duni04:

Believe it or not, there have been years when Nigeria has had trade surpluses, mostly occasioned by massive crude oil exports. In those years we would have earned more dollars than we spent but created very little demand for the naira. If for sentimental reasons we're pursuing a stronger naira, we should encourage foreign portfolio investors to come in and drop their dollars for our Naira to buy our securities. Exporting more doesn't make your currency stronger, it only eases your demand for dollars to fuel your imports, and even provides you with yet more dollars to increase your imports; Which is why the Naira has rarely appreciated in the past 20 years even when we've had trade surpluses.
Only a deliberate program of import substitution to ease (not eliminate) importation, and the devaluation of the Naira will stimulate the inflow of dollars that will ease the current demand.

menxer:
How so true, but the irony is our parents who were farmers sent us to school to get an education to escape being farmers and the life they lived, instead of getting an education, come back, take over and upgrade the farming with modern technology and techniques.

I am guilty as charged for patronizing foreign online stores mostly.

If my economics and my understanding of the way the world works are right, then that is as far from the truth as Jesus Christ is black

banmee:


Nigeria was never a great country. First coup was in 1966 with multiple Military leaders and with a history of corruption that was/and is off the charts till date. How and when did it have time to be great?

millhouse:
I wept after reading this

989900:
Buying foreign goods (the needed ones), is of less damage to the Naira than importing refined petroleum products -- factor-in importing alternative power sources, especially generators! Those are your real, and of course avoidable demands for Forex (if power is stable even if it is for 12-16 hours/day, and our refineries working).

How many shoes or bags does an average Nigerian buy a day, is it those $20-$30 (average) footwear you buy once in 3-6 months vs your average consumption of 4-7 litres ($5-$8 ) of imported refined fuel (PMS, AGO, DPK) per day?!

Fix power (can't be over emphasized).

Fix the refineries!!

Let the CBN Checkmate currency racketeering, and 'excess liquidity'!

The other stuffs mentioned are good (producing our own food), but are secondary maladies.

Oh, did I mention malfeasance? The GEJs, Diezanis, Dasukis, Abachas, Usenis, Abdusalamis, Tafa Baloguns, IBBs, OBJs, and cronies . . . we are talking probably anything between $150B-$200b in loot! So answer me; how many Brionis, Givenchys, Armanis, Pradas and e.t.c. have you bought, that collapsed the Naira?

MathsChic:
So true. As a finance analyst, I can't but agree with all of this article. Every country determines to an extent how much its currency exchanges for. Nigeria has a long way to go and there's reason to suspect 1000ngn/$1 is a possibility.

bookface:


Hmm...

Let's see how this works out.

Ban everything - then everything becomes incredibly more expensive! Think about that for a second. The current Ban is pushing inflation to crazy levels already. How would you feel if you need to buy a used laptop at 1 million naira?


There are no easy solutions. But the current approach is worse!

Emefiele should take the following steps.

First, allow a modest devalution of the naira. ---- This should allow the foreign portfolio flows that we urgently need. It would bolster the government coffers and put an end to depletion of the foreign reserve

Second, given that the step above will surely lead to an increase in inflation, he should immediately accompany it with an increase in interest rates

Third, fiscal consolidation is required in non productive sectors - cutting down salaries, laying of non productive workers etc - and simultaneously boost spending in productive sectors - like infrastructure, and agriculture.


The current approach of banning imports and drawing down on foreign reserve seems to rely on hope - hope that one day oil prices may recover. This may well be the case, but who knows? What if it is not? Then what? we draw down on the last bit of foreign reserves and we start borrowing money at incredibly high interest rates.

Bookiemart01:
its sad most of us have wrong mentality about all these
some are already prophesying you'll hear things like: "even if crude oil sells for $1/barrel, i cannot go broke cos i do not run the nigerian economy". mumu people. most do not have any plans ooo
We need to start thinking outside d box and look at other alternatives
no box sef

even importation is no longer viable, government is looking for ways to discourage unnecessary importation.....imported boxers and toothpicks
everyone of us ruined this economy
while the politicians were stealing, ordinary citizens were importing rather than thinking to produce (Including myself)
we all compete as to who uses the most expensive and latest gadget
our parents and elders taught us to study hard, get a multinational job and live wealthy
We really r in a mess
our engineers and agric graduates are working in banks rather than invent machinery and produce viable crops
our brains will open now. We av to think by force
politicians will steal, companies will retrench, we will be left with no choice than to use our brains
OAU and most other Tertiary Institutions were not built with oil money, it was proceeds from cocoa farming


state governments cannot even pay salaries, soon FGN will not fund them again, they will look inwards for money. That means they'll tax citizens like kilode (they have already started charging 50 naira on every deposit above 1000 int your accounts, the call it "Stamp charges"

nah the begining be that...........
we'll come out strong sha....but nah the people with shock absorbers go remain

duni04:
I hate the unnecessary whinning in this article. See as a consumer, I won't patronise made in Nigeria textiles because they are of low quality and they are very scarce. As a producer I won't manufacture textiles in Nigeria because there's no power and the machinery to produce the textiles has to be imported at the current exchange rate and without access to credit facilities from banks. If we want a buoyant textile industry, we should give the manufacturers power and access to cheap credit. We should give the consumers reasons to purchase locally made textiles by improving on the quality of our local production, increasing the duty on Imported textiles and empowering the Customs to do their job and arrest smugglers.
Chikena!
And Mr OP, the exchange rate is not a means of measuring the buoyancy of a country or its economy. You should check how much a dollar exchanges for the Japanese yen. A weaker Naira is even an incentive to exporters as long as we reign in inflation. You can't be advocating for increased export oriented local production and a stronger Naira. Doesn't make sense.
All these emotion laden write ups will do us no good. Enough of the noise making already!

hopeforcharles:

Do u know there was a time when the naira was bigger than the dollar? Do u know that there was a time when we export majorly? Read ur history books

hopeforcharles:

Do u know there was a time when the naira was bigger than the dollar? Do u know that there was a time when we export majorly? Read ur history books

persius555:
Thank you for making this point. This i believe was the 60-80s, when global economy powers then relied on raw materials like cocoa, tin ore, steel, crude oil etc

Then, there was demand for raw materials that we produced in huge quantities. The US dollar as a global base currency was not as strong as it is now. To get our raw materials which was in high demand, you had to come for our naira currency, so the naira was well sought after.
Let it be known that as at then nigeria imported luxury cars, like citroen, bentleys etc Because our currency was well soughted for we didnt have problem patronizing these goods. The 80s was an era when america unleashed its global capitalist system on the world, they virtually invaded every economy via its banks backed by the call for privatization which many countries bought hook line and sinker. This was an era the american us dollar became a global benchmark currency. Unfortunately, that was an era that we abandoned our agro allied industries and went after petro dollar.
The irony is that the americans did not abandon their own agric industry. Its amazing to know that agro-exports still accounts for the highest forex earner for the american economy. I am sure a lot of nigerians dont know this.

sdbaba:

All the points stated here are the true reasons why our economy is sinking. I'm still amazed that Nigerians now travel on Thursday/Friday to UK and Europe just to watch football matches to return on Sunday - two days trip and blowing over N500K? Chai this is what yoruba will call "omo oni nakuna - Apa!" Meaning a wasteful spender.

I've quarreled and explained to my wife why we can't take a vacation abroad now - How can I go on vacation abroad with my whole family when we are yet to build our own house? Thank God I'm still thinking straight. I almost jumped on the altar to hug my pastor the day he lambasted people who engage in frivolous expenditures and when he particularly mentioned this case of taking vacations abroad when one is still living in a rented apartment. I was the first on the queue at the church's turk shop to get the CD of that message after the service. I still make sure I play that CD anytime I'm home with my family.

This is article is the best I've read in years. God Bless the writer and the person that posted this.

989900:
Buying foreign goods (the needed ones), is of less damage to the Naira than importing refined petroleum products -- factor-in importing alternative power sources, especially generators! Those are your real, and of course avoidable demands for Forex (if power is stable even if it is for 12-16 hours/day, and our refineries working).

How many shoes or bags does an average Nigerian buy a day, is it those $20-$30 (average) footwear you buy once in 3-6 months vs your average consumption of 4-7 litres ($5-$8 ) of imported refined fuel (PMS, AGO, DPK) per day?!

Fix power (can't be over emphasized).

Fix the refineries!!

Let the CBN Checkmate currency racketeering, and 'excess liquidity'!

The other stuffs mentioned are good (producing our own food), but are secondary maladies.

Oh, did I mention malfeasance? The GEJs, Diezanis, Dasukis, Abachas, Usenis, Abdusalamis, Tafa Baloguns, IBBs, OBJs, and cronies . . . we are talking probably anything between $150B-$200b in loot! So answer me; how many Brionis, Givenchys, Armanis, Pradas and e.t.c. have you bought, that collapsed the Naira?

kenmaro:


Gbam! True talk! Importation of consumer goods is not d cause of Nigeria's financial problems, rather bad leadership, importation of refined petroleum products that can be refined at any of our homes, exportation of our money by our leaders, unstable power/electricity, & etc. No individual country can be self sufficient even d Americans import a lot of their consumer goods from China & Asia but they don't import refined petroleum products & they generate a stable power supply to boost their SMEs & give good relaxation comfort to the human brain & body after a stressful day at work thus enabling d brain to think & plan properly for next coming days unlike the Nigerian brain that doesn't rest even after working stressfully during d day, it will have to come back to a very uncomfortable rest at home thinking how to generate its power and water at home then rise up as early as 4am to prepare for d next day work again so as avoid d poor metro transit system.