TimeSpaceWizard:



Whether the world accepts naira or not, shouldnt be what bothers us, we should produce what we are importing.

TimeSpaceWizard:


Do I need one?


I have one here but do not need it. I do not spend dollars in Nigeria. I have an account in the USA for my business there.

TimeSpaceWizard:


Do I need one?


I have one here but do not need it. I do not spend dollars in Nigeria. I have an account in the USA for my business there.

CooKeed:


With due respect, you're beginning to embarrass yourself. I don't think you know enough about this topic. Please.

CooKeed:


Good evening.

I do not have anything to add to what jjman2322 and philip0906 have said so far. But I'll summarise:


When businesses approach Nigerian banks for dollars to import stuff (via letters of credit etc), the transactions still need to be settled in dollars i.e Nigerian banks will have to remit dollars to the correspondent banks, who will then remit to the suppliers abroad.

We earn dollars from exports. When we buy imported goods we pay in dollars (or some other prominent foreign currency).

The dollars we earn is far below what we need to import stuff, because we don't export a lot of stuff. So, Emzor,for instance , would need lots of dollars to buy raw materials, but sells their products locally in Naira.

Our major source of dollars is crude but
unfortunately crude prices have gone down. Secondly, we still spend a lot of the dollars buying back refined petroleum since we dont have functioning refineries. Which is why everyone has been waiting for Dangote to finish his refinery (but that is a story for another day)

So we dont have enough dollars. Therefore CBN rations what we have. If you walk into a bank and request for dollars to import stuff, the bank will 'bid' on your behalf. You may not get your full required amount in 6 months. So many businesses take the little that cbn gives them and source for the rest in the black market. Demand and supply. Demand goes up while supply remains unchanged. Therefore price goes up.

2fast4u:


You're earning dollars in USA and paying people via same.. You don't count amigo..

Now imagine your real estate company is in Nigeria, and people paid you NAIRA, but you had to settle suppliers in USA WITH USD.. This is the problem facing 99% of Nigerian companies and importers

Afriqan:


I keep saying it that Godwin Emefiele is the worst CBN governor in Nigeria's history.

All his policies and actions have not helped the country in any way. Imagine a very useful platform like Abokifx getting shut down just because he doesn't want people to be aware of the steady, constant fall of the Naira under his administration...

Na wa!

Solatium:



I have full understanding of everything you stated even before you itemized them.
i was only looking for something that i don't know unfortunately you did not state anything new sir,i am not being arrogant here.
but let me make few corrections to some of the things you said.

1...
Oil prices is not falling, it's actually going up,it was around $75 PB about 24hrs ago.



2... i agree we don't earn enough to balance our trading sheet and we can never earn enough,do you know why?
Remittance from abroad are routed through black market because you get a higher exchange figure when you do sell to them,that singular act alone has wiped off about 40% of your forex from the system,the remaining ones have to come from what is declared legally and whatever most people get from the legal means are divided into 2 and a part sold for profit at the black market while the rest is used for intending purpose,what do you think will happen when we do such? where will the replacement comes from if we all go to the black market to sell? of course you will go to the same black market to buy at any rate when you need them. we are all involved in these .


3.... You can not even have enough dollar in circulation even if our legal tender is American Dollar,it's simple economic term,the more currency you have in circulation the higher your inflammation,we do not even have enough naira to spend at every giving time.
Your o level economic subject an answer that when you flip to that page that talks about how you control excess liquidity which part of (a) OMO open market operations (b) Stock trading (c) withdrawal of cash from circulation and what have you.


I can tell you for free that their is no way your forex needs will keep jumping exponentially every week when the population remain almost the same within the same period.

Speculators which Black market and Abokifx belongs to that category are the major problem

TimeSpaceWizard:


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

Buckeyemedia1:
Bruv I get BOA account, doesn’t stop the need of operating a domiciliary account in Nigeria, when you need to withdraw & convert dollars to Naira when in Nigeria how do you do it?

benjijosh:


And CBN is printing dollars that everytime you go to them, they will give you just enough right?

lwisee:


Ni baba e

henryobinna:
do you guys even know the root cause of Naira having low value? You think converting all domiciliary account to naira would solve your problems? People are chasing shadows while ignoring the real problem.

Once again, nobody buys the naira. Nigeria doesn't export products to foreign countries that would require them to exchange their currencies to naira to buy. Nobody buys the naira oga.

Doing what you suggested would only create serious tension than the CBN can handle. E be like you and the CBN guy dey smoke same weed

henryobinna:
as a publisher that receives payment from foreign companines in dollars I deserve to know what it's traded at so as to not be swindled by folks like you

2fast4u:


Easy to say, impossible to implement.. Nigeria is so far behind that we need 100's of years to be like India or China.

Manufacturing takes billions of dollars in Research and development, stable electricity, Good universities, etc...

You think Nigeria will be able to manufacturer a computer chip, or a camera, or a phone anytime soon? nah fam.. we are 100 years behind at least..

Newboss:


Actually, BDC was not stopped. CBN only stopped selling currencies to BDC.

If BDC source for their own dollars, then they decide how much they sell and buy the dollars based on demand and supply.

CBN has greatly limited the amount of dollars that banks should sell, hence BDC are the ones offering unlimited and unconditional supply of dollars. Hence, BDC solves a problem CBN created. Hence, BDC controls the market.

You want to buy dollars from banks? Good luck getting the dollars!

RodgersAkpafu:

Sad truth

TimeSpaceWizard:


To solve Nigeria's problem you must shut down bdc and convert all fx to local currency. Full stop.

Your fx need is not a cash call, it is handled by correspondence banks in the countries you are importing from.

DuduParaPara:
E don set.

But will this stop the free fall of the naira?

So how then do we know the price to negotiate with aboki on the street?

Since CBN has decided to be unfortunate by refusing to be transparent?

lwisee:
Good move, most people sit behind their laptops, check the exchange rate on abokifx before giving you quotations.
The next thing you hear is 'Oga everything is expensive now ooo
Even 1 dollar is now N560 I swear, you can check abokifx'

Government need to shutdown the website as well.

TimeSpaceWizard:


To solve Nigeria's problem you must shut down bdc and convert all fx to local currency. Full stop.

Your fx need is not a cash call, it is handled by correspondence banks in the countries you are importing from.

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.

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!

CooKeed:


It is OK if you don't learn anything new from my post. Hopefully, a few others will.

Your 3 'corrections' are incorrect. And I hope you're arguing in good faith, not just for argument's sake. I will address them:

1. Please plot a chart of crude prices over the last 2 years (pre-covid to date) when the Naira was trading at 360 to the dollar and let's see. You cannot claim higher prices based on little fluctuations that happened in 24 hrs or a week.


2. The only question you need to ask yourself is this: what makes the black market to attractive? Why do people prefer to sell their remittances at the black market? Why is there a demand for dollars in the black market? You may please refer to my previous post for the answer.

3. This is simply not true. What do you mean by 'you cannot have enough dollars in circulation'? Both the Pound and Euro are worth more than the dollar. Surely, this means the UK and EU have more than enough dollars (relative to their respective currencies).

Finally, your fx needs can jump exponentially. It is not about population. It is about demand and supply. It happened in Zimbabwe. It happened in Venezuela. It happens in all countries where imports continue to outstrip exports while government depletes foreign reserves.

Are we saying that we don't have speculators? Of course we do. But they are not THE major problem. In fact, I'd say they are merely a symptom of the problem. If we had enough dollars, speculators would be out of job.