http://www.punchontheweb.com/Articl.aspx?theartic=Art200902199392064

The Chief Executive Officer, Global Fleet Group, Mr. Jimoh Ibrahim, has advised the Federal Government to look into the possibility of printing more naira as an urgent solution to the current global financial crisis, and to improve liquidity in the economy.

In a statement made available to our correspondent on Wednesday, Ibrahim said it was better and more cost-effective to print the naira than to deplete the country’s external reserves or support domestic spending through foreign reserves withdrawals.

According to him, even though printing naira notes will lead to inflation, this can be controlled using Treasury Bills to mop up excess liquidity.

But the Central Bank of Nigeria dismissed this as impracticable, saying that the country should be talking about fiscal stimulus at this point in time.

The Deputy Director, Corporate Affairs, CBN, Mr. Festus Odoko, said in a telephone interview with our correspondent on Wednesday that economists would not argue that the country should print naira in the current situation, adding that it was necessary to think through solutions properly.

“If we print money now, how do we use it? The necessary thing at this period is to put money in critical sectors to jumpstart the economy, and it is the government that does these things,” Odoko said.

But Ibrahim said printing naira notes would reduce interest rates and increase liquidity while banks would be well funded to be able to fund companies.

“Properly funded companies will not cut jobs; they will reduce unemployment; they will fund capacity utilisation; and by extension, spending habits will be promoted, which will lead to increased activities at the Nigerian Stock Exchange,” he argued.



Can this work truly? does it make sense to print more money to save the economy, pls share your view with us .WE NEED TO KNOW.

I think the geeza is hallucinating to be honest.

who is this man?
Does he understand anything about economics and how it can be applied to the Nigerian economic system?

Please tell him to keep quiet when he doesn't understand things

What does Mr Ibrahim know about inflation, one might ask?

Where are the Economists on this forum?

LOL, i have always wondered about this though

Why cant we just print more money and geddit over with

Gamine:

LOL, i have always wondered about this though

Why cant we just print more money and geddit over with

as in buy now pay later?

If you create more currency without raising the value of the whatever backs that currency, the value of the currency drops. That’s called inflation — you'll need more and more Naira to buy the same loaf of bread.

The idea is that if the Government prints more money and stuffs it into our pockets, we will all feel richer. So we will go out and spend. We might by clothes, or cars, or houses again. And that might just save some of those retailers and carmakers who are in such a bad way right now.

But what happens when we do all go out and spend the new cash that's been dropped into our pockets? The answer is that people selling clothes and cars can start raising their prices again, because we feel better off and don't mind paying a bit more. So prices rise. But then, of course, we all come to realize that this has been another of the government's elaborate frauds. There's more money in our pockets, but it's worth less. It doesn't buy us any more than what we had before. All we've done is spent our savings. Thanks, Gordon!

Under the Zimbabwe policy, the public find they are no better off, but a lot of businesses will find that they are actually worse off. When the new money hits the high street or the car showrooms, sellers start expanding again. They might lease new equipment, hire more staff, order more stock. The trouble is that, when the fraud is exposed and they demand drops, they are stuck. They can't just cancel orders without penalty, fire staff without compensation, or sell equipment and expect to get what they paid for it. And many of them will go bust.

Inflating the supply of money is like a drug. You need larger and larger doses of it to keep feeling happy. Eventually, though, you have to come down, and then you're going to feel worse than you did before.

Gamine:

LOL, i have always wondered about this though

Why cant we just print more money and geddit over with

ask the Zimbabweans - they got the trillion dollar notes

this is what happens when you print money

you use all that money to by a loaf of bread

Lmao!

this is serious

sounds like a high up quote from "the rise and fall of Idi Amin"

Coming from Jimoh Ibrahim, I'm not surprised.
Here is a man that employs 10 people and publish in papers, busy challenging Dangote, Otedola instead of facing his business, saying 'if they want to sell Ekiti state, he can issue the cheque', bragging around about being Harvard-trained(Dangote, Otedoal did not go to Harvard) etc.

blacksta:

But what happens when we do all go out and spend the new cash that's been dropped into our pockets? The answer is that people selling clothes and cars can start raising their prices again, because we feel better off and don't mind paying a bit more. So prices rise. But then, of course, we all come to realize that this has been another of the government's elaborate frauds. There's more money in our pockets, but it's worth less. It doesn't buy us any more than what we had before. All we've done is spent our savings. Thanks, Gordon!

What if after printing more money, we all collectively agree not to increase d prices of goods and services? Will there still be inflation? Just wondering cos av always loved economics but ended up with engineering.

And this Jimoh guy wants to be Governor of a state!!!!!!!
He'll not only ruin his state, He'll ruin Nigeria with this his suggestion.

The first rule to understanding money is this: Money is not real. It is just piece of paper.
What makes it important is the simple fact that we have all agreed to store value in that piece of paper.
So in essence, Money is a $tore of Value. Nothing More.

If Soludo wakes up one day [/b]and decides that he has just found the solution to our economic crisis;[b] Print money and share 5 million naira to each family.
We will all end up using the 5 million naira to buy pure water!

Jarus:

Coming from Jimoh Ibrahim, I'm not surprised.
Here is a man that employs 10 people and publish in papers, busy challenging Dangote, Otedola instead of facing his business, saying 'if they want to sell Ekiti state, he can issue the cheque', bragging around about being Harvard-trained(Dangote, Otedoal did not go to Harvard) etc.

i have always seen the man as a retard. na the fronting the man dey do for background movers and shakers dey give am mouth. i heard those employees heard serious wein when he employed them 6mths probabtion w half/no pay or something like that.

only in nigeria

how do you employ someone with 6 months probation? wow that's crazy.

bawomolo:

how do you employ someone with 6 months probation? wow that's crazy.

eh?

thats SOP in naija companies. you get confirmed after 6 months of er 'satisfactory' performance.

According to him, even though printing naira notes will lead to inflation, this can be controlled using Treasury Bills to mop up excess liquidity.

Is there any such thing as "control" in Nigeria?

How are we sure it will [i]not [/i]be added to the "abroad banks" or kept "safe" in our Governors or senator's hotel?

Printing more naira is not going to work, it's not even a solution, and it should not be one of their strategy to solve the Financial crisis.

The value of naira has already drowned, how low can it go?

oyb:

eh?

thats SOP in naija companies. you get confirmed after 6 months of er 'satisfactory' performance.

Funny how one nation has changed the meaning of satisfactory

What a round solution to a square problem?

well if the man cannot think,Sebi he has the money to employ somebody that can think and talk for
him in a more refined way. This is too raw & unfiltered suggestion emanating from a derailed, decayed & delapidated faculty of reasoning and thinking.

To what extent has this global financial crisis affect nigeria?

Did Nigerian banks get involved in the housing markets of US and Europe?

Has there been a marked change in nigeria's economy between the period prior to the global crisis and the present?

I have been made to believe that Nigerian financial sector is actually expanding. Expanding into the rest of west Africa and beyond. Is this untrue?

If one wanted to give the nigerian economy a kick start up the backside what would do it better, printing more money, or a project such as connecting nigeria's major cities and rural areas by Rail? Or even organising the management of our electricity.
I heard that in other west african cities they even have time table for when they will bring light and when they will take it. While this situation is not ideal at least one can plan one's business around it. If there is electricity only on Thursdays and Fridays then at least you know that if you want to go to the printers you cannot go on monday. The printer himself will not bother to call his employees to work on monday to wednesday. Something like this does not cost any money but will make doing business 20 times easier. How can anyone do business in a society when it is impossible to Plan?

Inflation will make it even harder to plan.

Some people have so much money, that they can't apply their minds again to reasonable thinking. How in the world does printing more Naira solve our economic woes?

Is the man sane at all?

This idiot never learned anything about economics.

Quantitative easing (printing money) is only used when the interest rate is really low and there is no room to cut it further.

Whats the interest rate in Nigeria?

Last time I heard, it was 15%.

This guy is an idiot. He is just looking for way to chop money.

Whats the point of quantitative easing anyway? Is it not to stimulate spending? In the West, it only occurs when people are seriously hoarding money and refusing to spend. We know who is hoarding our money in Nigeria - the politicians!

Stupidity has itz many forms, but dis one is simply way-off. Hw can sum-one dat went 2a reputable skool suggest dat. I doubt he went 2skool.
Is it dat Zimbabwe doesn't exist anymore dat he doesn't knw watz happn'ng there. Coz of printing more money, the country's inflation rate is over a 1000%.

Quantative Easing I wrote about this a few months ago, this is the extract.

Is a form of printing money, but this time not physical money but electronic money. The USA has been easing its currrency since November 2008, The UK will commence easing hers from next month that was in March 2009 and I can tell you things have really picked-up, there is credit everywhere now I even got a text this morning about a loan approval.

What does it actually means - Major banks in UK and USA have serious cash flow problems because of their exposure to the sub- prime market leading to banks having serious toxic debt in their accounts. The goverments of these countries made a prompt decision to bail out troubled banks that has over - expose themselves hence the easing process.

Easing process -  The bank's main Businesse in the UK and USA are different from say Nigeria, the banks provide funds to small businesses for the economy to be ticking over.  If for what so ever reason  funds are not forthcoming to small businesses there would be a down turn in the company which will invariably lead to laying off and subsequently increase the un-employment figures.  Small busineses employs 75% of the population so it is vital the Banks extends credit to small busineses.

Bailing out - The Goverment increases the money in circulation by credicting the banks that are bailed out. Basically it is not unsual for $75 Billion to be credicted into a bailed out bank's account over night, the effect is like printing physical money the only difference is that this money is used by the bank to generate more businesses thereby stimulating the economy by giving funds to creditors and giving mortgages to those that require it.

Would it work in Nigeria   - Nigeria banks dont borrow to small busineses, that is why we have a very high un-employment rate in Nigeria. However the Goverment can stimulate the economy by giving some of our major banks money from the reserves which stands at $52billion  to lend to un-employed  university graduates that has good business plan at very low rate of intrest. If 60% of such busineses succeed that could easily be interpreted to as high as 40 million new jobs created. But I have my reservations if this will ever be implemented.

   



QE - forget to mention that is an asset based printing of money not printing money for the fun of it. Zimbabwe comes to mind when you think of printing for the fun of it.

I first understood the sheer idiocy of this Jimoh when he unveil a plan he had nurtured for so long on how he was going to make a hostile takeover of TotalFinaElf worldwide. The plan had already failed before he revealed everything to us letting us know that some actions and inactions of the government made the whole thing fall through.

Jimoh planned that he will acquire land all over the nation and build several filling stations which he already had a contract with Total to do, and hand them over to Total in some kind of lease -purchase arrangement. Then, the more rapidly he built more filling stations, the less able Total is to make payments as agreed. So when Total cannot keep up with the payments and now owes him so much, he'll make his move and tender the takeover bid.

I almost cried due to laughter when I read that interview. Jimoh felt that his filling stations will translate into shares in Total Nigeria Plc and he will then carry them to Paris and God knows whatever he planned in his mind to do over there.

Well, to cut a long story short, the plan didn't work and Today, Jimoh Ibrahim is not the Chairman of Total worldwide.

As for this Naira printing revelation, I'm suprised that people are just commenting on this now. I wrote a note about it on Facebook two months back and it begins thus:

", and the Nobel Prize goes to Jimoh Ibrahim for saving a world on the brink of Global Recession."

Anyway, I feel it is an insult to everybody on Nairaland for me to start explaining the havoc that can be wreaked by mass printing of currency. Zimbabwe stands as a clear example.

Look at the USA they need dollars and they went to borrow billions of dollars from China. Dollars! Their own national currency which is accepted worldwide, they didn't just go and start printing dollars. Yet, Nigerian Naira should be massively printed to stem recession. Anyway, congratulations Nigerians, after he made that proclamation, Jimoh Ibrahim was appointed head of the CAC.

I am sure USA will end up doing this at some point, cos they owe too much for them to work themselves out of it.
Will devalue the money, but eventually, they will be OK

Financial Crisis Solution: Print More Money?

AAAAAAAAAAAAH! printing money ke? do you want to end up like Zimbabwe or Germany after world war 1? Abeg no. i understand the need to inject liquidity into the economy because money is not flowing around in the economy but please its not worth risking or else you would end up with STAGFLATION: a recession and inflation at the same time.