₦airaland Forum

4Play:
What better way to curtail imports than through the price mechanism - if imports are more expensive, they will become less affordable and the imports of finished goods will reduce.

The problem with a fixed exchange rate regime, not backed by adequate forex reserves, is that it preserves the purchasing power of the Naira for the highly connected and dissuades forex inflow which would have slowed down the rate of currency depreciation.

Your first paragraph should hold Rational! But events in Nigeria defies ration becuase the continue fall in the value of naira relative to the dollar shows thag consumers still demand imported goods.
Your second paragraph is correct and that's the writers point.

omohayek:
I point out an accounting identity that you can find in any introductory economics textbook, and you tell me to "stop digging" A simple Google search would have shown you that I am in the right on this matter. Here, read for yourself:

https://en.wikipedia.org/wiki/Balance_of_payments

As for "intuitive", that is not an adequate substitute for rigorous thinking based on reasonable axioms and mathematical models. Comparative advantage is hardly "intuitive", but no one who understands economics would deny its correctness. Conversely, lots of terrible ideas are "intuitive".

You keep dropping economic jargon's that are uncalled for. Talk about the issue on ground you keep running around...your choice of reference (wikipedia) also shows your academic depth.

omohayek:
Thank you. This is something important so many of the anti-imports brigade completely miss - that it is virtually impossible to have any export industries without imported inputs, and raising exports in the long-run may even require imports to heavily surpass exports in the short-to-medium term.

You guys are talking crap! And you know nobody is talking about banning importation of capital goods.And incase you dont know, FX is available at the official rate to the sector of the economy that imports capital products and not your usual tooth pick and designers group.
You two keep talking like you dont know that finished goods account for over 70% of importation into Nigeria. Nigeria is in crisis because of over importation of finished goods and this must be curtailed. This is the point that the writer and every development economist is trying to project.

baralatie:
Let me make a straight enough talk
1,Japan,China,Asian trade block used devaluation as weapon for economic growth,I.e they have cheap exports and relatively very very expensive imports
2,japan ,China pursued a clear development plan through private investors,(Japan) and technicology transfer (China),the Asia window used FDI.
3.Nigeria is battling with balance of trade to finance its energy needs and other imports but it does nor have enough dollar reserve
4.the CBN split its dollar requirement into two
Group a,one for the fg
Group b,the other for other items
The "b" group are allowed to sort for its dollar needs outside govt reserve and govt dollar proceeds which means the "b" group market is a demand and supply market(the price is hinged on the availability of dollar in that market) but......
The CBN has pegged the price for group a and that of group b is not allowed access its own dollar needs by an ceiling of CBN thereby "forcing" the devaluation of the naira in that market

You tried, at least you said something this time around but you are wrong all the same.
The reason CBN asked a sector of the economy to source their FX from the market is not to devalue the naira, but to discourage that sector of the economy from importation at this point in time. Or why do you think CBN is clamping down on the activities of Bureau de change dealers if things are the way you claim or why will the CBN be working against itself?

omohayek:
And what is the point of exporting without ever importing? The entire point of exporting in the first place is to buy imports! The notion that the key to prosperity is to import little but export a lot is nothing more than the old mercantilist fallacy

https://mises.org/library/mercantilism-lesson-our-times

and what export surpluses actually amount to is that your country is sending capital abroad, giving foreigners goods today in exchange for nothing more than promises to be paid back at some point in the indefinite future. Anyone who has studied international trade theory will know that this is an accounting identity: current account balance + capital account balance = 0 by definition.

What sense would it make for a poor country like Nigeria to be sending capital abroad, when we don't even have enough domestic capital to invest in basics like well-maintained roads and functioning railways?

You are in hole bro, stop digging already!
What do you mean by in exporting you are sending capital abroad? So by importing toothpick and pencils from China we have been receiving capital from China? Did you take Economics at all? some of this things are even intuitive...you should know that some commodities are demanded for production and not for immediate consumption while others like your designers shoes, jeans and toothpicks are for immediate consumption, and that commodities that fall under the later category is what every well meaning Nigerian is against.

baralatie:
Like someone said the easiest way to win a battle against an African is to hide it in a book
The most critical importance of foreign exchange is the effect on the external balance of trade/balance of payment. The bigger the deficit in balance of trade the greater the problem of the Country. Therefore the important countries of the World used all methods at their disposal to restrict imports and encourage exports so as to ensure favourable balance of trade which would also enhance productivity and employments. Some closed their economy completely in what is called autarky. Japan, China and Britain etc used autarky to curb and developed exports behind protective walls."

I don't want to post the other but technicalally the naira is already devalued the issues are that the CBN/fg policies on the market breeds irregularities itself

Are you joking? you copy the writers words verbatim and present them as your own? Its a criminal offence called plagiarism.
Secondly you claim he turned history upside down yet you copy his text word for word and blab about the Naira been technically devalued and how you dont want to post..lol..you ended up saying nothing, probably because you have nothing to say...you should have kept quite from the onset.
Do you even understand the implications of having a wide gulf between the official exchange rate and the market rate

baralatie:
No he did not!
He actually turned the history books on economics the other way round

Tell us your version of the history of economic development.




#criticism is the easiest task of knowledge

As I have always said, the price of the dollar should not bother every John and segun in Nigeria. The Naira is Nigerias national currency and not the dollar and this notes are just pieces of tainted paper which just serves as a means to exchanging value...a trade facilitator if you like. Without commodities to trade money is useless.
Nigeria needs to focus on the real sector and forget the relative value of the Naira against the dollar. The Chinese today are been accused of manipulating the value of their currency, making it relatively weak against the dollar so whats the big deal? Its trues that we have a comatose industrial sector now and would be unable to meet the needs of the local market if we curtail free trade, but that is a trade off we have to make...suffer today for a better tomorrow. Its inevitable, its either we face it today or postpone it for the future.

omohayek:
And where exactly did this "Dr" earn his PhD in Economics, Bolekaja University? Even an undergraduate who's just taken basic micro and macro-economics would know that advocating autarky is sheer stupidity - and that the growth of China and Japan has been through trade, the very opposite of autarky.

Anyone can stick all sorts of fancy titles in front of his or her name and claim expertise in a subject about which they know nothing. These are just the nonsensical ramblings of another opinionated ignoramus. Nigeria's export earnings have collapsed, and one way or another, Nigerian incomes will have to adjust to reflect that. There is no magic that Buhari or anyone else can do to prevent this, and the avoidable collapse of domestic production - along with a squandering of Nigeria's foreign reserves - is all that will be achieved by the refusal to acknowledge a devaluation that has already happened in reality, never mind the "official" rate that only the well-connected can ever get.

We've seen this picture before during Buhari's last time in office, and anyone claiming the results will be better this time round is either a fool or a liar.

Disparaging this report in the way you did shows you know little about development economics. I do not agree entirely with what he has written (and that is normal in economics hence different schools) but he makes a lot of sense! You also don't seem to understand the meaning of autarky or maybe you know nothing about China or how it developed, if not you should know that China only opened up to trade when their sectors were fully developed and were ready to compete globally.
Whoever wrote this is not saying anything new; I mean this is the oldest rule in the book, protect your local infant industries with every tool at your disposal and under every guise, until they are developed and able to compete internationally. This has been the order for ages and it has always worked.
you probably have a peripheral understanding of issues at hand hence your implicit support for free trade even though you have nothing to exchange. Free trade is a components of the Washington consensus, a set of rules that the west is using to keep underdeveloped countries like Nigeria under, hence the accusation of ''kicking away the ladder'' by Ha-Joon Chang.
My concern about refusing to devalue the Naira is that it would scare foreign direct investments away as the official rate of FX does not in anyway reflect the true price of the dollar and this has dire implication for the capital market/real sector. If the CBN cannot clamp down on the activities of the parallel market to the barest minimum then they would have to devalue the Naira so that the official rate is to an extent reflective of the true price of FX.

lonelydora:
Reason we need to start looking East and inwards. I don't trust all these Western countries.

Any policy an African country makes, and the West complains, know that it is a good one for that country. They will never want you to progress.

Theres no looking East or any other direction outside, the solution lies within!


looking East is choosing to serve new masters.

todayguest:
It surprises me that, nobody took a second look at the figures. 676,675,000-- six hundred and seventy-six million, six hundred and seventy-five thousand. Let me ask: what is the population of Nigeria that over 676 million people are applicants? Is Nigeria now more populated than India?

You probably typed this in a hurry. Read what you have written once more and you will find your answer.

excel101:
. Mr man u talk like a baby. You know what u're? An empty vessel and a no person. Weakling, that brags in social media nd nothing in reality. Experience has thought me that a successful person never looks down on his fellow human. Cos u just did a supply of #20,000, every other person is now small. Poverty is even small, i classify u in the class of penury, cos penury is the height of poverty.

Sorry am not on your level..no vex!

Ben Bruce is a clown who just regained his voice somehow after PDP lost power at the center. The idea that by buying made in Nigeria you grow the naira is fundamentally wrong. The price or value of a currency is driven by the demand for that currency, the naira will be strengthen if we have commodities that foreigners are buying in a large volume and as a result of this demand lots of naira. Don't let uncle Ben decisve you, he is just a paparazzi senator!

excel101:
. Oliseh was just smarting around when he was looking for the coaching job, he succeeded in criticizing and pulling down former coaches and Ex internationals Stephen Keshi and Samson Siasia(his former national team mates), rather than supporting them. Imagine he has not experienced 1 tenth of what his contemporaries went through b4 throwing the towel. He has himself to blame, cos he lacked the mental strength and character to withstand the pressure in the game. Considering the fallout between him and Enyeama, it goes to show his lack of indepth and managerial ability in the game. Additional, he was totally confused when he went to social media to vent his anger on the NFF saying some pple in the glass house are after his life. The list of his deficiencies as regards the demand of the job is unending. What I'll advice him to do is to go and be mentored in the game, cos many great coaches did it at one pointer the other. Most times its not all about the certificates but about learning on the job.

Your talking about frivolities like an average Nigerian ignoring the real issue!
Olishe is straight forward and a no nonsense man, he wouldn't take rubbish from the stupid thieves managing NFF withholding his salary and asking him to feature their players so that they could sell them.

Nigeria is in trouble as a lot of the youths are stupid and cannot decipher were to channel their anger. A man tells you that him and his boys have not been paid for 4 months when the money is there and instead of people asking for the reason he was not payed and what happens to his salary every person is talking bullshit all over the place. People who have achieved nothing worthwhile in their lives rush online to advice successful celebrity's like they no shit!

[quote author=OYIBN post=43269765][/quote]Your parents are very silly and you are glaringly bereft of senses.

So it is okay that Keshi was not paid? Dumb ass, that's an indictment because it explains the reason for the corrupt ways in which he featured players "to raise money"!

Comment was not in comparison of coaches but I was pointing out the salient reason for his resignation.
In your stupidity you could not decipher that, but went on to show how intellectually wretched you are by saying unspeakable things, imagine your comment "was Keshi paid"? Buzz off dimwit!

lexyclasy:
The interviewer was trying to force words out of our amiable president thinking he is the kind of president that will say all Nigerians are CRIMINALS they have failed....GEJ is a democrat to the core kudos Sir i love your responses

The performance of GEJ should make any sensible man ashamed that a person that stupid ever represented him.

Only sensible people should feel that way though!

https://www.youtube.com/watch?v=Ew21gbl6c7w

Teddeebear:
it is called wisdom.

it is not wise to criticize the government which you were once in esp when you have first-hand knowledge of the challenges, there are things he could say over there and Nigeria will boil.

GOODLUCK EBELE JOHNATHAN IS A TRUE LEADER

If there is anything that is not going well, he can speak with buhari instead of going to media

This man just rekindled in me the spirit of Patriotism.


i wonder why journalist enjoy asking questions that will heat the polity?

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APCHaram

Your submission that GEJs performance at that interview was smart shows how "smart"you are. Or, You probably did not watch the interview!

https://www.youtube.com/watch?v=Ew21gbl6c7w

Why didn't the OP attach the interview clip in it original form? GEJ was as stupid and looking criminal as always[sub][/sub], why go for an interview when you are not willing to make even hypothetical comments on heinous crimes you claimed innocent of ? judge for yourself.


https://www.youtube.com/watch?v=Ew21gbl6c7w

kayfra:
Bad education is a symptom of something else.

Our biggest problem is unfettered free trade. No matter how educated we are, if the cost of imports are cheaper than what we produce locally, then our industries will die out and our educated folks will leave the country. Which is exactly what we are experiencing.

Until we stop being a dumping site if cheap imports, we will never diversify or progress and will always rely on basic commodities.

In as much as you are making some sense, I differ with you on the main cause of the problem.
I said the main cause of the problem because we have TOO many problems currently plaguing Nigeria, but if we are to prioritize, the lack of support Infrastructures and very poor education is the root of most of our problems.
How do you restrict imports when you grossly lack the capacity to produce? There are fundamental issues that the government needs to address before restricting importation.
The urgent need to implement and enforce property and intellectual right laws in Nigeria too! In the pursuit of profit, people will go all out to innovate life changing technologies if they are sure that all the benefits from this invention would accrue to them. This will lead to capacity building and argument government investments and making the country better as a whole.

"...There is that broad, smooth road, with promises of no taxation, and no efforts to get money from other places, leading nowhere but to perdition, poverty, disease and economic enslavement; and there is the other road - people who go therein pay tax. They also have to apply self-help and self-sacrifice to get where they want. But this road ... leads to success." Awolowo, speaking to the nascent rentier Nigerian state, drunk on oil revenue in 1954. Prescient is an understatement.

There is NO WAY out of this economic quagmire in the shortrun, pain is inevitable!
It is unfortunate that Nigerians have to suffer this avoidable impending circumstance due to their nonchalance and shortsightedness. It has been proven empirically that it is very difficult for countries to develop on revenues from rent because of the tendency for rent seeking and corruption to blossom and neglect of other sectors of the economy and innovation. Besides that, economic theories abound that warn of inevitable decline in terms of trade in the long run for countries who have just one FX earner, especially more if the product is a primary commodity. One of the reasons Presbich singer gave for the decline in TOT for countries exporting raw materials in the long run is the ability of developed countries to innovate and discover raw materials substituting commodities (shale oil in this case) this leads to a sharp decline in the demand of this raw materials which subsequently impacts the exporting country negatively. In a nutshell, countries in this category do not control their fate!
The present situation in Nigeria will provide the opportunity for true separation of powers. It is getting to that stage were The federal government would tell all state governments to carry their crosses and find means to settle their obligations. This makes taxes inevitable because of the incredibly high debt profile of many states. Persons on which the incidence of the tax falls on would have no option but to pay attention on how the government allocates their had earned money, and this will lead to the probity, confrontations and political participation that makes development thrive. Its unfortunate that we have to tow this part, but am consoled that this is happening for good.

I am also happy that ethnic bigots and stupid Nigerians who are divided along political and religious lines and who come here to defend criminals that plunder away their future would be served by this events, there pay masters have stock piles of dollar and are immune to what ever is happening, am sure people will be wiser if Nigeria gets out of this round box.

Rays123:
Advocates and critics of capitalism (Free market economy) agree that its main contribution in history has been the encouragement of economic growth. My question is how was this achieved?



Tonyenista, seun, jarus,

Please everyone view is honestly appreciated

True! Empirics prove that Capitalism contributes to growth and this is quite intuitive. What do you think will happen if you tell a man that his earnings will equal his level of productivity? He will do everything in his capacity to increase his productivity. The problem though is that some people are going to be poor because they lack the requistive productive capacity to compete and capitalist do not care what becomes of these persons, hence the criticism of capitalism.
A good market system should cater for every one (both productive and unproductive ones) that's why the mixed market system is popular.
Eonomic growth is necessary but not a sufficient condition for development, as the growth may be accounted for by a few individuals.
Capitalism is better if it's augmented by a functional socialist system (mixed market)

scribble:
Can I have whatever you're smoking

The question is above your level of comprehension.
E rats who dont understand the effects of exchange rates on economies and who seldom handle foreign exchange come here daily reminding us that naira is failing against the dollar. Ask them the policy implications and what needs to be fixed they start calling God to help them. Country of jokers!

247Gist:
https://bazenaija.com/wp-content/uploads/2016/02/naira_dollar-600x392.jpg
This is Pathetic.

It’s no longer getting funny. We’ve to beg God to please Intervene in this Terrible Situation of things and hope he listen to the cry of Nigerians in time.
https://bazenaija.com/wp-content/uploads/2016/02/guardian_dollar_to_naira.jpg
This is the exchange rate of Dollar to Naira as of this night… This morning it was at N358 to $1.

Source:- The Guardian

http://bazenaija.com/serious-gobe-1-now-₦400-this-is-terrible/

Is the dollar your national currency?

hinwazaka:
Let him do it and receive the hammer of the IMF. The office of the Governor of the apex bank of any nation is an autonomous position acting as a representative of the IMF and World Bank in all the respective nation members of the IMF. Just like the NFF, the president has no legal backing to sack and hire the individuals heading this institutions. Emefiele has a tenure of four or five years, the president can only swallow the bitter pill and work with him, or do the impossible and risk turning this nation into an island. But of course, the president is a Nepa certificate holder surrounded by phools

Keep quiet and stay off topics you know little or nothing about!

IMF ko WTO ni!

Abagworo:
While PDP is crowning Sheriff, the Ebola hero is joining APC. Onyebuchi is tired of being an eagle in the midst of chickens.

Typical blackman, Ebola hero indeed!

crixtex:
Pls tell me in wat areas ds guys are better thanGEJ... Abacha, Obj or Buhari... tnxxx

If I have to tell you then it means you have a intellectual deficit.

(You can use your dictionary)

BushidoBlue:
Some people are bereft of manners

How can u call someone unfortunate over something you are guilty of
Oga fix your budget
Tout like you

I go kill you with words Oga, walai you go too lose blood if I maintain my pace, leave me jeje make I focus.

paramakina202:
The present and future is more important than the past.You can take that to the bank!

That's why you are not fortunate.
I came out of break to reply you because you need sense urgently, place your head on your computer and receive sense now!
You deal with situations and people based on previous experiences. Why do you think people read books and companies make research about consumers or rivals behaviours? Boy use your coconuts!

PDP rats, your session is over, happy wailing!