All this plenty grammar just to say we want to remove two zeros? That's when you know something is amiss.


We are using $40 billion to maintain the exchange rate of the Naira to the Dollar at 126.
Soludo should suspect that we would need a foreign reserve of $4,000 billion (4 trillion dollars) to maintain an exchange rate of Naira to Dollar at 1.25.

And as of now, we don't have that kind of foreign reserve.



So because Bolivia, Ghana, Angola and Afghanistan did something crazy, we too should meddle into it.

Look at his mention of Germany and you will realise it was after World War I and World War II that Germany revalued their currency. Afghanistan and Angola too, after Wars, South Korea was after War. Argentina that tried it during peacetime, all the revaluation led to total economic collapse, Ghana he mentioned just revalued their currency this year and we're yet to see the effect.


Brazil is the only stable country that revalued its currency during periods of stability and has continually revalued and will continue to revalue.


This man should not throw us into chaos. And waste billions of Naira printing fancy notes. In fact, I suggest that the company printing Nigerian currency should be investigated and even changed because this regular printing of money backed up by big big grammar is getting really suspicious.



Nigeria has escaped the debt trap abi? The $6 billion that is rapidly building up is Abacha's private liability?

But of course I support the CBN withdrawing from forex trading so that banks can stop roundtripping and start making money by giving out loans.


@Echidime


generally, I believe Soludo knows more about economics than myself but on some specific issues such as the recent minting of N2 coins?!! Please. I said it from the first day that it was rubbish. So my dear Echidime, how many times have you transacted business with the N2 coin?




NO TO COUNTERFEITING AND FORGERY BY THE CBN!

NO TO CURRENCY AND EXCHANGE RATE ILLUSIONS!!

LONG LIVE NIGERIA!!!

it will be good for people abroad to bring there money to nigeria and invest, although there might be inflation in nigeria, but it will be healthy for the economy. If you are a salaried person in nigeria, it might not be good for you, but if you are a business man or entreprenuer it will be good for you. for example i started investing in nija stocks 4 months ago, my investing in pounds is about £4700.00 today the value of my investment is £8200.00. What the re-denomination will do is that a foreign investor knows how much he will make on his investment without bringing out a calculator. This is good news for nigeria, and all nigerians should be proud of it.

What the re-denomination will do is that a foreign investor knows how
much he will make on his investment without bringing out a calculator.

This is a ridiculous statement in so many ways. Tell me:
1) What kind of investor makes an investment decision without bringing out a calculator? Only a foolish investor!
2) The re-domination is not going to introduce a fixed exchange rate, so you will still need a calculator.
3) Why should our government make a decision that will cost us all so much pain just to satisfy lazy investors?

If re-domination is such a sensible idea, then why have the Japanese not considered it? Afterall, the Yen has a low face value too. The important thing is not the face value of your currency, but the stability of the exchange rate. Despite the fact that 1 U.S. dollar = 118.245241 Japanese yen, the Yen is respected as a reserve currency.

In real terms it should make no difference. $1 naira equivalent today will get you the same amount of goods as $1 naira equivalent in august 2008. The only thing changing here is the unit of currency NOT the value.  Imports and exports should still cost the same in real terms (subject to slight fluctuations while the dust settles).

There would be some initial teething admin/accounting and cost issues, but in the long run there would be positive benefits.  Like for like comparism with other economies will be more transparent, we will no longer have a false sense of accomplishment where we throw figures in billions around which will now become more realistic millions, and millions now become thousands. This should motivate businesses to higher efficiency and productivity because revenue/profits that seem huge in Naira pre-august 2008, will now look paltry when compared with global standards like for like.  We are better able to appreciate our currency and see it as a store of value (which is an important function of money).  
Why should a bag of rice be priced at #6000 or 6000 of the unit of any currency for that manner or a car #6.5million, these sort of figures can play negative games on the psyche of an individual.  Are we in a war zone?

1 pence and 1 cent coins are widely used and accepted in the UK and US, this gives their respective currencies perceived value, the adage every penny counts comes to mind.  Every kobo should also count, this new policy will help make this a possibility.

Seun is Nairaland. a democracy.

Can I differ, without consequences?

i,m confused.Divide by 100So what happens when you have cash in yhe bank.e.g,if i have 1 million naira now.Will automatically become super rich in the land of thousanaires.Or will they divide my 1 million by 100.I go kill somebody o.SOMEONE PLEASE EXPLAIN.

Great Naija, All those 9ja wey dey 4 oversea no go dey happy ooooo

But wetin den go do,
  Sorry broda n sistas oooo

Thanks Soludo.

Love ya

it's always natural fir people to be against policies of the goverment. i encourage it but i prefer intelligent contributions to what has been obtainable so far. Some people are just against it cos it's a policy from a NIGERIAN and  not from one  oyinbo in IMF and WORLD bank.

During the bank consolidation thing, the banks were pegged to bring 25billion. less than 12 months after the consolidations Banks are themselves targetting 100billion

it is the duty of the goverment to create policies and provide enabling environment for it to thrive. Now the policy is 1.25 to 1 dollar. Once all the things have been put in place you can be sure that the poilcy will surpass our expectations.

SOLUDO IS A GENIUS , we have absolute confidence in him. Especially those of us NIGERAIN working in NIGERIA and DRIVING the economy.

Not those siting in the cold of europe , sweeping the streets or selling in the store.

@ debojyde (m)

i,m confused.Divide by 100So what happens when you have cash in yhe bank.e.g,if i have 1 million naira now.Will automatically become super rich in the land of thousanaires.Or will they divide my 1 million by 100.I go kill somebody o.SOMEONE PLEASE EXPLAIN.

I feel you my brother, you brought out the first laughter in me today, Thanks

@ azpunpin

Great Naija, All those Nigeria wey dey 4 oversea no go dey happy ooooo

But wetin den go do,
 Sorry brother n sistas oooo

Thanks Soludo.

Love ya

I think it wouldn't matter much, as in if they divide Naira by 100, so £1 will be like N2.45 abi, as opposed to N245, so what N245 will buy today, N2.45 will buy tomorrow.

Except if I've misinterpreted this whole thing, a piece of land 4 lekki which cost around N25million, will cost N250k next year abi, so that way, Nigerians in the Diaspora wouldn't feel anything "much" ,

Please correct me if I'm wrong

Peace Out!

Lets give them the benefit of the doubt as they seem to be

progressing with capitalization project.

There would be some initial teething admin/accounting and cost issues,

Are you kidding me? I'm a programmer, and I can assure you that this will be a major nightmare for IT and accounting departments. It'll be almost as troublesome as the y2k bug. For example, any accounting package that currently calculates to the nearest kobo will have to be updated to calculate to the nearest hundredth of a kobo. During the transition process, many companies will make mistakes and suffer nasty consequences. Government forms and business stationery will have to be thrown away and reprinted. Paper accounting records will have to be rewritten. And for what purpose? To make it easier to compare the naira to the dollar? To distract us from real work?

Like for like comparism with other economies will be more transparent,

This is completely false. First of all, the value of Japanese Yen is very close to the value of the Naira, so we can easily 'compare prices' of goods in japan to prices of goods in Nigeria. And Japan is a first world country. Secondly, many West African countries have currencies very similar to ours or less valuable than ours, so we can 'compare value' with them easily. Thirdly, exchange rates fluctuate all the time, so you can only "compare value" by using a calculator. That is why we study arithmetic in primary school, for goodness sake. Calculators are very cheap!

1 pence and 1 cent coins are widely used and accepted in the UK and US, this gives their respective currencies perceived value

I keep shouting 'Japanese Yen!' but nobody is listening. The respect of a currency is not determined by its face value but its stability. The Yen is respected because it's stable, despite 1 yen being less than a cent. For a while, the naira has been relatively stable, and that's what we need. Perhaps someone wants to use this redenomination exercise as an excuse to devalue the naira in real terms? Let's not be taken in by our wishful thinking.

We have so many real problems in this country. Why should our human and financial resources be wasted on this?

debojyde:

i,m confused.Divide by 100So what happens when you have cash in yhe bank.e.g,if i have 1 million naira now.Will automatically become super rich in the land of thousanaires.Or will they divide my 1 million by 100.I go kill somebody o.SOMEONE PLEASE EXPLAIN.

SOMEONE PLEASE EXPLAINI need to plan ahead.If they will divide  my 1 million by 100 then what we have to do  right now is withdraw my money in the bank now and change to 10 naira notes and hide inside my couch till next year.That way i go be millionaire when everybody get thousands.Ma ra hummer ni straight.How much will that be self.100,000k only.I,m too much.

The Naira is stable, but Nigeria remains a Country with one of the largest unofficial Markets. Nigeria remains one of many countries without a Nationwide Electronic Banking System. These things have to be achieved with various policies, and the re-denomination will help. It will make transactions easier, and accelerate Nigeria's "Cashless Economy" Goal. This will result in the alleviation of the size of the unofficial market, translating to more investments and confidence in the economy. Poverty will also be reduced as a result of the alleviation of the unofficial market, because it will integrate the black market with the Official economy, and strengthen it. Instead of having road side vendors, with their earnings kept in purses etc, we will have SMEs with recorded entries in Banking institutions.

The re-denomination will only be small part of this achievement and the major catalyst will lie in other policies such as Private Sector Reforms, but the re-denomination will help. The Naira is stable today, and due to the steady growth of the Nigerian economy, it will stay steady when the Naira has been renominated. The process of re denomination which we are seeing is decimalisation

Seun:

I keep shouting 'Japanese Yen!' but nobody is listening. The respect of a currency is not determined by its face value but its stability. The Yen is respected because it's stable, despite 1 yen being less than a cent. For a while, the naira has been relatively stable, and that's what we need. Perhaps someone wants to use this redenomination exercise as an excuse to devalue the naira in real terms? Let's not be taken in by our wishful thinking.

You mention Japan, as a point of reference, but; Russia, United States, France, Canada, Sri Lanka, India, South Africa, Australia, New Zealand, UK and Malta have all gone through the process of decimalisation

It is a misconception to think that re-denomination is child's play. The process is only achieved after economic policies have shaped the economy to strenghten the value of the currency.

So what happens when N25 billion of the Banks? Will they settle with N250 million or will they start pursuing the new N25 billion all over again?



@deor03

believe me, this is from IMF.



I trust a lot of Government policies. But not when I've made calculation and seen that it all amounts to nought.


Is it not this same CBN that has been selling commercial banks foreign exchange that was used for roundtripping? Is it not this same CBN that only this year minted N2 coins. Coins that even illiterates knew would not do any good before they were launched?



@mellow


benefit of the doubt? These policies cost billions of dollars to implement! We cannot continue allowing some bunch of financial scientists experiment with us.



Let me repeat this:

Then there is the issue that we will then be unconsciously experiencing massive inflation. After revaluing N1.26 to $1, by the time the currency depreciates a little to N2 per $1, we will not realise that what just happened is that exchange rate just went from N126 per $1 to N200 per $1 in terms of the old currency.

So revaluing the currency is actually devaluing our assets and in essence devaluing our lives.




@debojyde

if you hide your money, you're just digging your own grave because after the re-denomination exercise, the old currency will be banned so your N10 notes will turn to ashes.

What we have to do is actually fight against this criminal annual forgery, counterfeiting and tampering of the Naira by the Central Bank of Nigeria.

NO TO FINANCIAL ACROBATICS, NO TO FISCAL GYMNASTICS AND CAPITAL NO TO CURRENCY ILLUSIONS.

The only people that may not support this move would be people who had no idea what life was like in the '80s before the sudden devaluation of currency. I also believe a lot of people on this forum are just over reacting. What is the difference between N25 next year buying something that costs N2,500 now? In real terms nothing has changed. We are talking about the dignity of Naira here and trying to position ourselves as African point of reference when it comes to monetary (or if you like, currency) issues. This is not to increase the real value of Naira, but it's "face value", if you know what I mean? I'm sure if we change the name to Nigerian Pound like in the 70s some people here will start jumping up and down with joy.

I am 10000000000% in support of this. Can anyone on this forum confirm to me that buying a land for £25m in Lekki is worth it? By God's grace I have a landed property there which is strategically located, but then does this make it right to grossly overvalue goods just because they are owned by some "privileged" few? How many people will pay $250,000 for this type of land in the USA? I'm sure now my people's eyes will be open to see how we have been fooled and made to suffer for too long.

Long ago in the 80s, a prophecy came out that Nigeria will become one of the best places to live in the World and that things will be sooo cheap that people living abroad will start returning home.  I as one believe this prophecy 1000% despite situation turning worse for Nigeria then.

As Nigerians, I think we need some mental purge from the attitude of "maintaining the status quo". We are so used to suffering that we are even afraid of trying enjoyment or taking steps towards it. When one is used to darkness, light becomes dreadful. May God help us.

@ azpunpin

Great Naija, All those Nigeria wey dey 4 oversea no go dey happy ooooo

But wetin den go do,
Sorry brother n sistas oooo

Thanks Soludo.

na person wey don lost 4 abroad wey no go come home, this new thing is good in that if u have that entreprnur streak in you, you can make serious money in a developing country like nigeria, 4 abroad den don develop finish. Imagine setting up a muti-million naira company in nigeria, that will easily translate to multi million dollar company. more grease to soludo's elbow.

Hello All,
Personaly, i luv soludo and i admire his antics but guys i don't think this re-denomination or should i say re-decimalization is a right move.
improving our economy will improve the value of the naira.
Lets cosider things from a lay-mans point of view, if i intend selling my land for =N=1m will any enforcement agency be there to ensure that i sell for =N=10k?
i hope, wish and pray it works cos' i invest in the nigerian economy so if it goes wrong, i'll be at soludos doorstep next morning.
Could someone pls tell me how this will affect regular food on the table, unemployment,encourage production,solve niger delta bruhaha, power situation, bad road, increasing house and land value etc
I might be wrong, pardon me if i am but i believe if above issues are dealt with, the value of 'life' in naija will appreciate and thus will the naira.
Soludo i beg oooo.
Nigerians are hard working, give us the opportunity and the sky is the limit.
We can only suggest. How do we make soludo hear us?

Nationwide electronic banking system <snip>, the re-denomination will help.

This is complete hogwash. Re-domination will not help electronic banking in any way.

t will make transactions easier,

This is utter nonsense. You should be ashamed of yourself.

Poverty will also be reduced

What are you smoking?

Instead of having road side vendors, with their earnings kept in purses etc,
we will have SMEs with recorded entries in Banking institutions.

Because of re-denomination? Really, what are you smoking?
Many people avoid banks because of poor customer service!

The Naira is stable today, and due to the steady growth of the
Nigerian economy, it will stay steady when the Naira has been renominated.

Nonsense. The naira has been steady without re-denomination. Will re-denomination make it more steady? No.

The process of re denomination which we are seeing is decimalisation

I'm not intimidated by big and meaningless words. The naira has been based on the decimal system for ages.

You mention Japan, as a point of reference, but; Russia, United States, France, Canada, Sri Lanka, India, South Africa, Australia, New Zealand, UK and Malta have all gone through the process of decimalisation

The naira is already decimalised, so your argument fails. Also, decimalization is not re-denomination!

Re-domination only makes sense in countries like Zimbabwe that have experienced hyper-inflation. Germany was one of those countries, and after the world war they had to re-denominate their bastardized currency, but the naira is not in need of that because (1) it's current value is about the same as the value of the Japanese Yen, and it's even appreciating (2) we have not experienced anything close to hyper-inflation. This policy is 100% unsmart.

i don't think this re-denomination or should i say re-decimalization is a right move.

You are right, but this is not decimalisation. The naira is already based on the decimal system. Don't let them confuse you! This re-denomination is a confusing and pointless, ridiculous exercise. A very shameful waste.

[quote:denex]So what happens when N25 billion of the Banks? Will they settle with N250 million or will they start pursuing the new N25 billion all over again?[quote][/quote]



@deor03

believe me, this is from IMF.

they will start pursuing another N250million, nobody wants to sit on their laurel that is what is called ambition.

infact, this is good news .there won't be need going abroad to go and sweep the street anymore.

I hate to be like this, but i cant help but be skeptical. Everybody including Mr. Soludo are getting us really excited with the advantages of this re-denomination. now logically speaking, every coin has two sides to it. and so is any idea, including Mr. soludo's very bright idea. a good idea is only an idea whose advantages far outweighs its disadvantages by a relatively wide margin, (and so, not all bright ideas are good ideas)

I want to  believe that a scheme that would affect Nigeria in Her entirety would not be a 'blue milk run'. it would not come off so easily and cheaply. there's definitely a 'price' to pay somewhere. let us explore the existence of the 'prices' in this scheme and decide whether its time to jubilate or time to push the panic button.

thank you nairaland

As i am not an economist but i think some folks who are abroad will now start to hoard naira bought at current exch rates with a view to be very flush by the time these new measures come into effect Or am i missing something?

denex:


@debojyde

if you hide your money, you're just digging your own grave because after the re-denomination exercise, the old currency will be banned so your N10 notes will turn to ashes.


.

So much for my idea!!Are you telling me that this same CBN spent millions to print 1000naira notes and new 10,20 nairanotes in the last 2 years only to throw them away and waste more money printing new notes AGAIN?What,s to prevent them from coming in the next 3 years and saying "we have a new policy we want to implement,blah,blah,blah"

The people that will suffer most if this idea backfires like SAP did will be the salary earners.While they will be making one hundredth of what they used to make,that does not mean everything will cost one hundredth less.e.g,a car that used to cost 2million might cost about 25,000 naira instead of 20,000.That,s 500,000 more in todays language.So let,s keep our fingers crossed and pray for naija.

i believe Soludo is a very intelligent man but i think what he has probably forgotten is that, you cannot and I repeat cannot apply TEXT BOOK economics to Nigeria's economy because it is not a fully integrated economy with a functioning economic mechanism either fiscal or monetary.

Please lets leave Harvard and world bank theory's to the developed economies and design a tailored economic policy that would work through the system with real effects and not nominal consequences.

Experts pick holes in CBN reforms
By Ayo Olesin and Yemi Kolapo

Published: Wednesday, 15 Aug 2007

The planned redenomination of the national currency, the naira, which since its introduction in 1973, has seen a decline in its exchange rate from 65kobo per dollar to $127 at present, is another milestone in the transition of the nation’s economy from a rudimentary stage to hopefully, one of the world’s top 20 by 2020.

While this move may not have any real effect on its current value, it could at least serve as a physiological boost to those who, with the benefit of hindsight and memories of shopping sprees to London in the oil boom 70s, feel that the naira/dollar exchange rate is scandalous.

Conversely, it would come as a shock to some of those whose assets are valued in millions, but which will now be measured in the thousands. It could also be seen as a reversal of the recent redenominations, of the national currency, which saw the introduction of the N100, N200, N500 and N1,000 notes amid unfounded fears that this would spur inflation.

In the new scenario, N1m would translate to a mere N10,000 while a bank balance of N20,000, would now read N200, much closer of the current dollar equivalent.

Whatever the case, what the CBN is planning to do is not new. Since 1960, governments of developing and transition economies have redenominated their currencies on approximately 70 occasions. These redenominations generally involved reducing the value of the currency by a factor of 10.

Economists and political scientists conclude that such currency redenominations are usually due to a combination of economic and political factors, including inflation, governments’ concerns about its credibility, and the effect of currencies on national identity.

However, the most usual reasons are when an economy has witnessed hyperinflation to the extent that its currency exchange rate is in units that are far higher relative to a convertible currency such as the United States dollar. This is because calculation, in such situations, becomes a clumsy affair.

In January 2005, Turkey replaced its currency (the Lira) with the “New Turkish Lira”, with a conversion rate of one million old lira to one new lira. In July of the same year, Romania introduced a new “heavy” version of its currency, the leu, with four fewer zeros. In both cases, governments noted that redenomination would send a signal to citizens, as well as to the international community, that economic policy mistakes were in the past.

Currency redenomination, also came as part of a broad package of economic and political reforms in Afghanistan in 2002 , with the introduction of a new afghani with three zeros removed.; following years of decline in the currency’s value.

Venezuala is also currently undergoing a similar process and the re-denomination of the Venezuelan bolivar is to take effect on January 1, 2008. On that date 1,000 current bolivar will be equivalent one “bolivar fuerte” or strong bolivar, which will be legal tender for a transition period during which a new family of banknotes and coins will be introduced and the current bolivar demonetised.

The Venezuelan government said that the general purpose of its currency redenomination was to contribute to the consolidation of its currency and to affirm the objective of economic stability, as part of a group of policies aimed to foster growth and socio-economic development. Key also is the more efficient pricing of goods and services as high value coins will allow easier rounding.

The CBN explanation for its latest policy move is similar. The redenomination is to facilitate price stability, reduce inflation rate and make the recently reintroduced coins, which are yet to circulate on account of their negligible value, feature prominently in everyday transactions.

The CBN also said the redonmination and introduction of a new currency structure would strengthen public confidence in the naira and make for easier conversion to other currencies.

However, Chief Executive, Economic Associates, a private think tank, Dr. Ayo Teriba, says what the CBN is doing is redecimalisation, not redenomination, and questions the rationale behind the decision.

“If you are knocking out two zeros, such that N100 becomes N1, that is redecimalisation. There is no reason why it should have any impact on the economy. It is like measuring your cloth with centimeters. 100 centimetres makes one metre. So, if you choose to measure it in metres and not centimetres, why should anything change? They are just playing with zeros; It is of no consequence to anything.”

“Even as regards the quantum of money in circulation? It is in your mind that two zeros have been knocked off. It has not changed anything.

What does the Federal Government hope to achieve with this? What do they want to achieve that Japan has not achieved with its yen. What they are doing is inconsequential; they are just playing with zeros.

“It would have made sense if we were like Ghana or Germany or like France; If we had gone through hyperinflation, like in the CFA zone, where they measure their currency relative to other currencies in millions. Redecimalisation makes sense then. At 125, it makes no sense; it is uncalled for and a waste of time.”

Teriba also argues that the CBN does not need to redenominate the naira to make it easily convertible, pointing to the case of the Japanese yen, which exchanges at 118 yen per dollar.

“If you want to go for convertibility, there is no need to redecimalise. If you want to push for convertibility, go ahead and push for convertibility. Redecimalisation is not a prerequisite to convertibility. They could have gone ahead to achieve convertibility with the current N125 to a dollar. There is nothing they want to achieve that Japan has not achieved and they did not redecimalise.”

The Chief Executive Officer, Financial Derivatives Company, Mr. Bismarck Rewane agrees that the naira redenomination, to a large extent, has no major effect on any economic activity.

“It is just making the currency more portable and you will be dealing with less units of currency. Usually, it is a measure that is adopted by countries that are facing runaway inflation, where the currency has lost its value completely. But Nigeria does not particularly fall in that category.

As far as I am concerned, you don’t need 12 months to redenominate the currency, you need just about one month. When we decimalised our currency in 1973, in two months, it was all over and that was a major profound change because we were going from pound, shillings and pence to decimal currency. Not only were we changing the currency, we were also changing the units and we did it in two months.”

On the CBN push for naira convertibility, Rewane noted that the convertibility of the currency in 2009 was for current account purposes, not for capital account transactions, which was “no big deal because to all intent and purposes, current account transactions are virtually liberalised right now.”

For Teriba, however, the achievement of exchage rate stability has little to do with the current reserves.

“It has very little to do with the level of reserve that we have. I think that it is an illusion that you can fix the naira. You cannot fix the naira against currencies that are not yours. The naira has been stable against the dollar but it has been weakening against the sterling and the euro.

“The naira is a weak currency and redecimalising will not make it a strong currency. It is the strength of the economy that determines whether your currency is weak or strong. If the underlying strength of the economy does not change, no matter what gimmicks you try to play, the reality is that with a weak economy, your economy will remain weak.

“We have $40m in external reserves. China has about $1tn. So many other emerging markets have much more reserves and they are not trying games with their currency. So, if you want to float, you can float. The pressure is on the Central Bank’s interest rate policy. With the appropriate policy, if you take the pressure off the currency, you can take the pressure off the reserves.”

In further comments on the new measures, Rewane said the adoption of inflation targeting as a methodology for managing money supply and managing CBN’s operations was not new but noted that the decision to share part of federal revenues in dollars could pose new challenges.

“The main thing here is the fact that they said state governments will now get their state allocations in US dollars. This is where there will be some major implications.

One, the framework for allowing 36 state governments, which barely able to manage a naira treasury to now have a foreign currency component is a major challenge.

However, the advantages are quite phenomenal in the sense that you would have every month, 36 institutions selling foreign exchange to banks. There will be one rate.

What it means is that the state governments will have to convert their money. Also, it means that the state governments can now borrow internationally. The state governments can issue a dollar bond and use the dollar to pay.

“The management of the treasury of the state governments is going to be a major challenge. It has very wide implications. It will deepen the foreign exchange market and broaden it in terms of the number of players. So, it won’t just be the CBN.

For example, if this month, N400bn was shared, let us assume that it was in dollar, that will be like almost $3bn. If 50 per cent of this was paid in dollars, it would mean that $1.5bn would have been available in the market. The total IFEM in a month is about $800m. So, that allocation alone is more than the total IFEM in a month. The banks may not go to the IFEM in six month; they will be buying directly from the states. So, the market will be much more vibrant and mush more efficient. That is a major move in the right direction. You cannot have optimal growth in an inefficient market.

It is not a sufficient condition to do this to make people benefit, but it is a necessary condition that the market should be efficient. When there is efficient market, you will see the difference between a state that is well-managed and a state that is badly managed. “

I hope thesame government will not wake up oneday and say the commencement date is not feasible as in vision 2000-2010.

@ shoti (infact, this is good news .there won't  be need going abroad to go and sweep the street anymore)
Sorry shoti, but u are wrong , cos' if u were earning =N=200k, after the redomination u'll be earning =N=2k, and it doesn't mean u'll be able to afford more . what we need is to be able to afford more with little naira.
Redomination will not make people abroad come back,people abroad will come back if the economy improves drastically.

What people fail to realise is that redomination, will only make the naira accpetable at a point, what if it devalues again? we should think more about our economy. improved economy will appreciate the naira value.

The credit should go to the NESG. They made this recommendation five years ago. But Soludo should be commended for his courage to accept what he had earlier refused to accept. The onus now is how practicable are some of these theories. For the fact that Ghana did it and got away it doesn't mean Nigeria can also get away with same. Remember, countries have their peculiarities. However, I wish the economic team of Alhaji Musa Yar'Adua the best of luck.

the problem with the naira is not the value of the notes.
it is the weight it carries in the international market.
what use is a naira that exchanges for N1.25 to $1.00 when we have an import dependent economy?
what depletes our foreign reserve?
apart from looting by govt officials is it not when importers buy dollars with naira?
like someone rightly said.the value of the japanese yen is 118 yen to the dollar
japan is a highly industrialised country why dont they redenominate the yen to equal the dollar?
redenominating the naira will not reduce the price of goods in the market
it will not increase the value of the naira compared to dollars,pounds,euro or even the SA rand
it will not reduce unemployment neither will it create jobs
so what use is it to our economy?[/color][color=#990000][color=#990000][/color]

Good idea from a superb economist i hope it works. the whole thing is like a stillborn baby we shouldn't criticise it heavily we should just pray it works. afterall if u don't take a stance u would not stand a chance

Please note that this is demonic non sense!!.Most people just talk without understanding what they are saying,the soludo guy went to school with old decade textbook so he does not know the after effect of what he is saying.

I tell you,the economy will crash and they would reverse the stupid move immediately.Why caint he consult sharp brains that will tell him that nigerian's economy and marketability does not support that kind of fake dream in the mid-term run nor long run.

Europe tried this,remember they have been in existence for decades of civilization,yet they are still filling the negative effect.

Have had oppourtunity to study macro economics of the world and lived different part of the world including Europe and US,trust me until all fiscal polisies in Nigeria is equivalent to that of USA,then we can dable into such dumb imagination.

To support my claim,imagine how I need to convince investors in US to come to Nigeria to invest,wth my excuse of best ROI in the world which is sellable,but,mere fact that is Africa makes them arrogant and I caint blame them because if you live and understand thier economy,you would see that a lot of convincing has to be made.

Again,investors are not stupid,they would study a lot of things starting from 'long stability'in politics,monetization etc.

We need a lot of overhualing for a long period of time,redeem image,bridge the gap between the rich and the poor for making available expendable liquid capital within the masses, etc.

I am just supprised this kind of thing can come out from the mouth of the whole CBN govt.what a shame.at least he would have given a research assignment to economic students in Nigeria and let them come out with sensible analyis and compare with the analysis of the students abroad instead of him and some political idealogist making non-intellectual suggestions.

Mark my word,if they try it,the economy will crash immediately!!!.

I have kept quiet all this while,but this one will have almost complete negative consequecies.We need to have trillions of dollars to be able to do this.You will not only experience capital flight,but multinationals too will leave,and nobody will remain,is it local technology that is old and outdated that will sustain us,men,am highly disappointed in this soludo guy,my respect for him very low now,,,in my days of post graduate,i did this same analysis in economics in overseas with lecturesr from Havard,Cambridge and CPH business school in attendance,its not just feasibly possible for a country ;like Nigeria to think about tat for now and even in long run, except we have in place a good  perfomance indicators such as Social numbers for all,welfare programe for all,etc .

I really could not sleep well when i read the idea been thought of,I love my country.