jjman2322:



This is why a good business school is needed in Nigeria.. People dont understand Economics 101

First of all, CBN official rate is like 410, so converting any FX inflow to naira means you will get it at 410... Now let me ask you, your uncle in USA has $10,000 for you. Will you tell him to wire the $10,000 to nigeria for N4,100,000, or will you find a third party who needs to pay his supplier in China,India, and sell it to him for 550 (N5,500,000) ? This is whats basically happening.

As someone in the manufacturing, let me try and explain whats going on. There is severe shortage of USD. Lets assume you need raw materials worth $500,000 for the month, you may be lucky to get $5,000 in a month from your bank/cbn (through LC OR BILL FOR COLLECTION), so you now have to go to blackmarket for the rest.

Abokifx just publishes prevailing rate.. Abokifx is irrelevant when it comes to demand and supply.. Im too tired to explain more, but the solution is simple.. CBN needs to provide more USD to the big companies who need it, and the black market price (REAL DOLLAR PRICE) will drop..

The reason why goods are going up in prices (TV, PHONE, AC, FOOD, etc), even though officially dollar is 410, is because NOBODY IS GETTING 410, or even when they do its minimal.. Yes you can get PTA (Travel allowance) from your bank, but thats only like $4000.

The real problem is when as a manufacturer you need $1m.. Good luck getting that in 10 years....

There is real demand for USD from local companies here for at least $500M a day, and CBN is barely giving 10% of that.. See the problem

How much do you think NESTLE spends daily on USD, or Nigerian breweries... Quick example, indomie is made with tapioca starch, Potasium & sodium carbonate, sodium tripolyphosphate, riboflavin which are imported.. They must probably use $millions weekly just for import... So they go to black market = price jump in finished product... Hope i made some sense..

Wow...

I enjoyed your lecture.

Learning everyday is fun...

You do not need bdc to import anything. You do not nerd dorm account to import anything. As a matter of fact I am sending a memo to CBN today to consider converting all dorm reserves to naira at CBN rate and closure of all bdc.

You do not need to source for usd to import, it is only in Nigeria you get all these parallel fx system. Simply pay your naira and get the dollars from bank at CBN rate to be paid out.

Having bdc and dorm accts destroyed Nigeria fx sector and must be stopped.

Now everyone is just scamming their way to glory under the pretext of affiliate marketing and importation and manufacturing. I am manufacture 3 products and I have businesses offshore too.

I am not a novice

Hmmm...

This is a good suggestion. But isn't it an over reach?
I don't think the CBN has the mandate to do what you suggested.

daddytime:


Start with the major FMCG's (The Dangotes, Unilever, Nestle, BUAs et al

Ascertain the profit margin from each of their products, check out what percentage profit they are making on each product, weigh it in dollar terms against the official rate at which you sold dollars to these manufacturers, and then project and enforce to them how much they should sell to the citizens who are in the majority and the ones the leaders fought tooth and nail to come "serve".

CooKeed:
We don't even need to make all these fancy things for a start. No country makes everything. Make the one you can make. But make a lot of it and export it.

Just make something. Produce stuff. Two years ago we were celebrating the opening of our first pencil factory. As sad as that sounds, I was able to stomach that.

Importing graphite to make cheap pencils using imported diesel and imported machines with spare parts that also have to be imported might not bring in as much forex as you expect. It might not be worth it. But you have to do the calculations to determine that.

But I was shocked to learn earlier this year that Nigeria imports maize. Lots of maize. As in, we don't have enough maize to meet the demand of our livestock farmers. Maize that our ancestors have been cultivating for how long?!!! Maize!!! Ah!

How will we produce enough maize when herdsmen are allowed to graze on peoples' farms and kill the farmers if they date to challenge them? Cows love maize forage. Hundreds of farmers have abandoned their farms because of cows.

Seun:

Importing graphite to make cheap pencils using imported diesel and imported machines with spare parts that also have to be imported might not being in as much forex as you expect. It might not be worth it. But you have to do the calculations to determine that.

How will we produce enough maize when herdsmen are allowed to graze on peoples' farms and kill the farmers if they date to challenge them. Hundreds of farmers have abandoned their farms because of farms. Personally, I would rather grow cash crops like cocoa which can make a lot of money than commodity crops which are grown to feed animals and have to be sold cheap. We can use the cocoa money or chocolate money to import corn and wheat. That's smarter.

That's a point.

Agriculture is now counterproductive in places like Benue. You could be killed.

owagbeba:


What’s the way forward for businesses?

Only accept USD payments?

How low do you think Naira may fall?

We are currently calculating price of service for this week and next at 600 per usd.

It’s tough!

Simple.
Depreciate the Naira at the CBN rate to between 460-480. Resume sale of forex to the BDC'S around the 460-480 mark. This will lead to a close merger of the 2 rates so that the difference will between the rates won't be more than 3%. It may even drop to around 2%.

The reason why there is chaos is that Buhari does not believe in devaluation. This is the crux of the matter. Let me ask: If $10b was flowing in monthly and the price is $1 - 400, will the price remain the same if the volume of dollars inflow reduces to $5bn? Will those buying dollars have to pay more for it or less? Buhari expects them to pay the same price.

Due to that, the official rate stays the same. When buyers cannot get enough forex at the CBN rate, what will they do? They turn to the black market and this leads to the black market rate depreciating and leading to a large spread between it and the official rate. Until the CBN rate is allowed to depreciate due to market forces, the mess in the forex market will continue.

The best answer is to sack Buhari! With Buhari gone, the CBN governor will be able to act independently and put into place sound policies to fix the Naira.

philip0906:
CBN has reportedly shut down accounts belonging to AbokiFx on the basis of publishing rates as it violates the National Intelligence committee act of 2004.

Red hot!

jjman2322:
I found one RETURN ON CBN WHOLESALE FROM 2017.. And trust me their demand was much higher than given to them..

567 Customers, $95M given.. I can link you if you want.. But oil companies got like half of it..

Meanwhile companies like MTN, Airtel, Multichoice, also got a ton..

How does this work? Please educate me

Keep your dirty mouth shut. You guys are so wired to a financial system that is designed for fraud. Nigeria fx system is a fraudulent system. I have a US company and I use that to make payments for imports and its shipped into Nigeria. Why should I depend on a fraudulent system to actuate my destiny?

The person explaining there is suffering alongside you all that have to go through understand a stupid system in order to survive when he can simply incorporate a US company and do businesses in better economies.

I do not know why you guys are primarily Ape-like.

How do I go about incorporating my business in us?

philip0906:
CBN has reportedly shut down accounts belonging to AbokiFx on the basis of publishing rates as it violates the National Intelligence committee act of 2004.

*SMH.*

jjman2322:



This is why a good business school is needed in Nigeria.. People dont understand Economics 101

First of all, CBN official rate is like 410, so converting any FX inflow to naira means you will get it at 410... Now let me ask you, your uncle in USA has $10,000 for you. Will you tell him to wire the $10,000 to nigeria for N4,100,000, or will you find a third party who needs to pay his supplier in China,India, and sell it to him for 550 (N5,500,000) ? This is whats basically happening.

As someone in the manufacturing, let me try and explain whats going on. There is severe shortage of USD. Lets assume you need raw materials worth $500,000 for the month, you may be lucky to get $5,000 in a month from your bank/cbn (through LC OR BILL FOR COLLECTION), so you now have to go to blackmarket for the rest.

Abokifx just publishes prevailing rate.. Abokifx is irrelevant when it comes to demand and supply.. Im too tired to explain more, but the solution is simple.. CBN needs to provide more USD to the big companies who need it, and the black market price (REAL DOLLAR PRICE) will drop..

The reason why goods are going up in prices (TV, PHONE, AC, FOOD, etc), even though officially dollar is 410, is because NOBODY IS GETTING 410, or even when they do its minimal.. Yes you can get PTA (Travel allowance) from your bank, but thats only like $4000.

The real problem is when as a manufacturer you need $1m.. Good luck getting that in 10 years....

There is real demand for USD from local companies here for at least $500M a day, and CBN is barely giving 10% of that.. See the problem

How much do you think NESTLE spends daily on USD, or Nigerian breweries... Quick example, indomie is made with tapioca starch, Potasium & sodium carbonate, sodium tripolyphosphate, riboflavin which are imported.. They must probably use $millions weekly just for import... So they go to black market = price jump in finished product... Hope i made some sense..

Word!

You have a hang of the real world situation here...

There's also a lot of "artificial inflation" in the Nigerian economy due to the hoarding of imported and locally produced commodities and raw materials!

philip0906:
CBN has reportedly shut down accounts belonging to AbokiFx on the basis of publishing rates as it violates the National Intelligence committee act of 2004.

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