grandstar:


I have to be frank with you, I don't understand what you're saying.

Removal of the fuel subsidy and merging of the exchange rates were extremely urgent and should have been carried out years ago.

If you're supporting the multiple exchange rate policy of the Buhari govt, then you're supporting the briefcase millionaires you whine about.

In which space will a well connected renter briefcase businessman make money: where the official exchange rate is 461 and black market 750 or the present one where the official rate is 745 and black market 750?

Rountripping (buying forex at the official rate and selling at the BDC or black market rste) flourished under Buhari because of the massive differential in exchange rates. By floating the Naira, that has put an end to briefcase millionaires or even billionaires.

Also, the old exchange rate policy favored only the well connected. There was an unmet demand of $12bn under Emefiele. The airlines alone could nor repatriate $800m.

That waa not an environment conducive for business. In the past , dollars flowed to the well connected but now flows to those who can pay for it.

Secondly, the fuel subsidy simply needed to go. I have only filled my generator once since the subsidy was removed, so I know it hurts. But there was no option.

Your last few lines are appreciated. Let's see if the Tinubu can sell of the country's parastatals in a very transparent manner, free of corruption.

CodeTemplar:

Multiple exchange rate is ambiguous in the sense that all forex demands are not for productive uses. Some are just for pilgrimage. Others for fake hairs.

Why should a farmer trying produce food compete with hair importer or religious adventurer?

grandstar:


So, let's says I have N7m and use it to purchase $10,000.

I use it to purchase 7m worth of fake hair and I make 40% profit - that's 2.8m within 2 months.

I now repeat the cycle 6 times and make 16.8m in total profit within a year.

I deposit some of this money in a bank which can be lent out, I pay import duty (I forgot to include that), I pay income tax, I purchase land, I start building a house, I hire laborers, pay school fees, I purchase things from retailers which sustains their business and you don't consider fake hair imports as contributing to the economy?

Who will the bank prefer lending money to? The importer who can

You keep refusing to listen: imports aren't bad for you. What is wrong is if you don't exports.

Selling fx to the individual or company ready to pay the highest price for it, even if it is to import ice blocks should obtain it.

The best economists in the world are believers in free trade. They support import liberalization. Paul Krugman, an economist won the Nobel Prize based of his work and support of free trade.

CodeTemplar:
The beliefs of top economists is not the reality of top economies. I saw a video of where a Ghanaian professor was talking about the unfairness of US banning imports of vegetable oil while researching inferior ones and eventually approved their inferior vegetable oil above import of palm oil.
You see a good example what an economist believes and what an advanced nation does.

[b][b](You mistakenly assume economists dictate economic policies. Politicians and interest groups have a much greater say. For instance, Nigerian economists have urged for an end to the subsidies on refined oil products for decades but it has only now been implemented because the NLC and the masses had the frustrated things.

I won't be surprised a senator in the American congress wanted to protect his sunflower oil farmers in his constituency and wanted \a ban. The ban is a political decision and not an economic one. Ask the views of American economists and you'll discover they don't support it.

If Ghana feels the ban is unjustified, it can table a case before the WTO. If it discovered that what the US did was wrong, Ghana can place retaliatory tariffs of the equal value on some goods Ghana imports from the US

Anyway, Sub-Saharan Africa has ample access to the US and the EU. We can export our products duty free to them but the continent has not grabbed the opportunity with both hands. This is a shame.

Also, many Nigerians I met in the UK do not touch palm oil for health reasons. It was in the UK I first ate Egusi made with sunflower. It was alright but I found it weird)[/b]
[/b]
The US China trade war is another example. (China's trade policies are bad. They want to export but don't want to import. They also steal technology brazenly. Its trade sins had reached up to the heavens.

But let's come down to earth. Despite the Chinese sins, the US maintain a zero percent import duty on most Chinese goods because it was beneficial than putting up protectionist barriers against their goods and services. Read this report. There are several like it online https://www.bloomberg.com/news/newsletters/2023-03-16/supply-chain-latest-us-importers-bore-cost-of-trump-s-china-tariffs-itc-says)

You example of importing hair to create wealth is very weak and flawed. By importing anything, you lost the jobs involved in creating that thing. You import milk powder and immediately lose all jobs associated with rearing cows, milking them and processing liquid into powder. That is the whole point. Import creates jobs and earns money but does less of both compared to production. That's why govt here needs to strive to replicate the production conditions obtainable in nations we import from. ( You want the country to replicate it. What if the country has no comparative advantage in it? It is like your father demanding you settle down and that you must bring a woman home. You then go outside and bring any woman. Would that be wise? She must have good qualities of a potential wife. The same with production. It must be something the country has comparative advantage in.
The country can achieve full employment and still be importing all its milk from Europe or from wherever it gets them from.

If Nigeria wants to produce the milk as well, the milk industry will collapse. You are destroying the very efficient supply chain by forcing them to depend on Nigerian cows.)

If a rice farmer in Nigeria produces a tonne of rice paddy at certain price and his Indonesian counterpart does same at same price. The Nigeria farmer is facing extra cost of:
Higher cost of processing it into parboiled rice due to power cost.
Levies paid out to task forces and bandits.
That's why govt must strive to replicate the best condition of business environment for local produces. (I don't give a damn about rice production, Nigeria has no comparative advantage in its production. That is why smuggling thrives. Nigeria excels in cocoa and shea butter. Nigeria will be better off putting resources there. Those ones aren't complaining about killer herdsmen or bandits. If $1 was spent on cocoa and the same on rice, cocoa will achieve more as the country has comparative advantage in it. The nation will export cocoa and bring in foreign exchange but rice, not a dollar!