gambia:
Keep deceiving your zombies.

But when the same NBS said Nigeria was in recession, you believed right? SMH. The truth is that hardworking Nigerians are making money with the ease of registering businesses introduced by the Govt. We mustn't criticize everything and I agree we can hold them responsible for insecurity but on this topic, Buhari has done nothing wrong. Bless you brother!
Let's all pray we get to the promised land in our lifetime..

FOOLS don't place value on human lives.

20% would have been a better figure. just call a good number if you want to doctor figures. don't be beating around the bush.

Eriokanmi:
I can only respect external ratings and reports, not the one brought to the fore by the NBC

But when the same NBC post the unemployment and inflation rates, you will believe them because it plays to your negative mindset

I don't know why this so called Government are so stupid that they can't picture their failure, they keep on writing rubbish and celebrating.

presidency:
PRESIDENT BUHARI LAUDS GDP 5.01% GROWTH IN Q2 2021

President Buhari welcomes today’s Q2 2021 report by the Nigerian Bureau of Statistics, showing a third consecutive quarter of positive growth of Nigeria’s economy, as well as the highest quarterly growth in GDP since 2014.

The Gross Domestic Product (GDP) grew by 5.01% in Q2 2021 following 0.51% growth in Q1 2021. This growth, which continues the progress of the preceding two quarters, is a continuing trend reflecting Nigeria’s economic rebound following the COVID-19-induced contractions seen in Q1 and Q2 2020.

The non-oil sector is a significant contributor to the economic performance in Q2 2021 with growth of 6.74% in real terms, the fastest growth in the sector since the third quarter of 2014. The contribution of the non-oil sector to GDP increased from 91.07% in Q2 2020 to 92.58% in Q2 2021.

The President commends managers of the economy for hard work and commitment, urging them to keep at it till the positive development “touches the lives and pockets of the average Nigerian.”

The main drivers of the Q2 2021 economic growth include Trade, Information and Communication (mainly Telecommunications), Transportation, Electricity, Agriculture (Crop Production) and Manufacturing.

The service sector, specifically, recorded its strongest performance in more than a decade, growing at 9.27%.

These main growth drivers of this second quarter performance are reflective of the gains from easing restriction of movement locally and internationally, and the improvement in the business and economic environment compared to the same period in 2020.

The President notes the decline in real growth in the oil sector in Q2 2021, compared to a year ago. Oil production levels were at 1.62million barrels per day, compared to 1.67million barrels per day in Q2 2020. The lower production output as well as the volatility in oil prices since the beginning of the COVID-19 pandemic, is responsible for the decline in performance of the oil sector.

President Buhari assures that recent reforms and efforts like the conclusion of the Marginal Fields Bid Round, the renewed focus on gas development (including the NLNG Train 7 project, and various pipeline construction projects) as well as the passage and assent to the Petroleum Industry Bill (PIB), are certain to attract new investment to the oil and gas sector, and create conditions for more robust levels of growth in the future.

It is gratifying to note that the various policies of the administration, aimed at boosting agricultural production, improving the business environment, and investing massively in infrastructure, are beginning to yield fruit. Equally gratifying is the complementary news of the steady decline in the rate of inflation, over the last few months.

The positive effects of the Economic Sustainability Plan (ESP), which helped fast-track the country’s exit from the COVID-induced recession of 2020, continue to be evident, as some of the sectors driving the Q2 2021 growth have benefited or are benefiting from government-led interventions.

The successful roll-out of vaccines and COVID-19 protocols has also helped to reduce pressures on the healthcare system and the need for a lockdown.

Looking to the future, the President assures Nigerians that there is much to be optimistic about. He assures that the investments in agriculture and infrastructure will continue, as will on-going efforts to achieve a significant improvement in the security situation across the country.

“There is no doubt that a more secure environment - which the security agencies are working hard to achieve - will spur and energize the shoots of economic progress being seen and felt in the country,” the President said.

Femi Adesina
Special Adviser to the President
(Media and Publicity)
August 26, 2021

Siwel25:


But when the same NBS said Nigeria was in recession, you believed right? SMH. The truth is that hardworking Nigerians are making money with the ease of registering businesses introduced by the Govt. We mustn't criticize everything and I agree we can hold them responsible for insecurity but on this topic, Buhari has done nothing wrong. Bless you brother!
Let's all pray we get to the promised land in our lifetime..

I understand your point bro, but that doesn't change the fact that there's serious inflation everywhere. Shalom!

So why can't it be 51.8%?

stepaside2:

But when the same NBC post the unemployment and inflation rates, you will believe them because it plays to your negative mindset

enough said in my earlier post. It's fake report because it's not a true reflection of the realities on ground. I'm a businessman and I do know what's obtainable. I know how much the dollar is today. Most of you guys are still being fed by parents and guardian so you wouldn't understand. That's why you're posting anything

gambia:


I understand your point bro, but that doesn't change the fact that there's serious inflation everywhere. Shalom!

Yes, even the blind can see that. That is Nigeria's biggest problem because in developed countries, prices of goods remain the same for so many years which makes whatever little amount you have more valuable. In Nigeria, prices change every single year and I think it is one thing we should hold the Govt (this and next) responsible for. All we need are stable prices which will give value to whatever you earn and can help you plan for the future. Basic needs should be affordable and stable; Once they are, the gap between the rich and poor will not even be significant.

grandstar:
I think the economic spurt might simply be a recovery from the serious lows of caused by the Covid induced recession.

What is sad is that the economy would have been enjoying growth of at least 4.5% yearly if PMB had maintained the flexible exchange rate he met.

Instead, he pegged the exchange rate upon assumption of office. His interference in the exchange rate is the root of the mess the economy is in today.

I had written off the economy once he fixed the rates. It smacked of a lamentable understanding of economics.

Nigeria exchange rate has never been floated, it's always been fixed by monetary authorities at least in the last 15 years.
If not CBN won't announce devaluation of Naira from 165 to 199 in the twilight of 2014.
Black market rates had also been with us, relative stability of the naira from 2010-2014 was due to unprecedented supply of forex from high Oil earrings and speculation by FPI creaming off dollar profits for adding no real value. They started fleeing with oil price drop.

Ovamboland:


Nigeria exchange rate has never been floated, it's always been fixed by monetary authorities at least in the last 15 years.
If not CBN won't announce devaluation of Naira from 165 to 199 in the twilight of 2014.
Black market rates had also been with us, relative stability of the naira from 2010-2014 was due to unprecedented supply of forex from high Oil earrings and speculation by FPI creaming off dollar profits for adding no real value. They started fleeing with oil price drop.

Omohayek, is this correct that Nigeria never implemented flexible exchange rates?Omohayek is an Economist.

Yes, the stability of the Naira was largely credited to the huge inflow of dollars during the time.

Nevertheless, the foreign reserves should have been much larger if the then CBN governor had taken the advice of the IMF to devalue the Naira.

Princeton92:
So why can't it be 51.8%?

If wishes were horses, everyone would have several.

grandstar:


Omohayek, is this correct that Nigeria never had implemented flexible exchange rates?Omohayek is an Economist.

Yes, the stability of the Naira was largely credited to the huge inflow of dollars during the time.

Nevertheless, the foreign reserves should have been much larger if the then CBN governor had taken the advice of the IMF to devalue the Naira.

It seems a large number of Nigerians want to blame the govt for not allowing the Naira to devalue by floating while another large group, sometimes made of same people, want to blame govt whenever devaluation/floating is implemented and currency value drops. More like whatever you do you lose or get blamed.

While looking for scapegoats amongst ourselves, we've left the elephant in the room which is extremely low level of exports due to low productivity of goods in worldwide demand. Even if it is raw agricultural goods we produce, peanuts, beans etc, still better than everyone depending on diminishing Oil forex to pay for our desires, iphone, cars, foreign vacation/education/medicals, basic food.

Another big elephant is too much reliance on import substitution industrialization strategy. It's proven to be a failure, as they turn out to be forex guzzlers without contributing anything to forex earnings. We must change strategy to export led industry. Let's give companies that can export 90% of their products 0% company income tax holiday for at least 15 years for a start.

I personally believe that it will be better if the progress in GDP translates into food security and available not book profit GDP

Ovamboland:


If wishes were horses, everyone would have several.

Lol... unfortunately wishes don't come through in the country Nigeria

grandstar:


Omohayek, is this correct that Nigeria never had implemented flexible exchange rates?Omohayek is an Economist.

Yes, the stability of the Naira was largely credited to the huge inflow of dollars during the time.

Nevertheless, the foreign reserves should have been much larger if the then CBN governor had taken the advice of the IMF to devalue the Naira.

Yes, Nigeria had a fixed exchange-rate regime in the 1960s, as did most other countries under the Bretton Woods system, until the 1973 oil shock forced Nixon to float the US Dollar. Of course, Nigeria was one of the beneficiaries of that oil shock, and could therefore afford to peg the currency, at least until oil prices collapsed in 1979, after which the unaffordable peg could be sustained for a while by massive borrowing (which it took Obasanjo and Okonjo-Iweala to clean up decades later).

By the time Buhari pulled off his coup in 1983, Nigeria was both broke and a pariah in the international bond market, so Buhari tried to sustain the peg by the one and only method he has ever known for "fixing" things, i.e. issuing import bans and draconian punishments for "speculators" and "profiteers". Of course, that worked just as well as such measures have always worked in glorious places like Venezuela - i.e. not at all - so by the time Babangida was forced to go to the IMF (the lender of last resort when nobody else is willing), the only options were either a float or going down the North Korean route of autarky and mass starvation.

Ever since then Nigeria has had what is called a "managed float", which is to say the CBN tries to keep the exchange rate within a certain narrow band, but is sometimes forced to waste massive amounts of foreign reserves defending it in the face of speculators who can see that the rate is unjustified by the fundamentals. This wasteful system is only made worse by the insistence on running multiple parallel rates, with access to the better rates restricted only to a well-connected few who are able to make massive, riskless profits by reselling their "cheap" dollars to everyone else.

So to summarise, yes, Nigeria's foreign reserve situation would be much better if the Naira had been allowed to freely float, just as the US Dollar, the British Pound, the Japanese Yen and most other rich countries have done since 1973. Export-oriented countries recognize that a "strong" currency isn't something to be welcomed per se, which is why first Japan and now China have repeatedly been accused by American politicians of keeping their currencies weak to undermine American manufacturers. The Naira's real problem over the decades has not been that it was allowed to float, but that Nigeria's rulers have repeatedly opted for inflationary domestic policies, which inevitably lead to a weakening currency under what is called the Covered Interest Rate Parity condition.

Princeton92:


Lol... unfortunately wishes don't come through in the country Nigeria

Mere wishes hardly come true anywhere in the world, you got to work hard for it if you don't have a huge inheritance

omohayek:

Yes, Nigeria had a fixed exchange-rate regime in the 1960s, as did most other countries under the Bretton Woods system, until the 1973 oil shock forced Nixon to float the US Dollar. Of course, Nigeria was one of the beneficiaries of that oil shock, and could therefore afford to peg the currency, at least until oil prices collapsed in 1979, after which the unaffordable peg could be sustained for a while by massive borrowing (which it took Obasanjo and Okonjo-Iweala to clean up decades later).

By the time Buhari pulled off his coup in 1983, Nigeria was both broke and a pariah in the international bond market, so Buhari tried to sustain the peg by the one and only method he has ever known for "fixing" things, i.e. issuing import bans and draconian punishments for "speculators" and "profiteers". Of course, that worked just as well as such measures have always worked in glorious places like Venezuela - i.e. not at all - so by the time Babangida was forced to go to the IMF (the lender of last resort when nobody else is willing), the only options were either a float or going down the North Korean route of autarky and mass starvation.

Ever since then Nigeria has had what is called a "managed float", which is to say the CBN tries to keep the exchange rate within a certain narrow band, but is sometimes forced to waste massive amounts of foreign reserves defending it in the face of speculators who can see that the rate is unjustified by the fundamentals. This wasteful system is only made worse by the insistence on running multiple parallel rates, with access to the better rates restricted only to a well-connected few who are able to make massive, riskless profits by reselling their "cheap" dollars to everyone else.

So to summarise, yes, Nigeria's foreign reserve situation would be much better if the Naira had been allowed to freely float, just as the US Dollar, the British Pound, the Japanese Yen and most other rich countries have done since 1973. Export-oriented countries recognize that a "strong" currency isn't something to be welcomed per se, which is why first Japan and now China have repeatedly been accused by American politicians of keeping their currencies weak to undermine American manufacturers. The Naira's real problem over the decades has not been that it was allowed to float, but that Nigeria's rulers have repeatedly opted for inflationary domestic policies, which inevitably lead to a weakening currency under what is called the Covered Interest Rate Parity condition.

So it's not true that Buhari came to introduce fixed currency rate in reversal of any previous floating policy. Naira had always been essentially a fixed currency by monetary authorities.

Then we can have a clean debate about the pros and cons of allowing our currency to freely float like the industrialized countries. What would be the impact on forex supply, currency value and cost of living due to high levels of imported basic consumables?

Ovamboland:


So it's not true that Buhari came to introduce fixed currency rate in reversal of any previous floating policy. Naira had always been essentially a fixed currency by monetary authorities.

Then we can have a clean debate about the pros and cons of allowing our currency to freely float like the industrialized countries. What would be the impact on forex supply, currency value and cost of living due to high levels of imported basic consumables?

Nigerians love to say they are all in favor of importing less and producing more at home, and that is precisely what allowing the Naira to depreciate to its true value would accomplish: imports would become more expensive and domestic producers would be better placed to compete. Of course, what Nigerians say they want and what they really want are often very different things, and in this case what economists would call Nigerians' revealed preference is for lots more imports, which they see (often justifiably) as superior to the domestic alternatives. What most Nigerians really seem to want is for everyone else but themselves to forego imports in the name of a bogus "patriotism" that rarely manifests itself in day to day living.

As to what allowing the Naira to float would do to the cost of living, it can't be any worse than the status quo of pretending that it's real value is something very different, and then only allowing an extremely tiny elite to access USD at that "official" rate. Do you suppose the traders who supply the imported goods Nigerian retailers consume have even a prayer of buying substantial amounts of Dollars at the "official" rate? No, it mostly goes to the likes of Dangote, who already depresses the Nigerian standard of living through his monopolies, even before taking into account the diversion of Nigerian foreign reserves to further subsidize him. In short, abolishing the multiple-rate system and going for a full float should lead to no increase in the price of goods for most items, as those items are already being imported at black-market rates for the most part.

All of the above doesn't even take into account the consequences for FDI and remittances of abolishing Nigeria's absurd, byzantine forex controls. Do you know that it is currently forbidden for Nigerians abroad to use services like Wise (aka TransferWise) to send money home? All so Emefiele can force remitters to swallow artificialy low sums he can then divert to the connected few he love to play houseboy to. This might not seem a big deal if you didn't know that remittances are actually Nigeria's second-biggest source of forex after oil, and more than 11x times the value of FDI into the country as of 2018. How much more would that sum be if Nigerians above weren't being robbed of the amounts they currently send home?

And as for why remittances are so much larger than FDI in the first place: would you invest in a foreign country which told you to bring in your money at N400:$1, but would only allow you to recoup the same investment at N500:$1? In this scenario you'd essentially have to be guaranteed a 25% return on your investment just to break even! And that's even before having to deal with all the inefficiency and corruption you'll meet once you try to actually run a business on Nigerian soil ...

Whatever the (mostly illusory) gains to be had from maintaing the current convoluted setup, the opportunity cost in forgone growth is so great that there is simply no justifying the status quo other than as a means of enriching a handful at the expense of 200 million struggling to just get by. Luckily for the few, most Nigerians are badly educated and easily taken in by nonsense talk about a "strong" Naira they will never personally benefit from in any manner.

In the long run, the only way to improve any people's standard of living is by raising their productivity, and that means heavily investing in education, by reducing the scope and scale of corruption (not least by reducing the scope of government), and by hugely increasing the scope of investment in infrastructure through much better tax collection or much higher FDI. Nobody has ever gotten rich by messing around with their currency in vain hopes of making it "strong" - one might as well dream of building a skyscraper by shuffling around playing cards with sufficient cleverness and effort. It's the fundamentals that matter in the end.

omohayek:

Yes, Nigeria had a fixed exchange-rate regime in the 1960s, as did most other countries under the Bretton Woods system, until the 1973 oil shock forced Nixon to float the US Dollar. Of course, Nigeria was one of the beneficiaries of that oil shock, and could therefore afford to peg the currency, at least until oil prices collapsed in 1979, after which the unaffordable peg could be sustained for a while by massive borrowing (which it took Obasanjo and Okonjo-Iweala to clean up decades later).

By the time Buhari pulled off his coup in 1983, Nigeria was both broke and a pariah in the international bond market, so Buhari tried to sustain the peg by the one and only method he has ever known for "fixing" things, i.e. issuing import bans and draconian punishments for "speculators" and "profiteers". Of course, that worked just as well as such measures have always worked in glorious places like Venezuela - i.e. not at all - so by the time Babangida was forced to go to the IMF (the lender of last resort when nobody else is willing), the only options were either a float or going down the North Korean route of autarky and mass starvation.

Ever since then Nigeria has had what is called a "managed float", which is to say the CBN tries to keep the exchange rate within a certain narrow band, but is sometimes forced to waste massive amounts of foreign reserves defending it in the face of speculators who can see that the rate is unjustified by the fundamentals. This wasteful system is only made worse by the insistence on running multiple parallel rates, with access to the better rates restricted only to a well-connected few who are able to make massive, riskless profits by reselling their "cheap" dollars to everyone else.

So to summarise, yes, Nigeria's foreign reserve situation would be much better if the Naira had been allowed to freely float, just as the US Dollar, the British Pound, the Japanese Yen and most other rich countries have done since 1973. Export-oriented countries recognize that a "strong" currency isn't something to be welcomed per se, which is why first Japan and now China have repeatedly been accused by American politicians of keeping their currencies weak to undermine American manufacturers. The Naira's real problem over the decades has not been that it was allowed to float, but that Nigeria's rulers have repeatedly opted for inflationary domestic policies, which inevitably lead to a weakening currency under what is called the Covered Interest Rate Parity condition.

Thanks for this. I learnt something new. Do you think the Naira can be floated?

8 wasted years of Buhari will soon end. I foresee the dismantling of his forex control policies within a month of a new administration. They are the prime reason why the economy is in the horrid state it is today.

grandstar:


Thanks for this. I learnt something new. Do you think the Naira can be floated?

8 wasted years of Buhari will soon end. I foresee the dismantling of his forex control policies within a month of a new administration. They are the prime reason why the economy is in the horrid state it is today.

I don't see any reason why it shouldn't be. If anything, I expect that the "black market" rate for the Naira would actually rise upon floating the Naira, as the rational expectation would be that a clean float would be accompanied by the lifting of all current restrictions on remittances, and an uptick in foreign interest in Nigerian assets.

Assuming the Naira was allowed to have a single, market-determined value, the big question remaining in the minds of market watchers would be whether the new government retains the Buhari era's aversion to privatisation and deregulation. Staying with things as they are, with a horribly bloated public sector which requires heavy foreign borrowing to keep it afloat, is simply not sustainable: it's no good noting that the debt-to-GDP ratio remains relatively low by international standards if the revenue-collection-to-GDP ratio is far worse, not when income-per-capita is so low that even a few extra percent in taxes can tip millions into outright starvation.

The only realistic option for Nigeria to lift its rate of investment in productivity-enhancing factors is by heavy, sustained foreign investment, and a new government that doesn't immediately show it realises as much will be signalling to the markets that it's going to try to inflate its way out of trouble (and even more so once the bond markets and sovereign lenders start to say "no" ), which will inevitably translate into ongoing weakening of the Naira, whatever the efforts to disguise it through financial shell-games.

omohayek:

I don't see any reason why it shouldn't be. If anything, I expect that the "black market" rate for the Naira would actually rise upon floating the Naira, as the rational expectation would be that a clean float would be accompanied by the lifting of all current restrictions on remittances, and an uptick in foreign interest in Nigerian assets.

Assuming the Naira was allowed to have a single, market-determined value, the big question remaining in the minds of market watchers would be whether the new government retains the Buhari era's aversion to privatisation and deregulation. Staying with things as they are, with a horribly bloated public sector which requires heavy foreign borrowing to keep it afloat, is simply not sustainable: it's no good noting that the debt-to-GDP ratio remains relatively low by international standards if the revenue-collection-to-GDP ratio is far worse, not when income-per-capita is so low that even a few extra percent in taxes can tip millions into outright starvation.

The only realistic option for Nigeria to lift its rate of investment in productivity-enhancing factors is by heavy, sustained foreign investment, and a new government that doesn't immediately show it realises as much will be signalling to the markets that it's going to try to inflate its way out of trouble (and even more so once the bond markets and sovereign lenders start to say "no" ), which will inevitably translate into ongoing weakening of the Naira, whatever the efforts to disguise it through financial shell-games.

Also, a float would fix the "supply side" issue and not the "demand side" issue of forex which most governments focus on.

For the past 6 years, this government has not privatized a single company. No liberalization or deregulation whatsoever. He had the best of opportunities to deregulate the petrol price but time and time again, he blew it.

What he does not know is that a deregulation may even reduce pressure on the foreign reserves.

When the Saudi Riyal came under pressure after the oil price collapsed fairly recently, the government ended all oil subsidies and i think introduced a tax, I'm not sure if it's a direct tax on income or a VAT but Immediately that was done, the pressure disappeared.