Bevista:
You see, the Body Language of the president is completely irrelevant when market forces are at play. He needs to stop having a DEFINITIVE position on what the exchange rate should be. There are so many variables and moving pieces outside his control.
---
On inflation, what do you think is going to happen when 70% of the market sources dollars at N300 to import? Are those importers not going to pass on the interest rate differential to consumers by virtue of price increase? Sooner or latter, HEADLINE inflation will increase. They may try to subdue CORE inflation for a while due to the steady nature of price of PMS.
---
Devaluing the Naira will naturally curb demand and create a new equilibrium. The key will be choosing an appropriate price where supply can clear demand. That way, the bank will not have to worry about depleting Reserves. But yes, I agree, Core inflation will shoot up.

You are certainly correct. Sometime I wonder whether the ego of Mr. President is at play here on the expense of the economy. But it is not the president alone, most politicians are like that. I think the president is unwilling to take the advise of the IMF and it will hurt the nation.

Soon $1 = N0

Bevista:
Blaming the CBN Governor is like blaming the management of Chevron for sacking 7,000 employees and reporting a 40% reduction in earnings - all due to record low oil prices. Certain economic events will always follow certain market realities.
---
Our senators need to understand the interwoven nature of economic variables. The currency of every major oil exporting country is depreciating like hell. Even heavyweights like Saudi Arabia, Canada, Russia, Norway, etc with huge FX Reserves (in excess of $500bn) are suffering currency devaluation. Is it an import-dependent Nigeria with Reserves of $28bn that will not suffer currency devaluation? Is it the CBN Governor that authorized that our small dollars be shared to politicians? Is it CBN that said we should not invest in infrastructure to support local manufacturing? Is CBN responsible for our craze for foreign goods?
---
My only grouse with the CBN Governor is that he should converge the prices at the parallel and official market by officially devaluing the Naira. The current divergence (~N100) is providing banks with arbitrage opportunities for exploiting their customers. An official exchange rate in the region of N240 - N260 might be appropriate for now.
---
What Nigeria needs right now are real & clear Import Substitution policies to reverse our craze for foreign goods. This will reduce the demand for dollars and consequentially reduce the pressure on the Naira. That is not the job of Monetary authorities but that of Fiscal authorities. They should be summoning Kemi and Enelamah (the guy in charge of Trade & industries).

U sure know your onions. I like brilliant contribution like yours. Not like the dunces who come here and blame this and that. And if u make their papa the president, he will not know where to start from.

I want the zoo to lack funds such that they wont be able to buy arms for their cowardly and murderous military

wirinet:

Then every president and public officer in Nigeria is dull and brainless and you are the only brainful person in Nigeria. Since the creation of the Niara, it had NEVER been left to float on the open market, it had always been pegged. There had alway been an official market and a parrallel black market. Before now the government had enough dollars to flood the market and try to bridge the gap between parrallel and official rates. Now the CBN do not have the dollars to support the naira and so the gap between the official and parrallel markets is widening.

The official market price had always reflect the true value. Black marketers add few on top to make gain. there was never a time the difference between official market price and black market is 110. during the last administration, the difference was btween 15 and 8 niara

Firefire:


I was quoting USD at N240 previously, Modath was objecting, now Dollar is N305.

You were quoting 240 when it was 220 & there is evidence to prove no forget oooo...

I know the state of crude oil price must be a source of joy to you now, does it not perfectly suit you & answer your prayers? ! nohin do you jare my bros, orun n ya bo ni ki n se oro enikan!!! Gbogbo wa lo ma ta ba!!

Hdkfkkg

Bevista:
Blaming the CBN Governor for the fate of the Naira is like blaming the management of Chevron for sacking 7,000 employees and reporting a 40% reduction in earnings - all due to record low oil prices. The sad truth is that certain economic events will always follow certain market realities.
---
Our senators need to understand the interwoven nature of economic variables. The currency of every major oil exporting country is depreciating like hell. Even heavyweights like Saudi Arabia, Canada, Russia, Norway, etc with huge FX Reserves (in excess of $500bn) are suffering currency devaluation. Is it an import-dependent Nigeria with Reserves of $28bn that will not suffer currency devaluation? Is it the CBN Governor that authorized that our small dollars be shared to politicians? Is it CBN that said we should not invest in infrastructure to support local manufacturing? Is CBN responsible for our craze for foreign goods?
---
My only grouse with the CBN Governor is that he should converge the prices at the parallel and official market by officially devaluing the Naira. The current divergence (~N100) is providing banks with arbitrage opportunities for exploiting their customers. An official exchange rate in the region of N240 - N260 might be appropriate for now.
---
What Nigeria needs right now are real & clear Import Substitution policies/programs to reverse our craze for foreign goods. This will reduce the demand for dollars and consequentially reduce the pressure on the Naira. That is not the job of Monetary authorities but that of Fiscal authorities. They should be summoning Kemi and Enelamah (the guy in charge of Trade & industries).

I agree with everything you wrote except the bolded. Attempting to converge the parrallel and official market is like chasing your shadow. They will never meet. What you are asking for is to allow MARKET FORCES determine the value of the naira. The problem here is that devaluation would not cause a reduction in the demand for dollars since we inport up to 90% of what we consume. Since we would need the same quantity of dollars to import the same quantity of goods, whether dollars sell for $50 or $500. The official markets will perpetually chase the parallel market. Remember that was the argument in 1985 when IBB introduced SAP, The Naira rose N1.5 to N22 without any reduction in exports.

The key to our economic nightmare is manufacture and consumption of Local Products first, then exportation of finished products to earn foreign exchange.

sarutobie:

kai my guy you're enlightened. your detection of the responsibilities of the monetary and fiscal authorities gave you away..You must be an economist.

Yea 4sure, of all d comments so far... He stood out. He didn't politicise or whatever, straight 2d point nd very comprehensive.

mazeltov:
Unfortunately, Kemi Adeosun is sitting duck like an America F-35 jet

Is F-35 a sitting duck? Which one your country don produce? Abegi !!!

Proudlyngwa:
In summary

The currency had sunk to a record low of 300 per dollar at the parallel market on Tuesday, a day after the Central Bank of Nigeria stopped dollar sales to Bureau De Change operators.

The exchange rate of the naira to the greenback stood at 199.45 at the official interbank market on Wednesday,

The market is dry. It is very difficult for the BDCs to get dollars now. Banks are not selling; oil companies are not allowed to sell to us; exporters are not allowed to sell to us.

With pressure on foreign reserves and oil prices at $30 per barrel, devaluation is now unavoidable. The issue will be the quantum and methodology,”

The CBN had on Monday said it would no longer provide foreign exchange to the BDC operators, adding that with the continued depletion of the foreign reserves, such funding was no longer sustainable.


The CBN Governor, Mr. Godwin Emefiele, had said that between July 2014 and January this year, the country’s external reserves had suffered a great pressure from speculative attacks, round-tripping and front-loading activities by actors in the foreign exchange market.

These, he noted, had led to a decline in the reserves from $37.3bn in June 2014 to $28bn currently.

Hope some people know what the parallel market is.

In fact wats d diff btw parallel market n official rate?
Crude oil n brent crude?

perhaps the decline in the crude I think is as a result of US stopping importation of the crude, becos them don hoard am tale tale n wan cum dy sell/export the stock na...thats to say that US was the major buyer of crude... See sense. My question b sey, dem no get oil deposit ow dem wan cum dey sell sef?

Well, maybe baba truly wan use agriculture for our revenue sha becos d man na farmer o.

Talk ur own.

wirinet:
I agree with everything you wrote except the bolded. Attempting to converge the parrallel and official market is like chasing your shadow. They will never meet. What you are asking for is to allow MARKET FORCES determine the value of the naira. The problem here is that devaluation would not cause a reduction in the demand for dollars since we inport up to 90% of what we consume. Since we would need the same quantity of dollars to import the same quantity of goods, whether dollars sell for $50 or $500. The official markets will perpetually chase the parallel market. Remember that was the argument in 1985 when IBB introduced SAP, The Naira rose N1.5 to N22 without any reduction in exports.

The key to our economic nightmare is manufacture and consumption of Local Products first, then exportation of finished products to earn foreign exchange.

I want to take it for granted that you have some background in economics. Is so, what happens to quantity demanded when price goes up?
---
If price of $1 goes to N250, fuel prices will increase, most imported shirts and shoes will increase in price, laptops and other electronic gadgets will increase in price, etc. Basically, inflation will erode the purchasing power of citizens. This will reduce the quantity of items citizens can buy, resulting in a reduction in aggregate demand.

PROVACATEUR:
How can we be going down daily and some people are still praising this govt. I import some of my wares and for sometime now I can't break even because the clients are not ready to shoulder the extra add on

Blame the leader that didnt save up for the rainy day. Abi you think Buhari is the one controlling global oil prices whose decline led to all these?

shala01:

The official market price had always reflect the true value. Black marketers add few on top to make gain. there was never a time the difference between official market price and black market is 110. during the last administration, the difference was btween 15 and 8 niara

You must be very young not to have known that there had always been a disparity between the official and parallel markets. In 1986, when i was travelling to the US, i got BTA at UBA at a different rate from the black market. I already explained why the current disparity is the widest in history, there is no dollar to support the naira. That is why the government is trying to use force (restrictions) to reduce demand for dollars.

dear senate what he means is this:
N1 = $300
N2 = $2x
cross multiply
you get $300
that 2x is how many times he don chop naija money
gimme likes joor


meanwhile, check out https://www.dropbox.com/s/hyxvb57b21q6lzv/doc10.pdf?dl=0

get my ebook on how to make money doing almost nothing for free and be the first to review it.

Bevista:
I want to take it for granted that you have some background in economics. Is so, what happens to quantity demanded when price goes up?
---
If price of $1 goes to N250, fuel prices will increase, most imported shirts and shoes will increase in price, laptops and other electronic gadgets will increase in price, etc. Basically, inflation will erode the purchasing power of citizens. This will reduce the quantity of items citizens can buy, resulting in a reduction in aggregate demand.

Sorry to say, i do not have a background in economics. My training is Architecture.

I am not convinced that inflation will reduce the purchasing power of citizen. Why? because, first we have a HUGE population and secondly the imported items we purchase are essential commodities, ie, Rice, Sugar, Petrol, Kerosine, Diesel, clothes, matches, candles. As long as we do not substitute imported essential items with local ones, we are forced to buy at what ever price and with whatever means. Take yourself as an example, will you buy less petrol if petrol is selling at N150/litre? will you buy less rice if rice is N15,000 per bag? The only time you can talk reducing aggregate demand for an imported essential item is if there are local alternatives.

As i said, the Naira jumped from N0.75 to the dollar in 1983 to about N250 today, had there been an aggregate reduction in the demand for dollars or imported items over the years? What guarantee do we have that there would be a reduction in the demand for essential imported items if dollars is sold at N500 to the dollar?

989900:
This is bigger than Emefiele ( he is still a slow ret@rd though), this is about the economy as a whole!

Until we checkmate excess liquidity (implement the 'Boyo' approach).

Fix power supply --- thereby reducing PMS, AGO, and DPK consumption (throw in massive reduction in 'gen' importation), and reviving the economy.

Fix our porous borders where a large portion of those subsidized refined fuel bought with hard earned dollars go . . .

Fix our refineries.

Emefiele is always quick to attack importers of silly goods (while correct), his attack should be aimed more at Fashola (minister of power), Buhari (minister of petroleum) and Kachikwu (state minister of petroleum)!

Fuel importation eats up roughly 40% of our forex demands -- and these guys still do currency racketeering by the side!

End fuel importation = 40% reduction in demand for forex = appreciation of Naira !!!!!!

Any solution will only be a superficial one.

BTW, what happens to all the billions of dollars sent home by Nigerians overseas?

Is Emefiele telling us cutting daily spend on cards and withdrawals overseas from $3,000 to $ 300 or less has done nothing positively?

God bless you my brother. This is what i have been trying to make Nigerians understand, until we stop importation of energy (fuels), we can never talk of revaluating the naira. Importation of fuels account for up to 30% of the value of the naira. Even subsidy (not the actual amounts used to import the fuels) is in hundreds of billions yearly and all these must be denominated in dollars.

eden2015:

In fact wats d diff btw parallel market n official rate?
Crude oil n brent crude?

perhaps the decline in the crude I think is as a result of US stopping importation of the crude, becos them don hoard am tale tale n wan cum dy sell/export the stock na...thats to say that US was the major buyer of crude... See sense. My question b sey, dem no get oil deposit ow dem wan cum dey sell sef?

Well, maybe baba truly wan use agriculture for our revenue sha becos d man na farmer o.

Talk ur own.

I like it when people want to learn.keep it up.

The difference between the parralel market and official rate is about a hundred naira. Our economy is controlled by the petrodollar ,the consequence being that as an import driven nation, we will always suffer when the value of crude is weak .

The decline in crude sale is not due to the united states no more buying from us( one of this days I will do a topic on that) but because most buyers have become suppliers.

Any serious economy should be 60% agric
10% security
5% research oriented

wirinet:


You must be very young not to have known that there had always been a disparity between the official and parallel markets. In 1986, when i was travelling to the US, i got BTA at UBA at a different rate from the black market. I already explained why the current disparity is the widest in history, there is no dollar to support the naira. That is why the government is trying to use force (restrictions) to reduce demand for dollars.

No body is saying there in no disparity ooo. Before now, Market force determined the value of nigeria that is why the gap is not more than 15 niaria. Pegging it at 193(7) is contributing the the fall. If the goverment allows the niara to trade at it real value, it should not be more than 270/260 and the parallel market will be 280/285. The restriction is causing scarcity! Scarcity is aiding the free fall

joystickextend1:


india is not that better i guess

But it's better than nigeria

Wicked, confused and stupid governor would definitely have nothing meaningful to say

Cos his clueless too

centvin008:
By Babajide Komolafe, Henry Umoru, Joseph Erunke & Michael Eboh
The Naira appreciated yesterday to N302 per dollar in the parallel market, thus halting three days of sharp depreciation even as the price of Nigeria’s reference crude oil grade, Bonny Light, slid below the $30 per barrel mark, dropping to $29.47 per barrel.
Meanwhile, following the increasing depreciation of the Naira, the Senate, yesterday, summoned the Central Bank of Nigeria, CBN, Governor, Godwin Emefiele, to appear before it next week.
From N305 per dollar, Wednesday, the parallel market exchange rate dropped to N302 per dollar at the close of business yesterday, indicating N3 appreciation.
President, Association of Bureaux De Change Operators of Nigeria, ABCON, Alhaji Aminu Gwadabe, said that the appreciation was occasioned by drop in demand for foreign exchange and indications that CBN might review its decision to stop dollar sales to bureaux de change, BDCs.
The naira depreciated in the parallel market by N25 naira between Monday and Wednesday, following the announcement by CBN on Monday to stop sales of dollars to BDCs.
Earnings dip
Also, the price of Nigeria’s reference crude oil grade, Bonny Light, slid below the $30 per barrel mark, dropping to $29.47 per barrel, according to data obtained, yesterday, from CBN.
This was even as the price of Brent crude, the benchmark crude oil grade, rose to $30.77 per barrel in the international market. Brent crude had dipped below $30 a barrel on Wednesday, for the first time in more than 10 years, a day after the U.S. benchmark took a similar fall.
Specifically, Brent traded as low as $29.96 a barrel before settling down 55 cents, or 1.8 percent, at $30.31 a barrel on ICE Futures Europe, the lowest settlement since April 2004.
Therefore, using an average crude oil production of 2.2 million barrels per day, as stated by CBN, it is expected that the total amount accruable to the Federal Government and oil companies in Nigeria on a daily basis would dip to $64.83 million, about N12.967 billion daily, using an average exchange rate of N200 to a dollar.
Job loss at BP, Shell, Chevron
Consequently, as a result of the continuous decline in the price of Nigeria’s Bonny Light and other crude oil grades, experts are predicting massive job cuts in the Nigerian and global oil and gas industry in the next couple of days.
Already, the world’s biggest oil companies are slashing jobs and discontinuing major investments, especially as the price of crude falls to new lows.
A report obtained from the Associated Press noted that companies that would be affected by the declining oil price would not only be the big oil producers, but the numerous companies that do business with them, such as drilling contractors and equipment suppliers.
Particularly, companies like BP, which had earlier in the week said it is cutting 4,000 jobs, had already commenced trimming down their operations to cope with the slump in oil, whose price had plummeted to its lowest level in 12 years and is not expected to recover significantly for months, possibly years.
The report had quoted Chevron as saying last year that it would eliminate 7,000 jobs, while Shell announced 6,500 layoffs.
Furthermore, some analysts are forecasting a drop near $10 a barrel, making companies to brace up for more trouble.
In particular, Michael Hewson, chief market analyst at CMC Markets, said: “Calling the bottom in a market is always dangerous, akin to catching a falling knife. But when the clamour for lower prices becomes a stampede, warning signs and alarm bells tend to start going off, which suggests that a more prudent approach might be advisable.”
The uncertainty, the report said, is making companies think twice before sinking money into new oil projects.
“On the North Sea, there is a standstill in the new project, which may create a hole in the pipeline of projects next year,” said Florent Maisonneuve, Managing Director and co-head of Oil & Gas at AlixPartners in Paris.
Subsequently, CBN had in its Economic Report for the Month of October 2015, put the average price of Nigeria’s reference crude, Bonny Light at $49.23 per barrel in October, indicating a 1.3 percent increase relative to the level in the preceding month.
The Nigerian National Petroleum Corporation, NNPC, on the other hand, had stated that of the 18.24 million barrels of crude oil lifted on the account of NNPC in October 2015, 12.07 million barrels and 6.17 million barrels were for domestic and export markets, respectively.
It said: “At an average oil price of $47.45 per barrel and exchange rate of N195.95 to a dollar, the domestic crude oil lifted by NNPC is valued at $572.998 million or a Naira equivalent of N112.279 billion for the period.
“The remaining crude oil lifted for export was valued at $305,856,048.03 at an average price of $49.58/barrel. The total value of crude oil lifted on the account of NNPC in October, 2015 was thus $878.854 million.ý”
Meanwhile, concerned by the increasing depreciation of the Naira, the Senate, yesterday, summoned the CBN Governor, Godwin Emefiele, to appear before it on Tuesday next week at 11a.m., to explain the continuous weakening of Naira against the Dollar.
The development was sequel to a Point of Order raised by the Leader of the Senate, Ali Ndume, APC, Borno South.
The Senate President, Bukola Saraki, who presided over the plenary where the issue was raised, having listened to Senator Ndume, subsequently directed Ndume to convey the Senate’s resolution to the CBN governor.


http://www.vanguardngr.com/2016/01/depreciation-of-naira-senate-summons-emefiele/


Lalasticlala

We are a victim of a mono product commodity export based economy and when prices tank, then so is our fortune and currency. We had a boat load of opportunity under the last government to structurally change our economy by building infrastructure and diversifying our exports. But we blew away the days of oil at $140 a barrel. That was lost on private jets and ridiculous properties.

Anyway, accepting our reality let's look at what will alleviate the pain.

Monetary policy - CBN (Emefiele)
1. Devalue the naira and stop wasting reserves on our ego. Naira is not worth the official rate and let's be done with that reality. Of course, inflation will rise, which is inevitable.
2. Lower interest rates. This is to make the cost of borrowing cheaper, so more naira is available to spend to keep a buoyant economy. The banks won't enjoy runaway profits but they can make up for that in fees.
3. Stress test the banks and based on the results, recapitalizate the banks. We can't afford to have weak banks that'll collapse anytime soon. If the banks are not strong enough to do real banking, then consolidate them.
4. Formulate policies for banks to increase retail lending which will grow the economy when money is available to individuals to invest in businesses and other entrepreneurial activities such as farming. We have 160 million people and can run a growth based economy internally.
5. Put more import tariffs on frivolous goods to encourage local production.
6. Prioritize the issuance of forex to companies importing industrial or agricultural machines. Anything that will foster local production should be encouraged. This will get us from being a net exporter of raw goods to a net exporter of processed or semi processed goods.


Fiscal policy (Adeosun)
Kemi is already doing most of my recommendation

1. Look for ways to seal all the leakages in parastatals.
2. Retrieve every single kobo of revenue made by government agencies which will include customs, ports, waec, jamb etc etc
3. Review the cost of governance with the aim of drastically lowering recurrent expenditure. This may involve firing redundant people.
4. Review our VAT. We have a low tax rate and we need to tax consumption of foreign goods to discourage our dependence on them.
5. Broaden the tax base with targeted taxation across the economy. Anybody with a stall or farm has to pay taxes. No exceptions.
6. Automate governance using technology. We need an ERP solution and data warehouse. This will give easy access to information and reports so we can plan and make better policy decisions.
7. Review fee structure across the board. This will include police tickets, traffic tickets, tolls, road tax etc etc


Buhari
1. Communicate a vision and hire an economic adviser that can articulate the vision as concrete plans with milestones.
2. Go after trade agreements with African countries. We have a lot to sell the less developed African countries and can effectively replace a lot of their foreign partners. This will increase dollar repatriation from the revenue we make in those countries.
3. Stop speaking so negatively about Nigeria. You kill consumer and investor confidence when the head of state sounds so negative.
4. Fight corruption but don't let it take center stage of your government. It just shows you're not capable of managing a complex country with varying priorities.
5. Strengthen our defense. It's your #1 priority as commander in chief.
6. Go get a communication coach to teach you the art leadership using verbal and non verbal cues.


NASS
1. Pass PIB bill as a matter of urgency.
2. Pass any bill that will clear roadblocks and speed up the incubation of businesses. Example. Why does it take a year to get mining license? There are other examples.
3. Do real work and pass laws that will help the common man and big business. They go hand in hand


The People
1. Work hard, pray hard and party hard.

Same old same old shit
By Babajide Komolafe, Henry Umoru, Joseph Erunke & Michael Eboh
The Naira appreciated yesterday to N302 per dollar in the parallel market, thus halting three days of sharp depreciation even as the price of Nigeria’s reference crude oil grade, Bonny Light, slid below the $30 per barrel mark, dropping to $29.47 per barrel.
Meanwhile, following the increasing depreciation of the Naira, the Senate, yesterday, summoned the Central Bank of Nigeria, CBN, Governor, Godwin Emefiele, to appear before it next week.
From N305 per dollar, Wednesday, the parallel market exchange rate dropped to N302 per dollar at the close of business yesterday, indicating N3 appreciation.
President, Association of Bureaux De Change Operators of Nigeria, ABCON, Alhaji Aminu Gwadabe, said that the appreciation was occasioned by drop in demand for foreign exchange and indications that CBN might review its decision to stop dollar sales to bureaux de change, BDCs.
The naira depreciated in the parallel market by N25 naira between Monday and Wednesday, following the announcement by CBN on Monday to stop sales of dollars to BDCs.
Earnings dip
Also, the price of Nigeria’s reference crude oil grade, Bonny Light, slid below the $30 per barrel mark, dropping to $29.47 per barrel, according to data obtained, yesterday, from CBN.
This was even as the price of Brent crude, the benchmark crude oil grade, rose to $30.77 per barrel in the international market. Brent crude had dipped below $30 a barrel on Wednesday, for the first time in more than 10 years, a day after the U.S. benchmark took a similar fall.
Specifically, Brent traded as low as $29.96 a barrel before settling down 55 cents, or 1.8 percent, at $30.31 a barrel on ICE Futures Europe, the lowest settlement since April 2004.
Therefore, using an average crude oil production of 2.2 million barrels per day, as stated by CBN, it is expected that the total amount accruable to the Federal Government and oil companies in Nigeria on a daily basis would dip to $64.83 million, about N12.967 billion daily, using an average exchange rate of N200 to a dollar.
Job loss at BP, Shell, Chevron
Consequently, as a result of the continuous decline in the price of Nigeria’s Bonny Light and other crude oil grades, experts are predicting massive job cuts in the Nigerian and global oil and gas industry in the next couple of days.
Already, the world’s biggest oil companies are slashing jobs and discontinuing major investments, especially as the price of crude falls to new lows.
A report obtained from the Associated Press noted that companies that would be affected by the declining oil price would not only be the big oil producers, but the numerous companies that do business with them, such as drilling contractors and equipment suppliers.
Particularly, companies like BP, which had earlier in the week said it is cutting 4,000 jobs, had already commenced trimming down their operations to cope with the slump in oil, whose price had plummeted to its lowest level in 12 years and is not expected to recover significantly for months, possibly years.
The report had quoted Chevron as saying last year that it would eliminate 7,000 jobs, while Shell announced 6,500 layoffs.
Furthermore, some analysts are forecasting a drop near $10 a barrel, making companies to brace up for more trouble.
In particular, Michael Hewson, chief market analyst at CMC Markets, said: “Calling the bottom in a market is always dangerous, akin to catching a falling knife. But when the clamour for lower prices becomes a stampede, warning signs and alarm bells tend to start going off, which suggests that a more prudent approach might be advisable.”
The uncertainty, the report said, is making companies think twice before sinking money into new oil projects.
“On the North Sea, there is a standstill in the new project, which may create a hole in the pipeline of projects next year,” said Florent Maisonneuve, Managing Director and co-head of Oil & Gas at AlixPartners in Paris.
Subsequently, CBN had in its Economic Report for the Month of October 2015, put the average price of Nigeria’s reference crude, Bonny Light at $49.23 per barrel in October, indicating a 1.3 percent increase relative to the level in the preceding month.
The Nigerian National Petroleum Corporation, NNPC, on the other hand, had stated that of the 18.24 million barrels of crude oil lifted on the account of NNPC in October 2015, 12.07 million barrels and 6.17 million barrels were for domestic and export markets, respectively.
It said: “At an average oil price of $47.45 p

samofson:
Let's look at this from a different angle, instead of trying to look for ways to strengthen the naira why don't we invest in our local manufacturing and production of goods?

Cheaper naira means our locally made products would be cheaper to export. We would be able to compete with the cheaper Chinese or Indian products because foreign investor or traders would need less dollar for our produce thereby increasing our sales and output.

Also while focusing on home made production and service, we should also encourage some foreign investors to set up shop in nigeria due to the low naira.

I think we should be focusing on revamping our industries and agricultural sector instead of trying to sort out what really we have no power to control at the moment.

Necessity is the mother of invention. They should be a big push in infrastructure building and industry.This is where our main focus should be.

You've got It all mixed up. Having a weaker naira (through devaluation) will only spell doom for us. Apart from the near-worthless oil (worthless because of global glut), do we have any tangible exports right now?

Another question to answer is if our products are demanded/preferred in the international market...

The truth is we rely heavily on imports and so we deplete our foreign reserves more faster than we replenish it and so this our current predicament is kinda complex.

Monetary polices (by the cbn) may give temporary palliatives or worsen things depending on some factors such as inflation rates (if it is double digits), how pliant the market forces are.

If we had enough dollars in our forex reserve, fiscal policies of d government might be helpful (since our inflation rate is still single digit i.e. <10%). But now govt no get money to pump into d economy. High taxation will only put her citizens into agony, hardship and pains.... sighs

But I. Support the rest of your argument. Diversification coupled with technological development, local manufacturing, industrialisation etc will lift our economy up.

I'm no economist but right now if it were up to me, i'd let the unseen hand (hand of God ) hold our market while we develop and encourage our local manufacturing industries.

But damn our past leaders who where myopic and greedy. Just look @ Saudi, UAE amongs others. They can have peace of mind. Today because of past visionary leaders they had.

Right now what we need is prayer. #prayforNaija

Elxandre:

How is it our fault that Nigerian goods are substandard?
You can't get quality jeans, shoes, phones etc and you blame us for purchasing foreign goods abi?

then stop complaining...get used to it that the naira will become very worthless like this....

i am even awaiting that the naira will become $1=#1000 soon....

the calculation is very simple:....our main dollar earner is crude-oil...the more worthless crude-oil becomes the less dollars we will have...

their will be not enough dollars around to give you to buy foreign-goods.....

wirinet:


Sacking Emefiele would not change anything. Soludo was able to "perform" because during his time oil was averaging $60 per barrel and we had huge foreign reserves and excess crude savings. Now we have low savings and low oil prices. At $30 per barrel Nigeria would not even be making up to $2 per barrel. Mind you the estimated cost of extracting Nigeria's crude is put ar $28 per barrel, so the Government and oil companies will share $2 per barrel.

So unless everybody (including Federal, State and Local governments, private companies and individuals) sit up and work at reducing exports and produce and consume made in Nigeria products instead of blaming Buhari, then the Naira will continue its free fall.

Reducing exports?

Nigeria would just close down.

But jokes apart. I get what you are saying tho

modath:


You were quoting 240 when it was 220 & there is evidence to prove no forget oooo...

I know the state of crude oil price must be a source of joy to you now, does it not perfectly suit you & answer your prayers? ! nohin do you jare my bros, orun n ya bo ni ki n se oro enikan!!! Gbogbo wa lo ma ta ba!!

Pk001:
If they dare remove Emefiele Naira will further depreciate to 500 to 1dollar.
The problem is not him but PMB.
The way PMB is running the economy, investors are scared away.
Pretending to be fighting corruption but opening other leakages.

what other leakages you nattering nabob of childish idiocy?

Bevista:
Blaming the CBN Governor for the fate of the Naira is like blaming the management of Chevron for sacking 7,000 employees and reporting a 40% reduction in earnings - all due to record low oil prices. The sad truth is that certain economic events will always follow certain market realities.
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Our senators need to understand the interwoven nature of economic variables. The currency of every major oil exporting country is depreciating like hell. Even heavyweights like Saudi Arabia, Canada, Russia, Norway, etc with huge FX Reserves (in excess of $500bn) are suffering currency devaluation. Is it an import-dependent Nigeria with Reserves of $28bn that will not suffer currency devaluation? Is it the CBN Governor that authorized that our small dollars be shared to politicians? Is it CBN that said we should not invest in infrastructure to support local manufacturing? Is CBN responsible for our craze for foreign goods?
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My only grouse with the CBN Governor is that he should converge the prices at the parallel and official market by officially devaluing the Naira. The current divergence (~N100) is providing banks with arbitrage opportunities for exploiting their customers. An official exchange rate in the region of N240 - N260 might be appropriate for now.
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What Nigeria needs right now are real & clear Import Substitution policies/programs to reverse our craze for foreign goods. This will reduce the demand for dollars and consequently reduce the pressure on the Naira. That is not the job of Monetary authorities but that of Fiscal authorities. They should be summoning Kemi and Enelamah (the guy in charge of Trade & industries).

Dude!!!!


May I buy you a drink

You tell people to avoid foreign products and patronize local product, okay where re the local products How many products do we even produce and at what price, standard and quantity? Are you even aware of the cost of manufacturing in nigeria, according to the president of MAN(manufacturers association of nigeria) on Good morning Nigeria, NTA; he says the Cost of manufacturing is 2x(2times) the cost in ghana and 9times of what it is in China. So you can Imagine............
Its very easy to say, go & purchase local products, but the reality remains that there are not enough products to go round, and so many challenges like power, transport, cost of obtaining loans hinder local production to take place......There has to be working infrastructure before you even suggest local manufacturing. #my take

under the leadership of pmb