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CBN Policies Made Easy - Business (2) - Nairaland

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Re: CBN Policies Made Easy by Houseofglam7(f): 9:09am On Feb 03, 2016
CBN 101
Nobody go pass dis course!!!
Re: CBN Policies Made Easy by efilefun(m): 9:10am On Feb 03, 2016
grin
Re: CBN Policies Made Easy by mycar: 9:13am On Feb 03, 2016
Absolute scrap, the bottom line is that APC has some bills to pay and the masses have to suffer. If according to them, there is no corruption going on in this administration, where is now the money? at least not to make N1 equal to $1 but for the rate to remain manageable. OP says that nothing is still been gotten from crude oil, how was the country when it was selling at $24, at least, OBJ met it at $30per barrel, him and Atiku stole to their satisfaction but economy was not this bad.


Father will not feed his children, will not buy car, house or even pay school in the name that there is no money but still every morning, he goes to work and even his has nothing inside. It is either the father is not telling the children the truth or the father has another woman outside that he is spending on.

And for the BDC issue, it's all about giving the dog a bad name to him it, how much are banks selling forex? What of your credit card which was supposed to be a direct access to forex through issuing banks?

To buttress my point further, dollar was never N270 through 2015, so how can you say that BDC people make N74 in every dollar they buy when we all know that dollar had been at 167. . .170. . . .198. . . . .220. , . . 240 and so on and each time you go either sell or buy, marginal profit is always N2 to N5 at most.

2 Likes

Re: CBN Policies Made Easy by Dondav(m): 9:14am On Feb 03, 2016
I thought Dollar was 304Naira in the streets... These BDC's are making like 100N+ on each transactions..
Re: CBN Policies Made Easy by Nobody: 9:15am On Feb 03, 2016
Sugarhugs:



Please I don't understand, summarize?

Baby, just leave politics for the men. Most women can't understand it, it's too complex.

1 Like

Re: CBN Policies Made Easy by omozu1(m): 9:17am On Feb 03, 2016
This BDC biz is good and have been looking for the kind of biz i will invest.
Re: CBN Policies Made Easy by Youpele52: 9:23am On Feb 03, 2016
Sugarhugs:



Please I don't understand, summarize?

Only samurai can do that
Re: CBN Policies Made Easy by Seylad2009(m): 9:23am On Feb 03, 2016
Nigeria! Good People Great Nation.
I believe we'll get there
Re: CBN Policies Made Easy by AlPeter: 9:25am On Feb 03, 2016
tolutweety:


Now she just lost me completely.

Please is that Spanish you write...?
wrote. The correct word is wrote.... *goesbacktosippingpomo*
Re: CBN Policies Made Easy by Seun(m): 9:31am On Feb 03, 2016
Don't blame the BDCs for naira dropping. The CBN isn't selling enough dollars to meet the demand at the so-called official price, cos of oil price.
Re: CBN Policies Made Easy by Ayoola171(m): 9:36am On Feb 03, 2016
ednut1:
angry from observation another word for an economist is confusion.
You are wrong, another word for Economist can never be confusion, it's just being Rational and Flexible.
Re: CBN Policies Made Easy by grandlexuz(m): 9:37am On Feb 03, 2016
mycar:
Absolute scrap, the bottom line is that APC has some bills to pay and the masses have to suffer. If according to them, there is no corruption going on in this administration, where is now the money? at least not to make N1 equal to $1 but for the rate to remain manageable. OP says that nothing is still been gotten from crude oil, how was the country when it was selling at $24, at least, OBJ met it at $30per barrel, him and Atiku stole to their satisfaction but economy was not this bad.


Father will not feed his children, will not buy car, house or even pay school in the name that there is no money but still every morning, he goes to work and even his has nothing inside. It is either the father is not telling the children the truth or the father has another woman outside that he is spending on.

And for the BDC issue, it's all about giving the dog a bad name to him it, how much are banks selling forex? What of your credit card which was supposed to be a direct access to forex through issuing banks?

To buttress my point further, dollar was never N270 through 2015, so how can you say that BDC people make N74 in every dollar they buy when we all know that dollar had been at 167. . .170. . . .198. . . . .220. , . . 240 and so on and each time you go either sell or buy, marginal profit is always N2 to N5 at most.


I bet you are wondering why no one has " like" your post? Don't worry, soon those who were unable to read the OP because they felt his epistle was not summarised will give you likes.. Political bigot..Ignoramus.Itiboribor. The OP did a good job explaining the policies of the CBN, so the common man can get a better understanding. His article was without political bias, yet you were quick to bring APC and PDP wahala into it...

7 Likes

Re: CBN Policies Made Easy by piagetskinner(m): 9:39am On Feb 03, 2016
My worry is students who are schooling outside the country... How do they get money? because most banks are beginning to limit the amount of money sent via Western transfer
Re: CBN Policies Made Easy by hopilo: 9:43am On Feb 03, 2016
Bottom line, I can not pay my UK fees even with the use of official form A. i completed this form for about 4 weeks now but the bank still tell me they are biding for dollars. Time means money, let CBN review this to help many students that are stranded.
Re: CBN Policies Made Easy by Nobody: 9:48am On Feb 03, 2016
brilliant analysis
Re: CBN Policies Made Easy by Goahead(m): 9:57am On Feb 03, 2016
mulattoclaro:
Only a fool will say PMB isn't working. Those from the erosion ravaged part of country are hell bent on frustrating his efforts. But you know what? They'll certainly fail in IJN.
Shove your silly obsessions with the South east into your åss.... Unfortunate zombie.

3 Likes 1 Share

Re: CBN Policies Made Easy by FRANKOXY(m): 9:58am On Feb 03, 2016
OK o how about importers of cars & auto goods @ poster?
Re: CBN Policies Made Easy by PNomsule: 10:00am On Feb 03, 2016

On a bright note, the current situation presents enormous opportunities for local manufacturers/producers to compete with the foreign counterparts. For instance, rather than buy clothes at Asos or Zara, most of us will just visit Sura the tailor for a quick “cut and sew”- in the words of us travelers ‘bespoke or localized pret-a-porter’. Might I add, save more money and eat local rice- go Ofada rather than international Caprice.


This for me is the high point of this very educative piece but I guess it is not without its attendant qualms, being that the Nigerian economy is largely predicated on the strength or otherwise of the dollar. Now what it means is that, for the local entrepreneur, regardless of what enterprise they hope to venture into, there's always going to be a high cost implication to it no matter how locally sourced they may be. I may be wrong though.

4 Likes

Re: CBN Policies Made Easy by ncolumella(m): 10:12am On Feb 03, 2016
● Now is the best time to invest in the LPG industry.
kerosene subsidy has been removed and marketers are finding it hard accessing dollars to imports kerosene there making the product scares and expensive.

● The cost off LPG has fallen due to crude oil fall.

● The NNPC has said it would roll out free cylinders to every home this year. this cylinders are already in the country

There new mini LPG refilling plant you can purchase

For more information please visit/click: www.nairaland.com/2807449/turn-small-land-very-profitable


#INVEST NOW

Re: CBN Policies Made Easy by dapsonlou(m): 10:30am On Feb 03, 2016
You my friend is an Excellent Writers. You came down to the level on which everyone reading would understand.

1 Like

Re: CBN Policies Made Easy by Bgorgeous: 10:34am On Feb 03, 2016
Very educative post here thanks
Re: CBN Policies Made Easy by Laid2001: 10:50am On Feb 03, 2016
Good write-up.

Basically the op is describing the regulations put in place to implement the policy.

The policy itself is to encourage local production/manufacturing of goods and discourage importation. Encourage export of the said goods as well.
This will improve value of Naira when demand for Forex is lower than supply due to Net export compared to import.

CBN has actually not ban importation of any item!. It lacks the power to do that. It has only said it will not make FOREX available for importation of those items. Hence, importers of those items have to source for FOREX from parallel (black) market putting pressure on the exchange rate at the parallel market. If any importer has its FOREX, its goods will not be seized, he will only pay the duty at the ports.

It is the Ministry of Finance, via the customs that can ban importation of items and importer knows the items that are banned from importations.
Re: CBN Policies Made Easy by johntaiwo123(m): 10:52am On Feb 03, 2016
K
Re: CBN Policies Made Easy by Laid2001: 10:52am On Feb 03, 2016
come together and start car assembly.
The Car assembly plants have assess to FOREX from CBN to Import Completely Knocked Down Parts (CKD)

FRANKOXY:
OK o how about importers of cars & auto goods @ poster?
Re: CBN Policies Made Easy by Laid2001: 10:59am On Feb 03, 2016
For School fees, FOREX Is available from CBN via your bank.

piagetskinner:
My worry is students who are schooling outside the country... How do they get money? because most banks are beginning to limit the amount of money sent via Western transfer
Re: CBN Policies Made Easy by Dondav(m): 11:05am On Feb 03, 2016
Laid2001:
For School fees, FOREX Is available from CBN via your bank.


Elaborate...
Re: CBN Policies Made Easy by MaBuk(f): 11:06am On Feb 03, 2016
Thank you sir

1 Like

Re: CBN Policies Made Easy by Nicepoker(m): 11:13am On Feb 03, 2016
adeaks:
Wow. This was a great read. Actually learnt one or two things from it.

Sadly, quite a number of people will say they can't read it till the end.

as if u did. Now tell us what u learnt from the post.

1 Like 1 Share

Re: CBN Policies Made Easy by Laid2001: 11:14am On Feb 03, 2016
Go to your bank and collect the form to pay for School fees abroad, The bank will ask for evidence of school admission and school fees amount from you.
Fill the form and the bank will submit to CBN to get the FOREX for payment directly to the school overseas. Your Naira account will be debit for the FOREX sent to the school.



Dondav:


Elaborate...

1 Like

Re: CBN Policies Made Easy by distinguished1(m): 11:27am On Feb 03, 2016
Last time CBN came out with a new policy, I asked myself " Why all these policy Summersault?" Now I see reasons how BDC Mallams contribute to the strangulation of the naira.
Re: CBN Policies Made Easy by OROSUNBOLB(m): 11:35am On Feb 03, 2016
davide470:
It was the great philosopher 2face Idibia that said “I wake up in the morning and I brush up my teeth, say a little prayer and then out to the streets” You must have noticed he placed no emphasis on taking a bath. These days, one more step has been added to the routine – You have to check for what new policy the CBN has introduced.

For someone like me (and I’m sure you too), it’s getting really hard to keep up. Can we just go back to the days when our worry was the cruel manner in which the size of noodles was reduced? Can we return to the happy days when we only worried about what Eedris Abdulkareem was saying in those songs?

These days, everyone is talking about oil prices, dollars, devaluations, policies and what not. Most especially those of us with no dollars, we are the ones shouting the most like we have anything to really worry about.

We all do actually.

At this point, for the sake of those of us who haven’t had light since 2013, who have no access to news, newspapers or noisy neighbors and who basically are not aware of the various policies the CBN has dropped faster than Olamide drops albums, here’s an update:

1. In February 2015, the CBN scrapped its official dollar market to reduce its weekly dollar sales to market participants. This is like shutting down shoprite across the nation to reduce random, frequent shopping activity.

2. June 2015 saw the ban of some items (41 of them in particular) from accessing dollars from the CBN. This is similar to your dad not giving you money to buy Internet data/Brazilian hair to ensure some money is saved. You might consider it harsh, but it’s a wise decision considering the times.

3. Then in September 2015, we were constrained from depositing foreign currency into our domiciliary account. This was to prevent the ‘dollarization of the economy’. In other words, ensure that the Naira is still the national currency. After all, you’ve not used Naira to buy even pure water on the streets of America.

4. CBN further restricted the amount people on foreign trips can withdraw from their bank account to US$300/day – like reducing pocket money
Finally, well maybe not, CBN has recently stopped the sale of dollars to BDC (Bureau De Change – Mallams).


5. Oh and in a reversal of policy 3, we can now pay in forex into our domiciliary accounts again. Somebody shout hallelujah!!!


As the price of crude oil drops, our foreign reserves have also plummeted and it is in a bid to prevent further drop that policy 5 (on BDC) was put in place. Let’s look at the CBN as the father in the home and the BDC as his way of ensuring all the kids have access to a certain ‘lifestyle’. It is the role of the father (CBN) to ensure there is money in the home (our foreign reserves)– the kids do not have direct access to the money, so the father withdraws to provide for their needs. But the reserves are being depleted each time the father draws on it and the source of buildup has almost dried up, so the father withdraws his support and alters their lifestyle a little.

According to the CBN, it sells about US$1.5 billion/year to BDCs in the country at N197.0/dollar. The BDCs however sell to the average Nigerian on the street for as high as N260/N270/dollar. It means on the average, each BDC was making about N73.0 on each dollar bought.

That’s a whole lot of profit, right? WOW!

And you know what happens when our fellow Nigerians get wind of such profit making ventures? Everyone wants to jump on it! So more persons wanted the BDC license and the number of BDCs in the country grew from just 74 in 2005 to 2,786 as at the end of December 2015 – an astronomical increase of 3,665.0% in just 10 years. And that’s not all; about 150 entities apply to the CBN every month to obtain the BDC license, which means more trouble for the reserves. Even Standard Chartered Bank- was not getting as many forex requests as this!

The problem was that the consumers who require the BDC service were still not getting the access to it. BDCs were created to ease the transactions of the retail foreign exchange market i.e. you and I travelling around needing small change. It appears (and CBN caught them red-handed) that this was not being done, hence the policy to source outside of the CBN.

So just in case you have a boyfriend who operated a BDC and you’re rolling on the floor crying because he told you he no longer has a source of income, don’t believe just yet. The BDCs are now expected to source dollars from IOCs (international Oil Companies), exporters and other legal autonomous sources.

But then, how exactly does this affect you and I?

The general key impact of the falling Naira is in the value of the money in your pocket or wallet. As the value of the Naira falls, it means the price of imported items or commodities increases, which reduces the quantity of what we can buy. So, the value of your N5,000 hourly income reduces anytime the Naira depreciates.

Please, we are not asking you to ask for higher pay from your employer o.

On a bright note, the current situation presents enormous opportunities for local manufacturers/producers to compete with the foreign counterparts. For instance, rather than buy clothes at Asos or Zara, most of us will just visit Sura the tailor for a quick “cut and sew”- in the words of us travelers ‘bespoke or localized pret-a-porter’. Might I add, save more money and eat local rice- go Ofada rather than international Caprice.

So, if there is something you are good at making, this is the best time for you to step-up and properly position your business to tap into the enormous opportunities the current Naira situation has thrown-up.


We honestly need more of intelligent and smart guys like you here. There are lots of junks one reads on Nairaland nowadays. Thanks for this simple but highly insightful analysis.

1 Like

Re: CBN Policies Made Easy by davide470(m): 12:02pm On Feb 03, 2016
Seun:
Don't blame the BDCs for naira dropping. The CBN isn't selling enough dollars to meet the demand at the so-called official price, cos of oil price.
The ones they were selling at official rate caused the spread at the moment, so why continue?

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