Why Devaluation is very necessary at this crucial economy depression. After so many failed policy, The Nigeria economy is getting worse day by day the current exchange rate is 280=€1 .which the consequences fall on the masses. Devaluation means fixed exchange rate.The CBN new policy from January 2016 restricted more spending aboard. Diversification of Nigeria economy from crude oil to agriculture is the best solution. Nigerians should go back to farming in other to curb the current economy depression Effect of devaluation 1. Exports cheaper. A devaluation of the exchange rate will make exports more competitive and appear cheaper to foreigners. This will increase demand for exports 2. Imports more expensive. A devaluation means imports will become more expensive. This will reduce demand for imports. 3. Increased AD . A devaluation could cause higher economic growth. Part of AD is (X-M) therefore higher exports and lower imports should increase AD (assuming demand is relatively elastic). AD is likely to cause higher R Exports become 4. Inflation is likely to occur Advantages and benefits of devaluation on Nigeria currency 1. Exports become cheaper and more competitive to foreign buyers. Therefore, this provides a boost for domestic demand and could lead to job creation in the export sector. 2. Higher level of exports should lead to an improvement in the current account deficit. This is important if the country has a large current account deficit due to a lack of competitiveness. 3. Higher exports and aggregate demand (AD) can lead to higher rates of economic growth. 4. Deregulation of the economy: Nigeria should invest more in agriculture towards exporting more and importing less. Raw materials should be imported more. For contribution, support and suggestion: Odumade damilare M Upcoming Economist Whatsapp:08165143018

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Accepted.. Devaluation of the Naira is long-overdue. I have a few questions so that we are not looking at De-valuation in isolation
1: We are still not "potentially" earning nearly enough dollar revenue from crude and any other exports
2: How do we invest in Infrastructure and social development given the fact that over the course of 20 years and at the height of the crude windfall, we could not achieve any significantly impacting success
3: How do we manage the "Cost of Governance" still a major item on the 2016 budget,are we saying that the present economic realities are not to be reflected at the 3 arms of Government?
4: What are key Economic Development Strategies that can be applied in a depressed - Stagflation-economy that continues to engage in an openly aggresive Monetary Policy but screams Fiscal Restraint in the Media? clearly one undermines the other.. we must cut spending at Federal and State levels because that is where the bulk of Nigeria's expenditure goes.
5: The Private Sector will be forced to increase costs of operations and ultimately push this to the consumer (poor me and yourselves).. how do we adjust to low-income, low-liquidity and absence of sustainable local capacity to produce "ANYTHING" at affordable costs/price.

Has the Economic Team of the President addressed the above issues adequately?

Say no to devaluation. We don't need it right now, it can only make Nigerians and Nigeria poorer. While I agree that a weaker currency will be a great competitive advantage to leverage for every industrialized economy. In our Nigerian economy, devaluation will hurt us more than it will help us.

1. Reviewing our history from early 80's to 2015, naira has traded in the band of 50kobo -197 naira / dollar. History shows that devaluation, structural adjustment program has been one of the primary reason why our economy is in this doldrums. So, why toil the same line again?

2. When we devalue naira, we automatically reduce our GDP, Per Capital Income. We reduce our global purchasing power. What this means is that: we have to pay more abroad for healthcare, education, tourism, international flight and other products. We (FG) have to pay more for our international debt. Also, with a reduced per capital income, it makes it difficult to attract FDI.

3. Devaluation will not make our products cheaper, because significant portion of our raw materials are imported. Devaluation will spike the cost of imported raw materials, total cost of production, increase selling price, high inflation and other regressive negative economic effects.

Again, I say big no to devaluation.

Nonsense.
This is how IBB brought SAP and ruined Nigeria for decades

The thing that scares me the most is: How do you base your budget on a benchmark of $38/barrel when the current price is $32 and falling.. ?

Them don start with their nonsense shilling.

The same people who defended the deficit budget and removal of fuel subsidy ( even though they opposed it's removal under Jonathan) are now clamouring for devaluation.

Very soon they will come and tell us why Social Media bill is the best way to go and granting boko haram paid amnesty will end the insurgency.

Useless generation with no bearing, education and conscience.

Emir Sanusi of Blackstone Inc has been clamouring for removal of fuel subsidy and naira devaluation since August.

The only way JP Morgan will loan the APC govt money to run their scam deficit budget is when the devalue the currency.

There are a thousand ways to revive the economy other than borrowing to fund a reckless budget.

voltron:
Accepted.. Devaluation of the Naira is long-overdue. I have a few questions so that we are not looking at De-valuation in isolation
1: We are still not "potentially" earning nearly enough dollar revenue from crude and any other exports
2: How do we invest in Infrastructure and social development given the fact that over the course of 20 years and at the height of the crude windfall, we could not achieve any significantly impacting success
3: How do we manage the "Cost of Governance" still a major item on the 2016 budget,are we saying that the present economic realities are not to be reflected at the 3 arms of Government?
4: What are key Economic Development Strategies that can be applied in a depressed - Stagflation-economy that continues to engage in an openly aggresive Monetary Policy but screams Fiscal Restraint in the Media? clearly one undermines the other.. we must cut spending at Federal and State levels because that is where the bulk of Nigeria's expenditure goes.
5: The Private Sector will be forced to increase costs of operations and ultimately push this to the consumer (poor me and yourselves).. how do we adjust to low-income, low-liquidity and absence of sustainable local capacity to produce "ANYTHING" at affordable costs/price.

Has the Economic Team of the President addressed the above issues adequately?

There is no rule that says govt must spend on social services during a recession or invest in infrastructure.

The dwindling forex should be channeled to private business and infrastructure gap can be met with PPS agreements.

Sell or concession govt assets like stadia, buildings and equities in govt controlled companies.

The govt is big for a reason because politicians and civil servants want it so in order to continue stealing.

If all the Forex is made available to private business and govt only patronised local contractors the FG won't need Forex.

TheDevilIsALai:



There is no rule that says govt must spend on social services during a recession or invest in infrastructure.

The dwindling forex should be channeled to private business and infrastructure gap can be met with PPS agreements.

Sell or concession govt assets like stadia, buildings and equities in govt controlled companies.

The govt is big for a reason because politicians and civil servants want it so in order to continue stealing.

If all the Forex is made available to private business and govt only patronised local contractors the FG won't need Forex.

It is not a rule. .it is an ECONOMIC IMPERATIVE. it is clearly evident that Nigeria lacks critical infrastructure in the area of POWER & STEEL, ROADS, HEALTH and HOUSING.. there are other areas such as AGRICULTURE, EDUCATION and SECURITY

Like I said it has nothing to do with any economic policy or rule. It must happen otherwise we can expect to be in Zimbabwe's position this 2016. IT MUST HAPPEN. it is what is required for ECONOMIC DEVELOPMENT and EMPOWERMENT OF YOUR MIDDLE-CLASS (which is presently absent)

NIGERIA Must move at a minimum half of her working population into the MIDDLE-CLASS or create a Middle Class in this RECESSION. they are the ones who will drive micro-economic activities to sustain the country otherwise FG's concentration at the MACRO-level will simply have marginal effect