₦airaland Forum

D

Regarding the comment about accountants in top political leadership positions...


it's unfair to make a blanket statement that they don't know anything.


Having a background in accounting or finance can provide a unique set of skills that can be useful in managing public finances and promoting transparency.

Ultimately, what's needed is a leadership that is committed to transparency, accountability, and good governance, regardless of their background or profession!

Like you rightly quote I personally doubted the guys claimed that he is a graduate of accounting and economics from a school in a developed country. May be it's one of those online mushroom schools that chunk out half baked graduates, that tends to give other accountants bad reputation. The guy should not be proud to call himself an accountant. I urge the ministry of Education to investigate the guy and the purported school he attended. It's not only certificate from Benin,Togo et al that needs to be ban but also from certain schools in Australia.

LandMann:
This post is as a result of the comment of the user below:



It's a shame that bede2u can boldly claim to have studied ECONOMICS and accounting, yet has no basic understanding of how currency valuation works globally, and how politics plays a role in it.

1. If you are the only country in the world, then you definitely have no business with currency valuation and exchange rate... Why? Cos you are the only country in the world and there's only one currency.

2. Immediately you split the world into many different countries and these countries have to trade with each other with different currencies and different policies (which is largely determined through POLITICS), you open the pandora box of exchange rate valuation... How do we determine the rate at which one currency exchanges for another?

3. There are many many factors that determine exchange rate, but the most important ones are a country's level of productivity, it's level of exports compared to imports, the level of inflation and unemployment in the country and a country's policy stance.

4. The big question is how do these factors (productivity, export/import, inflation and unemployment and policy stance) determine exchange rate? Which of these factors are based on economics and which of them are based on politics?

5. Well, if you think about it from a rational and logical perspective you will notice that some of these factors are based on economics (productivity, export/import, inflation and unemployment) while policy stance is based largely on politics.

6. HOWEVER, policy stance, which arises from POLITICS can influence all the other economic factors to determine exchange rate. How?

7. In general terms, the better your country's politics and policy stance, the better your country's level of productivity, inflation, unemployment and level of export compared to import, the better your country's currency and exchange rate compared to another country's currency.

8. So, compare Nigeria vs UK, which is more productive? Which has lower inflation and unemployment? Which exports more than it imports (how much does one earn from export compared to the other)? I'm sure you don't need a prophet to tell you that at present the UK beats Nigeria hands down in all these factors.

9. If you compare UK to China, you won't get same result but you will discover that China's exchange rate is not so bad compared to UK cos China is performing well in terms of productivity, exports, inflation and unemployment. In fact, China's currency should be more valuable than the UK currency given that China outperforms the UK in several of the economic factors. But this is not case. Why?

10. China maintains a policy of keeping it's currency value low by sometimes devaluing it because China wants its export to remain cheap. In other words, China wants other rich countries to be able to buy from them always. China wants its exports to always outperform it's import. If you export more, you earn more money and you have more employment and productivity in your own country. If China decides to allow it's currency value to skyrocket, soon its goods and services will become too expensive for others to buy... Meaning, China's exports will fall.

11. So, you see that policy and politics can influence exchange rate but to a large extent you have to keep the economic conditions very good otherwise depending so much on policy and politics to set your exchange rate will destroy your country's economy.

13. Now, let me say these to you personally, based on your arguments... You're showing me that accountants have very limited understanding of economics and politics.

14. Tinubu is a so-called first class accountant but his understanding of economics is very very poor. That is why Tinubu has destroyed Nigeria's economy and exchange rate in such a short time. How?

15. Tinubu removed subsidy on fuel which allows Nigerian made goods and services to be cheap. In a country without stable electricity and cheap fuel to run factories, expensive fuel will increase production cost. This move caused inflation to skyrocket in Nigeria.

16. Tinubu also devalued the Nigerian currency to discourage imports and other so-called "corrupt" practices. However, Tinubu forgot that Nigeria has not attained the level of productivity to do so. Nigeria is still highly dependent on imports for critical components in its manufacturing sector... Nigeria does not produce manufacturing equipments from scratch... They are all imported... Only some outfits assemble these imported components together in Nigeria but the high cost of energy used in production makes their final products too expensive for exports... not to mention the quality standards of goods manufactured in Nigeria... The end result is the devaluation move by Tinubu the first class accountant also caused inflation to increase in Nigeria.

17. Finally, you and Tinubu have shown me that people who studied accounting are dumb when it comes to understanding economics. You may certainly be good with tracking and reporting accounting data but you lack understanding of how an economy works, so left alone you guys can destroy things without knowing it.

18. Tinubu's policies has destroyed multiple generations of Nigerians... No matter how good Tinubu's policies are intended to be, It'll take 20-30 years of staying on this path of subsidy removal and exchange rate devaluation, improving education, healthcare, security and seriously eradicating corruption before Nigeria can begin to see any progress from such reforms. Anything less and it'll be suffering upon suffering for Nigerians till God knows when.

19. Do you see Tinubu eradicating corruption in Nigeria, improving public education, health and security now? No.

Tinubu can only rule for a maximum of 8 years, therefore leaving the problems he's created for someone else to solve.

20. Never trust an accountant in top political leadership position in Nigeria. They don't know anything. And if they're corrupt, they'll plunge their domain into a heavy mess so that they'll steal without anyone realising it.

Using your logic, why is Kuwait currency stronger than the UK’s? Or why is the British Pound stronger than the American USD?

IT is all POLITICS. YES WE KNOW. BUT STOP SURRENDERING TEN OF YOU FOR JUST ONE OF ANOTHER.. IT IS INFERIORITY COMPLEX. IT IS SUICIDAL. IT IS SLAVERY. IT IS AN ENDLESS GAMBLE AND SURVIVAL OF THE FITTEST.

orisa37:
IT is all POLITICS. YES WE KNOW. BUT STOP SURRENDERING TEN OF YOU FOR JUST ONE OF ANOTHER.. IT IS INFERIORITY COMPLEX. IT IS SUICIDAL. IT IS SLAVERY. IT IS AN ENDLESS GAMBLE AND SURVIVAL OF THE FITTEST.

TRADE BY BATTER BASED ON LIGHT LEVERAGES AND LIFE IS THE ULTIMATE. IMF AND THE WORLD BANK ARE STILL NECESSARY BUT LET US START ANALYZING VALUES FOR NEEDS NOT GREED AND STOP FIRING UNKNOWN DRONES AT EACH OTHER. PERSEVERANCE OVERCOMES EVERYTHING.

Tinubu is just a criminal.

20. Never trust an accountant in top political leadership position in Nigeria.


You just reminded me of both Ambode and Fubara.

LandMann:
This post is as a result of the comment of the user below:



It's a shame that bede2u can boldly claim to have studied ECONOMICS and accounting, yet has no basic understanding of how currency valuation works globally, and how politics plays a role in it.

1. If you are the only country in the world, then you definitely have no business with currency valuation and exchange rate... Why? Cos you are the only country in the world and there's only one currency.

2. Immediately you split the world into many different countries and these countries have to trade with each other with different currencies and different policies (which is largely determined through POLITICS), you open the pandora box of exchange rate valuation... How do we determine the rate at which one currency exchanges for another?

3. There are many many factors that determine exchange rate, but the most important ones are a country's level of productivity, it's level of exports compared to imports, the level of inflation and unemployment in the country and a country's policy stance.

4. The big question is how do these factors (productivity, export/import, inflation and unemployment and policy stance) determine exchange rate? Which of these factors are based on economics and which of them are based on politics?

5. Well, if you think about it from a rational and logical perspective you will notice that some of these factors are based on economics (productivity, export/import, inflation and unemployment) while policy stance is based largely on politics.

6. HOWEVER, policy stance, which arises from POLITICS can influence all the other economic factors to determine exchange rate. How?

7. In general terms, the better your country's politics and policy stance, the better your country's level of productivity, inflation, unemployment and level of export compared to import, the better your country's currency and exchange rate compared to another country's currency.

8. So, compare Nigeria vs UK, which is more productive? Which has lower inflation and unemployment? Which exports more than it imports (how much does one earn from export compared to the other)? I'm sure you don't need a prophet to tell you that at present the UK beats Nigeria hands down in all these factors.

9. If you compare UK to China, you won't get same result but you will discover that China's exchange rate is not so bad compared to UK cos China is performing well in terms of productivity, exports, inflation and unemployment. In fact, China's currency should be more valuable than the UK currency given that China outperforms the UK in several of the economic factors. But this is not case. Why?

10. China maintains a policy of keeping it's currency value low by sometimes devaluing it because China wants its export to remain cheap. In other words, China wants other rich countries to be able to buy from them always. China wants its exports to always outperform it's import. If you export more, you earn more money and you have more employment and productivity in your own country. If China decides to allow it's currency value to skyrocket, soon its goods and services will become too expensive for others to buy... Meaning, China's exports will fall.

11. So, you see that policy and politics can influence exchange rate but to a large extent you have to keep the economic conditions very good otherwise depending so much on policy and politics to set your exchange rate will destroy your country's economy.

13. Now, let me say these to you personally, based on your arguments... You're showing me that accountants have very limited understanding of economics and politics.

14. Tinubu is a so-called first class accountant but his understanding of economics is very very poor. That is why Tinubu has destroyed Nigeria's economy and exchange rate in such a short time. How?

15. Tinubu removed subsidy on fuel which allows Nigerian made goods and services to be cheap. In a country without stable electricity and cheap fuel to run factories, expensive fuel will increase production cost. This move caused inflation to skyrocket in Nigeria.

16. Tinubu also devalued the Nigerian currency to discourage imports and other so-called "corrupt" practices. However, Tinubu forgot that Nigeria has not attained the level of productivity to do so. Nigeria is still highly dependent on imports for critical components in its manufacturing sector... Nigeria does not produce manufacturing equipments from scratch... They are all imported... Only some outfits assemble these imported components together in Nigeria but the high cost of energy used in production makes their final products too expensive for exports... not to mention the quality standards of goods manufactured in Nigeria... The end result is the devaluation move by Tinubu the first class accountant also caused inflation to increase in Nigeria.

17. Finally, you and Tinubu have shown me that people who studied accounting are dumb when it comes to understanding economics. You may certainly be good with tracking and reporting accounting data but you lack understanding of how an economy works, so left alone you guys can destroy things without knowing it.

18. Tinubu's policies has destroyed multiple generations of Nigerians... No matter how good Tinubu's policies are intended to be, It'll take 20-30 years of staying on this path of subsidy removal and exchange rate devaluation, improving education, healthcare, security and seriously eradicating corruption before Nigeria can begin to see any progress from such reforms. Anything less and it'll be suffering upon suffering for Nigerians till God knows when.

19. Do you see Tinubu eradicating corruption in Nigeria, improving public education, health and security now? No.

Tinubu can only rule for a maximum of 8 years, therefore leaving the problems he's created for someone else to solve.

20. Never trust an accountant in top political leadership position in Nigeria. They don't know anything. And if they're corrupt, they'll plunge their domain into a heavy mess so that they'll steal without anyone realising it.

So why is the British pounds stronger than the U.S dollars or the Euro and why is Kuwaiti Dinah stronger than the British pound and why do you feel the need to throw cheap insults about?

lionshare:
Using your logic, why is Kuwait currency stronger than the UK’s? Or why is the British Pound stronger than the American USD?

leave the guy. The funny thing is that he just accepted in his own post that politics play are large part in currency valuation. That was my point. The only question now is the percentage of influence politics plays. I'd say over 50% because if it is purely economics, U.S dollars and Euro would be by far the strongest currencies in the world, followed by Chinese yaun

jedisco:
Exchange rate means little. It can be set arbitrarily like many countries have done. Some have even rebased their currency but without the right fundamentals, the slide would only continue.

What matters is stability not the nominal exchange.
Its stability that determines the strength of a currency and investor confidence

This is the person who answered the question best. Nominal exchange rate means little. If Nigeria wants today, it can discontinue all naira denominations above 100 naira and peg the naira to be equal to the dollar. However that will probably not last long as economic forces would again start sliding the naira down almost immediately. The most important aspect of currency valuation is stability. That is the reason I was telling someone the other day that if I was president, I would work on valuing the naira at say 2000 naira to a dollar and pegging it there for the duration of my term.

At least the guy you quoted is sensible enough to know that exchange rate is more what the textbook tells you. Also the post in which that response was made had a robust round of arguments for and against,, but your display of ignorance is really appalling.

Now look at the quoted part of your post, it is shameful after spending a lot of time extolling China for devaluing her currency so as to make her export cheap to the world, you somehow did not realize that our present exchange rate actually favors export because it means in terms of USD, it is now cheaper to produce?

Before you start arguing blindly, assuming exchange rate was 100 naira to USD, if you use 200 naira to produce that item, that will be 2USD to produce that item, but if the rate is now 1000 naira to 1 USD, and you still use 200 naira to produce, then the cost of production will drop from $2 to 2 cent. If subsidy removal now makes the cost of production to be 400 naira, that will still be 4 cent, so rather than spend all your productive time doing fake analysis, think of what you can export also.

LandMann:
This post is as a result of the comment of the user below:



It's a shame that bede2u can boldly claim to have studied ECONOMICS and accounting, yet has no basic understanding of how currency valuation works globally, and how politics plays a role in it.

...

14. Tinubu is a so-called first class accountant but his understanding of economics is very very poor. That is why Tinubu has destroyed Nigeria's economy and exchange rate in such a short time. How?

15. Tinubu removed subsidy on fuel which allows Nigerian made goods and services to be cheap. In a country without stable electricity and cheap fuel to run factories, expensive fuel will increase production cost. This move caused inflation to skyrocket in Nigeria.

16. Tinubu also devalued the Nigerian currency to discourage imports and other so-called "corrupt" practices. However, Tinubu forgot that Nigeria has not attained the level of productivity to do so. Nigeria is still highly dependent on imports for critical components in its manufacturing sector... Nigeria does not produce manufacturing equipments from scratch... They are all imported... Only some outfits assemble these imported components together in Nigeria but the high cost of energy used in production makes their final products too expensive for exports... not to mention the quality standards of goods manufactured in Nigeria... The end result is the devaluation move by Tinubu the first class accountant also caused inflation to increase in Nigeria.

17. Finally, you and Tinubu have shown me that people who studied accounting are dumb when it comes to understanding economics. You may certainly be good with tracking and reporting accounting data but you lack understanding of how an economy works, so left alone you guys can destroy things without knowing it.

18. Tinubu's policies has destroyed multiple generations of Nigerians... No matter how good Tinubu's policies are intended to be, It'll take 20-30 years of staying on this path of subsidy removal and exchange rate devaluation, improving education, healthcare, security and seriously eradicating corruption before Nigeria can begin to see any progress from such reforms. Anything less and it'll be suffering upon suffering for Nigerians till God knows when.

19. Do you see Tinubu eradicating corruption in Nigeria, improving public education, health and security now? No.

Tinubu can only rule for a maximum of 8 years, therefore leaving the problems he's created for someone else to solve.

20. Never trust an accountant in top political leadership position in Nigeria. They don't know anything. And if they're corrupt, they'll plunge their domain into a heavy mess so that they'll steal without anyone realising it.

LandMann:
This post is as a result of the comment of the user below:



It's a shame that bede2u can boldly claim to have studied ECONOMICS and accounting, yet has no basic understanding of how currency valuation works globally, and how politics plays a role in it.

1. If you are the only country in the world, then you definitely have no business with currency valuation and exchange rate... Why? Cos you are the only country in the world and there's only one currency.

2. Immediately you split the world into many different countries and these countries have to trade with each other with different currencies and different policies (which is largely determined through POLITICS), you open the pandora box of exchange rate valuation... How do we determine the rate at which one currency exchanges for another?

3. There are many many factors that determine exchange rate, but the most important ones are a country's level of productivity, it's level of exports compared to imports, the level of inflation and unemployment in the country and a country's policy stance.

4. The big question is how do these factors (productivity, export/import, inflation and unemployment and policy stance) determine exchange rate? Which of these factors are based on economics and which of them are based on politics?

5. Well, if you think about it from a rational and logical perspective you will notice that some of these factors are based on economics (productivity, export/import, inflation and unemployment) while policy stance is based largely on politics.

6. HOWEVER, policy stance, which arises from POLITICS can influence all the other economic factors to determine exchange rate. How?

7. In general terms, the better your country's politics and policy stance, the better your country's level of productivity, inflation, unemployment and level of export compared to import, the better your country's currency and exchange rate compared to another country's currency.

8. So, compare Nigeria vs UK, which is more productive? Which has lower inflation and unemployment? Which exports more than it imports (how much does one earn from export compared to the other)? I'm sure you don't need a prophet to tell you that at present the UK beats Nigeria hands down in all these factors.

9. If you compare UK to China, you won't get same result but you will discover that China's exchange rate is not so bad compared to UK cos China is performing well in terms of productivity, exports, inflation and unemployment. In fact, China's currency should be more valuable than the UK currency given that China outperforms the UK in several of the economic factors. But this is not case. Why?

10. China maintains a policy of keeping it's currency value low by sometimes devaluing it because China wants its export to remain cheap. In other words, China wants other rich countries to be able to buy from them always. China wants its exports to always outperform it's import. If you export more, you earn more money and you have more employment and productivity in your own country. If China decides to allow it's currency value to skyrocket, soon its goods and services will become too expensive for others to buy... Meaning, China's exports will fall.

11. So, you see that policy and politics can influence exchange rate but to a large extent you have to keep the economic conditions very good otherwise depending so much on policy and politics to set your exchange rate will destroy your country's economy.

13. Now, let me say these to you personally, based on your arguments... You're showing me that accountants have very limited understanding of economics and politics.

14. Tinubu is a so-called first class accountant but his understanding of economics is very very poor. That is why Tinubu has destroyed Nigeria's economy and exchange rate in such a short time. How?

15. Tinubu removed subsidy on fuel which allows Nigerian made goods and services to be cheap. In a country without stable electricity and cheap fuel to run factories, expensive fuel will increase production cost. This move caused inflation to skyrocket in Nigeria.

16. Tinubu also devalued the Nigerian currency to discourage imports and other so-called "corrupt" practices. However, Tinubu forgot that Nigeria has not attained the level of productivity to do so. Nigeria is still highly dependent on imports for critical components in its manufacturing sector... Nigeria does not produce manufacturing equipments from scratch... They are all imported... Only some outfits assemble these imported components together in Nigeria but the high cost of energy used in production makes their final products too expensive for exports... not to mention the quality standards of goods manufactured in Nigeria... The end result is the devaluation move by Tinubu the first class accountant also caused inflation to increase in Nigeria.

17. Finally, you and Tinubu have shown me that people who studied accounting are dumb when it comes to understanding economics. You may certainly be good with tracking and reporting accounting data but you lack understanding of how an economy works, so left alone you guys can destroy things without knowing it.

18. Tinubu's policies has destroyed multiple generations of Nigerians... No matter how good Tinubu's policies are intended to be, It'll take 20-30 years of staying on this path of subsidy removal and exchange rate devaluation, improving education, healthcare, security and seriously eradicating corruption before Nigeria can begin to see any progress from such reforms. Anything less and it'll be suffering upon suffering for Nigerians till God knows when.

19. Do you see Tinubu eradicating corruption in Nigeria, improving public education, health and security now? No.

Tinubu can only rule for a maximum of 8 years, therefore leaving the problems he's created for someone else to solve.

20. Never trust an accountant in top political leadership position in Nigeria. They don't know anything. And if they're corrupt, they'll plunge their domain into a heavy mess so that they'll steal without anyone realising it.

Who told you Tinubu is an accountant? If you believe that Chicago crap then you can believe anything.

D

I got here thinking I'll see something impressive that'll make me understand exchange rate monetary policy better, but no, all I found is one nigga who can't think outside the box beside all those write up being displayed to him.

Tjra:
20. Never trust an accountant in top political leadership position in Nigeria.


You just reminded me of both Ambode and Fubara.

What is wrong with both of them? They are excellent leaders who did right and is doing right, the mindset of Nigerians has been corrupted to an extent that people now see godfatherism as a necessary evil in the country. They did right and they ain't only the people who didn't like their godfathers stealing from the wealth of the people

LandMann:
It is because of the factors I already explained earlier. If you see my exposé is insulting that's because you are actually stupid. Despite the lengthy explanation you still ask a rhetorical question to justify your belief or conviction even though it is wrong. Only stupid people do that.

Pounds is stronger than the dollar and euro because Britain has a better economy compared to the US and Europe in general (lower inflation, lower debt, lower unemployment, higher productivity)... Plus Britain has a lot of companies operating in foreign countries (especially in their former colonies), making money and repatriating their profits home... This is called net income from abroad in GDP computation.

Think of all the British companies operating in Nigeria and all other countries Britain colonised. Think of how much these countries return home every year.

Kuwait currency is strong because of similar factors as well as the policy stance of the country. Kuwait economy is very strong and they have and export large amounts of crude oil...the country doesn't impose taxes on citizens which encourages more productivity... Best of all, with its strong currency, Kuwait can import machinery and other inputs it needs cheaply incase their home based companies can't produce it.

My last engagement to you as you do not understand the dynamics of civil discuss or actually know anything about what you are talking about.

1. U.S unemployment rate in 2nd quarter of 2024 was 4.1% while UK was 4.3% and Europe was 5.9%
U.S inflation is 2.6% while UK was 2.6% and europ is 2.0%
U.S GDP Growth Rate 2023 was 2.5% while UK was 0.1% in Europe = 0.8%
UK public debt was 98.5% of GDP at the end of September 2024 while U.S was 123% in Europe it was 88%

From the above can you tell me how uk is particularly doing better than Europe or U.S?


2. Your second point about UK companies working abroad can be calculated with a metric called Gross National Income. (Please google it). The GNI of the U.S is 26 trillion dollars while the U.K is 3.9 trillion dollars. The UK companies working abroad are very little compared to European and American companies. Think about Facebook and other tech companies alone.

3. Kuwait is among the worst performing economies within the GCC. It is expected to grow in 2025 by the second least amount ( the least growth is Qatar) Its GDP per capita is low compared to Saudi, UAE and Qatar. It doesn't have any recognisable brands like its neighbours and its also one of the most unstable politically because of its proximity to Iraq.

You obviously do not understand the topic being discussed as well as you think and I'd rather not engage with you anymore. Unless you say something really intelligent next

Besides, I don't like Tinubu either so I'm not sure what the rest of your post is about

D

Bede2u:
leave the guy. The funny thing is that he just accepted in his own post that politics play are large part in currency valuation. That was my point. The only question now is the percentage of influence politics plays. I'd say over 50% because if it is purely economics, U.S dollars and Euro would be by far the strongest currencies in the world, followed by Chinese yaun

It's absurd to mock someone who is wise enough to recognize their own ignorance, especially in a vast field like finance and accounting, where no one can know everything. I personally have great respect for individuals who demonstrate this kind of humility.

Using my voodoo accountant calculation.

Scenario 1
Exchange Rate == N500 = 1$

Imported Chemical: $100 (100 * 500 = 50000)
Other materials (Assumption): N50,000 (50000/500 = $100)

Total cost of production = $200

Scenario 2
Exchange Rate 1500 = $1

Imported Chemical: $100 (100 * 150 = 150000)
Derate for other materials based on 35% inflation: 1.35 * 50000 = 67500 (67500/1500 = $45)

Total cost of production = $145

Do not get me wrong, I am not insensitive to know that the cost of production in naira would increase, but the dollar cost actually reduces which is why your cost reduces if you decide to export.

The initial post was praising China for devaluing Yen and still could not see the export opportunity in the devaluation of the Naira.

So if the Izal company decides to go into export, they would make more money they would have made than before. The present high exchange rate is also aimed at discouraging importation so that where possible, companies can increase their local capaacity and source alternative productsfor their raw materials.

So the question is, why do you not think we should improve our export capacity since the other numbered part of your post acknowledges that a devalued currency is export friendly?

Secondly, why do you think an accountant would not know that constant increasing borrowing to pretend to have a low exchange rate is bad for the economy?

LandMann:
The bolded part of your argument is ridiculous. Have you worked in any manufacturing outfit in Nigeria? From a Nigerian producer perspective, who told you that cost of production is fixed and even declines when naira depreciates?

Let's say you manufacture IZAL in Nigeria and the raw chemical to manufacture that IZAL in Nigeria is imported.

When exchange rate is N500 to $1 it cost you N50,000 or $100 to buy a 20 litre gallon of the imported chemical for the IZAL you manufacture. From this chemical you dilute and manufacture Forty 1 litre IZAL cleaning solution that you sell for N2000 each in Nigeria, making you N80,000. Remove your chemical cost and other cost and the rest is your profit.

Now, if Tinubu devalues the naira or causes the naira to depreciate to N1500 per $1, the cost of the imported raw chemical you use is still going to remain $100 per 20 litre gallon in dollar terms or even increase due to inflation in the home country where it is produced. For simplicity, let assume the price of the imported raw chemical remains $100.

Now, using your voodoo accountant calculation, please tell us how much naira you'll need to buy the imported raw chemical. Also tell us how much you will sell each of the 40 pieces of 1 litre IZAL cleaning solution you manufacture from the raw chemical.

That is your first task.

In case it's too hard for you to do then know this;

You're one of the many government propaganda agent on Nairaland. I tend to avoid your comments on other threads because you tend to turn logic on its head when presenting your argument, which is what typical government propaganda agents do.

But this is my thread so I'll respond to you to clarify your misinterpretation and deliberate attempt to misinform people again.

1. Devaluing your currency can be good and it can be bad.

2. Devaluing your currency is good if your country produces finished goods for export. Finished goods are cars, airplanes, jets, electronic chips, batteries, solar panels, finished food products like chocolate, coffee, etc.

3. China devalues its currency to ensure its finished goods remain cheap in the international market. This is good.

4. China does not depend very much on imported machinery to run its factories because it can manufacture these machinery right there in China. China's education and technology is that advanced and develop for your information. This too means China can devalue its currency without affecting the cost of manufacturing in China.

5. Devaluing is bad when you do so because IMF and World Bank and other lending agencies mandate you to do so before they can approve your loan request.

6. Devaluing is bad when bulk of your export is agricultural produce and raw materials instead of finished or manufactured goods like the ones I listed earlier. Why?

7. When bulk of your export is agricultural produce and raw materials and you devalue your currency, other countries can easily buy off your agricultural produce and raw materials which is needed as inputs in the manufacturing sector of your country. The end result is that there'll be scarcity of agricultural produce and raw materials in your own country which will lead to price increase for everyone. For example, this process contributed to increase in cost of poultry feeds manufactured in Nigeria. Naira was devalued and CFA which is used by Nigeria's neighboring countries became more valuable... The result? Nigerians exported millions of tons of corn and other cereals to Cameroon, Niger and other west african countries. The result was shortage of corn in the Nigerian market, leading to increase in price of corn and subsequently increase in price of poultry feeds.

8. Now let's add insecurity to the mix. When majority of your export export is agricultural produce and raw materials and insecurity is causing production of agricultural produce and other raw materials to decline....by the time you devalue your currency you'll be dealing with multiple problems. You're already facing shortage because of declining production as a result of insecurity... agricultural produce and raw materials producers in your home country who want to maximize profit will prefer to export or sell to the neighbouring country because their currency value is higher and they can pay a little more than your domestic consumers... the end result? Shortage in your home country raised to level 2, causing all other output from that scarce agricultural produce or raw material to increase.

8. Now ask yourself, what is Nigeria's main export till date? Agricultural produce and raw materials (crude oil) which is needed for producing in the domestic economy. From the previous explanation, what do you think will happen to domestic prices when Nigeria devalue its currency like Tinubu has done? If you still pretend not to understand, can you remember the excuse Dangote who manufactures cement and pms in Nigeria gave for selling pms at over N1000 when PMS price was just N195 before the devaluation?

9. In comparison and to reiterate, when China devalues, the price of the end product in China doesn't skyrocket and they sell more products to other countries. But in Nigeria, when you devalue, shortage is created in your domestic economy causing price to skyrocket.


10. When prices skyrocket, in the face of fixed wages/salaries, who suffers most? Do you understand why Tinubu the so-called first class accountant is a dunce who doesn't understand economics and how his actions is throwing Nigeria into a complete mess?

11. Another reason why devaluing can be bad, especially for a country like Nigeria, is because of the existence of large scale corruption in the public sector. When devaluing makes Nigeria's main export cheap and leads to increase in exports, citizens pay a higher price because of shortage in the domestic economy. The proceeds of the cheap exports goes to different player viz; government (crude oil sales), farmers and companies (foreign and domestic).

12. The bulk of the revenue from cheap export going to the government in dollars ends up being looted by public officials. The bulk of the revenue going to the farmers will end up being used to buy domestic goods and services at higher prices and foreign manufactured inputs for their farming at higher prices leading to a cycle of increasing prices or inflation... the bulk of the revenue going to the domestic companies is going to foreign companies that will end up repatriating their profits abroad.

13. In light of all these, how does devaluing help a country that is underdeveloped, a country where bulk of its export is agricultural produce and raw materials, a country where insecurity is rife and hampering agricultural and other economic activities is many regions in the country, a country where corruption is so commonplace?

14. Nigeria possesses all the aforementioned traits and no sane leader will go around devaluing such a country's currency.

15. If you now understand that devaluing is bad for a country like Nigeria, why then do your politicians hide under different excuses to devalue the currency? They do so because it's the condition they're given before their loans can be approved by IMF and World Bank and other lending agencies.

16. Should you devalue your currency because you want to take a loan? Given all the existing problems in Nigeria, is it wise for Tinubu to devalue the naira because he wants to get loans from IMF and World Bank and other lending agencies? What happens when the loan is approved and then looted by the politicians instead of being used for productive purpose?

Bede2u:
My last engagement to you as you do not understand the dynamics of civil discuss or actually know anything about what you are talking about.

1. U.S unemployment rate in 2nd quarter of 2024 was 4.1% while UK was 4.3% and Europe was 5.9%
U.S inflation is 2.6% while UK was 2.6% and europ is 2.0%
U.S GDP Growth Rate 2023 was 2.5% while UK was 0.1% in Europe = 0.8%
UK public debt was 98.5% of GDP at the end of September 2024 while U.S was 123% in Europe it was 88%

From the above can you tell me how uk is particularly doing better than Europe or U.S?


2. Your second point about UK companies working abroad can be calculated with a metric called Gross National Income. (Please google it). The GNI of the U.S is 26 trillion dollars while the U.K is 3.9 trillion dollars. The UK companies working abroad are very little compared to European and American companies. Think about Facebook and other tech companies alone.

3. Kuwait is among the worst performing economies within the GCC. It is expected to grow in 2025 by the second least amount ( the least growth is Qatar) Its GDP per capita is low compared to Saudi, UAE and Qatar. It doesn't have any recognisable brands like its neighbours and its also one of the most unstable politically because of its proximity to Iraq.

You obviously do not understand the topic being discussed as well as you think and I'd rather not engage with you anymore. Unless you say something really intelligent next

Besides, I don't like Tinubu either so I'm not sure what the rest of your post is about

1. Are you aware that UK or Great Britain was already established before USA?

2. How many countries did Britain colonise? How many did USA colonise?

3. You think GDP or GNI is the complete picture of a nations wealth? Well, if all the UK companies in Nigeria and all other former colonies of Britain and elsewhere tabulate their asset value together, do you think UK will look so small compared to the US?

4. Kuwait is among the top three least indebted countries in the world. If Kuwait is not borrowing like your Nigeria, if Kuwait is one of the largest exporter of crude oil and earns a lot from it, why do you think that it's currency should be lower in value compared to countries like USA and UK that are heavily indebted and UK that is highly dependent on its neocolonial economic dominance policy which is not discussed in public?

5. Like I clearly stated earlier, factors determining exchange rate are multivariate. You need to be a strong productive and economically independent country before you can use political policy to fix your exchange rate. Otherwise it's other countries or organisations that will be doing it for you indirectly, and they'll do it to put you at a disadvantage.

Comparing countries that are in same class will not help you understand, especially if you don't know history as well... Nigeria cannot wake up tomorrow and declare that $1 is equal to N1. If Nigeria does this, it will be very beneficial to Nigeria.

But Nigeria cannot. Do you know why?

I doubt if you would like to know.

If economics is written anywhere on the certificate you were given please return it and ask them to write only accounting. You don't know anything about economics. You bring nothing but shame to Economics when you argue illogically and blindly.

LandMann:
1. Are you aware that UK or Great Britain was already established before USA?

2. How many countries did Britain colonise? How many did USA colonise?

3. You think GDP or GNI is the complete picture of a nations wealth? Well, if all the UK companies in Nigeria and all other former colonies of Britain and elsewhere tabulate their asset value together, do you think UK will look so small compared to the US?

4. Kuwait is among the top three least indebted countries in the world. If Kuwait is not borrowing like your Nigeria, if Kuwait is one of the largest exporter of crude oil and earns a lot from it, why do you think that it's currency should be lower in value compared to countries like USA and UK that are heavily indebted and UK that is highly dependent on its neocolonial economic dominance policy which is not discussed in public?

5. Like I clearly stated earlier, factors determining exchange rate are multivariate. You need to be a strong productive and economically independent country before you can use political policy to fix your exchange rate. Otherwise it's other countries or organisations that will be doing it for you indirectly, and they'll do it to put you at a disadvantage.

Comparing countries that are in same class will not help you understand, especially if you don't know history as well... Nigeria cannot wake up tomorrow and declare that $1 is equal to N1. If Nigeria does this, it will be very beneficial to Nigeria.

But Nigeria cannot. Do you know why?

I doubt if you would like to know.

If economics is written anywhere on the certificate you were given please return it and ask them to write only accounting. You don't know anything about economics. You bring nothing but shame to Economics when you argue illogically and blindly.

1. Your first point is infantile. No need to answer that as it has no bearing on the matter.

2. If it's by colonies, Euro should be stronger than pounds since it's members together, colonised more countries than UK. Lol another infantile comment

3. There are more American and European companies in Nigeria than British. Hell UK is not even a major trade partner of Nigeria or West Africa in general. Apart from Cardbry and Shell BP, which other British company that makes sense?

4. Congo DRC is also one of the least indebted countries, does it have a strong currency? Lol

5. Your 5th point is exactly what we are talking about and I say a lot of politics are involved in currencies matters

Brother, are you sure you understand this topic because your points are a bit shallow honestly

LandMann:
1. Are you aware that UK or Great Britain was already established before USA?

2. How many countries did Britain colonise? How many did USA colonise?

3. You think GDP or GNI is the complete picture of a nations wealth? Well, if all the UK companies in Nigeria and all other former colonies of Britain and elsewhere tabulate their asset value together, do you think UK will look so small compared to the US?

4. Kuwait is among the top three least indebted countries in the world. If Kuwait is not borrowing like your Nigeria, if Kuwait is one of the largest exporter of crude oil and earns a lot from it, why do you think that it's currency should be lower in value compared to countries like USA and UK that are heavily indebted and UK that is highly dependent on its neocolonial economic dominance policy which is not discussed in public?

5. Like I clearly stated earlier, factors determining exchange rate are multivariate. You need to be a strong productive and economically independent country before you can use political policy to fix your exchange rate. Otherwise it's other countries or organisations that will be doing it for you indirectly, and they'll do it to put you at a disadvantage.

Comparing countries that are in same class will not help you understand, especially if you don't know history as well... Nigeria cannot wake up tomorrow and declare that $1 is equal to N1. If Nigeria does this, it will be very beneficial to Nigeria.

But Nigeria cannot. Do you know why?

I doubt if you would like to know.

If economics is written anywhere on the certificate you were given please return it and ask them to write only accounting. You don't know anything about economics. You bring nothing but shame to Economics when you argue illogically and blindly.

Bro drop the argument. Shocking when the empty is the one insulting the knowledgeable!
That guy gave you factual statistics not unrelated conjectures like yours. Debate the figures.
Also your initial post essentially agrees with his submission that politics plays greater factor than the theoretical metrics.
Finally I agree that fixation on nominal exchange rate is a wild goose chase. Stability and predictability of exchange rate is an index of growth not nominal exchange rate.
NB: Brevity is the soul of wit!

9jatriot:
Using my voodoo accountant calculation.

Scenario 1
Exchange Rate == N500 = 1$

Imported Chemical: $100 (100 * 500 = 50000)
Other materials (Assumption): N50,000 (50000/500 = $100)

Total cost of production = $200

Scenario 2
Exchange Rate 1500 = $1

Imported Chemical: $100 (100 * 150 = 150000)
Derate for other materials based on 35% inflation: 1.35 * 50000 = 67500 (67500/1500 = $45)

Total cost of production = $145

Do not get me wrong, I am not insensitive to know that the cost of production in naira would increase, but the dollar cost actually reduces which is why your cost reduces if you decide to export.

The initial post was praising China for devaluing Yen and still could not see the export opportunity in the devaluation of the Naira.

So if the Izal company decides to go into export, they would make more money they would have made than before. The present high exchange rate is also aimed at discouraging importation so that where possible, companies can increase their local capaacity and source alternative productsfor their raw materials.

So the question is, why do you not think we should improve our export capacity since the other numbered part of your post acknowledges that a devalued currency is export friendly?

Secondly, why do you think an accountant would not know that constant increasing borrowing to pretend to have a low exchange rate is bad for the economy?

I don't know why you did the calculation halfway. I don't want to assume you saw the ridiculousness in your initial postulation, that is why you are now backpedaling.

Using your own calculation;

the first cost of production is $200 and at the exchange rate of N500 your total cost of production is N100,000 ($200 x N500).

The second cost of production makes a false assumption. That is part I put in bold. This is you turning maths, common sense and economics upside down to paint a false narrative.

If the domestic input cost was valued at $100 (50,000) and a devaluation occurs that shoots naira to N1500 per $1, who told you the domestic input cost will rise by only 35% (which is the inflation rate your propaganda government deceives everybody with)?

Lets assume for simplicity that water is the only domestic input you use.

Water is the most available product in Nigeria... At least we don't import water, though we import the water pumping machine and water purification system. Yet, as available as water is everywhere in Nigeria, what has been the percentage price increase of price of ordinary water in Nigeria since Tinubu's infamous subsidy is gone and naira devalued speech?

Sachet water that uses to sell for N5-N10 is now N20-N30 everywhere in Nigeria. Is this percentage increase not over 100%? Pick any commodity in Nigeria today and tell me the percentage increase in price since Tinubu was sworn in as president. If there's anyone that has not increased by at least 100% I will send you N50,000 in USDT within one hour of your doing so.

My point is, input cost for domestically available items itself has increased by over 100% yet government propaganda agency NBS tells you inflation is 35% and you swallow it hook line and sinker even when reality is telling you otherwise.

Well, let's assume your assumption is correct (it isn't, don't deceive yourself), and production cost is now $145 after devaluation... At the current exchange rate of N1500 per $1, your total cost of production will be N217,500 ($145 x N1500).

Your production cost moved from N100,000 to N217,500 using your false inflation rate of 35%. Even at that, a production cost increase from N100,000 to N217,500 is a 117.5% increase.

If your production cost increase by 117.5%, what will be the percentage increase in the selling price of your IZAL product? At least 117.5%, lower or higher?

Now in all of these, we're assuming that you have savings stashed somewhere that you can use to fund the increased cost of production.

What if you don't have? You want to go take a loan at the bank with 35% interest rate? Yes? No?

If you take the loan, who will pay the interest? You or the consumer? So your cost of production is now 152.5% higher - 117.5% + 35% (bank interest).

So, price of your product will be at least 152.5% higher, yes or no?

1. Now, your argument in support of Tinubu is that the producers should export the product because it's now cheaper to the foreigner buyers... If a product is now at least 152.5% more expensive, how is it cheaper for foreigners to buy?

2. Now, which foreigners are you going to sell your product to? The same foreigners that are able to manufacture the raw chemical and sell to you? If they can manufacture the raw chemical, who says they can't manufacture the IZAL themselves? Why should they go through the headache of importing from you and having high BP in fears that their container of shipment from you has been seized by pirates or the Houthis when they can simply produce the product in their own country?

3. You also assume that you have the facilities, equipment and capital to immediately produce enough for export after your currency is devalued. Is this true and even possible?

3a. You also expect companies to immediately start sourcing for local alternatives and increasing local capacity. Indirectly you're expecting many of your manufacturing companies to bring in more hard currency to your country to increase local capacity when you have not created the enabling environment like good judiciary, good roads, stable electricity, and good security. Meanwhile, most of the good brains in your country that will provide manpower in the increased capacity have fled abroad because of the extremely poor wages paid here and the poor economy where price of everything is expensive compared to how much people can legitimately earn. Which foolish existing company will increase their investment in such an environment or take the risk of borrowing to invest in such an environment? Most of them will fold up or sell their investment to any willing buyer and flee. This is exactly what you are seeing in Nigeria. How many foreign companies have packed up, sold their shares and left Nigeria? What we are seeing is replacement of existing companies but how many new companies has Tinubu's policies introduced into Nigeria since he started his ill advised first class accountant voodoo generated policies or hardship and suffering?

4. The aforementioned is to tell you that devaluing exchange rate doesn't necessarily mean your exports of manufactured goods will increase. Instead it is your agricultural produce and raw materials that serves as input to them and that they can't easily produce themselves that will be bought by them, and that is exactly what is happening in Nigeria. This is the concept of absolute/comparative advantage in economics.


I'll use a rhetorical question to respond to your last question as thus;

If Tinubu, a so-called first class accountant knows that his constant borrowing is harmful, why is he doing it?

[quote author=Buccalcavity2 post=133360266][/quote]I'm sure you know that reading is essential for those who seek to rise above the ordinary. Again, from passions grow opinions; intellectual laziness lets these harden into convictions.

It's not my calling calling to encourage intellectual laziness, so my posts and comments may not suit you.

Cheers.

LandMann:
I'm sure you know that reading is essential for those who seek to rise above the ordinary. Again, from passions grow opinions; intellectual laziness lets these harden into convictions.

It's not my calling calling to encourage intellectual laziness, so my posts and comments may not suit you.

Cheers.

Nice attempt at brevity.....largely gibberish though. 😂

Regarding the comment about accountants in top political leadership positions, it's not fair to say they lack knowledge. A background in accounting or finance can offer valuable skills for managing public finances and enhancing transparency. Ultimately, effective leadership requires a commitment to transparency, accountability, and good governance, regardless of one's background or profession!

LandMann:
I don't know why you did the calculation halfway. I don't want to assume you saw the ridiculousness in your initial postulation, that is why you are now backpedaling.

Using your own calculation;

the first cost of production is $200 and at the exchange rate of N500 your total cost of production is N100,000 ($200 x N500).

The second cost of production makes a false assumption. That is part I put in bold. This is you turning maths, common sense and economics upside down to paint a false narrative.

If the domestic input cost was valued at $100 (50,000) and a devaluation occurs that shoots naira to N1500 per $1, who told you the domestic input cost will rise by only 35% (which is the inflation rate your propaganda government deceives everybody with)?

Lets assume for simplicity that water is the only domestic input you use.

Water is the most available product in Nigeria... At least we don't import water, though we import the water pumping machine and water purification system. Yet, as available as water is everywhere in Nigeria, what has been the percentage price increase of price of ordinary water in Nigeria since Tinubu's infamous subsidy is gone and naira devalued speech?

Sachet water that uses to sell for N5-N10 is now N20-N30 everywhere in Nigeria. Is this percentage increase not over 100%? Pick any commodity in Nigeria today and tell me the percentage increase in price since Tinubu was sworn in as president. If there's anyone that has not increased by at least 100% I will send you N50,000 in USDT within one hour of your doing so.

My point is, input cost for domestically available items itself has increased by over 100% yet government propaganda agency NBS tells you inflation is 35% and you swallow it hook line and sinker even when reality is telling you otherwise.

Well, let's assume your assumption is correct (it isn't, don't deceive yourself), and production cost is now $145 after devaluation... At the current exchange rate of N1500 per $1, your total cost of production will be N217,500 ($145 x N1500).

Your production cost moved from N100,000 to N217,500 using your false inflation rate of 35%. Even at that, a production cost increase from N100,000 to N217,500 is a 117.5% increase.

If your production cost increase by 117.5%, what will be the percentage increase in the selling price of your IZAL product? At least 117.5%, lower or higher?

Now in all of these, we're assuming that you have savings stashed somewhere that you can use to fund the increased cost of production.

What if you don't have? You want to go take a loan at the bank with 35% interest rate? Yes? No?

If you take the loan, who will pay the interest? You or the consumer? So your cost of production is now 152.5% higher - 117.5% + 35% (bank interest).

So, price of your product will be at least 152.5% higher, yes or no?

1. Now, your argument in support of Tinubu is that the producers should export the product because it's now cheaper to the foreigner buyers... If a product is now at least 152.5% more expensive, how is it cheaper for foreigners to buy?

2. Now, which foreigners are you going to sell your product to? The same foreigners that are able to manufacture the raw chemical and sell to you? If they can manufacture the raw chemical, who says they can't manufacture the IZAL themselves? Why should they go through the headache of importing from you and having high BP in fears that their container of shipment from you has been seized by pirates or the Houthis when they can simply produce the product in their own country?

3. You also assume that you have the facilities, equipment and capital to immediately produce enough for export after your currency is devalued. Is this true and even possible?

3a. You also expect companies to immediately start sourcing for local alternatives and increasing local capacity. Indirectly you're expecting many of your manufacturing companies to bring in more hard currency to your country to increase local capacity when you have not created the enabling environment like good judiciary, good roads, stable electricity, and good security. Meanwhile, most of the good brains in your country that will provide manpower in the increased capacity have fled abroad because of the extremely poor wages paid here and the poor economy where price of everything is expensive compared to how much people can legitimately earn. Which foolish existing company will increase their investment in such an environment or take the risk of borrowing to invest in such an environment? Most of them will fold up or sell their investment to any willing buyer and flee. This is exactly what you are seeing in Nigeria. How many foreign companies have packed up, sold their shares and left Nigeria? What we are seeing is replacement of existing companies but how many new companies has Tinubu's policies introduced into Nigeria since he started his ill advised first class accountant voodoo generated policies or hardship and suffering?

4. The aforementioned is to tell you that devaluing exchange rate doesn't necessarily mean your exports of manufactured goods will increase. Instead it is your agricultural produce and raw materials that serves as input to them and that they can't easily produce themselves that will be bought by them, and that is exactly what is happening in Nigeria. This is the concept of absolute/comparative advantage in economics.


I'll use a rhetorical question to respond to your last question as thus;

If Tinubu, a so-called first class accountant knows that his constant borrowing is harmful, why is he doing it?

1 Everybody arguing with you or your in depth analysis are not sincere. They are either not educated enough or not in the same field level with your understanding.

2. Wether you like it oe not, those who are bent on supporting foolish propaganda and those such propane fuelled their low understanding can not stop fighting your generosity in explaining details with natural examples, figures, scenarios, simple ideologies, basic economic principles, graphical and practical solutions to this mayhem we found ourselves in Nigeria due to a round peg in a square hole leading the affairs of our economy.

3. I wish one day, time and chances, opportunity and mandate is given to you to exert this knowledge of yours, in a humble and rendering service mode, to our dear country Nigeria.

4. Even when your antagonists here have very low understanding of how simple mathematics and direct logics/principles of economics would humble them to learn the "truth" you are passing, humbly you still made them run through it, gainfully.

5. There are some here who hate one talking about the direction the present administration is taking us to.

May God have mercy on Nigeria.

You earn a follower.