[size=16pt]Naira heads for 200 to US dollar[/size]
By Bosede Olusola-Obasa
Saturday, 8 Oct 2011



Entrepreneurs, salary earners and housewives should brace for greater pressure on their budgets, as the naira continues to experience a free fall when paired with the United States dollar.

Some financial and economic analysts drew this conclusion in separate interviews with SATURDAY PUNCH on Friday while weighing the implications of the ongoing currency devaluation for the ‘ordinary’ citizen.

The naira has consistently weakened on strong demands for the foreign exchange, which only receives limited supply.

A week-long assessment showed that the naira closed on September 28, at N158.45 to the US dollar on the inter-bank market; but recorded an all-time low of N159.75 to the dollar at the close of activities on September 29.

As at October 6, the naira had fallen to a new record low of N164.85 to the US dollar.

Financial analysts have said that if the naira maintained the current rate of devaluation, it would exchange at between N180 and N200 to the US dollar by the end of 2011.

A financial analyst, Mr. Ola Ogedengbe, said that as long as the Nigerian government failed to strengthen the real sector of the economy through the provision of energy, tightening the borders and granting friendly duties on importation of raw materials for manufacturers, the economy would not be healthy.

He said the behaviour of the naira was a replica of the weakness and instability of Nigeria’s economy.

Ogedengbe said, “There is no way the naira would not depreciate. The problem is primary. The real sector is not working. We import substandard versions of things manufacturers strive to produce locally, thus destroying the market for them.

“As the naira falls, importers of all categories will require more volume for foreign exchange. If the Central Bank of Nigeria allows the depreciation as it is now, N180 to N200 is in view.

“The consumer then bears the brunt, because the difference in the cost of doing business is ultimately passed on to them. Prices of goods and services will definitely go up because people are in business to make money. Even people who send children to study abroad will pay more. Whichever way, Nigerians will be the losers.”

Another financial analyst and stockbroker, Mr. Jire Oyewale, said that for a long time, it had been difficult to measure the real effect of economic policies on the economy and the capital market.

He said that even if this were to be an official move to devalue and stabilise the currency, the usual problem of policy inconsistency might soon rubbish it as measures would soon be taken to check it.

Oyewale said the current trend might further plunge the naira to N200 to the US dollar. If this is done, he added that it would erode the value of salaries earned; even the N18,000 minimum wage, as prices of goods begin to skyrocket.

He said, “We expect that if petroleum subsidy is removed, the government should redirect the funds to other sectors to assuage economic hardship, but what you find is that the money is taken overseas. People that matter are not interested in growing this economy; that is why it is so weak.

“We don’t even need foreign investors as much as people make it appear because so much can be achieved with good, consistent and committed economic policy directions. My position is that if the end does not justify the means, CBN policies are a mere rhetoric.

“The prices of goods will further go up because we do not operate a closed economy. As long as people can pay the required duties, they are free to import just anything into Nigeria, how then do the local manufacturers survive?”


http://www.punchng.com/Articl.aspx?theartic=Art201110080342126

:/

The greatest error in Nigerian history was making the central bank totally independent. Something has to be done to restore sanity.

hmmmmm

Until 2015 courtesy of CIA

It is at times like this that we should remember those leaders who resisted devaluation - Buhari and Abacha.

We can continue suffering and smiling or we can demand accountable and patrotic leaders.

I think Nigerians are waiting for the fools in power to impoverish us until we are dirt poor,before we  realise that enough is enough

Bravo! This if fressssshh Airrrrrr!

I dey laugh oo!

what is happening nigeria?

see this malu, so it is now the fault of the CBN we have falling oil price, govt uncontrolled election year budget, non implementable budget?

it's only enemies of progress/democracy that would oppose independent institutions

Ogedengbe said, “There is no way the naira would not depreciate. The problem is primary. The real sector is not working. We import substandard versions of things manufacturers strive to produce locally, thus destroying the market for them.

Exactly like one mugu importing billions of naira worth of Dustbin, that the most unpatriotic thing any president can do! even shame will prevent him from ever doing that! dustbin, toothpicks

nigeria i wish u all goodluck and fresh air, u people signed up to this so don't u ever complain

Beaf:

The greatest error in Nigerian history was making the central bank totally independent. Something has to be done to restore sanity.

U MOST BE WELL PAID THIS INSANITY

igboitalo:

nigeria i wish u all goodluck and fresh air, u people signed up to this so don't u ever complain

No problem, they voted for G E J not P D P.

Sanusi this is the time to prove your mettle

Obinoscopy:

Sanusi this is the time to prove your mettle

the cbn cant control the way the FG spends money, cant control the price of oil, cant control the low output of the manufacturing/aagricultural sector and cant defend the naira forever with reserves

omg #200

Sanusi has always maintained that CBN alters interest rate to compensate for excessive govt spending. An economy the spends 75% of its budget on salaries and wages of politicians should not expect anything better.

lol!! so this means if i send 5000 US dollars back to naija i will have a million naira, sweet! nice one!

but the 1 million will get you far fewer items than before as they will be more expensive, i think -

Exactly!!!! ^^^^

That is just the problem!!!!!

Exactly like one mugu importing billions of naira worth of Dustbin, that the most unpatriotic thing any president can do! even shame will prevent him from ever doing that! dustbin, toothpicks

Laugh wan tear my belle!

This is the consequence of misrule of the country for very long time.

The country will be divided when there is no money to run the government affairs for the population of people running close to 200 million.

Nigeria creates nothing and exports nothing besides oil, that is not enough to have a vibrant economy. Let us wait till those stupid, selfish, direction-less failed leaders drag us to the abyss, maybe then Nigerians will open thier eyes.

By the way Air-france ran its first commercial flight on bio-fuel from UK to France this month

http://esciencenews.com/sources/physorg/2011/07/04/air.france.power.planes.with.cooking.oil

With a target of 2018 as a major milestone. lets see what happens to the price of oil then and potentially Nigeria

where is beaf?

fresh air don dey show and it will continue until we stand up against these criminals(rulers).

proverbs 29 : 2. when the wicked are in authority, the people mourn and when the righteous is in authority, the ppl rejoice.
are we rejoicing? No. are we moruning? yes. who is in power? a big question calling for an answer.

Beaf:

The greatest error in Nigerian history was making the central bank totally independent. Something has to be done to restore sanity.

I think u deserve an award here on nairaland; as the most 'UNREASONABLE' person on this forum, to add to ur huge pay package so that u can be more fulfilled in ur choosen career.

Wrong title.

OP - why are you always out to deceive people? Nowhere is dollar exchanging for 200Naira but your title says Naira Drops to 200. where?

Even the content of the story you quoted is not at par with the title you gave it.

OP - change your title to something that is more of the truth. Lies doesnt get us anywhere.

I NO FIT SHOUT! 

GEJ DON FINISH USOOOOOOOOOOOOOOOOO!

AND HE IS THERE WITH HIS SO-CALLED ECONOMIC TEAM LAUGHING THEIR AS-S OUT!

What determines the strength of a currency is the productiveness of the people behind the currency.The power, and the authority of a currency lies in the things that the people can do for themselves,by themselves to stay afloat that others might need as well.

Currency might just as well be cowrie.It is power of exchange and interactions.

Forget about dollars,it is a thing of the past,what matters now is what the people really need to survive

the title for this post is misleading. Its different from the writeup itself. Naira is not exchanging for a dollar at N200 anywhere.

Anti GEJ imbeciles wont even read the write up half way.