danvery2k6:
Lets not panic Nigeria. The UK did it once but today, the pound sterling is the strongest everywhere.

A devaluation occurs in a fixed exchange rate. A depreciation occurs in a floating exchange rate system. Both mean a fall in the value of the currency.

Effects of a devaluation

1. Exports cheaper. A devaluation of the exchange rate will make exports more competitive and appear cheaper to foreigners. This will increase demand for exports

2. Imports more expensive. A devaluation means imports will become more expensive. This will reduce demand for imports. (I am personally happy with this one. Maybe its because am Igbo: More demand for Aba made. )

3. Increased AD. A devaluation could cause higher economic growth. Part of AD is (X-M) therefore higher exports and lower imports should increase AD (assuming demand is relatively elastic). Higher AD is likely to cause higher Real GDP and inflation.

4. Inflation is likely to occur because:

i. Imports are more expensive causing cost push inflation.
ii. AD is increasing causing demand pull inflation
iii. With exports becoming cheaper manufacturers may have less incentive to cut costs and become more efficient. Therefore over time, costs may increase.

5. Improvement in the current account. With exports more competitive and imports more expensive, we should see higher exports and lower imports, which will reduce the current account deficit.

Overall, The CBN made a wise decision if our leaders are prudent and push a little harder.

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Gawd! People like you say a lot .....while saying NOTHING!

You remind me of that Village Boy who said he needs to climb to the top of a very tall Iroko Tree.... but he does not want to start from the base of the Tree ..(he prefers to start somewhere very close to the top).
When asked why he thinks its not "prudent to start from the base and gradually go upwards", he responded by saying that "the base" dont matter, as long as l get to the top quicker".

A wise man standing by asked him to start his venture and lets see how long it takes him to get to the top!
Ofcourse, he cant even get to the point of starting since there was not "a ladder" around!

"Those who fail to appreciate and learn from there PAST will only go round in circles, trying to move into the future"


Like that Village Boy, you have "jumped right into the middle" of the problem, trying to proffer a solution (reaching the top)...by not considering:

1.) "What led to Nigeria being in a position that we MUST devalue our currency, ...just because of fluctuation in oil price"?

Whatever lead to nigerias productiveness didn't occur in the last 8 years, its been 40 years of mismanagement and unproductiveness by the people and her government.. Well, when you import everything from tooth pick to rice you need foreign exchange in dollars to pay for that, because we import, we put unusula demands for dollars.. and without the government getting paid in its dollars to increase supply of dollar in the market you will have an inevitable devaluation of naira its supply and demand..

if you have other suggestions on how to reduce dollar demand without supply of dollar from the sale of crude to the international markets, you might be a genius and go apply for the cbn governor? kindly state how thats possible

2.) You have failed to consider that there are ways and means to "buffer" one's currency such that when the "expected and inevitable fluctuations" in oil price occurs, our currency will still stand firm (examples are strong foreign reserve, diversification of streams of foreign exchange income, strong domestic manufacturing economy, to mention just a few)

Name one way on the short term genius... and mind you will you deplete your Foreign exchange to 0 because you want a 1=1 ratio of naira to dollar the others you mentioned is unlikely to happen in the next 20 years..

you could have mentioned gold, but we dont even have gold!!


3.) You said every state should increase IGR (Tax, Fees and Fines) and called them parasites .......but you fail to even understand that before you can increase your IGR substantially, you need a "booming economy" where people are working and trading, thus paying more tax, fees and fines! (Take Lagos as an example, compared to say Ondo). IGR does not just "jump-up" except you fall into the category of people who think it is okay to tax a poor man to death, irrespective of ability to pay! Oppressors!

Blah Blah Blah, nigerians are parasites, they want to believe its the governments responsibilities to take care and baby feed them.. time to contribute and make your government stronger in its devise to shore up infrastructure and maintain its function, they run.. but they never fail to give 10% to their thieves call pastors who delude them with nonsense.



4.) Again, your lack of understanding of "basic economics and dynamics of governance" is exposed when you said "remove subsidy and even increase petroleum price by 10% after"... 180 Million parasites want to feed on $25Billion from Oil".

What is nigerias main revenue from is it manufacturing? isnt it oil? isn't that whats shared between the 3 tiers of government for spending?? if there is something else mention in?


The issue of subsidy has been repeatedly shown and proven to be a SCAM by the members of the Oil cabal who simply buy or bunker petroleum produced in Nigeria, load it on a ship and sail for a few minutes into the sea, do a U-Turn and voila: That Petrol has become "Imported Fuel" .....which qualifies it for subsidy!
That is a short summary of the SCAM called Subsidy, so whether it is there or removed,[color=#006600] it changes nothing for the common man who does not benefit from it in anyway.[/color]

since its of no benefit to common man, then wouldn't you agree its removed now, so the government/oil cabal wouldnt have an excuse as to why huge sums are spent on subsidy??


I dont know your "level of education or the quality of it" but judging by what you have written, it is obvious you need to "re-educate" yourself properly! You cant even spell (tightening) correctly!!

Take an O'level Economics textbook like "O. Teriba" and read about the most basic idea of "creation of wealth/money".
$25Billion, if properly utilized, is more than enough to "generate enough wealth" to feed 500Million people.
Govt will/should create the enabling environment for those millions of people who in-turn, create goods, work, trade such that the money multiplies itself rapidly... and the IGR you are mouthing about, will roll-in without fuss.

But how can you "create wealth' from an economy without the "basics" of industrialisation?
Infact, l like to ask people like you... Which comes first: The CART or the HORSE?

is china an industrialized nation? is it even a developed nation? lastly isn't it a third world?? no one is asking for industrialisation thats in 50 years time, how about this genius?? Self F*** reliance, produce what you consume, consume what you produce.. we still import water for drinking and your talking about industrialization..

its up to nigerians to come up with innovative ways on being productive, bring the idea and source for capitalism... Only one man in steve jobs created a product that makes more money than the entire people in our country, was it the american government that showed him??


Why do we have a Government, if that Government cannot "organize and marshal the people into a formidable productive unit"?

[b]Even "Black Ants" have been known to overcome that process?

Give the people Stable Electricity, Give them Roads, working Refineries, Give them a few Industries like Steel Plants, Petrochemical Plants that can provide inputs like fertilizer at a cheap rate... and see whether Nigerians are the 'lazy parasites' you call them!

[color=#990000]so after your experience with a government you term "useless" you still depend on them to give you things before you kick start your life?? Keep waiting you will wait tire.. I say government should Get the F** out of those businesses. they lack the forsight, expert, vision or profit making drive, apart from roads everything should be in private hands of its citizens to run..


The Masses, most of whom are on your level of intelligence, "need to be led and properly organized" by the few ones with higher intelligence; That is what LEADERSHIP is all about [/color] ...... not the other way round, as we have it in Nigeria for some time now

lol now you get personal, because you dont like what i say...your the crop of people who want government to do things for them, lazy eggheads, your kind is in every country in the world... i stay in the usa, and you remind me of the typical blacks, despite the opportunities still blame the government for their uselessness, despite others (chinese, koreans, indians) making it... keep waiting on the government


Before Oil was discovered, Nigerians fed themselves easily.... Yes, before we were saddled with clueless people (very much like yourself!) masquerading as "Leaders"!

Lol, no those leaders unlike me didnt believe in the nigerian people, infact they loathed them... i believe the nigerian people should be doing better, we should be creating ideas and looking for ways to establish them through sme's and financing..

Like someone posted earlier, Nnamdi Azikwe, Awolowo, Tafa Balewa were not as "Greedy, Corrupt, Visionless and Inept" ...as the group of leaders Nigeria has been saddled with , of recent!

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BTW: I agree with the part about people allowing pimping Pastors to "airlift their wallets" in the name of Religion!...