benpedro:
guy relax, your emotions are high but it has NOTHING to do with the VALUE of the naira.Who doesn't want something good for his country? In fact I want the price of a naira to be equal to the US dollar but the point here is that the naira is already devalued, the law of economics says that the policy of pegging the price of the a currency leads to a disaster and so it will inevitably be unless the President retract it's step.He can only achieve his goal If he also peg the price of naira to a dollar in the black market (which is impossible).The same economist news that says that GEJ is an ineffectual buffoon which I agrees he is even more than that is also saying that Buhari's policy of pegging the currency value is ineffective and will only lead to a disaster.Procter and gamble is just a firm, we need more investors, buhari is not a fool for traveling all over the world trying to woo other investors. Moreso, nigerians in the diaspora which is one of the basic avenues the nigerian economy receives dollars will be slowed down.Why? If you send a dollar through Western Union, they will give you 197-199naira but if you want to transfer that money back to the US, the bank charges you 270-290.As a diasporan, would you risk sending your hard earned money to Nigeria?

NavierStokes:


I am hoping the mods do move it to frontpage, so we have a balanced view of the message, seeing some people just picked a few lines of insult at the ex-president leaving the very raison d'etre of the article, which is basically a criticism of the President's crude economic tactics.

grandstar:


The present government economic policies are an outrage.

The foriegn exchange restrictions is killing the economy.

If the fall in oil prices left the econony half dead, the present statist policies will finish it off.

If this expansionary budget is passed which they wrongly praised. it will cause a drop in the naira to 400 in the nlack market by year ending at the latest. I am actually suspecting by July this year

tsdarkside:


pahh...go acquire your dollars yourself......

look at you....you earned in nairas,and you want dollars..........

your nairas are worthless in the world,without the goverment giving you dollars for your nairas.....

the goverment should even completly stop giving them dollars for nairas..

let them go exchange their nairas,directly by the international-markets and find out how worthless their nairas realy is......

onatisi:
Gradually people are beginning to get their senses back. This is something we have been warning of since August irrespective of party affiliation or political interest that the present government is leading the country to economic albatross but unfortunately whenever you criticize buhari or the government you are either tagged a wailer,pdp member ir ipob

muzzol:
I have three simple questions for the emergency economists here.
1. Why is Nigeria economy in its present state?

2. In your own opinion, what is the best fix for an economy in this position, that is, dangerously open, not productive, dependent on rent seeking yet plunging extractive sector, corruption infected, poor trade position against other nations, high marginal propensity to consume mundane import goods etc?

3. What in your opinion is the allowable lags to create a balance in fiscal and monetary adjustments necessary to stimulate other sectors especially Agric and Manufacturing while refocussing growth in local production?

If you can't provide your own opinion to these, then discussion on this thread is not for you, just read and move.

totorimi:
In a country of over 167m people. We have some of the best brains in the world, we have technocrats, we have great philosophers, we some of the worlds best economist and financial experts, we have some world respected scientist and researchers. In short we have everything here but it beats my imagination the way we choose our leaders.

In this highly complex and technological world where only the best is good enough. We are still neck deep in considering mundane issues such as tribe, religion when we choose people to lead us. We really need to change our ways and do things right. When you apply a crude old tactics into governance because you think it worked before that is a recipe for disaster.

grandstar:


The problem with most people is that they depend on head knowledge when discussing economic matters.

What you have said here makes no economic sense.

The best economists in the world advise that a devaluation of the currency is best at this stage. Why should I listen to a stockbroker?

Soludo and Sanusi have both condemned his policies and that alone is enough for me

Wallade:
Devaluation of currency can impact the economy positively in a case whereby the country is productive, this stimulates exports and improves the balance of payment in favor of Nigeria.
Nigeria is highly import driven, we manufacture few products which can't even meet local demand and international standards in most cases.

I have a teaser question for you all that are asking the government to devalue the currency: How does currency devaluation impact the economy positively and translate into positive BOP for Nigeria?
You guys are only advocating devaluation to meet a short term need for FOREX and capital inflow. Mind you, the bulk of the capital inflow you will get from foreign investors will be working capital inflow. If the foreign investors are so keen on the Nigerian market, they should invest in production and manufacturing plants, human capital development and skill acquisition to enable complete production of goods and services locally for the local and export to international market.

Imports restrictions and bans is one of the measures to compel Nigerians to produce local goods and services to meet local demand at least and perhaps export to international market. With time, local manufacturers will perfect the production and meet international standards to ensure acceptability of Nigerian made goods in international markets, especially highly standardized markets.

You may be surprised that I believe in these policies introduced by the government. The only problem I have is with the CBN governor going back and forth on some policies thus giving the impression that he isn't decisive, well informed and planned.

God help Nigeria.

Bevista:
The budget is fraught with disturbing allocations, but it doesn't preclude the fact most of the funds have been allocated to Capital Projects.

tsdarkside:


if someone says,make you cut off your arm,would you agree because he sees himself as someone special??...

its your arm,damn it!!!...

how can devalue be helpful to us,if we import most of our things....we sell nothing realy meaning-full apart from oil...

how can this strategie be helpful to us??...

NavierStokes:


http://www.economist.com/news/middle-east-and-africa/21689584-cheap-oil-causing-currency-crisis-nigeria-banning-imports-no

Mods, I hope you will do justice to this as well, will be interesting to see this and the other thread calling Jonathan a "buffoon" go head to head,
Same article but different perspectives

Wallade:

I have a teaser question for you all that are asking the government to devalue the currency: How does currency devaluation impact the economy positively and translate into positive BOP for Nigeria?

4Play:


Allowing the Naira to reflect its market rate will reduce consumer purchasing power for obvious reasons - higher import costs will increase inflation. However, not doing so will achieve the same outcome as a fixed rate requires restiction to forex access with such restrictions increasing import costs. The difference is that a fixed exchange rate not backed up by sufficient reserves has the ironic effect of accelerating currency depreciation because - as earlier stated - it reduces the incentive for bringing in foreign exchange into Nigeria.

Ultimately, the root cause of Naira depreciation is reduced forex coming into the country due to lower oil prices. Anything that further reduces forex coming in, such as restrictions necessitated by a fixed exchange rate, will have the unintended effect of accelarating currency depreciation. Of course, the official rate will stay the same but the greater the divergence between the official and market rates, the more the former becomes irrelevant.

arresa:



And like I said, it's up to us to clean up our house and formulate the best economic and financial policies for us, not the portfolio investors with zero care for us and our welfare..

Portfolio investors crying all over the place because they want to make a quick buck, but who cares, physical investors are still entering Nigeria and setting up shops daily and creating jobs.


Procter and gamble, the world's largest manufacturer of consumer products just expanded into Lagos with another huge manufacturing plant, this is there 3 plant after Ogun and Oyo state plants and many more are making the same moves. This is the economic power of 150 million people. This is what we need, not portfolio investors and currency speculators.


We are not under any kind of illusion that things are going to be rosy within a year or even 2 after the rot, pillage and decay we just suffered in the last 16 years and in particular, the last 5 years..

We survive when oil was selling for less so what's your point.

grandstar:


As a practical econmist. the following should be done:

1. Devalue the Naira. Allow it to float. Let it find its true vslue.
With FX pressure from foreign investors who come in with capital rather than sunk/manufacturing etc funding, Nigeria would lose all its naira for dollar thus leading to inflation-a situation Zimbabwe is yet to recover from.

2. End the import restrictions on the 41 products excluded from the CBN window.
Restrictions on foreign goods at least temporarily was how countries like China,Singapore and Malaysia became emerging nations. We are too import dependent. If the budget is fully implemented, local manufacturers would b encouraged as business transactions within Nigerians would open up the economy.

3. Slash import duties. High import duties simply rncourage smuggling.
Import duties should remain but more ports given permit other than Lagos to reduce cost of logistics. If customs continue with what we're seeing now, blocking smugglers& sacking corrupt officials & enforcing same duty or more on apprehended smuggled goods then we'd have more earnings.

4. Lift all import bans. Same reason as above.

5. Slash company tax to 18%.
Company tax in Nigeria is relatively the least compared to countries like UK&US. If the government is sincere by providing infrastructures, power, etc paying higher tax won't be a problem.

6. Pay the monthly allocations to the 3 tiers of government in dollar certificates. This will end the persistent excess liquidity and also lead to a massive slash in inflationary pressure and interest rates


7. And so on