Hi Nairalanders,

I am deeply concerned about the sudden drop in Nigerian currency and I would like to start this thread to discuss ways in which we can savage our beloved currency. Also anoda area of concern is that our naira has no value again. 1-20 naira, has no real value. I was paying transport fare the other day and realized that the 5 naira i had in my hand cannot be used to pay transport fare. In fact apart from some kind of sweet its not useful at all.

My Brothers, fellow Nigerians, what can you and i do, to salvage this dear nation of ours?What can we give our naira value again? What can we do raise the value of currency in the FOREX market?


Please suggest, It might go along way to help our dear nation and her leaders.

I await your responses.

While i give u kudos for ur concern on monetary issues in Nigeria. I see it as wishful thinking. The economic handlers or call them financial govt, are the once that can impact it negatively or positively. What i believe we can do is take advantage of it in production areas and produce goods and services within the price range of N5-N20. This would mean the goods would be affordable to everyone. Our small dollar cant impact the currency market as much as the bigger dollars (oil dollar) which is d mainstay of the economy.
Havent said this what we can basically do is to elect a govt come 2011 not base on ethnicity, religion or location but a govt that can break corruption, reduce the big govt to small govt and put the peoples agenda's ahead of the big kabal.
Also a strong message of disappointment should be sent to the national assembly members by out voting all of them completely, they are suppose to keep the executive in check and not dance to the executive. Lets learn from USA and Obama's election and kickout the so called rotational presidency. I'm from the Niger-delta, i dont give a damn if we ever produce the president, i want a man that can best do the job according to the wishes of the people. Rotational presidency will only set us back, because it will be based on my turn and ur turn not performance.

No single individual can salvage the fall of the Naira,
but you can take advantage of it by going into an export business.
If enough people do that, the trend of naira depreciation will be reversed.
The best way to solve the problem is to exploit it! Don't you just love economics?

@ Seun
True as wht u said may sound, it is a text book solution not an on-the-ground working solution in Naija.
no amount of inflight can defeat the outbound flight of the dollars. what are we to export apart from oil?, is it guguru and epa?
Forget Obasanjo cassava theory oh!, even Obasanjo have ignored the project he intiated. If the govt was serious on export, they should have formed a body that would purchase exportable goods from local farmers for onward exportation. Not telling baba-kabiru who didnt read and write or bearly has N9,500 naira in his account to go and export cassave cos he is a farmer, and how do u expect him to source for buy online when if he see the computer the only thing that comes to his mind is
"ah oyibo sha, aje ni won". In Saudi, Kuwait, Bahrain, Oman the govt buy farm produce from farmers and re-distribute it for sale. That way a farmer knows that after his hard work on the farm, there will be no sweating to sell.

Seun:

No single individual can salvage the fall of the Naira,
but you can take advantage of it by going into an export business.
If enough people do that, the trend of naira depreciation will be reversed.
The best way to solve the problem is to exploit it! Don't you just love economics?

At a time world trade, concomittantly exports, is falling, you think we can export our way out of a currency depreciation?

Why do we Nigerians cry foul whenever a little change in world economy knocks on our currency?

Europeans increase taxes and fares all the time.
It simply means that the economy is nose diving.
Instead of collectively complaining, you can individually take advantage of the situation by either buying stocks or selling it.
In the alternative, start exporting business like seun said.

Stop complaining, it happens to every country every time

Seun:

No single individual can salvage the fall of the Naira,
but you can take advantage of it by going into an export business. 
If enough people do that, the trend of naira depreciation will be reversed. 
The best way to solve the problem is to exploit it! Don't you just love economics?

The truth remains that a nation who relies heavily on importation for basically every need will and shall always remain poor.Even though that the US economy still play a key position in the world economic politics.Its obvious that the Chinese and Japanese economy are more vibrant and robust.

You may ask WHY?

The answer is there for you clearly. Don't you see it.

@Seun,  now I see that we have an economics here.

Case Studies like Japan,China and even Italy should make us realize that emphasis should be laid more on the economy than the currency

i think its a general phenomenon. its would bounced back soon.

its affecting all countries.

i don't think there is something that can control, that from Nigeria here

@sam milla
Comparing Naija to tax paying countries in the EU or US is the most foolish thing anyone can do.
Why?,

*We have oil, why aint our refineries working?
*Why dont we have electricity?, for the welders, electricians and barbers to do their jobs?
*why aint our roads motorable. Buying a car is now a cash trap, has anyone ever calculated how much he or she spends on spare parts or car repair in a year!
And yet some dumb ass is saying, we like complaining. Even Liberians wont tolerate what we are tolerating as a people.

Thadude. Seconded

@Tha dude, its fair to say that you have echoed my thots everytime so far.

Tha_dude:

@ Seun
True as wht u said may sound, it is a text book solution not an on-the-ground working solution in Naija.
no amount of inflight can defeat the outbound flight of the dollars. what are we to export apart from oil?, is it guguru and epa?
Forget Obasanjo cassava theory oh!, even Obasanjo have ignored the project he intiated. If the govt was serious on export, they should have formed a body that would purchase exportable goods from local farmers for onward exportation. Not telling baba-kabiru who didnt read and write or bearly has N9,500 naira in his account to go and export cassave cos he is a farmer, and how do u expect him to source for buy online when if he see the computer the only thing that comes to his mind is
"ah oyibo sha, aje ni won". In Saudi, Kuwait, Bahrain, Oman the govt buy farm produce from farmers and re-distribute it for sale. That way a farmer knows that after his hard work on the farm, there will be no sweating to sell.

True, the best thing for government to do is t0 form a body that will not only buy exportable produce from framers but will also enable mechanized farming possible. If you have ever been to the middle belt part in Nigeria you will see large expanse of land lying fallow. Its just unfortunate that our leaders are only interested in enriching their pockets and do not care about the good of the people. Those large expanse of land is enough for Nigeria not to be dependent on crude ( considering the fact that the price of crude oil keeps dropping in the international market). Its really very sad, that opportunities abound and we are not making use of it. Why is China, Japan and the rest not complaining about the downturn of the world economy?

what is the rate today in naija?

its not a new thing to Nigerians when it comes to naira crash. Salvaging our currency simply means finding a means of manufacturing products that can be exported. thereby solidifying our Gross Domestic Produce (GDP). There is no other way to get our currency better if not by exportation of products produced or manufactured in our country, Nigeria. Therefore, i urge those that benefited from the oil boom to please start investing in farm products. by so doing, there will be enough for people in Nigeria at affordable price and for export purposes.

I think the best of its all should be God factor, how una see am

I was reading Herald Tribune this morning and was shocked at what I read. Just didnt know what to believe. Was this some PR stunts of what?
THAT NIGERIA'S ECONOMY IS BETTER INSULATED AGAINST THE GLOBAL CRISIS compared to world's top economies.
And no that's not all
THAT NIGERIA VIRTUALLY HAS NO DEBT and THANKS TO THE FORESIGHT OF SOLUDO, NIGERIAN BANKS ARE STABLE.
You all remember the recapitalization process some years ago.

some people like to lie

My brother this country has turn to another thing. But the only way out is to reduce the price of food items like; rice, beens, Garry and some other food stuff. If the can help in reducing this things, it can help our currency to be value.

I belive what we need to do is to concentrate on making the avrage man have something to eat, making the raod s work and provding eletrical power supply for small and medium scale productions. If the basic necescietis are available we stand a better chance to influnce the Gross National Product. and other national Economic parameters.

I heard some yahoo boys saying the naira should keep falling as $1 is now 150 Naira that 100 Dollars is 15,000 naira for them so its good for them,don't you think these guys are going crazy ? 

ARGENT
Why is China, Japan and the rest not complaining about the downturn of the world economy?

Its not entirely true to say that China, and Japan are not complaining. On BBC, Toyota(Japan) is constantly reducing their sales forecast due mainly to this global economic downturn. Their chief consumer, i mean the US isn't buying as much as the used to. Can remember i saw a BBC report that the garage(somewhere in Dettroit) which represented the interface between Japanese production and American consumption is gradually turnind into a "desert", with only few cars on display. If the garage owners can't sell, they won't buy more either.

For China, there has been masive layoff since factories are not meeting up due to dwindling sales.There has been frequent repeat of the South African Xnophobia, though, in very small scale in china for fear the foreigners might take over their non existent jobs.

China, Japan and the rest are complaining, but not on NAIRALAND(which happens to be your only source of information) so that ARGENT can see it. APPOLOGY IN ADVANCE. One love Argent.

densel:

ARGENT
[

China, Japan and the rest are complaining, but not on NAIRALAND(which happens to be your only source of information) so that ARGENT can see it. APPOLOGY IN ADVANCE. One love Argent.

What makes you think nairaland is my only source of information, and why would I make niaraland where everybody come to spew their opinion my only source of information. I take that as an insult. Please learn to answer people's questions without insulting their intelligence.

laughing sarcastically

@poster,  saving the Naira is too broad a mission for an economy in a state such as ours to undertake successfully (not that it is not possible at all), it is not possible until some 'key' economic enablers change for the better (not forgetting the external global 'forces' that affect the Naira sooo obviously)

Firstly, i am not a professional economist or analyst, my analysis stem from simply looking at the facts on ground and interpreting it as it turns (i.e what happened next after this event occurred)

1: Foreign Trade  (How much dollar exports are we doing with developed/developing nations compared to imports,  i doubt the balance is fair in any case)
2: Money Supply and Interest Rates utilizing either a progressive (start-finish) Monetary or Fiscal Policies to stimulate the economy to actually produce value that is directly related to the amount of money in circulation (a properly de-regulated economy and a managed inflation rate, but things go tight like in the UK)
3: Forex Reserves: The amount of dollars, pounds, cefas etc that the CBN has and uses to back the Naira (currently $50 billion)
4: Population: While not a readily measurable economic enabler, it's influence on the value of the Naira is undoubtedly strong


Let me Explain further.
In a 'flexible'  exchange rate system (as in what obtained during babangida/obj regime), Forex reserves allow the CBN to purchase Nairas (which is considered a liability for the CBN) This action can stabilise the value of the Naira. unfortunately i do not see other countries buying naira as much as we buy dollars, so this pitch is out of place

Typically  central banks throughout the world buy and sell official international reserves to attempt to influence exchange rates. (hence Forex Market)

The amount of forex reserves can change as CBN implements monetary policy. when CBN implemented a fixed exchange rate policy (abacha/era) it faced a situation where supply and demand pushed the value of the naira lower or higher (an increase in demand for the Naira would tend to push its value higher, and a decrease lower). In a fixed exchange rate regime, these operations occur automatically, with the CBN clearing any excess demand or supply by purchasing or selling the foreign dollars. Mixed exchange rate regimes ('dirty floats', target bands or similar variations) may require the use of forex operations to maintain the targeted exchange rate within the prescribed limits as it obtains today (somewhat) 

An exchange rate target cannot be independent of an inflation target. Since our inflation figures are 'distorted' or unrealistic with the reality on ground, we can assume that cbn is operating a floating exchange rate, and this allows the market to set the exchange rate; therefore there are limits to the type and amount of forex interventions CBN can execute to save our dear naira. Even if the CBN strictly limit forex interventions, it recognizes that forex markets can be volatile and may intervene to counter disruptive short-term movements. (I doubt this crisis is for the short-term, so ditch any hopes of a stronger naira)

In order to maintain the same exchange rate if there is increased demand, the CBN can issue more Nairas and purchase more dollars, which will increase the size of forex reserves. In this case, the Naira's value is being held down; since the domestic money supply is increasing (money is being 'printed'), this may provoke domestic inflation (the value of the Naira falls relative to the value of goods and services).

Since the amount of forex reserves available to defend a weak Naira (since it is in low demand) is limited, a forex crisis or devaluation is the result.

We can thrash it out with different theories, but in the end the solution is not as simplistic as it seems as numerous other factors (domestic demand, production and productivity, imports and exports, relative prices of goods and services, etc) will affect the eventual outcome. As certain impacts (such as inflation) can take many months or even years to become evident, changes in forex reserves and Naira values in the short term may be quite large as different markets react to our distorted economy.

You can forget FDI's and the Private Sector, they actually do more damage to the Naira than good.

So in reply to your question, how can we save the Naira,  the truth is it will take more than ecomonic policies to save the Naira. we have to deal with internal productivity issues, power (electricity, fuel, gas etc), inflation, industry development, man-power development etc.

I ask you, from what you see happening in Nigeria today, do you think the Millenium Development Goals can be achieved within good time without been derailed by our atypical politicians and surreal leadership? 

When people have no vision,they are destined to perish.It is a natural thing that Famine is preceded by Abundance.We sold oil for $150 per barrel and what did they use the money for?they shared it among themselves thinking that it would always be like that.Now the oil is below $35,they are devaluing the naira to finance deficit budget.Bunch of devils we call leaders.May they perish one by one and may their generations know no peace.

When people have no vision,they are destined to perish.It is a natural thing that Famine is preceded by Abundance.We sold oil for $150 per barrel and what did they use the money for?they shared it among themselves  thinking that it would always be like that.Now the oil is below $35,they are devaluing the naira to finance deficit budget.Bunch of devils we call leaders.May they perish one by one and may their generations know no peace.

otokx:

some people like to lie

@otokx, lie about what?

all these are problems. What is the way forward. Same complain in every forum. Leave them alone. They say they are born to rule.

all these are problems. What is the way forward. Same complain in every forum. Leave them alone. They say they are born to rule.

How Can We Save the Naira?

Simple, by engaging in other economic activity and leaving oil the f uck alone.

A few years ago when the naira redenomination scheme was put into place, nigerians were complaining that if Charles Soludu makes 1 naira equal about 1 dollar they would never become millionaires and they threw insults at him. Today I see people begging for a better naira.  I dont understand nigeria. 

Naira will start appreciating when we are empowered to produce things we can export to earn foreign income. Relying solely on crude oil sale is what has landed us in our present position. Somebody should do something about the energy crises.

I wish that Power Holding Company of Nigeria will be scrapped and replaced by private companies who will be efficient. Even though GSM tarriff is high, it is far better than the days of NITEL.

Give us ELECTRICITY, then we can salvage the value of Naira via production. As long as factories are being shut down and manufacturers are relocating to more conducive countries, Nigeria will be the worse off.