1freshdude:
Money is valuable because it is relatively scarce, the level of productivity in a country is always put into consideration before taking this decisions, else money loses value, it becomes worthless and an alarming inflation ensues. Zimbabwe is a good example of what printing more money in the face of very low output can cause.

Makes sense because America continuously prints more money because it can afford to do so as a very productive country unlike Nigeria.

The reason is simply. It is just one reason. You will need quality of materials to print money. Thus, you will have to spend a huge sum to print that amount of money so it is better to borrow. As against what most people have said about inflation. It is not because of inflation as you can print and not put into circulation. It is simply because of the cost associated with printing

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

PeeDaVinci:
printing money is different from printing bank notes and coins. Nigerian security and mints deals with printing bank note and coins.
Printing money involves the CBN just creditting an account with some particular amount which they dont have out of thin air with the hope that the account will make the repayment into the thin air where it came from in the future, and CBN can only do that with the currency they control i.e. the naira, and not with the dollars

can you please shed more light on dis

Chinas manipulation is different in that they dont print more money..instead they devalue their currencies to make it cheaper to export but more expensive to import.
As such it attracts foreign investments since they will be export foucus while at same time discouraging imoortation of those same products!




Haven't you heard about currency manipulation by China that America keeps crying about while they are the chief currency manipulators. [/quote]

No sane country will just wake up and start minting currency. Nigeria is signatory IMF & World Bank which oversee some of the activities of the cbn. Therefore, it's practically impossible for any country to mint her currency the way she wants it without recourse to these organizations.

Ensquare:
look at this,what if we print this naira exchange it with dollars n make sure make sure the money is in CBN(Not in circulation).Then use to dollars to settle all outstanding debt. will it still affect the economy?

Right now, the only way Nigeria can earn dollars is via export revenues (and tariffs on imports) as well as loans.

We cannot just print naira and exchange it for the dollar equivalent. For starters it costs money to print naira in the first place...and printing naira equivalent of $5bn would drain our forex reserve drastically.

Only way to earn dollars? Diversify the export base....or take a loan from IMF (and IMF won't lend us money to print naira....their economists would scream in horror at the proposition)

Truckpusher:
And you've failed to see the sarcastic nature of that comment. You need a brain reset asap.

Don't try to save face, accept that you know nothing about economics.
That is why you tried mixing two unrelated issue of national fraud and
currency manipulations.

You won't die by accepting that you are wrong.

@Ensquare, I don't know if printing to pay debts and service loans will affect d economy, but printing to take on projects in Nigeria will definitely affect d economy... Besides, d purpose of taking a loan is to use it for profitable projects whereby d profit gotten from d project can be used to pay d debt.. but Nigeria borrows to embezzle dat y we keep servicing debts.... if d loan borrowed is used for wat it is meant for, dere will be no need to print money to pay back or service loans. My own opinion tho

sorepco:
Chinas manipulation is different in that they dont print more money..instead they devalue their currencies to make it cheaper to export but more expensive to import.
As such it attracts foreign investments since they will be export foucus while at same time discouraging imoortation of those same products!




Haven't you heard about currency manipulation by China that America keeps crying about while they are the chief currency manipulators.

Correct...and the thing is ....China has a lot of things to export...being a strong manufacturing nation with a large export base.

i already did.(summary) wanted to expand further, but noticed some guys below have done all that. so no need.

johndwayy:

Instead of you to give a very lucid explanation, you are saying the question is funny....

@topic...I still don't understand oh, economists in the house should explain well. Why not print the money in naira form and use it for industrialization and urbanization that will draw foreign investors our way. Please make una explain o. Thanks

Truckpusher:


Nigerians would become persona no grata all over the world in just six months.

You meant to say persona non grata.

But, who cares!
So long Nigerians get all the monies & investments we ever wanted as you remain on the saddle. Lol

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

Oga when you have so much money in circulation it will result to more money buying few goods and services this is because every body will have money and when u have money what happen u will never like to stress your self to work and to farm and any body that will work for u will charge u high because there is money at the same time is only few people that will be willing to work and few people will farm so those few people that will be farming will charge very high because there are many people waiting with money to buy the farm produced at this time you will see so many people with money but no goods to buy because goods and services will be scarce while money will be every where and when money is every where without seeing what to buy with the money the money automatically becomes useless in your hand. Its the worst thing that can happen to any economy pls dont pray for it.

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

you r too dull to ask such a question. even if it's our money, don't u know what happens wen too much money is in circulation.

It is possible to create more money without causing inflation . The US used quantitative easing in 2008 to help get them out of the recession. CBN would have to be very smart in doing so . The problem for me is I don't trust CBN has the intelligence to do this.

QE is when the central bank creates more money electronically and uses it to buy up financial assets like bond etc. This helps to stimulate the private sector and control inflation cause the money is not being flooded into the open market.

So in a way creating more money for a particular use can help but like I said I don't trust the CNN to do it properly . It may become another way to loot

Pinkfriday:
If d CBN shud print dat amount of money in d naira equivalent, it will lead to inflation. Lets say d CBN prints d money give it to the FG, d govt in turn use it for project nd other things(government spending). We need to understand dat money moves in a circular flow, and government spending is a form of injection into d economy, simply put, govt spending pumps money into d economy. Now, excessive government spending cud lead to inflation whereby derz too much money in circulation, persistent increase in prices and too much money purchasing too few goods. The value of naira will fall in d domestic economy and dis can lead to total collapse of d domestic economy if inflation is not remedied. So,it better to avoid inflation or keep at a reasonable level...

But government would not spend the borrowed$5.5bn?

Economics just making life harder for the masses. Poor people don suffer

Ebookmathswaec:

And borrowing the same huge amount won't do same?

you obviously didn't do economics in secondary and university

If tomatoes are 4 for N100 and Dangote plant tomatoes on all available land and flood the market with tomatoes.... how much will tomatoes worth? Wouldn't it lose its value? Zimbabwe printed and pumped money into their economy... the value dropped so much and so fast that kt became worthless.... including one's life savings. US did the same for a time under Bush... the currency of the dollar began to plunge... on the way to becoming worthless. Yes...they can print money...but it will lose its value and become worthless.
But why the urgent need for such loan?...that's bad news.

IamaNigerianGuy:
This is a good question. To answer it, lets start with two short definitions:

1. Inflation Too much money chasing after too few goods

2. Money: A store of value and a medium of exchange

In summary, money is a convention that is used to reflect value. It must be backed by production. There is more to it than that, but this is a simple explanation a layman can understand.

. While I understand you very clearly, I state that once the printed money is used for production of services like building bridges, schools, hospitals etc, there won't be inflation.

sorextee:
Very funny question.. Even the naira sef, we cant just be printing it anyhow..
it would lead to inflation, the money no go get value. more money chasing fewer goods.

Is Nigerians not currently experiencing the worst inflation ever?

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

Shey u want 1 dollar to become 16,000 naira abi...

lonelydora:


When i was in primary 4, i used to think like you. Which school did you graduate from?

Even if it's naira we are seeking for, we can't print it because it will lead to what we call INFLATION

Chisos Khrist my chest.... pure savagery

Like seriously........ If every country should be pretty excess money, where do you think we will all be heading to..... Inflation man. Even passport booklet is not easy to print.

Did you do Economics in Secondary school... or you were NOT listening in class?.... GOOGLE IS YOUR FRIEND!

Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

ivolt:


Don't try to save face, accept that you know nothing about economics.
That is why you tried mixing two unrelated issue of national fraud and
currency manipulations.

You won't die by accepting that you are wrong.

Sooth yourself.

TimeMod3:
You meant to say persona non grata.

But, who cares!
So long Nigerians get all the monies & investments we ever wanted as you remain on the saddle. Lol

And you had to point out a typo this Wednesday morning ?

I killed five people in Aba because of this

Inflation will NOT kill Nigeria if the Central Bank prints more money, they'll just have to be smart in doing it. It is called Quantitative Easing (read it up), during Obama's regime it was used to bring the US out of economic distress.

pls learn so that you will not make such mistake if u find yourself in power tomorrow

If you print naira of such equivalent, where then is the dollar to exchange it with? Have u forgotten that most of the goods and services Nigerians enjoy today come from other countries. it will then result to too much naira chasing one dollar, eg 850 naira to one dollar. imagine if such is the exchange rate now, do u know the quantity of hardship you have inflicted on the masses coupled with hardship already in place. this automatically will increase the general price level more than double. I believe one of the major causes of the problems we are facing in this country is printing naira in excess of our GDP and borrowing foreign money only to use it for consumption purposes, no capital investment both locally and internationally. if only we will have investment(multinational companies) in Europe that will generate this dollars, we won't be after borrowing since our crude oil export is not generating enough dollars.

You use money to print money, printing of money in Nigeria is under the mint and printing, its not that simple bro, a lot of bottlenecks are involved, if they print a lot of naira to that tune, it will cost a fortune in naira, and we still need to buy dollars, so a lot of cost will be incurred.

Do you think we should still go ahead and print the monies?

francotunsco:
. While I understand you very clearly, I state that once the printed money is used for production of services like building bridges, schools, hospitals etc, there won't be inflation.

You might face the unwanted attention of the international community as to how you raised the money. Remember that each country has an account operated by the world bank, Bank for International Settlements and other financial institutions. You would also 'pollute' your legitimate funds with the fraudulent ones and cause your viability to be called to question.
Some countries practice what you advocate but they do so as a last resort and need to be very smart about it. It's just much safer and foresighted to create value through production in the long term and borrow in the short term.

itiswellandwell:
Hmmmmm.. Lemme learn.

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