modath:
Buhari may have good intentions but his methodology is flawed..

Only the FORCES of demand & supply can determine pricing, brute force will only lead to scarcity, which will only make a bad situation worse...

We know quite well saboteurs & speculators are the unseen hands driving up forex rate... cracking down on BDC operators is the wrongest move to make...

TheDEVlLHimseIf:
now everyone will agree with me that Buhari is a terrorist an economic bokoharam a vagabond and a useless nonentity kunu drinking bastard

drss2:
must be anoda advanced market economics daura style.

modath:
Buhari may have good intentions but his methodology is flawed..

Only the FORCES of demand & supply can determine pricing, brute force will only lead to scarcity, which will only make a bad situation worse...

We know quite well saboteurs & speculators are the unseen hands driving up forex rate... cracking down on BDC operators is the wrongest move to make...


My brother i suppport the invasion abeg, these bdcs are criminal , do not forget that CBN is the major source of supply, it provides the dollar at 390 naira with an agreement that they will sell for 400, hw come these guys go and sell for as high as 460, how can you now tell me the government should be looking. Travlex also provides dollar to them at a cheap rate. what they do is the collect all these dollars and then stuck them. then begin to bring little by little and sell.

Abeg they should clamp them down , if they dont sell cbn will use the banks to sell to people. Even though we knw the banks are not different either. All greedy set of people.

But i can assure you the market forces principle wont work in this case

tiwiex:

Brother. See where good intentions has gotten us oh. When people said this man only knows about cattles we no gree hear. Who goes to your business in insists you sell your goods at a price they miraculously feel. If the government says the rate is less than 400 tthen they should show buyers where to go. This is a double speak govt. BDCs don't sell beyon a very little margin. They count on turnover. The only indicator from this price is that they get it from CBN at something close to what they sell it. If PMB thinks he can slow down things like this, he needs to go to the rice market and force prices down. My God. How did we get ourselves here. This government is being run by PMB and DSS. Seems we don't have any other departments and agencies.Sad.

DavidEsq:

Exactly. What ever happened to free market system, abi am I getting it wrong here?

plaetton:


My friend,
How naive can you and the government be to think that banks and bureau de changes will simply ignore demand and supply dynamics to make a profit , and instead , conduct themselves to please the government?

Everyone is in business to have advantage.

Which part of economics and human nature do you not understand ?

overcomer123:



This is different, cbn and travelex is the major source of forex as against the prices of Goods.

It is like me manufacturing a car and selling to the distributor at 500k, and this same distributor now sell it to the public at 1m. What useless market forces is that one. what value are they adding that they will jack it up that high. Abeg dss should clamp harder on them.

obailala:
Maybe I should rephrase my comment for you to comprehend it... Like I said earlier, it is impossible for the CBN/Fg to enforce the price fixing, it is also silly for the CBN to even fix the price in the first place. However, the raided BDCs deserve every bit of treatment they get. They signed an agreement to get dollars at a cheap rate from a privileged source and also sell at a cheap rate. For them to turn around and sell at the going rate is a criminal breach of agreement.

kings09:
Nawa oo. Buhari n his gra gra approach. Som1 pls wake Buhari n tel him dis is 2016 not 1984 abi which kain president be dis sef. Christmas season will soon arrive n he ll spoil d season wit his thought-less brain.

Wch kain punishment we come get in dis presidiot.

Repair d bad economy n encourage production n u ll see d naira strengthen.

Truly Buhari needs a lesson in Basic Economics. Abi iru aboki wo leleyi

drss2:
soldiers used to forced down price of goods in 1984. dss used to forced up d value of d naira in 2016.
history repeating itself all ova again.

modath:
Buhari may have good intentions but his methodology is flawed.
Only the FORCES of demand & supply can determine pricing, brute force will only lead to scarcity, which will only make a bad situation worse...
We know quite well saboteurs & speculators are the unseen hands driving up forex rate... cracking down on BDC operators is the wrongest move to make...

grandstar:


Economics dictates that whatever the exchange ratemail, the government must be able to supply enough forex at that rate.

This the present government has failed to do. The government can not provide enough has the huge forex scarcity and the massive differential between the official and black market rates. The naira is overpriced.

obailala:
The point is that in the first place you shouldnt be selling the car to the distributor at that cheap rate of 500k with the hope that he would sell at 550k. The fact is that he would end up selling the car for over a million because there are lots of people already begging him to sell that car to them for over a million.

grandstar:


You are contradicting yourself.

The existence of subsidies can not be divorced from abuse said a 19th century economist.

It is wishful thinking if the government thinks there won't be round tripping. Any economist worth his salt will tell you this. That's why Sanusi is seething at the economy illiteracy.

It's like asking your teenage daughter to wear skimpy clothes and bring home men and then shocked at the man "stupid" enough to get her pregnant. The joke is on the FG.

overcomer123:


no that is not correct and right, i know manufacturers who give their distributors a margin to work with.

Atleast a personal experience is thermocool, they go round and enssure their distributors do not sell lower and higher than a price range, anyone found doing so loses his license as a distributor.

Also this is why you see some product, carrying the prices tag on their packs.

doubling the price without proper justification makes no sense, if the manufacturers do not hw can you do that as a distrubtor, where is the moral justification.

The bdc deserve what they are getting and i see a drop in price, called my aboki yesterday and he confirmed he is selling at 400 naira.

The writer of this thread is misleading Nigerians, probably to create more sentiment or a panic situation.

it is all greedy, every body shouts politicians are corrupt, tell me what this is if nt corruption.

obailala:
I am not contradicting myself, go back and read what I wrote, but this time do it slowly with an open mind, and you will realise that the epistle you just typed is the same thing I wrote. The only additional point i made was that the BDCs deserve the treatment they get for breaching the agreement they signed when they got cheap forex from the CBN source.

grandstar:


The agreement is bound too be breached.

obailala:
The manufacturers would give them a realistic margin; i.e. something close to the true value of the product being sold. If that's not the case, you can never discount or water down the influence of human greed, the marketers MUST find a way to manipulate the system to get more profits, but that is not to say that erring marketers shouldn't be punished if they are caught. The only way this model of price control can really be enforced effectively is if the controlled price isn't far away from the 'true price.'

overcomer123:


listen to yourself talk, who else can give the value of a product it is the manufacturer, in this instant the manufacturer is FGN since it is the one who provides the dollars.

the margin government has set is very reaslitic , you buy 390 sell 400, that is very realistic. What expense are the BDC guys incuring that they will now add additional 60 to 70 naira on every dollar. to me it makes no sense.

overcomer123:


If the bdc were the ones sourcing their dollar from overseas or other place i would have agreed with you and said yes the market forces can run it cause, but the truth is this is not the case, places where you allow market forces there are usually no government intervention an example is the telecoms, Nigeria is different, government supplies the bdcs with dollars.

This bdc guys are now the ones hoarding the dollar, how can you buy a thing at 390 and sell at 460, what is your justification for the 70 naira addition(your margin should not be more than 10 to 15 naira). let me remind you that this is for just 1 dollar, imagine closing a deal of 1 million dollars. The profit is so high, even commercial banks are doing the same.

What you are saying is also not correct, how can you say the Naira is overprice. It is the dollar that is being over priced, and this is because of the partial artificial scarcity caused by the BDC. Although i know the government is not providing at it use to during the oil boom year, it is however it has been providing significant amount.

grandstar:



I give you an example china's laws and policies are very far from what you have in the US, UK and Germany.

Yet its nation thrives



Please understand that economics like physics and other disciplines have well establish laws.

For instance, we know that the angle at the circumference of a circle is twice that at the centre.

Buhari is breaking many economic laws and expects there to be no repercussions. His refusal to allow the market to dictate the value of the naira is the primary cause of the massive spread that has led to the extremely profitable round tripping you seethe about. An economist worth his salt won be surprised.

That is why Sanusi is seething. He has condemned the dollar subsidy which he said encourages round tripping and other vices just the same way oil subsidy does.




The bucks stops at the FG door. When the market prevailed before Buhari messed things up, there was no cry of dollar hoarding by BDC or artificial scarcity because the area did it's job. The spread between the official rate and black market then was less than 3%.

During Soludo's era, the spread was so insignificant that people stopped going to the central bank.

Buhari is anti-market by nature and a statist. His integrity is admirable but his economics sucks

obailala:
The only reason the BDCs can actually add a whooping 60 to 70 and still be able to sell is because there is still scarcity of the commodity. When there is scarcity, by natural law of demand and supply, the price goes up. So with the current level of demand for the commodity, 400 doesn't sound realistic.

overcomer123:





no sir, economics and politics are not like physics since these two subject have little to do with nature more to do with humans, who by nature are not stable nor predictable. Where as physics has more to do with nature and is predictable.

What useless economic laws, those damn laws have never helped Africa, from the SAP(structural adjustment programme, to ZBB)

My point is every policies must be crafted to suit it environment not the other way around.

These economic theory you are saying was developed for the western world, where things work under normal circumstance.

Africa particularly Nigeria is unique, our people are unique, and sadly corrupt and greedy thrives among the people.

We need a different set of laws.

how then do you begin to think the foreign economic policies will work.

For what i know this dollar might hit 1000 naira if we allow the so called market forces determine.

Yet there wont be commensurate benefits.
Just some rich abokis.

grandstar:


Who told you SAP and other policies don't work here? Who even told you they work "there" in the Western Nations? A good example is Greece.

The truth about these policies are that they work but either politicians detest them or interest groups hate them or the masses deplore them with passion.

When the IMF says remove fuel subsidies, so as to save massive sums of money , to make the downstream sector investment friendly, to end the abuse that always associated with subsidies and so on, there will be cries from all

The cabal that benefits from the oil subsidy will fight tooth and nail. The masses who don't went to pay higher prices for oil will go on the streets.

If the IMF says cut your bloated labor force which is gulping 80% of government revenue, the government might resist because it will become unpopular. The civil servants will resist as no one wants to lose their job.

Failure to properly implement free market policies is the root cause of the failure of many African countries to grow

overcomer123:



Bros greece is yet to recover from the economic problem it has, it is always looking for bailout fund from EU.

I personally know the greece story.

And yes the SAP policies dont work, ?IBB tried to introduce it and that was when nigeria's doom began.