Obviously, the disciples of devaluation of Naira don't mean well for the country and would plunge Nigeria into it's ruin for their selfish interest. We must support the president even in the face of current economic downturn #prayforNigeria

greenguy:
Obviously, the disciples of devaluation of Naira don't mean well for the country and would plunge Nigeria into it's ruin for their selfish interest. We must support the president even in the face of current economic downturn #prayforNigeria

On the contrary, most (not all) of the vocal proponents of devaluation are just haters of the president who are hell bent on going the exact opposite way from whichever way PMB suggests.

In my opinion, I think it would be quite difficult to predict between devaluation vs non-devaluation, which would be best for Nigeria's present circumstances. As has been suggested by some good brains, a proper economic summit should be organised to brainstorm and debate on which way forward.

Firefire:
"...Buhari must be encouraged to resist further devaluation and save the naira by finding an antidote to the poison of Excess Liquidity".

One way is to stop the rent seeking economy we currently practice and find a way to force the banks to fund the real sector. How that will be done, i don't know.

IMF doesn't care bout Nigeria, and those pestering the president to devaluate naira are greedy and selfish importers who don't give a damn bout us

Say No to Devaluation!!

MOST OF ALL WE NEED GODS INTERVENTION IN NIGERIA...WE HAVE MORE PROBLEMS THAN THE EXCHANGE RATE. WE NEED TO DROP ALL OUR DIFFERENCES(TRIBE,RELIGION,STATUES),WITH ONE UNITED VOICE SEEK THE FACE OF OUR CREATOR.

IMF and currency devaluation

[size=14pt]Nigerians are in trouble[/size]

seunmsg:
Henry Boyo's perspective on the foreign exchange management is always very interesting to read. I agree with him completely that devaluation is not the solution to the current exchange rate crisis. If we devalue now, we will all come back here to debate about the inevitability of another devaluation in the next 6 to 12 months. So, fighting the root causes such as excess naira liduidity is the way to go.

I also think we need to stop appointing bankers as CBN governors. They always face this crisis of interest that makes them to take decisions that are more in the interest of the banks than the country. We need well knowledgeable economist like Henry Boyo who are not attached to any commercial bank to head the CBN. We need a CBN governor that can see through IMF's recommendation and stay away from them. IMF is only out to protect foreign interest and not that of Nigeria.

ao is nigeria not a foreign interest when u r in UK or France?

How exactly does he want to curb 'excess liquidity'? FG is the biggest spender in Nigeria and anytime it witholds funds the whole econmy bleeds! Where is the excess? Nigeria just simply needs to earn more by producing to scale, by taking risks to enhance its earnings within and without, through promotion of private enterprise.

Dee60:
How exactly does he want to curb 'excess liquidity'? FG is the biggest spender in Nigeria and anytime it witholds funds the whole econmy bleeds! Where is the excess? Nigeria just simply needs to earn more by producing to scale, by taking risks to enhance its earnings within and without, through promotion of private enterprise.

Dont you get it ?the money does not reach the real sector ,you can never produce and can never become an exporter of goods because you will not have money to do it .The money is not sinking down to the public that wants to borrow and build companies and produce .

HAH:
This same IMF advised IBB to devalue the naira where are we now ? Have we achieved the growth they deceived us in devaluing the naira ? Remember IBB met the Naira 0.87 to the dollar by the time he was leaving it became N22 that is over 2200%.

Abeg abeg abeg IMF should keep their advice to themselves

I stand with Buhari

Jesus! 0.87 in the 80s

obailala:
On the contrary, most (not all) of the vocal proponents of devaluation are just haters of the president who are hell bent on going the exact opposite way from whichever way PMB suggests.

In my opinion, I think it would be quite difficult to predict between devaluation vs non-devaluation, which would be best for Nigeria's present circumstances. As has been suggested by some good brains, a proper economic summit should be organised to brainstorm and debate on which way forward.

I concur.

Why is IMF so interested in our economy? Whose interest are they serving? Lots of questions begging for answer.

We stand with Buhari against devaluation. Importers should seek ways of producing locally or assisting local production.

daniska3yaro:
I thereby use is forum to tell nairalanders to help fight against is stupidity that has being going on in northern nigeria,hausa men kidnaping young girls(igbo girls especially) @ d age of 13yrs old,take her to a mallam place to brainwash her then convert her to become a muslim without her consent,change her name and married her out to the kidnapper.
Many families have lost their own daughters in is manner not only Ese Oruru was treated is way bt many girls,their families took the matter to police and c.a.n(christian association of nigeria) bt nothing has been done abt them till now.
I pray is nuisance will be put to end.

Theres a problem with this your request, where are the security agencies in bayelsa, what were they doing that someone can adopt a girl and take her some 900kms away to marry, why did the parents not raise alarm on time.

I suspect complicity in this matter.

They send noi to destroy the economy; she succeeded a bit, but time was against her. They now want to kill it fully.bubu is smart enough not to give Dem a chance

The westerners are having headache in preventing non-western nation from outgrowing them.iran,Brazil, china, Russia,egyt south Africa are posing serious threat. They can accommodate NIGERIA threat. That's y they want to kill the economy of our nation

AZeD1:

One way is to stop the rent seeking economy we currently practice and find a way to force the banks to fund the real sector. How that will be done, i don't know.

You just asked the most sensible question... honestly, this should be what our Govt/CBN in all capacity should do. These commercial banks are very lazy, since our mumu government (most especially previous ones from IBB to GEJ) gave them an easy way of making fat profits. Government sold bonds and T-bills to these lazy Commercial/financial/security/equity institutions. They would rather invest in Govt bonds than service the real economy by giving loans to local manufacturers/producers/Entrepreneur; because of the great interest rates and low risks associated with them.

So invariably, our commercial banks are just banks for the government and the lazy rich who just want their monies to keep increasing with little or no efforts.

If these Commercial banks are made to do the real work they are supposed to do, the real sector will get the boost it needs because apart from providing capitals (loans etc) they will also offer pro-bono services such as risk assessment and management etc. This would increase the chances of business survival. At the end, their loan is repaid, and the business is sustainable and waxes stronger.

Now is the time for real work.
God bless Nigeria.

Imf

martineverest:
They send noi to destroy the economy; she succeeded a bit, but time was against her. They now want to kill it fully.bubu is smart enough not to give Dem a chance

The westerners are having headache in preventing non-western nation from outgrowing them.iran,Brazil, china, Russia,egyt south Africa are posing serious threat. They can accommodate NIGERIA threat. That's y they want to kill the economy of our nation

Lol...valid point

seunmsg:
Henry Boyo's perspective on the foreign exchange management is always very interesting to read. I agree with him completely that devaluation is not the solution to the current exchange rate crisis. If we devalue now, we will all come back here to debate about the inevitability of another devaluation in the next 6 to 12 months. So, fighting the root causes such as excess naira liqudity
Nigeria.

Boyo is wrong on excess liquidity.

CBN does not print money to give to the states and FG for crude oil sales in usd.

This is about the best write up against naira devaluation. Good job sir.

Good write up, good job !

@Henry boyo, thank you for the insight analysis of the inherent disadvantages of devaluing the Naira. Its only those who are not in tandem with the Nigerian economy and state of the naira that is calling for its devaluation. Someone should please tell the louded mouth governor fayose that the issues of the naira and our economy is not an issue that is handled at Garages where his colleagues are, but a national issue that require the input of reasonable people like boyo. Fayose can contribute any day he becomes refined.

seunmsg:

...
Surprisingly, the IMF report inexplicably shifts attention from the albatross of ‘liquidity surplus’ that undeniably fuels inflation well beyond best practice models below two per cent. Or is there an unwritten law that countries like Nigeria must not also enjoy minimal inflation and truly catalytic low interest rates below six per cent to facilitate inclusive economic growth? Surely, it is not so difficult to understand that all static income earners, particularly, pensioners and other lowly paid workers will expectedly lose 50 per cent of the purchasing value of their income every five years, if inflation continuously trends closer to double digit rate.

...

Instructively, however, if IMF’s recommendation for the ‘’removal of restrictions on access to foreign exchange’’ was adopted, the naira exchange would have since plummeted below N1000 per one dollar with serious economic and social consequences. In such event, the World Bank would step up to advance Nigeria,a dollar denominated loan, with shylock terms, to defend the naira. Regrettably, the Nigerian economy would ultimately unravel and the naira rate will unfortunately track the Ghana cedi, which eventually exchanged for over 10,000 cedi to one dollar with no respite in sight.

...

Devaluation does not hold any promise for Nigeria other than the obviously misguided and unrealistic expectation that matching official with parallel market exchange rates will attract foreign investors or ensure competitiveness of the Nigerian economy. Conversely, naira devaluation from 0-50kobo before 1979 to the present N310 to one dollar did not attract much more than about $20 billion in foreign investments, that is a paltry annual average of $540 million. Worse still, foreign investors were ‘smart’ enough to invest primarily in economically and minimally impactful but high-yielding Nigerian government’s bills and bonds!

The unusually wide gap between the official and parallel naira rates may have intuitively engendered the observation that Nigeria’s economy will only become competitive if the naira is devalued and brought closer to the street market rate. Instructively, however, despite series of naira devaluation, Nigeria’s economy remains neither diversified nor internationally competitive. Maybe, as suggested, a further devaluation to N300 per one dollar may just change our fortunes. But, such an expectation must be predicated on the parallel market rate remaining stable. Consequently, if the root cause of the deliberate market imbalance against the naira is not squarely addressed, while the street market rate continues to climb, the call for further devaluation beyond N300 to one dollar will again become clarion from misguided and self-serving experts.

Fortunately, President Buhari is not fooled by the false promises canvassed by advocates of devaluation. The President is sharply aware that the intensity of deepening poverty in Nigeria correlates with the naira’s steady depreciation, even with bountiful reserves. Buhari certainly recognises that devaluation instigated and has sustained our economy’s debilitating brain drain and the mass migration of our youths to greener pastures.

Besides, another major devaluation will only precipitate Labour’s agitation for wage increases, while pension incomes will invariably gradually become valueless. Furthermore, the inflationary spiral instigated by a major devaluation will further reduce consumer demand and adversely affect investment decisions, with collateral damage for job creation; increased raw material costs and high cost of funds will similarly make imports cheaper than Nigerian products.

Additionally, Nigerian holders (including government) of dollar denominated loans may require 50 per cent more naira to service and repay their debts, while the increased cost of critical plant and equipment will adversely challenge the implementation of the capital budget and may further deepen the projected over 30 percent 2016 budget deficit. Invariably, the operations of critical subsectors such as power, aviation, oil and gas will also be severely challenged if the Naira suffers further devaluation.

If the dollar sells officially for N300 to one dollar and above, fuel price will spiral beyond N130 per litre and make deregulation and the saving of over N1trillion annual fuel subsidy impossible. Sadly, Nigeria’s celebrated Gross Domestic Product of $510 billion will invariably also shrink below $300 billion, while the current stock market capitalisation of about $42 billion will similarly recede below $25 billion and make the market vulnerable to an easy take over by foreign portfolio investors. In short, poverty will deepen nationwide.

In the above circumstances, Buhari must be encouraged to resist further devaluation and save the naira by finding an antidote to the poison of Excess Liquidity.

http://www.punchng.com/devaluation-imf-versus-buhari/

Reading through the write-up is quite revealing. Devaluing may end up just sending us to the grave earlier than we should. A full blown economic debate should be organised to properly appraise the merits or demerits of any devaluation instead of just relying on textbook standard principles of devaluation whenever things go tough. After all, despite all the devaluations done by IBB which amounted to over 2000%, how did that really help the Nigerian economy till date with regards attracting foreign investors?

daniska3yaro:
I thereby use is forum to tell nairalanders to help fight against is stupidity that has being going on in northern nigeria,hausa men kidnaping young girls(igbo girls especially) @ d age of 13yrs old,take her to a mallam place to brainwash her then convert her to become a muslim without her consent,change her name and married her out to the kidnapper.
Many families have lost their own daughters in is manner not only Ese Oruru was treated is way bt many girls,their families took the matter to police and c.a.n(christian association of nigeria) bt nothing has been done abt them till now.
I pray is nuisance will be put to end.

If what you are saying is true, then charge/sue fellows to the Court of law and there you will find justice and not in the social media like this..

Please, stop painting Islam a bad name, please.

Activa:
Boyo is wrong on excess liquidity.

CBN does not print money to give to the states and FG for crude oil sales in usd.

When the CBN receives dollars from crude oil sales, where do they get the Naira equivalent to fund the Federation Account? Just asking.

daniska3yaro:
I thereby use is forum to tell nairalanders to help fight against is stupidity that has being going on in northern nigeria,hausa men kidnaping young girls(igbo girls especially) @ d age of 13yrs old,take her to a mallam place to brainwash her then convert her to become a muslim without her consent,change her name and married her out to the kidnapper.
Many families have lost their own daughters in is manner not only Ese Oruru was treated is way bt many girls,their families took the matter to police and c.a.n(christian association of nigeria) bt nothing has been done abt them till now.
I pray is nuisance will be put to end.

If what you are saying is true, then charge/sue such fellows to the Court of law and there you will find justice and not in the social media like this..

Please, stop painting Islam a bad name, please.

I have always known Henry Boyo to be a resound economist
Good analysis

seunmsg:
Henry Boyo's perspective on the foreign exchange management is always very interesting to read. I agree with him completely that devaluation is not the solution to the current exchange rate crisis. If we devalue now, we will all come back here to debate about the inevitability of another devaluation in the next 6 to 12 months. So, fighting the root causes such as excess naira liduidity is the way to go.

I also think we need to stop appointing bankers as CBN governors. They always face this crisis of interest that makes them to take decisions that are more in the interest of the banks than the country. We need well knowledgeable economist like Henry Boyo who are not attached to any commercial bank to head the CBN. We need a CBN governor that can see through IMF's recommendation and stay away from them. IMF is only out to protect foreign interest and not that of Nigeria.

I believe he once suggested that rather than give the states, Naira from federation sharing, the states should be given Dollar certificates. In that way, the CBN doesn't have to print more money,and then have to mop up excess liquidity.

We should try that route and see where it takes us.

I am with you on the appointment of bankers as CBN governors.

Some of what Mr Boyo makes sense and some does not.

Frankly speaking some is sky in the pie.

How can he state that if foreign exchange restrictions are removed, the naira would drop to 1,000? Sounds preposterous!

Also suggesting that the naira will drop to 300 is outright silly. In 2009, Soludo refused to devalue the naira after the oil price sank to $35 from $148, which led to a depreciation of the naira from around 120 at the parrallel market to 190. It stayed at 120 at the official rate.

Sanusi replaced him that same year, devalued the naira to 150 and immediately, the black market rate rose to 150.

If the naira is devalued at the official market to about 240-250 range, the black market rate will merge with it.

However, I do strongly believe that ending the naira substitution policy will put an end to the high cost of funds and also strengthen the naira.

Firefire:
"...Buhari must be encouraged to resist further devaluation and save the naira by finding an antidote to the poison of Excess Liquidity".

So, you could support the president on something?

May your liberation be permanent. Amen.