₦airaland Forum

Germany amigo.. UAE isnt a place to plan long term

LOL and here i am with an actual legit business that produces goods that are in the market and I cant find someone to invest 500M

problem is nobody can offer you 10% a month.. Realistically anything over 30% a year is a scam..

TimeSpaceWizard:
Do I need one?


I have one here but do not need it. I do not spend dollars in Nigeria. I have an account in the USA for my business there.

You're earning dollars in USA and paying people via same.. You don't count amigo..

Now imagine your real estate company is in Nigeria, and people paid you NAIRA, but you had to settle suppliers in USA WITH USD.. This is the problem facing 99% of Nigerian companies and importers

TimeSpaceWizard:
Whether the world accepts naira or not, shouldnt be what bothers us, we should produce what we are importing.

Easy to say, impossible to implement.. Nigeria is so far behind that we need 100's of years to be like India or China.

Manufacturing takes billions of dollars in Research and development, stable electricity, Good universities, etc...

You think Nigeria will be able to manufacturer a computer chip, or a camera, or a phone anytime soon? nah fam.. we are 100 years behind at least..

CooKeed:
Good evening.

I do not have anything to add to what jjman2322 and philip0906 have said so far. But I'll summarise:


When businesses approach Nigerian banks for dollars to import stuff (via letters of credit etc), the transactions still need to be settled in dollars i.e Nigerian banks will have to remit dollars to the correspondent banks, who will then remit to the suppliers abroad.

We earn dollars from exports. When we buy imported goods we pay in dollars (or some other prominent foreign currency).

The dollars we earn is far below what we need to import stuff, because we don't export a lot of stuff. So, Emzor,for instance , would need lots of dollars to buy raw materials, but sells their products locally in Naira.

Our major source of dollars is crude but
unfortunately crude prices have gone down. Secondly, we still spend a lot of the dollars buying back refined petroleum since we dont have functioning refineries. Which is why everyone has been waiting for Dangote to finish his refinery (but that is a story for another day)

So we dont have enough dollars. Therefore CBN rations what we have. If you walk into a bank and request for dollars to import stuff, the bank will 'bid' on your behalf. You may not get your full required amount in 6 months. So many businesses take the little that cbn gives them and source for the rest in the black market. Demand and supply. Demand goes up while supply remains unchanged. Therefore price goes up.

Perfect explanation.. Someone who gets it..

TimeSpaceWizard:
Use the word, Nigeria suffer head importers. I basically do not need to move funds from Nigeria to bring things here. It gives me headache. It is a fake system.

its not a fake system. Many countries with NONE TRADABLE CURRENCIES have the same issue.. Zimbabwe, Zambia, Venezuela, etc.. rapid inflation and devaluation of currency due to dollar scarcity.. This issue isnt unique to Nigeria.

TimeSpaceWizard:
That's just an excuse. You can not strengthen Naira by continuing stake it against reserve currency. Eliminate the form accts and work your corresponding banks.

The challenge facing Nigeria import is having to buy dollar and having to buy imported goods. Eliminate dorm accts and convert all FX to local currency and the economy will reset.

You dont understand.. Let me give a simple example.. Imagine if you were the only man left in your state? All the girls would be lining up to beg you to sleep with you....

Now imagine if there's only one girl left in your state? all the guys would be begging her to sleep with her..

I just broke down simple demand and supply..

Our currency is not in demand because no country trusts it. Naira has not been tradable in the world market for decades and I doubt it will be anytime soon.. Its too unstable of a currency.. Let me ask you a simple question, be honest..

You just won the lottery in USA... They can either deposit your $100M winnings in a USD account in america, that you can come whenever to access, or they can convert it to naira and deposit the naira in Nigeria.. (Note $100m will last you many generations)..

Guess what? 99.99% of people would pick the USA option? Why? Because in 10 years their USD is still roughly the same value minus a little inflation, but in 10 years their naira may not buy toilet paper..

Do you know that back in the late 90's, early 2000s In nigeria (just 20-25 years ago), if you had 10.000 naira, you could buy food for your entire family of 4 for the month? ask your parents... Now 10,000 is junk.. You cant say the same for people that have USD ..

Solatium:
Yes,but your monthly dollar requirements don't just go up from $5m to $200 with an increase of over 1000% every month.
Nigerians are crooks,they buy dollar's and keep,if they read that the rate drop from ₦550 to just ₦500 today you will see them dumping the ones in their hands for minimal profit

I agree there is a lot of speculation, but thats not the reason why dollar is high.. Why was dollar 160 for MANY YEARS? why was it 350 for many years?

For sure i agree that some of the dollar demand are for crooks who will turn around and sell it back for profit.. But the truth is that there just isnt enough dollar... If there was the rate would be low and stable, eliminating possibility of round tripping..

TimeSpaceWizard:
You are not crazy, you are silly.

The parallel FX system in Nigeria has birthed too many complexities and all you do is restore the default system as all other countries do.

Do you need to buy dollars and put in your dorm accy before exporting, Only in Nigeria. But that's total bullshit.

When you close all dorm accts and allow naira to be converted at CBN rates via different trade instruments it will be exactly how other countries trade.

For now, you must continue to lament.

Our currency is garbage and not accepted internationally. Other countries have world currencies.. You cant go to any country in the world and try to spend your Naira, but you can sure go to pretty much EVERY COUNTRY in the world with your USD, EURO, YEN, POUNDS, etc..

thats why those countries dont need dorm accounts. They can directly settle the supplier with their currency, or get the required currency easily as there are millions of people who trade and need euro,usd, daily.

Solatium:
There something call balance of trade,your NNPC pay for whatever forex spendings from their account that domicile in JP Morgan, Chase and the rest of them,they do not need to move physical dollar's for payment.
Bro get proper education on this things, this singular argument has just point me where and how you get your mind set

The dollars Nigeria will have in JP MORGAN, etc are proceeds from CRUDE OIL SALES.. They don't get dollars from thin air.. So dollars less in JP Morgan means less dollars available for the rest of the industries in the country.

TimeSpaceWizard:
Any bank or Nigeria banks. I have to repeat this again and again. I said all your complexity of FX is due to the falsely manufactured FX operations by the CBN.

You do not need to have dorm accts in any other countries to import stuff.

Take away the dorms and parallel FX system and the default system is easier using corresponding banks to handle trades

You dont need dorm accounts in other countries because their currencies are tradable.. You can wire USD, EURO, GBP, JPY to any person abroad and it will be accepted.. Goodluck wiring Naira to anywhere even Chad..

done