macherie1:
There's an ongoing debate on the devaluation of the Naira which means allowing the exchange rate to float i.e allow the forces of demand and supply to dictate the exchange rate. The implication of this is that the CBN exchange rate will spike. Presently, the CBN exchange rate is 199 to a dollar. The advantage of devaluing the Naira is that the federal government will realize more Naira from the sales of dollar which will increase government spending. This will in turn increase allocation to the three tiers of government, more projects, supply of money increases leading to creation of Jobs and investment.

What we should not forget though is that ours is a peculiar economy. Allocation to the three tiers of government does not guaranty that the money will be adequately distributed as corruption is still entrenched in our economy. Also, devaluation may not stop the increasing exchange rate in the parallel market since CBN has withdrawn issuance of scarce Forex to bureau de change.

So before we go chanting 'Devalue the Naira' lets examine the current fixed exchange rate policy. Nigeria though a crude oil exporter is also a refined petroleum product importer. Importers of petroleum products source Forex from the CBN. Allowing the exchange rate to float means fuel prices would spike dramatically since more Naira will be needed at a higher exchange rate to buy the dollars to pay foreign suppliers. We all know that this will have a ripple effect on the price of all commodities. Also, Major industries, manufacturers buy funds from the CBN. If Naira is devalued, it will lead to a dramatic increase in price of good and services, worse than is being experienced now.

We may want to allow the forces of demand and supply play out in determination of the exchange rate and wait for the economy to adjust in the long run but remember what the renowned economist John Maynard Keynes said "in The long run we are all dead". Therefore government intervention in the exchange rate determination is necessary for now.

What the government should do then is inject funds to develop infrastructures so that local industries can grow. The best period to boost local industry growth is now since foreign goods are now relatively expensive to locally made goods. Then we can diversify our exports and strengthen the value of our currency.

The saying that 'sometime it has to get worse before it starts to get better' is what Nigeria is experiencing. There are potentials in the present economic crisis for those that can see it. The clue is 'made in Nigeria products' are the best deals at this period.

acenazt:
As an Aspiring Economist. Even tho the course sickens me. I'd say Devaluation is totally a bad idea. Why?
1 we run an import based economy so our currency will go down lyk d Kwacha due to no or little Revenue.
2 our biggest export crude Oil Accounts for almost 90% Of our Revenu and right now its not as lucrative as it used to .
The solution to our issue is Instant Diversification. I believe we have abundant Resources at our disposal.
Land,Labour,Minerals,Enterprenures. All we need is capital and a good framework.

cckris:
Forex rate of 800 - 1000 Naira to the Dollar is the only policy that can stop Nigerians from importing I PASS MY NEIGHBOUR, Rice, & other junks that waste Foreign Reserve, without ADDING VALUES. Nigeria will get worse if DEVALUATION is delayed.

oyinkinola:


3. ....OIL AND LFR
THE TWO MAIN MEANS OF INCOME FOR NIGERIA ECONOMY
.....with the determination of Nigeria president Buhari and the trust of of world leaders toward nigeria, from America, Eroupe, Asia and gulf nation the down price of oil and the rise in $ is not a corse to nigeria but a blessing.
Among the oil producing countries, and OPEC only nigeria have what other didn't, we have oil in common but nigeria have the looters as well, this opportunity raise nigeria above other oil nation and when all this country are frustrated with oil down price, nigeria have turn to her looted fund reserved to keep her economy running.
Nigeria is bless with oil and (LFR) looted fund reserve, when the oil price is down, the rise-up of dollar $ hike the value of our LFR, if government inject the LFR recovered on the economy, it will boot our economy!
at rate of $ to ₦ today if government managed to recovered $1 trillion LFR it will give us:

$1=₦400, $1trillion=₦400trillion!
I hereby challenge the Nigeria economists who insist that rising $ and downwards of oil price is a broke to nigeria economy to come-up for debate!
Note (LFR is looted fund reserve)

oyinkinola:
[[s]quote author=playtheblues post=43128227]The solution is very simple:

Get Buhari impeached!

He's too stubborn to take any good advice.

[/s]

[s][s]The efforts of Nigerian government to recover the looted fund without the full supports of Nigerian would not make the task easy for the government, to recover the looted fund, we are hearing that the looters will fight back the nation and they were doing so without hide! it's samefull to this nation that a few elements with their evil acts and their colaborators hold down the 170 million nigerian in sufferance at the watch of themselves without any reactions isn't this a shame to the nation? If $1 trillion is unaccounted for and we are looking elsewhere for an angel to come and fix our economy for us without taken the looters responsible, it's a shame to this nation, if we still depend on the aid of western world , Usa, Asia gulf state for our own survival while harbouring the looters who looted us to bone without challenge, then it's a shame to the nation! if the Europian looted their treasory can they have the money to fix their economy talkless of helping others. if a party which formed for the service of the people openly support and protected the looters it is a shame, enough is enough for the office holders and publics sevants who looting nigeria treasory. NLFRC is now at watch of you looters and a drastic action will be taken against any looters!
here is some of the action taken so far:
Letter to the UN
Letter to the EU
Letter to the world bank and monetary institutions
Letter to the AU
Letter to the ECOWAS
Letter to the nations: Swis, Gb, Usa, Germany, Asian nation, Gulf states etc
we let's these international communities known that we need their full support on how to help nigerian government recover every kobo looted in nigeia and placed in their countries, no more hide out for the looters any longer, they either return the looted fund at their disposure or return it, no other options, they may try to play god or take is as joke all for their peril!

JOIN NLFRC Crusade to save nigeria nation!
NLFRC: Nigeria Looted Fund Reserve Recovered Crusade.[/s][/s]
GOD BLESS NIGERIA....AMEN

co-ordinator oyinkinola

oyinkinola:


.....with the determination of Nigeria president Buhari and the trust of of world leaders toward nigeria, from America, Eroupe, Asia and gulf nation the down price of oil and the rise in $ is not a corse to nigeria but a blessing.

cckris:

These are the kind of Lecturers teaching Economics in Nigerian Universities[/s]. How to sustain CONSUMING European, American & , Asian products.

playtheblues:


Buhari is a big scam.

ogechieku:
The only advise to whosoever that has hears is NO TIME anyway!

oyinkinola:
[s][/s]

1. ....there are very many commentary on depreciation of ₦ nowadays expecially in parallel market, although parallel or black market can be manipulated by the traders, they either do it on their self interest, so those who doesn't beleive in the prosperity of nigeria can harbour $ as they can on imported goods hereby cause hike!
But in my own point of view the depreciation of ₦ is a great success to this nation if well manage to nigeria situation today. the looted fund is in $ and it must be refunded back in $, so if $1 is ₦198 when the money is looted, then if the money is refund today at $1 to ₦350 the nation has gained ₦152!
imagine if $1=₦1000, the gain is ₦902!
So in conclusion if the government managed to refund the $trillion looted and the refunded money, change it in parallel market, this will reduce the pressure on ₦ and the scarcity of $ in parallel market so the ₦=$.

(take note all the money took out of CBN during jonathan regime were changed in parallel market before ditributed)

you have other opinion?

2. ...2017 budget will beat record... ₦1 quadrillion!, all the social sectors will be substantially finance to trillions ₦, poverty will be completely eradicated and by the end of year 2018 Nigeria will be declared a developed state and classify one of the first three country in the index of human .
I know you will argue on how this can happen with the economics situation of today, low foreign reserve, low oil price, with depreciation of ₦.
yes oil price is down, foreign reserve is dry but we still have foreign looted fund reserve at hand! when recovered and well managed, it won't be problem to have money for this budget!
we can only pray that a $ hit ₦1000 and all $1 trillion looted recovered!
I know for sure that with the determination of this government and the support of foreign nation to help recovered all $ trillion looted it will happen.....$1 trillion recovered and change to ₦ will give us ₦1 quadrillion needed to financ that budget!
year 2017 bye bye to poverty!

3. ....OIL AND LFR
THE TWO MAIN MEANS OF INCOME FOR NIGERIA ECONOMY
.....with the determination of Nigeria president Buhari and the trust of of world leaders toward nigeria, from America, Eroupe, Asia and gulf nation the down price of oil and the rise in $ is not a corse to nigeria but a blessing.
Among the oil producing countries, and OPEC only nigeria have what other didn't, we have oil in common but nigeria have the looters as well, this opportunity raise nigeria above other oil nation and when all this country are frustrated with oil down price, nigeria have turn to her looted fund reserved to keep her economy running.
Nigeria is bless with oil and (LFR) looted fund reserve, when the oil price is down, the rise-up of dollar $ hike the value of our LFR, if government inject the LFR recovered on the economy, it will boot our economy!
at rate of $ to ₦ today if government managed to recovered $1 trillion LFR it will give us:

$1=₦400, $1trillion=₦400trillion!
I hereby challenge the Nigeria economists who insist that rising $ and downwards of oil price is a broke to nigeria economy to come-up for debate!
Note (LFR is looted fund reserve)

playtheblues:
The solution is very simple:

Get Buhari impeached!

He's too stubborn to take any good advice.

cckris:
Those arguing for a STRONG Naira do not want Nigeria to INDUSTRIALISE.

acenazt:
As an Aspiring Economist. Even tho the course sickens me. I'd say Devaluation is totally a bad idea. Why?
1 we run an import based economy so our currency will go down lyk d Kwacha due to no or little Revenue.
2 our biggest export crude Oil Accounts for almost 90% Of our Revenu and right now its not as lucrative as it used to .
The solution to our issue is Instant Diversification. I believe we have abundant Resources at our disposal.
Land,Labour,Minerals,Enterprenures. All we need is capital and a good framework.