pipnator00:
How long/time are we gonna continue devaluing the naira?

If we devalue today, in about 6-8 months, there will be another talk of Naira devaluation.

Simple float the Naira and let the Naira find it's value at the open. That way, govt will have enough $$ to channel into other areas of the economy.

The effect/pain of a worthless naira is something we will/must suffer whether we like it or not since we are a consumer nation coupled with the govt's increased borrowing.

Rather than make us suffer the pain/effects of worthless naira in piecemeal, give us the suffering once and for all so we can move on.

Like i wrote, whether we like it or not, we will suffer it, though we are already suffering piecemeal.

But make i no lie, the suffering go hard die! Lots people will die/suicide, crime will increase, in fact e go rugged gan!!

Crime don increase.
Going out at night now na risk. Carrying huge amount of money na risk. Street dey para

They look flashy, dress well, good academics but zero management and leadership skills.

abokimallam:
The Vice President knows that Nigeria is an import dependent country since all the governments I knew since I became adult,has been preaching diversification, yet they do nothing. All they are after is oil money which is quick to get without any commensurate investment.
Today, I suspect that 50 percent of Nigeria forex earnings is used for fuel importation. Why should the naira not be under pressure.
I would advise the Vice President to look at the history of naira devaluation since 1975 and point to its impact on the economy.
However, my advice is that Government should be ready to denominate workers salaries in DOLLARS along the line of the devaluation since almost everything consumed in Nigeria is imported.
Economics is not Law, Mr VP.
Leave economy for economists.

Chai
Your point on looking at the history of devaluation sums up every single thing gaskiya. VERY SOLID POINT but will they ever implement? That's the big question

his statement is worrisome and mind bugling

madmohamed:
Nigeria prepare for what it seems will be the greatest corrupt government for nest two years

We just discovered something most wicked and evil government of Nigeria under buhari this is grave consequences

We discover that this buhari government and Fulani cabal's have secret account where they transfer 35% of the money they borrow from foreign country (not including China) and most likely from oil money billions of dollars are transferred to some of this accounts


They open this account in case of if something happens to Nigeria they will use that billions to survive mind you the north Sentral is not part of this only Fulani cabal's knows about this accounts

The account was opened in the name of northern development management just to confused the borrower's that the money is mean for development of northern Nigeria

The signatory of this accounts in Saudi Arabia have ellofi signature the governor of Kaduna state and baba amed the Northern Elders volume and two other people we can't get their name.

They also have tow account in Qatar Yusuf buhari is one of the signatory of one of the account and about seven others.

If you don't stop Fulani Nigeria will cry time is coming when you will not see any money for any developments you will be only paying for Dept

They the Fulani are making plan to install another Fulani man and you people are there shouting 2023 Powe must return to south whit out any action. By nest year you will see how they will use efcc and DSS to against Southerners special the people who don't agree with them some of Southern politicians will run away

Stop Fulani known or unknown is coming

This write up can only come from an illiterate

Agboriotejoye:
America first is a foreign policy not an economic policy. Obama and goons turned the US to father Christmas and Jesus all rolled into one. Remember when Trump became president, he told all NATO members they have to start paying their share of NATO bills instead of US shouldering it alone. It will surprise you that same Trump actually ran an expansionary economic policy instead of the frugal ones the GOPs are known for.

Do you know what you are talking about

Trump touts ‘America First’ economy over ‘crazy’ Democrats

The approximately hour-long speech was a “greatest hits” of Trump’s economic record. In the president’s telling, he rescued the nation from a “slow inevitable decline” that would have decimated the struggling middle class with “a new economic policy that finally puts America first.”

https://www.washingtonpost.com/business/economy/trump-touts-america-first-economy-over-crazy-democrats/2019/11/12/7449720a-0566-11ea-ac12-3325d49eacaa_story.html

SmartPolician:
Huncle, why did you leave out the second paragraph? FYI, as far as this government is not ready to fix power, the cost of producing in Nigeria will always be higher than the cost of importation.

Just like Amanda Ngozi-Adichie asked German chancellor Angela Merkel, everyone should be asking what happened to the agreement this yeye government signed with Siemens to provide electricity.

Is electricity shortage responsible for the vehicle choice of our president etc

Hassanmaye:

Are you teaching in a secondary school

yes.

SmartPolician:
Please let's not devalue the naira because we run an import-dependent economy. If we devalue the naira, people will get poorer, crime rates will increase and prices of goods will rocket.

I don't know who advised Buhari but the worst decision he ever made was borrowing to invest in railways over epileptic electricity supply. We cannot experience industrial revolution with 3-5kmegawatts of electricity.

They want to finally wreck the Nig currency, instead of coming up with an agricultural framework that would help each region produce an agricultural product that they have comparative advantage, firing those custom bosses that are responsible for turning the ports to business ground and discouraging export. Focusing on making agriculture so attractive in a way that loan is easily accessible with little interests rate, spend on roads and cargo rail, fix electricity, and raise the bar in supporting small, large, and medium industries that converts agro product into finished goods, support manufacturers and encourage exports they want to devalue, easy way out with a lot of long time unfavorable repercussions.

This is not the first time Nig currency has been devalued, what has been the essence so far. When you devalue, as time goes on you would have to devalue again, us this not an artificial solution?

Bluffly:
Why are we so fixed on Consumption. Can't our goverment focus on stimulating massive local production in all spheres and set us up for a top exporting nation. By this external reserves should'nt be a problem. The goverment is only measuring itself from Crude oil. Haba

Theres no light for that

seguno2:


Do you know what you are talking about

Why don't you read the link you posted.

Trump took on China and forced American manufacturers to reopen firms they closed and exported to Mexico, China and India due to stiff climate regulations put in place during the Obama era.
I hope you understand that these are all foreign based policies and not having anything to do with the macroeconomic or microeconomic policies of the govt.
You are advocating for Nigerians to embrace homegrown goods. That is an economic policy that can be likened to the border closure for example. But the question is has the border closure weaned Nigerians off the penchant for foreign goods? Economics is about choice and preferences and not necessarily patriotism. That's why we can close the border but we can't make people lose their preference for foreign made goods.

Agboriotejoye:
Why don't you read the link you posted.

Trump took on China and forced American manufacturers to reopen firms they closed and exported to Mexico, China and India due to stiff climate regulations put in place during the Obama era.
I hope you understand that these are all foreign based policies and not having anything to do with the macroeconomic or microeconomic policies of the govt.
You are advocating for Nigerians to embrace homegrown goods. That is an economic policy that can be likened to the border closure for example. But the question is has the border closure weaned Nigerians off the penchant for foreign goods? Economics is about choice and preferences and not necessarily patriotism. That's why we can close the border but we can't make people lose their preference for foreign made goods.

Many thanks for your feedback, clarification and mature engagement.

Do you think that sincerity by the president who closed the border, in using homegrown goods, will make others follow his example

Olafisoyem:
Theres no light for that

Will there never be light for anything except parties and prayers, hence we will forever import our needs and be enslaved to debtors

TheRareGem1:
VP never call for Naira devaluation. He only called for an official rate reflective of market reality. The current dual exchange rates allows for arbitrage and blocks inflow/supply of dollars from investors.

What does that implies. It means the CBN should float Naira to find it's level which is devaluation. Road to Zimbabwe, Nigeria run an import dependents economy, hence need to protect our currency. PMB tried to avoid devaluation but ultimately succumbed to the antics of propagandist and forex racketeers. Since the first devaluation during his government in 2016 Naira has never appreciated to any of its old rate.

PDP government were corrupt but our currency is not this useless. Nigeria is just a mysterious country, and Nigerians doesn't hold their politicians and office holders responsible.

Olafisoyem:


Theres no light for that

It is still part of the focusing to ensure there is energy efficient enough to power the economy

ezekins:


It's unfortunate that you still don't reason in the right direction. I assume you are a Nigerian but you easily buy the position of our politicians as if you are a foreigner. Has naira not been devalued before and what became the resultant effect. Cbn should review the operation of domiciliary accounts in Nigeria because it's become a tool with which they use to hoard Fx in Nigeria. why should people be banking dollars , euro pounds in Nigeria. This will be my last reply to this. People should reason independently.

Too many of you don’t realise the magnitude of the challenge Nigeria faces. You obviously know little about macro/micro economic dynamics. Releasing all the dollars in domiciliary accounts won’t save the naira. Nigeria’s ability to generate dollar firepower is rapidly diminishing. Even if it did, Naira subsidy only breeds more corruption.

This is free market economics. Nigeria will never be competitive with all this finance command/control nonsense. FDI will continue to decline. We are paying the price for decades of underinvestment and corruption. The current naira value is artificial and unsustainable. Devaluation will happen whether we want it or not. Just a matter of time

seguno2:


Many thanks for your feedback, clarification and mature engagement.

Do you think that sincerity by the president who closed the border, in using homegrown goods, will make others follow his example

That border closure is an ill-thought, harebrained idea that is reminiscent of the cluelessness of this administration. Like I said, you first have to be able to produce before you start "blocking" the foreign goods from coming in. And you have to produce quantity and quality commensurate with what the foreign goods are offering. For example, rice. Do you know in the 70s rice was a delicacy for most Nigerians? By the 80s and 90s when rice became a staple, most Nigerians spent hours picking stones from rice for hours before cooking. That obvious time and energy wastage was wiped out by the influx of thai and Chinese rice into the Nigerian market. You just wash, and cook. 30-45mins max!!
Now the question is what were our leaders looking at all through the 90s they couldn't get Nigerian rice to be stone-free and of almost equal quality with the Thais?
Fast forward to 2018 and along came a Buhari who ruled in the 80s when Nigerians used to pick stones from rice, while he an elite then ate Uncle Ben's ordering everyone back to the 80s. I remember a lot of his online supporters then chanting "Border remains closed"!! Well, 3 years later, have Nigerians adapted to eating stony rice? Has Buhari stopped eating Uncle Ben's? If Buhari cannot help himself to a spoonful of stony rice but wants Nigerians to do same, isn't that barefaced hypocrisy?
So, it is not about sincerity in using homegrown goods that will make others follow suit to answer your question directly. Rather, it is giving homegrown goods a competitive advantage over foreign goods be it in pricing, quality or quantity. I listened to Akinwumi Adesina during the medium term retreat and he detailed how he made it easy for farmers to get farming inputs and other innovations he put in place to boost agriculture. Note, most of those innovations are dead now and instead we have a money sharing Anchor borrowers programme which has not yielded any positives in terms of boosting agric outputs yet, we want our citizens to embrace homegrown goods cause they need to be patriots. Does that make any sense at all?

Agboriotejoye:
That border closure is an ill-thought, harebrained idea that is reminiscent of the cluelessness of this administration. Like I said, you first have to be able to produce before you start "blocking" the foreign goods from coming in. And you have to produce quantity and quality commensurate with what the foreign goods are offering. For example, rice. Do you know in the 70s rice was a delicacy for most Nigerians? By the 80s and 90s when rice became a staple, most Nigerians spent hours picking stones from rice for hours before cooking. That obvious time and energy wastage was wiped out by the influx of thai and Chinese rice into the Nigerian market. You just wash, and cook. 30-45mins max!!
Now the question is what were our leaders looking at all through the 90s they couldn't get Nigerian rice to be stone-free and of almost equal quality with the Thais?
Fast forward to 2018 and along came a Buhari who ruled in the 80s when Nigerians used to pick stones from rice, while he an elite then ate Uncle Ben's ordering everyone back to the 80s. I remember a lot of his online supporters then chanting "Border remains closed"!! Well, 3 years later, have Nigerians adapted to eating stony rice? Has Buhari stopped eating Uncle Ben's? If Buhari cannot help himself to a spoonful of stony rice but wants Nigerians to do same, isn't that barefaced hypocrisy?
So, it is not about sincerity in using homegrown goods that will make others follow suit to answer your question directly. Rather, it is giving homegrown goods a competitive advantage over foreign goods be it in pricing, quality or quantity. I listened to Akinwumi Adesina during the medium term retreat and he detailed how he made it easy for farmers to get farming inputs and other innovations he put in place to boost agriculture. Note, most of those innovations are dead now and instead we have a money sharing Anchor borrowers programme which has not yielded any positives in terms of boosting agric outputs yet, we want our citizens to embrace homegrown goods cause they need to be patriots. Does that make any sense at all?

It seems like we understand sincerity differently. If Buhari eats local rice and makes a big show of doing so, won’t others follow?
Is it possible that Buhari’s 1980s policies of cheap rice imports through the Nigerian National Supply Company (NNSC) helped make rice a staple food while killing off the farms

For the bolded part, is that how the Chinese, Koreans and even Japanese became industrial giants?

Whichever decision they take, no problem.

We are back at that time in 2015 when the official rate of the dollar was N197, and the parallel market rate was N260. There was more than a 20 percent gap between the parallel market and the official side. Today we have 411 vs 570, which is also more than a 20 percent gap.

The above is the reality.

Even if you devalue the Naira today to N1,000/1$ you're still going to have that 20% gap because the solution is not devaluation. The solution is to attract more dollars into the country by way of export or service. As long as we can't export more or offer services to earn dollars from overseas, we will never have enough dollar even if you devalue to N1,000.

The people benefiting from everything since 2015 are corrupt business elites and neo-colonial foreign business syndicates (world bank & IMF clandestine agents) always there to exploit and run down third world countries.

seguno2:


It seems like we understand sincerity differently. If Buhari eats local rice and makes a big show of doing so, won’t others follow?
Is it possible that Buhari’s 1980s policies of cheap rice imports through the Nigerian National Supply Company (NNSC) helped make rice a staple food while killing off the farms

For the bolded part, is that how the Chinese, Koreans and even Japanese became industrial giants?

OBJ was very adept at encouraging locally made goods. But even he realized the folly of forcing people to use local goods they do not agree with. If Buhari likes, he should come on TV at 9:00pm and eat locally made rice, if the rice is not available, affordable and of good quality in the market, he will simply become an object of mockery. After all, Jonathan ate cassava bread on camera. Yet today, nobody has taken a fancy to it.
I don't think Buhari started rice imports in the 80s. If I am wrong correct me but that NNSC was existing during the time of Shagari to bridge supply gaps in essentials, only for Buhari to come and take it to a ridiculous level of price control. That ultimately led to more scarcity and hoarding as would be expected.

China, Korea and Japan all took different routes to get to where they are today. I think every country has to have its own vision and ideas of what is important to it and what it wants for and from the people. China took a Buharic route at first and a lot of people died of starvation and malnutrition. It took Deng Xiaoping to steer China away from that path.
Japan undertook Total Quality Management to turn around its industrial fortunes. They hired the best brains and minds from around the world to come up with ideas and innovations.
You can see that each must understand what it wants and how to go about it. Not just thinking that patriotism is going to solve economic or development problems.

musicwriter:
The above is the reality.

Even if you devalue the Naira today to N1,000/1$ you're still going to have that 20% gap because the solution is not devaluation. The solution is to attract more dollars into the country by way of export or service. As long as we can't export more or offer services to earn dollars from overseas, we will never have enough dollar even if you devalue to N1,000.

The people benefiting from everything since 2015 are corrupt business elites and neo-colonial foreign business syndicates (world bank & IMF clandestine agents) always there to exploit and run down third world countries.

Did we have up to 20% gap before the wind of change blew over us in 2015?

anorexicmuster:


Exactly

But all this is lipstick on a pig. At the end of the day, we have to earn more and more forex.

Which this government is not doing. Diversification is still a paper idea, and we are still oil reliant.

Are we a socialist or a capitalist country? Should industrialization be government driven or people driven?

GEJ tried to reduce our consumption of wheat to save on dollars, so he introduced cassava bread.
GMB tried to reduce our importation of rice, so he introduced his back to the farm policy. This is socialism

Both of these policies are failures in my opinion.

Nollywood, Afrobeat and our comedy industry developed out of peoples will to survive and using their God given talent to better themselves. This is capitalism.

Most countries, even socialist China understand that the decision of what to produce, for whom to produce and how much to produce is best made by their citizens than the government. This is why countries invest heavily in basic education and health care. This is why the human development index is based off of public investment and effectiveness in the delivery of basic education and healthcare. Developed countries know they can recoup their investments on their citizens, since their citizens would be able to pay taxes as adults.

In Nigeria, our foolish leaders and some citizens think that the provision of quality basic education and healthcare is a social service. This is why the naira is destined to fall to infinity and beyond

seguno2:


Did we have up to 20% gap before the wind of change blew over us in 2015?

No, the gap was smaller then because we had better economic managers who attracted more dollars into the country. If we attract more dollars today, the gap won't be as much.

Investors want to buy up nigerian assets very very cheaply

Avoid that nonsense

This article, as well-meaning, as it is, has some flaws and these flaws paint hoth devaluation and market forces in bad light. I will only dwell on one.

The article said “When Buhari and Osinbajo took office in 2015, one of the first demands of the investing community was for the government to devalue the naira and maintain a single exchange rate system. President Buhari strongly opposed this position. He famously said he will not kill the naira.”

This is inaccurate. Before Buhari’s assumption of office, the value of the Naira had depreciated from about 155 to a $1 in June 2014 to about 197 in May 2015. This was because of a rapid decline in oil prices as that would mean decreased dollars inflows which would lead to the weakening of the Naira. This was a job well done by Emefiele..

Upon PMB’s assumption of office, probably within his first week, he pegged the Naira at $1 to 197. This was the genesis of the crisis. He had no right to do so. Secondly, it was the wrong thing to do as oil prices were still falling, hence some more weakening to come.

Since the 197 rate was not market determined, the CBN could not meet demand at that rate and many buyers were forced to turn to the parallel market and the rate there started to depreciate fast leading to a massive differential between the official rate and the parallel rate.

By August 2015, Nigerian Letters of Credit were no longer being honored overseas as they were not dollar backed. A serious crisis had started. It was around this period that the business community urged a devaluation be done to correct the distortions in the market and encourage an inflow of dollars. This fell on the death ears of Buhari as he refused a devaluation to bring sanity to the market.

Buhari believes devaluations are dictated by economists.and considers it cruel. He does not seem to get that currency depreciations or devaluations are market determined. It is like saying mathematicians are the ones that dictate 1 + 1 =2. It is simply what they extrapolate from nature. Anyone who trades forex based on fundamentals will have a better grip of what I am saying.

@Grandstar, your comment is completely factual.

What if no policy changes (fiscal) are made to how Nigeria's economy works and the market value of the naira tumbles to 8000. As ridiculous as this may sound, it is a possibility. Should the president at that time just fold his/her hands and watch as Nigeria goes up in flames?

What suggestions do you have to stop the fall in the value of the naira? Wait for oil prices to rise, industrialisation led by the government, or industrialisation led by the people.

This to me is the crucial conversation Nigerians ought to be having as opposed to whether the naira should be floated or not, which will only provide a temporary panacea to a mountainous problem

Tianamen1:
@Grandstar, your comment is completely factual.

What if no policy changes (fiscal) are made to how Nigeria's economy works and the market value of the naira tumbles to 8000. As ridiculous as this may sound, it is a possibility. Should the president at that time just fold his/her hands and watch as Nigeria goes up in flames?

What suggestions do you have to stop the fall in the value of the naira? Wait for oil prices to rise, industrialisation led by the government, or industrialisation led by the people.

This to me is the crucial conversation Nigerians ought to be having as opposed to whether the naira should be floated or not, which will only provide a temporary panacea to a mountainous problem

The Naira can't fall to 8,000 just yet. It all depends on fundamentals. Fundamentals are everything.

Part of the reasons why the Naira has fallen over the past year are due to increase in the minimum wage, collapsed oil prices occasioned by the lockdowns, massive government borrowing, printing of Naira and so on. More Naira flooded the market without an increase in dollar supply.

I'm not too worried about the Naira value fallen as long as it is for a good reason. For instance, without the Italian Lira's continuous devaluations, Italy would never have become a rich country! Ever since the introduction of the Euro, the Italian economy has suffered badly because it does not have the power to devalue the Euro like it did the Lira. Devaluations was the only way to make their products and services competitive due to the bureaucratic and costly state that is Italy.

The Naira will always suffer turbulence as long as crude oil accounts for 90% of export earnings and inflation is in double digits.

What is needed are reforms that encourage an inflow of investment and dollars into the country. It should also encourage local investments. Reforms such as a slash in corporate taxes to between 10-15% for instance. Such a reduction would encourage a massive inflow of foreign investment. Also the Naira must either be floated or be flexible. A realistic and competitive exchange rate is a must. Also, lending rates should be brought down to single digit figures (less than 10%) and must also be higher than inflation in real terms.

Others are removal of fuel subsidies and the deregulation of the price. This would also encourage investment in the oil and gas industry. It would also reduce pressure on the Naira. NNPC should be broken up and sold.

Ajaokuta Steel should be blown up. It is a white elephant project. All import bans be lifted and replaced with reasonable tariffs that do not encourage smuggling. Privatization of the 4 major international airports and so on. Introduce policies to ensure Nigeria enters the top 30 in the "Ease of Doing Business Index"

The list is endless.

Charles Soludo said if a country receives as foreign investment equaivalent to 5% of its GDP yearly, such an economy would overheat after some years and crash. Nigeria can easily achieve this if it introduces many of the policies enumerated. What of a crash? Itb will bounce back up after a while. Boom and bust is not unusual with fast growing countries.

Agboriotejoye:


America first is a foreign policy not an economic policy. Obama and goons turned the US to father Christmas and Jesus all rolled into one. Remember when Trump became president, he told all NATO members they have to start paying their share of NATO bills instead of US shouldering it alone. It will surprise you that same Trump actually ran an expansionary economic policy instead of the frugal ones the GOPs are known for.

Obama and his goons did not turn the USA into Father Christmas and Jesus all rolled into one. Please tell me the Father Christmas policies of Barak Obama?

The US since the end of World War 2 has spent colossal sums on global issues as a world superpower. The spending was even much higher in those early days. Many of the things you subtly refer to are things Obama met on the ground.

You neglected to mention George W.Bush who started two wars. The second war was so annoying because the US was already embroid in one and for no cogent reason, start another. Obama was the president that started drawing down troops in both Afghanistan and Iraq but wasn't stupid like Trump who just abandoned the Afghans without a care of what would happened to them. We have all seen the result today.

grandstar:


Obama and his goons did not turn the USA into Father Christmas and Jesus all rolled into one. Please tell me the Father Christmas policies of Barak Obama?

The US since the end of World War 2 has spent colossal sums on global issues as a world superpower. The spending was even much higher in those early days. Many of the things you subtly refer to are things Obama met on the ground.

You neglected to mention George W.Bush who started two wars. The second war was so annoying because the US was already embroid in one and for no cogent reason, start another. Obama was the president that started drawing down troops in both Afghanistan and Iraq but wasn't stupid like Trump who just abandoned the Afghans without a care of what would happened to them. We have all seen the result today.

You seem to think wars are father Christmas policies. I'm surprised. Kindly explain how.
Let me give you two father Christmas policies of Obama apart from the NATO bills
1. Iran nuclear deal
2. Paris climate agreement
That's not to mention the TPP which gave Mexico and Canada a head in regional trade over the US.
I'm surprised it's Trump who abandoned the Afghans and not Biden. You must be a hardcore leftist to even say that.

1, THE PRESIDENCY SHOULD DIRECT THE CBN TO DENOMINATE NAIRA TO DOLLAR RATE AT N200:$1 OFFICIAL RATE. AND N215:$1 FOR BDCs.

2, DIRECT THE MINISTRY OF FINANCE TO REDUCE IMPORTS AND PRODUCE LOCAL ADAPTATIONS FOR USE AND FOR EXPORTS. AND

INCREASE PRODUCTIVITY AND QUALITIES OF WHAT WE EAT, DRINK, WEAR AND USE FOR EXPORTS AT FAIRLY LOWER PRICES.