Thats anoda angle sef. Back den in skool,I know it cost 8naira(or a Lil bit higher,) to print a single 20 naira bill. I dnt know how much the figure is now. If to say e easy like dat, no country will be in debt.
USA did something similar, in 2001-2004, by printing so many dollars into the economy,which led to a geometric increase in money supply. It affected their housing sector, whuch led to a collapse in 2008.

koladebrainiac:
apart from it leading to inflation, imagine the cost of printing a naira note? how much it will cost to print each note of billion nairas?Think about it that way

sorextee:
Thats anoda angle sef. Back den in skool,I know it cost 8naira(or a Lil bit higher,) to print a single 20 naira bill. I dnt know how much the figure is now. If to say e easy like dat, no country will be in debt.
USA did something similar, in 2001-2004, by printing so many dollars into the economy, which led to a geometric increase in money supply. It affected their housing sector, which led to a collapse in 2008.

Money can only be minted to augment the mutilated ones and maybe new denominations to increase circulation of it

Maybe you should read about the history of money and currencies. Gold is the real money in the world, currencies are only receipts of gold because we cant be carrying gold around cos of weight and other factors. To print currencies, there has to be its equivalent in gold somewhere. This is why gold is always a topic or subject of value everywhere in the world.

The secondary reason is inflation. Just look at it logically, if countries could print their ways out of economic mess the world will be a paradise. You dont get money for nothing, it is money for something, something of value.

You mean we should be like this

Wow thanks a bunch, I learnt something new today

Klington:

No
Am not
They only print #5,#10,#20 and #50 here in Nigeria
Other higher denominations are imported.
Find out.

There are rules and conditions to printing money...do you know that it costs 200 naira in raw materials to print 100 naira?...lol

thesicilian:







Hahaha. I know it is not a good idea share, considering the economic implications, but sometimes I just like thinking outside the box, as in, "what if...?"

Inflation only occurs if the public knows what you have done. After all, no one will ask you where you got your money from when you go to buy a car in the market. Just like its not possible to recognize a black chicken in the stew...
Not feasible share, but still fun to think about.

Guy we are thinking inside the box things are like this, what if we start to think outside the box?

lonelydora:

When i was in primary 4, i used to think like you. Which school did you graduate from?
Even if it's naira we are seeking for, we can't print it because it will lead to what we call INFLATION

because you know, does not mean another person know, some are not opportune to good education so there for, we should try n educate ourselves and not insulting one another for asking question

I understand what inflation mean but what is going on in Nigeria is what exactly

[quote author=IamaNigerianGuy post=61310800]This is a good question. To answer it, lets start with two short definitions:

1. Inflation: Too much money chasing after too few goods

2. Money: A store of value and a medium of exchange

Good reply, i have a Question..what value are yahoo boys bringing into the economy, all they do is push buttons and get millions of dollars into the economy.. how does it affect inflation at large?

exlinklodge:



Am interested in your explanation about China devaluation of their currency and IMF wanting third world countries like our to devalue ours.

I know if Nigeria devalues it will be a gain to the advanced world since we are import based country, so they buy our goods cheaper while we buy theirs higher. But I don't understand how China gains more by devaluing their currency since they are export based country.

Could you shade more light on that?

The cheaper their goods, the more the world want to buy from them...especially the third world countries whose masses can't afford the Western more expensive goods.

Ranchhoddas:
Shut the hell up.

And you think you made sense?
You're seriously mad and you have no one to tell you.

chiefeconomist:

Your claim on China's imports is incorrect sir. Last year China imported goods and services worth over $1.3 trillion (almost 3 times the size of Nigeria's GDP). Based on economic principles, any country will benefit from a weaker currency eventually over the long run. Even if you are an import dependent country like Nigeria, a weaker currency will make imports prohibitively expensive, which will eventually encourage local production. For example, since the naira began to reflect its true value in 2016, practically no one imports things like eggs, toothpick, cooking oils and many other consumer goods. It will take time, but if we allow the naira at this low level long enough, I assure you more and more products will be produced domestically.

the best have read so far, if the cost of importation is expensive and the government cud seize the opportunity to create such factory to create same goods, there will be employment and importation of such goods will be baseless. We might be exporter and more dollars for us, instead of spending we recieve.

lovingyouhun:


Guy we are thinking inside the box things are like this, what if we start to think outside the box?

Lol. Maybe the box is too small, we might have to get a bigger one.

thesicilian:

Lol. Maybe the box is too small, we might have to get a bigger one.

That is exactly how this present Government think. I concur

[quote author=donbabajay post=61318100][/quote]

Yahoo boys may contribute to inflation in the micro economy. In cities suburbs where they live, they can drive up rent or the price of cars and clothes for instance; this is mostly a localized effect however. One must also realize that demand for goods and services is depressed in most of Nigeria due to low purchasing power and high unemployment. Hence, the increase in demand fueled by 'yahoo' money is viewed in a positive light by vendors and the yahoo money supply they bring in is not enough to cause widespread or systemic or national inflation.

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

What a dumb azz

the origin of money is from trade by batter... there is no amount of money you acquire or print if there is no goods and services exchanged then it is just like a sticker or handbill used for publicity.

A country that has refused to utilize its natural resources rather continue to orientate each generation the need to live a flamboyant and luxury life style with all citizens either trying to import or travel out of the country not knowing that the higher we pay for services the more naira becomes devalued thereby creating room for either borrowing or printing more....

like others have argued it will lead to inflation but I can tell you Nigeria has always trend on the economics of inflation even with the Harvard gurus handling the economy why? this is as a result of the problem earlier cited above.

Oh my goodness! Please somebody tell me that this dude is joking!! What kind of education do Nigerian students get these days?


Na wao, this reminds of the story we used to hear about Field Marshal Idi-Amin Dada of Uganda. The Central Bank governor once informed him that the country is broke....that the country doesn't have money any more. And Idi-Amin was like "What do you mean, we don't have money? Isn't it your job to print money. Go and print more money."


O pari

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

sorextee:
Very funny question.. Even the naira sef, we cant just be printing it anyhow..
it would lead to inflation, the money no go get value. more money chasing fewer goods.

Abeg make them print half and borrow half. We need to dey see this money always.

1freshdude:
Money is valuable because it is relatively scarce, the level of productivity in a country is always put into consideration before taking this decisions, else money loses value, it becomes worthless and an alarming inflation ensues. Zimbabwe is a good example of what printing more money in the face of very low output can cause.

No be when we see the money 1st b4 to spent am on things become problem?.

Ebookmathswaec:


No. I mean Naira equivalent.

It will make the money worthless and inflation skyrocket. It is against basic economic principles to print money at will. Most governments will will even want to reduce the local money in circulation to shore up the value.

tillaman:
Wow thanks a bunch, I learnt something new today

Anytime buddy

Truckpusher:
Print the goddamn thing and before the West will wake up and suspect anything you've already used it in buying shares, gold, companies from their economy while bringing in policies that will lure their investors down here with the promise of cheap labor and wait till everywhere is calm.

Haven't you heard about currency manipulation by China that America keeps crying about while they are the chief currency manipulators.

Lol...its not about America! It's about relative scarcity. Even at the moment some businesses in Nigeria (local) prefer dollars, they won't take naira from you.
Money is paper, it was created to solve the trade by barter debacle, it just facilitate the transfer of value, it's actually "Nothing" without output, if you have all the money in this world and there is no productivity or output will you eat the money?

Currency manipulation is entirely different, it has to do with the FX (foreign exchange) control, even Nigeria does it, its the deliberate use of a countries foreign reserves to manipulate the value of it currency relative to other world currencies.
The value of the naira should be about $=1000 or there about if government let's it float, but our government is manipulating the currency by buying $ and selling it at 400 (or there about). It's the reverse in China.
The Chinese currency ought be just as strong as the $, because of their massive output and impressive trade volume. Almost everybody is buying from China So this ought to push the renminbi (the Chinese currency up), and this means there goods get more expensive relative to goods priced in other currencies, this will remove their competitive advantage (price).
Now the Chinese government pegs it's currency so that the value does not reflect the actual demand and supply situation. The this hurts the U.S.A and other international producers because China retains that affordability advantage, making Chinese goods a preference for many over their more expensive goods priced in $.

Did'nt we read that CBN/MINT has been printing money for FGN to use? If it was right or wromg as long as the government found it proper to do before it went public, they should continue and continue to bring mockery to Nigeria and her Leaders. The ministry of finance once said Nigeria don't have the reason to borrow money, so why this desperation? Atimes, i want to think the cabals are desperately advising the president to bring his down fall.

The young man raised a thought, although it may appear leftist, it is worthy of consideration. Let us look at it again..... For those claiming borrowed money does not equal inflation but printed money would, how would you explain the same to a toddler if in the end, the economy is getting a boost of equivalent amount of money.....mind you before you rush to answer, in both instance, there are no exchange of goods.

For those saying he doesn't understand elementary economics, haven't it occurred to you that you may be repeating the same thought train that has been ingrained in you, leaving you without the option to think through the challenge in another way?

You see my friends, as much I understand the concept of money both the scientific and sentimental ideas of it, there are also other ways to see through things. The old ways might just have been wrong for so long.

Let us ponder anew! You never know what we might come up with.

The last time I read anything about economics was about 20yrs in my SS2 and the more I reason these money theories the more it doesn't make sense. some of them are just ideal theorems (in life, nothing ideal is ever real or true). Remember what this administration started with their forex policy & hoarding of forex ($)? what did they achieve? Did the hoarding/scarcity of $ improve the value of the Naira? what happened to our inflation rate? was that policy not the textbook method of tackling dwindling resources? why did Buhari refuse to devaluate the Naira (answer = so called belief that it will increase inflation despite increased earnings)? Did that policy curb recession, inflation or devaluation of the Naira?

bottom line: I tend to agree with the op or support CBN to selectively mint notes in such situations to fund capital projects, this newly printed money is not just shared to every Tom, Di*k & Harry but is earned for offering value & commensurate to effort, how will this now lead to inflation if the money shared is rightfully earned?

#thoughts of a layman seeking answers

ELff:
The young man raised a thought, although it may appear leftist, but it is worthy of consideration. Let us look at it again..... For those claiming borrowed money does not equal inflation but printed money would, how would you explain the same to a toddler if in the end, the economy is getting a boost of equivalent amount of money.....mind you before you rush to answer, in both instance, there are no exchange of goods.

For those saying he doesn't understand elementary economics, haven't it occurred to you that you may be repeating the same thought train that has been ingrained in you, leaving you without the option to think through the challenge in another way?

You see my friends, as much I understand the concept of money both the scientific and sentimental ideas of it, there are also other ways to see through things. The old ways might just have been wrong for so long.

Let us ponder! You never know what we might come up with.

Nice contribution!

Icon79:
Oh my goodness! Please somebody tell me that this dude is joking!! What kind of education do Nigerian students get these days?


Na wao, this reminds of the story we used to hear about Field Marshal Idi-Amin Dada of Uganda. The Central Bank governor once informed him that the country is broke....that the country doesn't have money any more. And Idi-Amin was like "What do you mean, we don't have money? Isn't it your job to print money. Go and print more money."


O pari

Also reminded me of the movie I watched in childhood (The rise and fall of Idi Amin). The Conversation went thus:
Gov: We can't print more money, It'll make our currency as worthless as tissue paper

Amin: What? you call uganda money shi*t paper? Mallam Mugu (calling his aide) take this man away and show him what we do with sh*t (Gov brisk away to be imprisoned /killed & new Gov appointed on the spot that agreed to print more money.

Have you noticed that most of these dictators make decisions contrary to the west and despite international sanctions they achieve monumental advancement and development for their countries amidst Human Rights violations and their western friendly successors tend to underachieve?

anyicash:
There are rules and conditions to printing money...do you know that it costs 200 naira in raw materials to print 100 naira?...lol

I beg to disagree with this assertion unless if you can proof with facts. You mean in essence that when I spend 100 Naira to buy/pay for a service it's actually worth more what am paying for? it doesn't add up and makes no economic sense for cost of production to surpass value of product.

ashiwajew:
The reason is simply. It is just one reason. You will need quality of materials to print money. Thus, you will have to spend a huge sum to print that amount of money so it is better to borrow. As against what most people have said about inflation. It is not because of inflation as you can print and not put into circulation. It is simply because of the cost associated with printing

nice post, I was initially convinced with your point until this thought popped up. is borrowing cheaper than printing in the short term or long term? seeing that a large percentage of our national budget goes in merely servicing our debts from money borrowed taking donkey years to pay up such loans and invariably costing five times the initial borrowed amount.

IamaNigerianGuy:
This is a good question. To answer it, lets start with two short definitions:

1. Inflation: Too much money chasing after too few goods

2. Money: A store of value and a medium of exchange


From these two definitions we can proceed to an answer to the question.

The money in circulation is a store and reflection of the value in an economy. A rich country has more value stored, a poor country has less. Think of it this way: suppose a bricklayer works for a day and gets paid N4,000. He has made a wall or fence or whatever and created value of N4000 in the economy. He will be rewarded with N4,000 in his account. An oil rig engineer might get N30,000 per day because he has created value for his company worth more than N30,000 by his actions to operate a rig. His bank account will reflect that. The one that produces more value should be richer. Oil rig engineers are richer than bricklayers. This also explains why America is richer than Japan and Mexico is richer than Nigeria; the first country produces more goods and services than the second.

If a country prints money, there is no value to back that money. It has not done any work. It has not created any goods or services to warrant having that much money. That country is lying to the world about its value.That country is like a senator overpaid for making noise in the house or like Evans the kidnapper. 'Money miss road'
The local economy and the international community will react to this sudden and unaccountable wealth. Vendors will take your money, sure, but they will charge more for their services because they can. Some people will wonder: 'how much more does this guy really have ? How much of it is genuine ? how do I get more from him ?' Thus both the printed funds and the genuine funds previously legitimately earned will go down in value since the former casts doubt on the latter and it is a natural law that things that are abundant lose value. This is the phenomenon of inflation and has happened most recently in Zimbabwe.
But note that while the money is going down in value because it is in excess and its origin is dubious, the prices of goods and services will continue to rise. (Remember the example of our overpaid senators ? They will use the excess 'awoof' money to pay for houses, cars and flights for themselves and their concubines. They have 'free' money and can afford to pay rent of 5.5 million in Asokoro and you and I cannot, so we will be pushed out of decent accomodation. Again inflation in action.) Same thing can happen to nations.

Lastly, if you print local currency, the international community will take note of your country's actions and either refuse to accept your money since it has lost value, or force you to pay in dollars or other foreign currency which you will not have. If at that stage, you decide on currency forgery of US dollars, pounds sterling or whatever, that exposes you to sanctions and other bad things. This is the position faced by North Korea.

No country with a sane government in charge wants to be in the position of Zimbabwe or North Korea. If you cannot produce to create value, and you cannot go on a printing spree, then you must borrow. Borrowing has its own challenges that will require another article to explain, mainly because the lenders terms are not the same for poor and rich nations, but it might be the only choice.

In summary, money is a convention that is used to reflect value. It must be backed by production. There is more to it than that as economists will point out, but this is a simple explanation a layman can understand.

_{Disclaimer: I am not an economist.}

please enlighten us more o the borrowing effects