OK, as you might know, I'm collaborating with Morty in this desparate attemp to improve Nigeria. My plan in politics was just for Spain, but I got involved in this one for the same reason. I started several factories there, and that warehouse selling at base cost +$1 to cover the rent and advertising costs. No need to say it, but basically it is a charity mission for Nigeria, we are not making profit out of it in any way. So, let's get in-deep into the reasons and goals for this project. The post will be long, sorry in advance.
This project aims to promote the local production and sale of Nigerian products, in order to develope the market and generate incomes in order to counter the heavy losses that the Nigerian economy has. Fully fixing the problem might take several real life years, so we have to start from below and gradually attemp to counter the main problems that lead to those massive losses in Nigeria.
As you know, Nigeria is a favourite for production at low cost. But due to the same low production costs, the retailing there is not as profitable. That usually leads to having production being exported at base price and sold somewhere else, where the "big profit" is. That leads to barely generate any tax for the region, and so, no way to counter the expenses. The region used to buy energy at $105/MW (which will become $110 after the update) and supply it to cities for a 10% of that cost. This is something done everywhere for promoting the local production. The region "sacrifices" that energy in order to produce stuff that will return the investment. However, Nigeria is not recovering that investment because of the profit being generated beyond its borders. Add these things together (large number of producer units, lack of generated taxes, and loss of energy without return of the investment), and you have the perfect moneysinker country. That explains the dialy 4 billion losses for the region of Nigeria.
In theory, there are several ways to counter the problem, but many of them are virtually inviable. Stepping into Gobernor seat would cost 4 daily billions per day, and it would require years to solve the problem. The profit tax and energy cost can't be increased because of that. So, the best choice right now is attemping to solve it from below to make it easier way to take it from above. But this would require cooperation and/or sacrifices from the playerbase.
In order to help to reduce the energy sinking, it would be great to use solar panels in factories for halving the expenses. (Half the energy required, half the energy bought by the region.) This would have the cost increase for the production. If it is a mass produced item, the cost would barely be a few bucks per unit. This would barely be noticed by the producer, specially if it is for exporting and selling somewhere else. Items produced in lower quantities might suffer it a bit more. Items for local retailing would mean sacrificing a bit of the profit to the region. If players are not using the quality management innovation, it would be mostly welcome if they were willing to cooperate by using solar panels. This would require the cooperation of many players. We can't expect to halve the whole energy expenses, but it should be easy to reduce it around a 10% if many players cooperate. Each cent counts.
Nigeria barely has exporting duties, so the price remains low for most of countries when importing their products (even when duties from 10% to 30% for importing). But because of being internal sale production for companies most of times, as opposed to direct sale for others from the very own factory, barely any tax is being collected. In order to collect more taxes to cover the expenses, it would be required either direct sale to other customers, or (better yet) retailing in the same area. The stores in Nigeria can't take high quality production and make profit of it, but it is possible to sell low quality products there, as long as they are produced at low cost (be it in Nigeria, or in a similar low-cost country). This is in part the idea of the N.D.P., to promote the sale of those products in order to generate income. Not to mention that this is an open door for new players to find a way to sell low quality products at low cost. Any unit you can afford to spare will help to generate wealth.
Countering the problem would require a conservative economy plan. That is, promoting the sale of local Nigerian products. Any goods being produced AND sold in Nigeria would generate an extra income for the region. This would require having players "sacrificing" a store that might be somewhere else generating a lot more of profit. The good thing, is that any cheap product can be "sinked" in those stores, and not having a lot of competence there, it should be easy to do that. As simple as searching for a cheap supplier (as quality is not such an important factor there), and retailing the product there. Having a store with wide variety of products should help to counter the renting costs, even when they are not too high either. Again, this requires players being willing to sacrifice or spare a store unit there.
Mayors have the chance of changing this at the cost of their own fortune (as Morty is doing since he is mayor in Abuja), but up to certain point. The main ways are increasing salaries, rising municipal taxes, increasing rent costs, expanding the city size when active inmigration is pushing the real population beyond the real one, and promoting retailing. But what ways are really effective there? Let's check the pros and contras of each one:
Higher salaries have two positive effects: they generate more base taxes (10% of the average salary) and increase the retailing power of citizens, thus allowing higher prices.
Negative effects: we can point out the increase of production costs, but considering that it is based on the number of produced units per worker, this would barely have any effect on the cost. Another setback is that it might require increase in educational level to keep up with higher techs production.
Hight tech production with 10 units per worker, would barely be +$10 bucks in a $100 average salary city. In products produced in small quantities like bikes, scooters, or jewelry, this is unnoticeable because of their high selling prices. If you produce things like food, that you get around 100 units per worker or more, that would barely be and extra $1 buck per item. Even less if the techno is higher.
Low tech production might be "punished" a bit more, but using cheap supplies would reduce the problem. Considering once again that local retailing doesn't ask for high quality there, and that exportations can provide income anyway, this is not a serious problem. Items produced in small quantities (per worker) would suffer the problem more than massive-produced items in this case.
The problem in Nigeria is the lack of stores, so rising renting costs wouldn't be a viable option. The idea is attracting retailers, not scaring them away. It varies depending on the size and location of the store or restaurant or service. Once the retail market is stronger, and people can afford to pay higher prices, then, and just then, higher rentings might be an option for the budget.
This is only viable if the city real population is larger than the nominal one (inmigration). Turning inmigrants into permanent residents will help to both collecting more municipal taxes and thus reducing the expenses generated by that additional population. It also prevents having to "deport" those inmigrants while they are in vacation mode, thus helping to keep retail at higher levels. But again, if there are little stores, this is of no help.
These are a bunch of suggestions that might mean a sacrifice from the player in order to help:
-If a city has overpopulation and low retailing, avoiding units in vacations mode would help. However, those units should be producing AND selling their stuff in order for being of help. Even if it is just for "sinking" those products at lowest cost. If not, and the unit is going to be in vacations undefinedly, it would reduce the city expenses if workers were fired. The expenses in this case are much larger than what the given wages generate. Problem: if the player has invested in trainings, that would be lost and they would have to train again if the enterprise continues in the future. If they relied on inflated wages, it wouldn't be a problem. Again, this is only advised if the real population is beyond than the nominal one and has 0% unemployment rate.
-For cities without mayors, the average salary will rely on the salaries given by players. If they double their salaries (for example, and when affordable), that would lead to modifying the average wage of the city at the virtoyearly update. In case the city has a mayor, this changes triggered by the players would have no effect, if the mayor uses the salary increase project. This would require many players doing the same. If there are 1.000.000 workers in the city, and players are doubling the wages for 250.000 of them, that would increase the average wage by x1.25 (not double, as it is an average). It keeps being more than what can be done at mayor level (x1.05, that would be like 50.000 workers at doubled wage there), but it requires full cooperation of players. Of course, this is much easier to achive in smaller cities, while larger ones should rely on a mayor for this salary changes. Same applies for average skill level, but it being based on trainings instead.
-I guess many of you know Morty, and most possibly he has helped you to increase your wealth incomes, or even saved your ass from bankrupt sometime. It is not asking for too much for those to provide a few stores in order to lend a hand.  C'mooooon...
-Added this suggestion. If you happen to use warehouse for world external sales, using a warehouse in Nigeria would send the profit taxes to the region budget. Right now this will not make too much difference, but each cent counts. If you are willing to sacrifice that 20% profit tax, it would be mostly welcome too. Just be careful with duties when transporting. Some items might become too expensive for being attractive anymore.
I guess that's all, not sure if I'm forgetting something. So, if you consider yourself a strong player, this might be a good challenge for you. Feeling in the mood to give it a try? |
Maybe it's time to bother the support team once again?
How fortunate we have at least one Mike that likes wicked challenges...
