active users in July 2022”, notes LinkedIn News.

Indeed, the Threads hype went down. You hardly create a new tribe of customers when the product is a clone of a popular product (here, Twitter, now called X). Typically, creating fandom happens when you offer a new basis of competition, by offering something really new to users. Category-king companies pioneer new vistas in markets and chart their paths to financial glory. They go for the perceptions of customers, and not just the needs.

Remember: never scale a product until you have found a product-market fit. If you do not follow that, users will come, become disappointed, and then will leave. Advertising money does not retain customers; only products do!

Now that Meta wants to add a web version of Threads, the new app could become relevant to more users. Simply, this principle works, whether a big or small company: you must create a value proposition for users to win them in the market battle.

Meta Platforms  plans to launch a web version of microblogging app Threads early this week, the biggest new feature to be introduced on its competitor to Elon Musk’s X.

The desktop version would address one of the biggest of a long wish list of features users have sought for Threads. The text-first social-media app appeared on track to be a smash hit out of the gate when Meta launched a bare-bones version in early July, but use of it has plunged in recent weeks.

Users have been able to see specific Threads posts on the web but their access is limited, as the app is mostly geared for mobile phones.

Adam Mosseri, head of Instagram, said on Friday on his Instagram profile, that the web version of Threads would be launching soon and is already being tested internally at Meta. People familiar with Meta’s plans said it will launch early this week, although the launch plans aren’t final and could change.

“It’s a little bit buggy right now, you don’t want it just yet,” Mosseri said. “As soon as it is ready we will share it with everybody else.”

Meta rushed to launch Threads to take advantage of the growing interest for an alternative to X, formerly known as Twitter. Threads became the fastest app to reach 100 million downloads, hitting the mark in five days.

Yet, do not count out Threads because it is funded by a really deep pocket: Facebook’s Meta. They can decide to keep pumping money into it, just as they’re doing with WhatsApp which is amazing, and yet FREE in all sense of free. Just for that, I wish Threads well, and hopefully it can pick the shreds and thread back!

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Comment 1: Your narrative is spot on, Scaling a product should only happen after achieving product-market fit. In my work with online businesses, I emphasize that they must initially gather a substantial customer base at a set acquisition cost. Additionally, those customers should actively use the product and it be something they are willing to share with their network before scaling becomes a consideration.

This was not really the case for ? threads, they never really got around getting people to use the app and what to use the app for exactly, I believe they will figure it out as they go along

Nice analysis

My Response: “I emphasize that they must initially gather a substantial customer base at a set acquisition cost. ” – a clinical great strategy which is like physics because it works.