Bobloco:


Please stop arguing

It was floated in june last year and we warned then that it was a disastrous thing to do

I gave an illustration using the Singaporean dollars. Thankfully, facts don't care about your feelings. As long as two different rates exist for one currency, the currency HAS NOT BEEN FLOATED!

WakeUpNigerians:


Stop arguing!

Use your head!

You people used yours yet campaigned and voted for Buhari in 2015.

Now, you are telling me who did not vote for Buhari to use mine.

Gerrard59:


I gave an illustration using the Singaporean dollars. Thankfully, facts don't care about your feelings. As long as two different rates exist for one currency, the currency HAS NOT BEEN FLOATED!

Stop making silly comparisons.
Is Nigeria Singapore? On what basis should you be comparing Nigeria with Singapore?

Bobloco:


Stop making silly comparisons.
Is Nigeria Singapore? On what basis should you be comparing Nigeria with Singapore?

Does not change the fact that the naira has not been floated. Why is this hard to grasp?!

Gerrard59:


Does not change the fact that the naira has not been floated. Why is this hard to grasp?!

Why is it on a free fall

kingsways:
The black market rate is the rate at which the Dollar is freely available and anyone who has Naira can easily buy Dollar.
Now, can someone please help me out and explain why the official Naira to Dollar rate today is worse than the black market rate as of Buhari's last day in office 28th May 2023?

28th May 2023:
Official rate: N465 per dollar
Black- market: N780 per dollar

28th January 2024:
Official rate: N1,348.63 per dollar
Black- market: N1,450 per dollar

The figure you quoted as the official rate is not correct. But let's assume that your info is correct.

The major reason is the fx backlog. You can't give what you don't have.
The CBN is owing some $7 billion and she doesn't have the money to pay.
The foreign reserves is almost nothing.
NGN excess crude account has less than $500,000
Declining foreign investments

Anyone that understand these things will not be surprised why we have the present rates.

Bobloco:


Why is it on a free fall

Because Nigeria imports more than she exports.

Simple.

P.S. Nigeria doesn't need a strong currency in the first place. We are not Switzerland or Singapore.

studyless123:


The figure you quoted as the official rate is not correct. But let's assume that your info is correct.

The major reason is the fx backlog. You can't give what you don't have.
The CBN is owing some $7 billion and she doesn't have the money to pay.
The foreign reserves is almost nothing.
NGN excess crude account has less than $500,000
Declining foreign investments

Anyone that understand these things will not be surprised why we have the present rates.

Amaechi, Fashola, and the fugly-looking Oshiomole were at the forefront of "share the money" when attacking Ngozi Okonjo. In 2015, Nigerians voted and campaigned for a cattle rearer whose cows defied biology and elementary economics.

Nigerians deserve everything they are facing!

Gerrard59:


Because Nigeria imports more than she exports.

Simple.

P.S. Nigeria doesn't need a strong currency in the first place. We are not Switzerland or Singapore.

But Nigeria has been more of imports than exports for decades

Bobloco:


But Nigeria has been more of imports than exports for decades

The problem is that Nigerians want a strong currency, but that is not feasible due to the hooge population. We don't need a strong currency. I like the naira as it is. What should is to enact policies aimed to easing the costs of doing business: establishing industrial parks in each sesnatorial district based on what the district has to offer; supply electricity to that park for at least 18 hours even if it means the rest of the state or district remains in darkness; open up more seaports and reduce costs of exporting products; tackle the issue of Fulani herdsmen for good; remove import levies on imported machineries etc.

Me no know why this sounds like rocket science o. Tanzania is doing what I outlined there. Should there be stability in that country for ten years, it will become a massive industrial complex for companies who want cheap labour and quicker access to Asia and the Middle East.

Gerrard59:


The problem is that Nigerians want a strong currency, but that is not feasible due to the hooge population. We don't need a strong currency. I like the naira as it is. What should is to enact policies aimed to easing the costs of doing business: establishing industrial parks in each sesnatorial district based on what the district has to offer; supply electricity to that park for at least 18 hours even if it means the rest of the state or district remains in darkness; open up more seaports and reduce costs of exporting products; tackle the issue of Fulani herdsmen for good; remove import levies on imported machineries etc.

Me no know why this sounds like rocket science o. Tanzania is doing what I outlined there. Should there be stability in that country for ten years, it will become a massive industrial complex for companies who want cheap labour and quicker access to Asia and the Middle East.

Gerard, you are mixing it up. Let me do a quick analysis to paint a picture here. I saw a recent twitter post where someone claimed a nurse he knew was earning 25k and out of annoyance he sent her money to do her international passport

Minimum wage in Nigeria is 30,000 (that's 20$ using 1500/$ rate). Let assume the person works 7hrs per day (mon - fri), that's 140hrs in a month which translates to 0.14 dollars or 14 cents per hour. Can you compare this pay rate to any country in the world?

Someone earning 90,000 naira in a month is earning around 72 cents per hour. That's how useless the purchasing power has been.

Nigerians want their pay rate to be able to purchase goods and services. The depreciation of naira is killing us

studyless123:


The figure you quoted as the official rate is not correct. But let's assume that your info is correct.

The major reason is the fx backlog. You can't give what you don't have.
The CBN is owing some $7 billion and she doesn't have the money to pay.
The foreign reserves is almost nothing.
NGN excess crude account has less than $500,000
Declining foreign investments

Anyone that understand these things will not be surprised why we have the present rates.

When we told people to vote PO, they put ethno-religious sentiments ahead of common sense.

Nigeria doesn't have 7bn USD to clear backlog but they did a stupid deal with afriexim bank to borrow 3bn USD with 12 bn USD worth of Nigeria crude oil.

Nnpc invested 2.7bn USD in Dangote private refinery but somehow, we don't have usd to clear FX backlogs.

Let the scam continue sha. By the time these useless people are done wrecking Nigeria, Lebanon and Venezuela will be a dream destination.

lastkingsman:


Gerard, you are mixing it up. Let me do a quick analysis to paint a picture here. I saw a recent twitter post where someone claimed a nurse he knew was earning 25k and out of annoyance he sent her money to do her international passport

Minimum wage in Nigeria is 30,000 (that's 20$ using 1500/$ rate). Let assume the person works 7hrs per day (mon - fri), that's 140hrs in a month which translates to 0.14 dollars or 14 cents per hour. Can you compare this pay rate to any country in the world?

Someone earning 90,000 naira in a month is earning around 72 cents per hour. That's how useless the purchasing power has been.

Nigerians want their pay rate to be able to purchase goods and services. The depreciation of naira is killing us

This same analogy exists in Japan and South Korea, two developed countries with very weak currencies compared to the dollars. Professionals in Singapore out-earn their Japanese and Korean counterparts because the SGD is stronger. What about Phillphines? Obviously, the free fall of the naira might be bad, but we cannot have a strong currency. It does not suit us - huge population and limited natural resources. Or are you suggesting salaries should be adjusted as the exchange rate changes? Also, salaries in Nigeria differ. What is 50K in Lagos is different from 50K in Taraba. The major problem is that we are not producing enough as we ought to. But the naira cannot be stronger again as 2000-2010s. That time don pass.

Another example is Vietnam. We don't need a strong naira. What we need are massive FDIs into productive sectors which can employ a lot of people. Again, Vietnam is walking in that path with major corporations opening manufacturing facilities across the country for EXPORT.

Gerrard59:


This same analogy exists in Japan and South Korea, two developed countries with very weak currencies compared to the dollars. Professionals in Singapore out-earn their Japanese and Korean counterparts because the SGD is stronger. What about Phillphines? Obviously, the free fall of the naira might be bad, but we cannot have a strong currency. It does not suit us - huge population and limited natural resources. Or are you suggesting salaries should be adjusted as the exchange rate changes? Also, salaries in Nigeria differ. What is 50K in Lagos is different from 50K in Taraba. The major problem is that we are not producing enough as we ought to. But the naira cannot be stronger again as 2000-2010s. That time don pass.

Another example is Vietnam. We don't need a strong naira. What we need are massive FDIs into productive sectors which can employ a lot of people. Again, Vietnam is walking in that path with major corporations opening manufacturing facilities across the country for EXPORT.

Haba na. It's not the same analogy abeg. Minimum wage in South Korea is 7.8$ and Japan is 6.49$.

Please compare that with Nigeria that's 14 cents. It's not this same analogy. China is 3.5$.

Remember the point I am trying to make here. You said Nigerians want strong currency. I am trying to establish the fact that Nigerians want their currency to be able to purchase sth and the true measure I normally use is minimum wage per hour as it covers everybody in the country including the people earning the lowest.

Just ten year ago, that 30,000 naira tranlates to $1.33 per hour in Nigeria. Is that not low enough to give you a competitive edge in export?

Remember that in production (for export), labour cost which we are discussing is just one of the components. We have others land, capital and entrepreneurship

The biggest issue we have is the capital component as you need borrow at unreasonable interest rate, purchase and maintain infras a lot (including your own generator) to run a successful venture here. Our infra deficit is 800bn USD and nothing has been invested to bridge the gap

lastkingsman:


Haba na. It's not the same analogy abeg. Minimum wage in South Korea is 7.8$ and Japan is 6.49$.

Please compare that with Nigeria that's 14 cents. It's not this same analogy. China is 3.5$.

Those are big boys, but remember, I mentioned Vietnam and the Philippines, which are comparable examples.

Remember the point I am trying to make here. You said Nigerians want strong currency. I am trying to establish the fact that Nigerians want their currency to be able to purchase sth and the true measure I normally use is minimum wage per hour as it covers everybody in the country including the people earning the lowest.

Unfortunately, Nigerians are not productive enough to warrant high salaries. Previous salaries relied on oil wealth to grow the economy. However, oil production has plunged under gEnErAl Buhari and his brothers inflicted harm on Nigerians who decided to invest in agribusiness, even to the extent of killing their own in katsina and Zamfara. We need massive FDIs and a government which protects private wealth.

Just ten year ago, that 30,000 naira tranlates to $1.33 per hour in Nigeria. Is that not low enough to give you a competitive edge in export?

There was little push by previous governments to revamp the economy and stop needless subsidies. Yar'Adua cancelled the sale of refineries, which stopped the progress of refining our crude. Jonathan removed subsidies so that private companies could see the need to invest in refineries. Tinubu and Buhari ganged up against it. What we are suffering would have been endured when the going was good = oil price was high, and insecurity was at its nadir, and there was enough reserves in the excess crude account.

Remember that in production (for export), labour cost which we are discussing is just one of the components. We have others land, capital and entrepreneurship

The biggest issue we have is the capital component as you need borrow at unreasonable interest rate, purchase and maintain infras a lot (including your own generator) to run a successful venture here. Our infra deficit is 800bn USD and nothing has been invested to bridge the gap

This is why I have recommended supplying electricity to industrial parks, which each senatorial district should have one based on its comparative advantage. In return, remove levies on imported equipment and tackle the issue of Fulani herdsmen as that affects livelihoods and transportation. Infrastructural development no too hard. Do PPP and privatise all major roads and rail services.