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Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador - Business - Nairaland

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Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Islie: 11:24am On May 16
Kayode Oyero

A former United States Ambassador to Nigeria, John Campbell, says Nigeria is experiencing a shortage of Foreign Exchange due to the fall in international oil prices.

He said the dip in oil prices occasioned by the coronavirus pandemic has had a negative effect on the Federal Government’s revenue and its access to US dollars through oil exports.

This was contained in a piece by Campbell published on the website of the Council on Foreign Relations, a US nonprofit thinktank.

The PUNCH reports that oil closed at about $60 per barrel in December 2019 but has since plunged to about $25 per barrel in May 2020.

The former American envoy to Nigeria said, “Driven in part by the need for dollars, the government devalued the Nigerian currency, the naira, to 360 to the U.S. dollar, down from 306. That, apparently, was not enough. As of May 12, the naira is traded at 445 to the dollar on the street, and the one-year forward trading rate is 514 to the dollar, which means traders expect the exchange rate to fall even further.

“The Lagos stock exchange index is down about 12 percent since the start of the year. Because it is denominated in naira, and the naira has been devalued, the loss in value is even greater in terms of international currency. There are anecdotes (impossible to quantify) that rich Nigerians are getting out of the market and doing what they can to shelter their assets abroad—an old song in times of instability, whether economic or political.”

https://punchng.com/nigeria-running-out-of-forex-ex-us-envoy/

5 Likes 3 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by donbachi(m): 11:26am On May 16
Nigeria will make do with the recovered abacha's loots and states on igrs...till e go be.

13 Likes 6 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Racoon(m): 11:27am On May 16
Of course this is happening because crude oil is our only source of foreign exchange with our mainly oil dependent mono-economy.

27 Likes 3 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by festacman(m): 11:29am On May 16
Ambassador John Campbell has not 'discovered another River Niger' by his analysis. He said the obvious.

However, it comes down to the criminal failure of successive governments to diversify the economy. But it is too late to cry over the spilt milk. We just need to clean up the mess real fast and come up with a sustainable plan for the future. It can be done. Well, in any case, it has to be done because we ain't get no choice.

61 Likes 3 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by DDeliverer(m): 11:30am On May 16
Lol. Nigeria would soon start selling zombies to raise money..

Wahala too much abeg

104 Likes 3 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Racoon(m): 11:33am On May 16
donbachi:
Nigeria will make do with the recovered abacha's loots....
Loots that have long been re-looted? Governors are even asking to be incorporated in the looting galore.

54 Likes 2 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by helinues: 11:39am On May 16
Dollar is currently above N400..

If the dollar scarcity lingers, then we should be expecting N500/$

39 Likes 2 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by helinues: 11:39am On May 16
Racoon:
Of course this is happening because crude oil is our only source of foreign exchange with our mainly oil dependent mono-economy.

We must blame Buhari for the low oil price... grin

6 Likes 3 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Karlifate: 11:41am On May 16
That's one of the result of relying TOO much on oyel money.

6 Likes 1 Share

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by KnowAll(m): 11:45am On May 16
Nigeria cannot run out of forex because the diaspora community sends in about $20 billion dollars every year. Where do u think that dollar ends, Nigeria central Bank.

24 Likes 1 Share

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Racoon(m): 11:48am On May 16
helinues:
We must blame Buhari for the low oil price... grin
Perhaps you have forgotten the dullard promised to stabilise oil prices? Helinues!!!!

70 Likes 2 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by tayebest(m): 11:49am On May 16
Nigeria need to shift the radar from petroleum, if not, we are in serious mess! angry

2 Likes 2 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by helinues: 11:50am On May 16
Racoon:
Perhaps you have forgotten the dullard promised to stabilise oil prices? Helinus!!!!

That was a twisted media talk.. That's not logically possible.

7 Likes 2 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by 4Play(m): 12:11pm On May 16
helinues:


That was a twisted media talk.. That's not logically possible.

We came into this crisis with the excess crude account (ECA) at $70m from $2bn just 2 years ago, forex reserves falling to $38bn in January this year from $45bn in June last year, and a tripling of foreign-currency denominated debt from $9.5bn in 2015 to circa $27bn today. These have left us more vulnerable than we should have been as we ran down our 'savings' (ECA & forex reserves) at the same time we were tripling our outgoings (debt repayments).


Because Nigeria is dependent on oil exports for forex, any government, no matter how competent, will struggle. But Buhari's government increases the likelihood of financial distress due to its economic illiteracy.

It should have taken the opportunity of the 2015/16 forex shortage to float the exchange rate and abolish the implicit subsidy in maintaining multiple exchange rates, and abolish fuel and electricity subsidies. These would have preserved cash and ensure the scarce money available to the government is used in beefing up infrastructure, healthcare and education.

I understand the urge to borrow from abroad as it tends to carry lower interest but we shouldn't do this unless we have built up enough fiscal buffers in the form of savings and lower budget deficits.

Any person who follows the history of oil prices will realise that it is a volatile commodity prone to sudden crashes. Government spending and borrowing should always be managed with this in mind until we wean ourselves from dependence on oil.

99 Likes 16 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Slawormir: 1:32pm On May 16
Damnnnnn niggarrr
Isoright

4 Likes

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Badonasty(m): 1:32pm On May 16
Ok
Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by xcesspaschal(m): 1:32pm On May 16
Who do we now believe?

1 Like

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Osidazz19: 1:33pm On May 16
ok

All currencies are taking hits right now except for the greenback (Dollar) simply because it's the currency of last resort where people all over the world are packing their money for now. Considering the oil prices and Coronavirus pandemic, the Naira is not doing too bad for now.

11 Likes

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Exc2000: 1:33pm On May 16
cool


we cant even sell our oil, even if they pay us $20 per barrel, our oil are at high sea accruing bills , demorage and storage / shiping fees

Tinubu's advise comes handy now, print in more Local currency to stimulate local purchasing power just has US are doing right now printing dollar, when the economy goes right CBN can mop up excess liquidity

Or They can use Athiefku's model seeking us to sell National revenue generating Asset so as to generate forex and spend it on toothpick, gucci and prada.. and when the next recession comes we wont have anything to sell again

.

8 Likes 1 Share

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by careytommy37(m): 1:33pm On May 16
We already knew that
Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Miracle4Sure: 1:33pm On May 16
Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by GamalNasser: 1:33pm On May 16
Certainly , Nigerians will have to pay for electing a hyper Dullard like Buhari..

11 Likes 1 Share

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Emax911(m): 1:34pm On May 16
v
Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by money121(m): 1:34pm On May 16
Ok
Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Ferdinandu(m): 1:35pm On May 16
When did he become our CBN Governor or our Finance minister? These Americans and Europeans always feel that they have a say in what is Going on in our lives

10 Likes 1 Share

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Osidazz19: 1:35pm On May 16
4Play:


We came into this crisis with the excess crude account (ECA) at $70m from $2bn just 2 years ago, forex reserves falling to $38bn in January this year from $45bn in June last year, and a tripling of foreign-currency denominated debt from $9.5bn in 2015 to circa $27bn today. These have left us more vulnerable than we should have been as we ran down our 'savings' (ECA & forex reserves) at the same time we were tripling our outgoings (debt repayments).


Because Nigeria is dependent on oil exports for forex, any government, no matter how competent, will struggle. But Buhari's government increases the likelihood of financial distress due to its economic illiteracy.

It should have taken the opportunity of the 2015/16 forex shortage to float the exchange rate and abolish the implicit subsidy in maintaining multiple exchange rates, and abolish fuel and electricity subsidies. These would have preserved cash and ensure the scarce money available to the government is used in beefing up infrastructure, healthcare and education.

I understand the urge to borrow from abroad as it tends to carry lower interest but we shouldn't do this unless we have built up enough fiscal buffers in the form of savings and lower budget deficits.

Any person who follows the history of oil prices will realise that it is a volatile commodity prone to sudden crashes. Government spending and borrowing should always be managed with this in mind until we wean ourselves from dependence on oil.



Rubbish voodoo economic theory.

You are asking Buhari to do something that previous govts were not able to do even when oil was selling for more than 100 dollars per barrel.

13 Likes 5 Shares

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Exc2000: 1:37pm On May 16
KnowAll:
Nigeria cannot run out of forex because the diaspora community sends in about $20 billion dollars every year. Where do u think that dollar ends, Nigeria central Bank.



funny thing is Diaspora forex earning has drastically reduced since NFIU , CBN and EFCC started messing with money transfer mediums

.

18 Likes 1 Share

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by AgroTrade: 1:38pm On May 16
I don't mean to sound negative, but NIGERIA is a disaster

6 Likes 1 Share

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by jansonn(m): 1:38pm On May 16
Gaskia, naija don tire me!! Abeg who know how I fit take jappa naa

1 Like

Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by Mykel51(m): 1:40pm On May 16
True...
Re: Nigeria Running Out Of FOREX – John Campbell, Ex-US Ambassador by temptnow: 1:40pm On May 16
Comments like this can destroy the naira even more, cos there will be panic buying in the forex space

18 Likes 2 Shares

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