If the managers of the Nigerian economy were to be sincere with the nation, they will agree that there is something basically wrong with the continued fall in the value of the Naira. Even when our so celebrated foreign reserve stood at $60billion and an import demand cover of about 20 months, the Naira exchange rate never firmed up. Rather, the Naira was on a slide against other currencies; a situation which negates all known economic principles.

Yet in the early 1980s, when the nation's foreign reserve stood at just $2billion with a four-month import cover, the Naira exchanged for less than one Naira to the Dollar.

So, what is it that went wrong with the economy in these 25 years that the Naira has been so battered to the point of exchanging for as much as N215 to the Dollar? The answer is not far fetched from a mismanaged currency by the Central Bank of Nigeria (CBN) in collusion with the commercial banks.

It is obvious, and the warning signs are crystal clear, that Nigeria's economic managers have broken the doors to economic sanity and compelled Nigerians to tow the path of poverty. Before the free fall of Naira which began with the introduction of the Structural Adjustment Programme (SAP), during the regime of military President, Gen. Ibrahim Babangida, Nigeria was never rated among the poorest nations of the world; neither did Nigerians crave the Dollar nor did 70% of Nigerians live on a Dollar per day.

As a panacea for the deepening poverty, advocates like Henry Boyo, have proffered a better managed currency for a stronger exchange rate of the Naira as the only solution. It is discernable that the poverty in the land correlates with the depreciation of the Naira; and regrettably, the value of Naira does not correlate with the high foreign reserve.

It is an economic contradiction; an aberration which suggests a deliberate manipulation of the currency - and by extension the economy - to keep Nigerians poor.

Else how did the affluence that resided with the Nigerian and his Naira in the 1970s and early 1980s suddenly vanished into thin air, so much so, over 70% of Nigerians, today, are now suffocating under the yoke of poverty?

The CBN, as the manager of the economy, has as its prime mandate, price stability. That, of course, can only be ensured through a stable exchange rate. But the CBN is known to deliberately devalue the Naira on monthly basis through the creation of excess liquidity and the substitution of Dollar earnings with minted Naira to be shared at the monthly federal allocation; thereby creating scarcity of the Dollar and surplus of the Naira in the economy.

It is only logical, economically, that with a surplus Naira pursuing few Dollars in the open market, the value of the Naira will continue to fall. The CBN is, therefore, deliberately devaluing the Naira, with the prevailing climate. Certainly, this policy needs to be reviewed.

This Newspaper is of the opinion that with this CBN policy, the Naira will never witness any stability. That the Naira is on free fall is not just because the international oil price is down - after all, when oil sold for over $140 per barrel the Naira was never known to have risen in value - but the fact that the CBN acting on the advice of the Brettonwood institute is deliberately keeping Nigerians poor.

That is why, for 25years, Nigeria has been fighting excess liquidity. Nigerians need to hold the CBN and the commercial banks accountable for the downward value of the Naira. That is the only way to arrest the deepening poverty in the land.


http://nairausd..com/2015/02/the-danger-that-come-with-naira.html

thanks for this bit of news.

Though the devaluation of a countries currency is a necessary evil during economic down-time, however, I think its really sad and painful especially when one compare it's dollar equivalent.

henribj:
thanks for this bit of news.

You welcome

Desteenee:
Though the devaluation of a countries currency is a necessary evil during economic down-time, however, I think its really sad and painful especially when one compare it's dollar equivalent.

It's evil and a blessing in disguise.
The devaluation of naira will cause increase in nos of foreign investors into the country

I believe the devaluation of the naira will lead to a chain of reactions, many of which may not have the intended results. For a largely monolithic-economy, like ours (Nigeria), the expectation that a devalued naira will drive export of local products, which do not exist in the required volume for now, will create additional burden on the populace. When you juxtapose the consequence of an inflation induced policy on an economy, nay the people who do not possess a corresponding purchasing power, by reason of unemployment, the consequences are better imagined than experienced.

No doubt there is the expectation that the government’s revenue, in terms of naira will move up, because of the wide exchange rate disparity between the dollar and the local currency. However, the point must be made that this expectation may be unrealisable of two variables- the falling oil prices and lower crude production aggregate.


You might say Ymodulus Is there any escape-route?

Certainly, but the question remains if Nigerians have been sufficiently sensitized to brace for this situation. In the developed nation’s when currencies are devalued, it is to encourage exports, because the prices of local products serve as an incentive and a toast for foreign buyers. In the process, they earn foreign exchange, increase production and create additional jobs. Unfortunately, that is not the position with Nigeria. Another issue would be that Nigeria will have greater difficulty in paying its external debts, which are on a growing trajectory. Earning less foreign exchange in the face of growing external debts, is an ill-wind that blows no one good.


I had said earlier on, once on this forum where i cant recall that the sack of Sanusi a Veteran Banker and the Imposition of Zenith Bank Ex MD. Emiefele Godwin is a big mistake. I have never liked Zenith bank cause of their wrong banking policy and ideology and i knew that a man such as godwin coming to the apex seat of the banking sector will pose a problem, but some nairalanders here called me an APC fanatic, i hope they can now learn as its happening. Lastly I see the naira being devalued to official rate of N220 by May 1st, as long as the CBN substitution of the naira allocations for dollar is not STOPED.

Mark my words the naira would be at a rate of N220 officially by May 1st.

I am Ymodulus


We need a Change
#SaiApc
#SaiBuhari/Osibanjo.

You are right man.

Charpell:

It's evil and a blessing in disguise.
The devaluation of naira will cause increase in nos of foreign investors into the country

Charpell:

It's evil and a blessing in disguise.
The devaluation of naira will cause increase in nos of foreign investors into the country

I dont think so. Man

Ymodulus:


I dont think so. Man

I know how you feel bro, but the truth is that it's nobody's fault. The devaluation of naira was inevitable because we run a mono economy system
It could have happened to any govt

k

The dangers of a clueless administration.

Thunder fire GEJ ass to otueke...
Quote nd Die

Love news like this...
It makes me look less stressful..

Its this political I guess no!


Lemme keep observing feeds frm GEJ nd GMB e-faithfuls

Seriously it will leads to high cost of goods and services amidst dwelling purchasing power of the naira. Many factories will be closed down due to high cost of operations which can not be passed to the consumers. OBASANJO sacked ngozi Iweala because of poor economic management and growing level of poverty,but Clueless GEJ brought her back and even made a prime minister. Means,she doesn't have experience on preventing unemployments,growing a third world economy and increasing employments generation strategies. All she knew is Privatization and Subsidy
This is very small compare to the hardships coming after GEJ re election. Let's pray for it to stabilize at 400/$ by 2019

It would have been an advantage if we were a manufacturing and exporting country, since we would be producing at a relatively high price, which becomes cheap in countries like UK, thereby boosting export. But since pdp has plundered our resources, the advantage would be lost and we continue trading with our weak currency.

Som eidiots would come here now and start shouting PDP and APC

like they have no other thing in their head

Should be read by every Nigerian

Of course....another explanation is that since the 1980's....we have become more oil dependent....and more import dependent.

At least when the first oil shock happened in 1982...we still had some Agric, and some industries. Not anymore.

who is to blame?

That harvard poo does not know anything there are many smarter Nigerians that can do wonders we need to sack that woman after GEJ is sacked

hmm

Really bad mehn... It seriously has some negative effects on me. The money my dad sends that I change for like $1000 before, I now get less than $800 for it.

Nigeria making lives of citizens stressful since 20AD

Ooooooooooooh. I don't understand

Wait for it


The "SAI" Crew will soon be here.

I didn't mention any particular party, but believe me, they will surface in a second.

Meanwhile, I only came here to do nothing but to book frontpage space.

Modified: Before I even finished typing this, they already beat me to it. Scroll up, you will see them. It's like they been programmed to Scream Sai dis and Sai that.

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The part I still can't understand, let alone explaining is this..... when oil was $139/barrel, the Naira never rose. Now the oil dropped and the Naira is falling as if a regressing rocket is attached to it

THAT IS REASON WHY WE NEED CHANGE

WE NEED TO CHANGE JONATHAN / SAMBO AND SEND THEM TO THERE RESPECTIVE TERACEMA

WE NEED BUHARI /OSINBAJO {THE AGENT OF CHANGE }

IN WASIU AYINDE VOICE

[size=17pt]ENI BA TEKA PDP OFO NIO SHEE [/size]

TRANSLATE IT TO HAUSA AND IGBO PLS

This is serious ooooooooooooooooooo....



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