blazer234:


You have a point, but I think it is just right to always focus on the message and not the messenger.

always focus on the message, dude what are you talking about? so if a known thief and liar comes out say your dad or mom or someone cloe to you is a thief or a big liar, let us all believe him right, very nice, thank you for your input, you are indeed very smart.

3rdlegxxx:


always focus on the message, dude what are you talking about? so if a known thief and liar comes out say your dad or mom or someone cloe to you is a thief or a big liar, let us all believe him right, very nice, thank you for your input, you are indeed very smart.

The question should not be about the messenger, it should be about the authenticity, or lack thereof, of his message. Yes, fayose can't tell me he is not a thief. But is what he is saying true or not? That is the main issue worthy of attention.

blazer234:


The question should not be about the messenger, it should be about the authenticity, or lack thereof, of his message. Yes, fayose can't tell me he is not a thief. But is what he is saying true or not? That is the main issue worthy of attention.

Alrite then, i agree with you.

He's making sense tho.

Why would a sane govt devalue her currency to satisfy importers of luxury goods. The demand for dollars is high because everything we use is imported including toothpick. Depend on made in Nigeria the demand for dollars will die down. If your salary is reduced by 70% will your life style remain the same? Don't know why this simple economics is difficult to understand. Maybe for their personal gain. Devalue the naira simply means sell as you buy. Which means inflation.

[size=14pt]If Buhari had allowed market forces to determine the naira instead of his artificial voodoo economics, Naira will still devalue, but will be at about 230-240 per dollar.

It is Buhari's clueless economic policy that introduced the uncertainty and panic that drove the exchange rate to 400 per dollar.[/size]

Rayhut:
Buhari need to devalue naira to N350=$1 to close up with black market rate of 400 or 500 in the future,this will help the prices of goods to stabilize as Nigeria is heavily dependent on imported goods,made in Nigeria goods is not enough to service already foreign dependent goods.

Wonder shall never end, as if we don't know that Nigerian economy does not respect any economic law, when dollar was crashing heavily in the last six years naira did not appreciate due to our greed in this country, ,
Baba already knows that even if he devalued naira to 500naira, you and your fellow currency racketeers will eventually beat it down to 1000- 1500.
It is bad already nobody should compound the situation, NO TO NAIRA DEVALUATION.

Pesuzok:


I thought you used your head, a civil servant that is paid 50k naira per month, how much would he be paid after devaluation?

I doubt if you even have a brain at all. If you do, you will know that the 50k has already reduced in value to 30k. Go to the market to buy stuffs and you will understand better.

blazer234:



I doubt if you even have a brain at all. If you do, you will know that the 50k has already reduced in value to 30k. Go to the market to buy stuffs and you will understand better.

So if the naira is officially devaluated now, will it increase the value of the 50k? No, rather it will further reduce the value to 10k because there will be increase in the price of fuel and other products that their prices has not increased.

Fayose, always remember that you were never never democratically elected. You should be in prison for treason and electoral and sovereign manipulation of the Federal Republic of Nigeria.

Pesuzok:


So if the naira is officially devaluated now, will it increase the value of the 50k? No, rather it will further reduce the value to 10k because there will be increase in the price of fuel and other products that their prices has not increased.

What I'm saying is that naira is already experiencing devaluation technically. All this insistence by the president not to devalue is mere hypocrisy and pretence. Nigerians are already spending devaluated naira.

blazer234:


What I'm saying is that naira is already experiencing devaluation technically. All this insistence by the president not to devalue is mere hypocrisy and pretence. Nigerians are already spending devaluated naira.

Officially devaluating the naira will only worsen the situation

Jirate:
This Will For ever and ever Hunt and Hurts APC......

Do you think they care? Today, the exchange rate is =N=503/ 1 USD. Here is an excerpt from an old article on devaluation of the naira written by henry Boyo, an economist.

Should the naira be devalued? | Economic Renaissance by Henry Boyo lesleba@lesleba.com | Punch Newspapers, May 2014

Why are some experts recommending that the naira exchange rate should be devalued?
Indeed, the suggestion that the naira is overvalued is not new, and even the managers of the much celebrated, yet comatose National Economic Empowerment and Development Strategy had, over a decade ago, indicated N180=$1 as the appropriate equilibrium and desirable rate for the economy. Much more recently, however, the huge untamed speculative market demand for dollars might have influenced the suggestion, by some experts, that the naira should be quickly devalued to avoid a catastrophic free fall.

Would the naira rate become stable with devaluation?
Historically, the naira exchange rate has suffered multiple devaluations, which evidently, did not prevent further depreciation in the last two decades. Consequently, another official devaluation would not necessarily induce long-term rate stability.

Experts have claimed that naira depreciation would increase our exports
Curiously, this argument has often been made to confuse and deceive Nigerians. Interestingly, the Nigerian industrial subsector was more diversified and productive, with increasing employment opportunities when the naira exchange rate remained less than N5:$1. Amazingly, the industrial landscape has become famished, and the values of non-oil Nigerian exports have actually plummeted, as the naira sunk to the present N160:$1. Sadly, much cheaper imports have quickly replaced the output of our erstwhile thriving industrial subsector, and there is, no reason to believe that an exchange rate below N160:$1 would reverse this trend.

Will a weaker naira reduce inflation?
Capital No! Historically, once again, inflation rate remained below five per cent between 1975 and 1985, when the naira was much stronger. In fact, a weaker exchange rate will invariably instigate higher production cost across the board, and also fuel inflation.

For example, if a manufacturer required just N100,000 to import a container load of raw materials when the naira was N1:$1, the same factory would currently require to borrow over N5m at over 20 per cent interest rate, to purchase the same stock. All manufacturers who import vital inputs have sadly suffered this fate, with disastrous consequences for growth and employment. Thus, further naira devaluation will seriously deepen poverty nationwide.

Will a weaker naira reduce cost of funds to the real sector?
No! If anything, a weaker naira will actually instigate higher cost of funds; ironically, even when we are blessed with increasing dollar revenue from crude oil.

How does a weaker naira instigate cost of funds?
A simple example may suffice: if Nigeria earns $1bn from crude oil, with naira exchanging at N1:$1, the three tiers of government would share N1bn. If on the other hand, the exchange rate falls to N160:$1, the $1bn forex revenue would be substituted with freshly created N160bn before distribution to the three tiers of government.

Worse still, if naira rate falls to N200:$1, the payment of N200bn for $1bn would in turn further instigate the burden of excess naira supply, in bank coffers. However, the fear of inflation will compel the monetary authorities to restrain liberal access to the surplus funds unleashed on the system by the Central Bank of Nigeria’s increase of money supply with its unilateral substitution of naira for distributable dollar revenue.

Would the naira rate become stable with devaluation?
Historically, the naira exchange rate has suffered multiple devaluations, which evidently, did not prevent further depreciation in the last two decades. Consequently, another official devaluation would not necessarily induce long-term rate stability.

Experts have claimed that naira depreciation would increase our exports
Curiously, this argument has often been made to confuse and deceive Nigerians. Interestingly, the Nigerian industrial subsector was more diversified and productive, with increasing employment opportunities when the naira exchange rate remained less than N5:$1. Amazingly, the industrial landscape has become famished, and the values of non-oil Nigerian exports have actually plummeted, as the naira sunk to the present N160:$1. Sadly, much cheaper imports have quickly replaced the output of our erstwhile thriving industrial subsector, and there is, no reason to believe that an exchange rate below N160:$1 would reverse this trend.

Will a weaker naira reduce fuel prices and subsidy?
Once again, the answer is no; in actual fact, if petrol price remains at the current level of N97/litre, a weaker naira rate will increase the domestic price of fuel, and will also increase the value of fuel subsidy beyond N2tn annually. For example, we know that international crude oil price is the benchmark for the feed stock of all refineries worldwide. Thus, if one litre of petrol ultimately sells, for example, for $1 ex-refinery, this would be equivalent to N160/litre in Nigeria. If however, the naira rate falls from N160:$1 to, say, N200/litre, the same petrol ex-refinery in Nigeria would now also sell for N200/litre. Instructively, however, lower naira rate would neither spur the price nor demand for Nigeria’s crude oil export.

Furthermore, if however, petrol continues to be sold domestically at N97/litre instead of the devaluation induced price of about N200/litre, the value of subsidy will increase to N103/litre, instead of the current N53/litre with the present naira rate of N160:$1.

Will a weaker naira reduce the dollarisation of the economy and stop capital flight?
The truth, of course, is that a weak and unstable naira exchange rate will actually promote dollarisation of the economy and capital flight. A continuously depreciating naira will elicit less consumer confidence in holding the local currency as a store of value. Conversely, however, a stronger and stable naira will induce confidence, and make the local currency desirable as a means of exchange and a solid store of value, at the expense of other foreign currencies.

Consequently, the greater the intensity to forsake the naira because of continuous depreciation over time, the greater will also be the propensity for capital flight and the adoption of dollars, for local transactions.

In reality, a weak naira exchange rate is actually not the result of reduced earnings of dollar revenue. In fact, evidence on the ground suggests that the naira exchange rate has ironically steadily fallen simultaneously with vastly improved foreign reserves. For example, in spite of our relatively paltry reserves of $4bn with four months’ imports cover from 1995, the naira exchange rate remained at N80:$1 for over four years. Curiously, however, the naira exchange rate fell to below N150:$1, when reserves rose above $50bn about three years ago, with over 15 months’ imports cover.

Evidently, a weak naira is primarily the product of the surplus naira instigated by the CBN’s monthly substitution of naira allocations for dollar revenue, and the CBN’s regular auctions of dollar rations.

Post script: Sadly, by January 2017, three years later, the naira rate has since nosedived beyond N300=$1, purportedly as a result of crude oil price and output dropping below $30/barrel and two million barrel/day respectively.

Nigerians may however silently wonder why naira rate still remains under intense speculative pressure even when crude price is steadily approaching $60/barrel with output also nearer two million barrels/day.

Sadly, despite the positive tide, historical evidence unfortunately does not suggest that the naira exchange rate will appreciate, even if crude oil prices unexpectedly exceed $100/barrel with output well beyond three million barrels/day. Indeed, the resultant naira liquidity from such bountiful outcome will further spur inflation and crush the naira rate well beyond N1000=$1.

Don’t believe me, just check the historical relationship between bountiful dollar reserves, inflation and naira exchange rate. http://punchng.com/should-the-naira-be-devalued/