Breaking News: N100 To Become N1 By August 1, 2008

Soludo has just confirmed that starting from August 1, 2008,  One hundred naira nigerian currency will become one naira Nigerian currency.

This will make the naira to appreciate against the international currencies a great deal. For example, if you have 1,000,000 naira now in a nigerian bank , this will mean 10,000 naira starting from August 1, 2008. A naira will be exchanged for £2.50 (against pounds sterling)  and $1.27 (against dollars)(if the present day exchange rate is maintained on 1st August, 2008). This also means that someone collecting 200,000 naira as a month salary will be collecting 2,000 naira.

What are the implications of this for the economy ?. I guess it's a good development but I stand to be corrected.

Educative and intelligent comments are welcome please

source : http://africa.reuters.com/wire/news/usnL14819379.html

this is serious? how will this affect everyday buying and selling?

@yodiyokun

it just means - more idi and more ikun for you - u will become yodiyokun times ten - hahahahah.

how is this going to help anything?

ok so now the dollar will exchange for $1.27, who the heck told you that will stop people from leaving the country in droves?

this is strictly a value of money issue - if my 1,000,000 becomes 10,000 and buys me the same amount of goods/services as it did before, what have I gained by this naira revaluation?

it will have an effect of throwing the whole economy into crisis, because TOTAL a currency change will be needed in this case, if not, someone who has 1 million in cash will suddenly become a millionaire in dollars because of the currency change! It is a harebrained idea

@debosky, correction someone who has 1 million Naira in cash will have 10,000 as the cash will be revalued.

*sorry redenominated, how they will manage and roll out this scheme debosky is what we have to see.

One definite bonus of this is the portability effect of redenomination. The portability of the redenominated naira will make it more convenient to carry large sums of money on a person rather than in ghana must go bags. The time wasted in the counting of large sums of money and the risk involved in carrying large sums of money in nylon bags, or bulging pockets will be reduced drastically with the redenomination. It could also facilitate the introduction of of the use of vendor machines and car parking meters as well as the re-introduction of the use of coins for smaller units of money.

Could not have been better said! If we want to see vending machines and other things paid for in coins, this is the way forward. I'd also like to be able to talk to people from other cultures about pay/prices and the like without having to think if I missed a few zeroes when dividing N6, 500, 000 by N128 to get USD

Is there a Soludo fan club anywhere? I'd like to join.

The truth must be told that its an effort in futility if our industries are not revamped.

Very good  idea, I would say that Soludo and his crew should start now to sensitize Nigerians about this brilliant measure in other to prepare them down for this grand design. This is the best way to give better value to our currency.

the most important advantage of this revaluing will be:

- drastic reduction in banks roundtripping. Since N1.25 = $1, more money will be available to give out as loans rather than hoarding dollars and reselling at inflated rates.

- sounding a death knell on the illegal money changing mallams. they can now get a proper job.

Unless we revamp our economy, this entire process will lead to monumental inflation in the country. Why do we think countries like China and Japan would rather have their currencies the way they are, than let them appreciate over the dollar?

Whenever Soludu and the CBN decide to start this madness, I'll withdraw my holdings in naira and reinvest them in a more stable currency like the Euro. Thereafter, I will stand aside and watch us as we begin the macabre dance of economic death.

We can achieve what we want to achieve by ensuring a more productive economy. Let there be constant power supply and social security in Nigeria, and every other thing would be added unto us.

@Easimoni
Hear Hear!
You are still at the level of fan club? I am ready to pre-order a copy of his Memoirs even if the book is set to take another 5 years before it hits the bookshops    . So tell me if you know any bookshop or seller that is taking pre-orders for Soludo's memoirs, which would be a must read for many persons. The man is a tribute to local content, when Soludo was first appointed, an Associate Prof of Economics in UNICAL told his students to look out for the strides Soludo would achieve. The aforementioned Prof also alerted his students to the fact that Soludo being a home-trained Economist would not work with a western mindset, it is happening before our eyes    .
I am not an economist, all I have is a simple C6 in Economics. But even a simpleton can actually tell the difference between  Soludo and those brainwashed people that have run the CBN until Soludo got there. It must be said that though I hadn't the privilege of  attending the UNN, this man-Soludo-represents what can be achieved when our local unis get their act together.

I have been reading the posts by nairalanders and I am especially fascinated by this topic cos of its serious implications. I want to commend the effort of the govt in this direction if it is actually meant to facilitate economic development and revitalise our economic sectors. However, I want to say that the value of any currency is determined by what it can purchase (its purchasing power) and not the figure on the currency. If you will have to purchase a specified quantity of goods  for =N=1 come August,2008 which would have been bought for =N=100 before then, the implication is that nothing has actually changed.If you will have to put in the same number of hours in work to get =N=1 just as you had been doing to get =N=100, then no difference.
The arrangement will then be nothing but a make-belief. The economy of a country cannot be made better by such an approach. There are factors which foster economic development and I want to believe these are the factors that must be concentrated on to ensure the economy assumes an upward trend naturally without the introduction of an artificial measures which at the end of the day leave things as they were.
The nation's economic recovery hinges so much on an uninterrupted power supply and not until that is adequately addressed, we are still all living in the fool's paradise. It is a fundamental factor for any national development. Our leaders should note this.
Appreciation of the value of naira cannot be divorced from power stability which has a direct and indirect connection to all other factors for economic development that we can ever think of. Let us grow our economy by doing what is right. We will not only improve the value of our currency, posterity will be glad that we came before them.

@ PTH revaluation of the Naira will make no difference to round tripping,  The effect of round tripping would remain the same if the issues surrounding this is not addressed,   Look at it as a % issue if there remains a black market for the naira it would make no difference if the naira was at par to the pound,  All I need do is move 20 units in the naira and thats 20% return,

Removing 2 decimal points in the naira in effect results in no change to ones purchasing power,  I have read this can reduce inflation,  I beg to disagree as inflation is brought about by interest rates, supply & demand etc,  The key to improving the naira regardsless of its exchange rate is wealth creation within the Nigerian economy (job creation, etc),  The Japanese yen is no better than the naira, but Nigeria's economy is no where theirs,

I guess a good point is I do not need to load my pockets with notes and lead thieves to my home,

The re-evaluation of the Nigerian currency is without any doubt a good news; however, important questions should be put into intensive consideration before taking this dangerous, but nevertheless vital, step into reviving the economy of a not-so-thriving nation. This decission should, rather than serve as a delusionment charm to us, be an awekening call to face the dounting responsibility of keeping the Nation's head above the waters by maintaining a stable or rising economic system.

Of course, corruption is not the sole factor crippling our system. It is a known cliché that we Nigerians have an unconstrained affinity for foreign goods owing to our massive inferiority complex. Unfortunately, our Government are still about to realize that in order to make money you have to sell stuffs. Our importations by far outweigh our exportations which is similar to a business venture buying more than it is actually selling out.
Honestly, the only difference between our Government and toddlers is that they don't wear diapers; otherwise tell me how it has managed to escape their comprehension that most things that are imported are actually being manufactured by the local production companies. Nigerians are very talented in virtually all aspect of employment you can possible come up with, but yet the Government stand from afar and watch the talents of their people follow them to the grave. We need employment and not some bullshit of "revaluation of the Naira"; of what use is the currency if there are no employments? How better off will we be then if the facilities of our companies go to rot? Plagued by corruption and greed we are and doom is our destination.