₦airaland Forum

oloworulz:
Wots dis fish brain talking about? Can't u ppul be hardworking in your states..... Am sure u ve not taken Ur breakfast by now. Na dis one won feed me... Hahahahjahah. Poor boy

Lmao.. Look at who is asking me whether I have had breakfast....smh... I see u in your olympic size palour, wearing ur red joggers and over sized sneakers posing for time magazine. Relax that ur sneakers go soon size u. Ediot. See who is calling someone poor. I still maintain that I can personally feed u and ur immediate family.

#nobemouth

oloworulz:
see dis refugee guy, I pity u. Those abokis can't wait to wipe out ur ass . U igbos have turned Lagos to your New York . Mumu Boî , I have better things doing than ur joint family( mother and family side)

Bros we are a hardworking people and will always make it wherever we go. Personally I can put ur immediate family on a salary for 1 year and there would be no change in status for me.
So go back to ur father and ask him y he failed in bringing u up properly. You ilk cannot stand when folks like me do things.

Ediot.

PS: 10 bucks says u have no job and live in d very midst of poverty. That's y u blame everybody for ur troubles except yourself.

oloworulz:
we will soon wipe all of ya. Most of u are robbers, kidnappers too and all those bad attitudes. I only like d hardworking igbos

Apparently u are a tribilastic ediot. I urge u to wake up and get something doing to better ur life and that of ur family. Cause the way I see it, u are wasting away.

Ediot.

oloworulz:
The igbos are the one dat should have been deported. Most of them are involved in robbery.

You are a re.tard from the above comment. I don't know how you manage to use that smart phone u used to type that nonsense.

Badassniggga:
^^ All i see is a buncha pained foøls...
Do you have what it takes to match this resumé?

My brother, u couldn't have said it better. They are all r.etards that have become used to mediocrity as a way of life.

cupidhero:
Imagine these old men arguing about who is better in a particular sports and one even accusing the other of having sexx and giving out military commands while he is still ontop of a woman.This is nigeria and these are our heroes. Both of them are mad but OBJ seems to be dumber.

Bros the part about giving orders on top woman cracked me up. Believe me I havnt laughed like this in a long time. I feel OBJ was just being petty

Skelemba1:
bh brodaz

U don't have enuff education to handle a smart phone.
BTW who bought u that phone?

missberrypop5:
.hmmm, really. I don't think i fancy guys who are too tall. I'm 5.7ft i only need a 5.8, so that kissing him won't stress my heals much. 5.8 and fleshy(not fat)

I fit your specification. Let's hook up.

ypzilanti:
why are you soliciting for people to come and get rich? All your relatives and friends don rich finish?

Bro I had to login to tell you that was a fantastic response. I don laff so tey tears dey drop for my eyes.

Good 1 bro. Have a blessed Sunday.

Tallesty1:
She is free to buy pets.


Pets like cats.


Big black cat.

Bro I just got home now after long hours in traffic. The big black cat got me cracking. Good 1

VickyyB:
Ask Chimamanda Ngozi Adichie if she's independent alone.

Even if i become independent alone, I won't care.

You think Chimamanda was busy trying to prove a point on NL b4 she got international fame.

Keep decieving yourself.

VickyyB:
It will make me a strong independent woman.

The upside is you might eventually become an INDEPENDENT woman. But u will be independent alone.
#fact

VickyyB:
lol. I should be submissive to a man that i'm feeding and sponsoring with my own hard-earned money?. The answer is NO.

I can't be submissive to any man because we are equal talk-more-of, when i'm catering for him.

Continue with that attitude and see where it gets you.

JaypeeAnics:
how did this rubbish get to d front page?.....I swear we suppose flog moderator ......very soon na nepa bill una go put for front page....

Guy you no go kill me o. Lmao @ Nepa bill.
Nice 1 bro

[quote author=emusmith post=28395143]Guys and reading! hmmm! That's why some men find it hard to find a match mate, intellectually!

This is actually my biggest challenge. Most of the babes I meet can't keep up intellectually.

abeltolu:
The Nigerian media has been awash of the news of Naira devaluation due to fall in Oil prices, and the consequences it has on our economy. I surfed the internet and found this great masterpiece explaining in layman's method the Naira devaluation, its effects on individuals, e.t.c. Enjoy.

So How Did This All Start?

First thing first, oil price fell. Why? Everyone’s increased their production of oil and no one plans on cutting back. In the US, shale oil’s getting cheaper, so there’s more oil out there…and we all know what happens when you have a lot more of a product — price falls. When price falls, consumers are happy and producers are unhappy. Consequently, nations that are consumers of oil have a lovely time, and oil producer countries …a not so lovely time.

So? What Does This Have to Do With the Naira?

Before we go on, a little info on currency and exchange markets. It’s important to note that our currency doesn’t exist in a vacuum. Essentially, a unit of our currency is exchanged for a unit of another currency. Hence the term, Foreign Exchange or Forex or FX, for short. When we buy products from outside Nigeria, we have to exchange our Naira for Dollars. Your Naira is useless outside of Nigeria. It’s why you convert your Naira to Dollars before you travel. You want to test it? Travel to Dubai with only Naira.

Back to the question you raised. Nigeria is fortunate(?) to be an oil producing nation…when oil prices are high. Presently, oil prices are not high and that’s bad for us. Nigeria’s economy is dependent on oil revenue: about 75% of Government revenue comes from our crude oil sales. So when oil prices fall, oil revenue falls too, and that’s bad for the economy.

In the currency market, exchange rates are often centered on the health of a country’s economy. When the economy of a country is strong, its currency is also strong in the foreign exchange market. When the economy appears to be weak, its currency loses value in the currency exchange rate. Nigeria’s dependent on oil, so when oil prices are weak, so our currency loses value in the foreign exchange market. This loss of value of Naira is called a ‘depreciation’ in currency value.

Here’s a simple example. If we began with a dollar exchange for a Naira, both are in a sense equal. However, once I have to give out 2 of my Naira for just 1 of your dollar then the value of Naira has fallen. In the past months, the exchange rate was $1 dollar to roughly N150. Thanks to depreciation and eventually devaluation (we’ll get to that later), it’s now $1 to N168.

Alright. I Get the Currency Part, But What Does Our External Reserves Have to Do with our Naira Value?

To explain this, we’ll have to look into what the External Reserves is and why it exists. Think of your External Reserves as a Savings account where you put some portion of your salary every month. That money gets saved for something later: paying your children’s university fees, buying a house, or importantly, in case things get bad in the future (perhaps you lose your job).

Likewise, countries keep these reserves, but mainly to safeguard the value of their domestic currency, boost their credit worthiness, protect against external shocks and provide a cushion for a rainy day when national revenue plummets. When Nigeria earns revenue from oil, it gets paid in dollars, so we simply stash a portion of the money in our reserves.

Moreover, the reserves of oil producing countries like Nigeria tend to benefit economically from higher oil prices. The higher the price of oil, the more money oil producing countries like Nigeria get to earn and save.

So if We Have an External Reserve, Why’re We Worried?

Well, having a bank account doesn’t mean you have money. We have a reserve, but our money no plenty. Nigeria has been dancing shoki with its reserves. When oil price was high, we apparently weren’t saving that much into our reserves. In fact, our reserves have been on a downward trend for years. We’ve been using our External Reserves to keep the value of Naira stable for months. When our currency appears to be falling, we take out some dollars from our external reserves and purchase Naira. Increased demand for Naira leads to increased value of Naira, and that’s how we stabilize our currency.

However, we sacrifice a portion of our External Reserves to pull this off. For instance, “while the central bank stepped in Nov. 7 to send the Naira to its biggest one-day gain in three years, intervening in the market has reduced foreign reserves to a four-month low of $37.8 billion.” In the last few months, even Russia with their large reserves had to devalue their currency by 23%.

So is This why Everyone Was Making Noise About CBN Devaluing the Naira?

Yes. Now there’s only so much spending from the reserves that the CBN can do, especially given that we’ve really sucked at growing our reserves when oil price was in the $100 range. It’s like when your office was paying you N100k, you were clubbing every weekend rather than saving some money. Then the minute your office decided to increase your income tax, that’s when your jobless relative comes to live with you too. So now, your salary is not only less, it’s burning faster cause there’s an extra mouth to feed.

The drop in oil price does not only send our currency downwards, it also makes it difficult for the CBN to defend our currency. It’s a double whammy. Essentially, if the CBN keeps trying to defend the rate at N150, it’ll burn through the reserves pretty fast and then we’ll be screwed. So relaxing this currency threshold to N168 means they can relax a bit. They don’t have to keep using as much of the reserves to prop up the Naira. If you’re still curious on how it all works, Feyi goes into the intricacies of devaluation in his fantastic post here.

Okayyy! I Think I Understand Now, But How Does This Affect Me?

Like many other economic events, devalution creates winners and losers. Let’s start with the losers. If you generate revenue in Naira and incur costs in dollars, this is a bad time for you. Any activity that has you converting Naira for Dollars will hurt you way more than a few months ago.

Let’s have a moment of silence for our Igbo brother who will be ‘importing containers’ this christmas. Life just got harder for them. Given that importers have to pay for their imported goods in dollars…and dollars just got more expensive, the cost of their goods have increased overnight.

Same thing happens to those Behind parents who’ve got their kids in Nigerian schools that only accept their fees in dollars or Nigerians that have children schooling abroad. If you like flying, shopping or doing anything abroad, your cost of doing so has risen. On the contrary, if you earn in dollars and pay in Naira, life is looking pretty good at the moment.

Exporters also benefit. The fall in value of Naira means more exports because our exports have gotten cheaper. But ermm…what exactly are we exporting?

Phew. So It Doesn’t Affect Me Like That

Don’t be so sure. Nigeria’s an import-dependent nation, which means that most of what you purchase is produced abroad. I heard we import our toothpick too. If the prices of imports have risen, trust your Nigerian brothers and sisters to increase their prices too…leading to what’s popularly known as inflation.

I Was Hearing All These Oversabies Saying CRR, MPR. What Does This Mean?

CRR stands for Cash Reserve Ratio. It’s the proportion of what a bank can lend, to what it has in its coffers. So if the bank has N1000 and its ratio is 50%, can only use 50% of that money (N500) for business. Given that awon banks do not mess around with profit making, they will make sure that N500 brings back maximum profit. Banks are like the servant in Jesus’ parable that got 10 talents from his master, not the lazy one that got 1 talent. So to make max profit off the N500, they will raise interest rate if you want to borrow their money.

MPR stands for Monetary Policy Rate. The Central Bank uses the MPR to control base interest rate. The higher the rate, the less money in circulation. How? If interest rate is higher, will you borrow money from the bank knowing that you’ll pay much more later on? Nope. Instead, you’ll take your money from your pocket and give it to the bank, so they’ll make you more money.

Remember that thanks to devaluation, awon boys will be increasing prices left and right. General price increase in a given period leads to inflation. To tackle this, CBN increases CRR and MPR to reduce demand for money. This way, they prevent inflationary rise.

Okayy. I think I Understand That Part, So What’s This Austerity Thing Aunt Ngozi was Talking About?

That one is another long story. So, we’ve all been in situations when we’re broke. Ok, maybe just some of us. We adjust our lifestyle around the middle of the month when our salary hasn’t been paid. You go from eating jollof rice to drinking garri. When friends tell you to come out and party, you form ‘I’m very busy’.

Nigeria’s proposed austerity measures are similar…except on a grander scale. To cushion the effect of the falling crude oil prices, we have to cut back on spending and quite literally tighten our belts. The Government is cutting back on wastage (less government traveling and all that sort). The Government’s also raising taxes on luxury goods such as private jets, yachts and champagne. Somewhere in this luxury tax is the amusing observation that the revenue from taxes on the rich will still go back to the rich.

For the proletariat, the sweet subsidy you enjoy when you fuel your car will also get cut. Prepare to pay more for fuel. This is a good thing. Subsidy has to go anyways.

Wow. That was Long. So, Any Lesson to Learn from All This?

Yes. First lesson: Nigeria is the most reactive and least proactive nation you could’ve been born into. This isn’t the first time oil prices have fallen. Government should’ve gotten used to fluctuating oil price and prepared accordingly. And, since oil is the figurative oil in Nigeria’s economic engine, judicious and prudent management of oil revenue should’ve been practiced. However, we largely mismanaged our wealth during the time of booms and we’re now trying to behave ourselves in the time of slump. Let’s see how that goes.

The second lesson to be learnt is that we should’ve diversified our economic sources of revenue a long time ago to prevent price shock of primary products from affecting us drastically. Also, State Governments should’ve been pressured to increase their internally generated revenue much sooner. We can’t keep reacting to every economic shock that hits us.

Anyways, this is getting too long and no one probably got to the end, so no need for a witty or wise ending. But, if you reached this point, congrats! After spending all that time reading this, make sure you show off your new macroeconomic knowledge to your friends. And please, stop abusing econ-nerds. We have feelings too. Selah.

Source: http://naijanomics.me/2014/11/26/the-bricklayers-explanation-to-oil-price-fall-naira-devaluation-everything-else/

This was a fantastic read. The delivery was superb. Keep it up and keep em coming.

Again, thanks a lot

adedayourt:
Glad u fell dat way...smile off ur troubles bro

Yea bro. Thanks a lot

chrisbaba1:
[size=15pt]So APC is in charge of the judiciary? ?? Nairaland needs to start age restrictions because some comments are just too nauseating for any sane thinking individual to make. Forum becoming bastardized by children possession of phones[/size]

You have just stated the reason I stopped commenting on this forum. You see a lot of very shallow reasoning here.

adedayourt:
Awwwwww am soo happie for him

Bros its been a while I made a comment on NL but this your comment has made me forget today's troubles.

bloglover:
This one is strong........ shout out to chronic adulteters out there, ya case go enter nairaland very soon

Bro this your comment really got me cracking. Nice one tho

Alenkakent:
U well @ all?
Is this what ur lineage is yearning for or a better Nigeria? How does this make Nigeria better?
Rather it paves way for more corrupt acts

Funny thing is some retard$ actually liked his comment.

Fashola...A man after my own heart

#No_homo

The word is not hostility....they are just cranky.

Sweetlemon:
They are all over the damn place. In our offices, in our neighborhoods, on social networks, everywhere! Torturing us with their low IQed defenses for the first couple and their allies. There are so many things they say in their desperation, or should I say docile-minded states, but the following ones make me want to cry in frustration or lock them up in a room and beat the living shii outta them until their IQs rise several notches up.

1. Other Presidents Were Not Better That GEJ:

Can you imagination that?! (in Giringori's voice and grammar) So just because we have had bad leaders in the past, we should continue having bad leaders and sit, fold our arms and watch while the rest of the world overtake us by 1000 years?
Let me also remind them that never in history have we heard of billions of dollars (not naira o) disappearing from all sections of the economy. Even the Sharia crisis wasn't as violent and as prolonged as what we have now.

2. He's The Best Option Among Other Bad Options for 2015 (The devil we know is better than the angel we don't know syndrome)

Typical Naija mentality. No wonder vision 2020 seems like just a tall dream. Why not? When we have decided to stick with a devil? GEJ has suddenly become the best devil simply because he's a southerner? Oh of course! A bad southerner is better than a strong northerner. We must to support our brother with the last drop of our blood so we can keep those born to rule northerners in check. Abi nau?

3. We shouldn't Criticize Them Because They are Our Father And Mother's Age Mates:

"can you talk to your father/mother like that" "can your mother speak better English?" "can your father be a President?"

It's high time these...... (I lack words to describe them) got it into their heads that Presidents, Governors, etc are not elected to be fathers/mothers. They were elected to work for us and provide the enabling environment where we and our families can thrive in our chosen businesses/careers. even if my mother cannot speak better English, for sweet heaven's sake she ain't no first lady! She ain't representing no Country or State or whatever but herself and our family. So if she's got issues repping our family well, it's our business alone. Gerrit? And hey, if my dad ever becomes President and he starts saying stuff like stealing is not corruption, He is on his own. Oya take that!

4. English Is Not Our Language:

Oya start telling your children's teachers in school to start teaching them in Igbo nau. Please Google 'lingua franca' or 'official language' to understand why Germans, Russians, Chinese, and other non English-speaking country leaders and their first ladies do not speak English at public functions. I no get power.

5. Would You have Done Better As A President?:

Mba o. I would have done trade by bata. Nansense! A company CEO sends out an advertisement for a PA. Someone who can speak 3 languages, write in short hand, high memory retention, etc. Or the owner of a big departmental shopping mall, hotel, recreation center, etc wanting a manager. Why you no ask them to do these things by themselves nau? You see ya dumb sefs?
Secondly, not everybody can be Presidents. Same way law, medicine, engineering, accounting, etc are only for people with the flair, know-how and passion for these things.
So yes, I doubt I have what it takes to lead a country like Nigeria....... and did I tell you I'm contesting?? So please if you can't lead well, park well for someone else who can.

6. His Enemies Vowed to Make Nigeria Ungovernable:

His enemies kwa? Please remind me who the C-in-C is again I don forget. Since when did enemies become more powerful than someone that can wake up one morning and make rules that could make his enemies go bankrupt? Since when did enemies control the police and armed forces? Oh ok. I forgot, maybe you guys mean his village enemies aka African insurance ba? mtcheeeeeeeew! Your dear Presido keeps saying BH are in his govt. Oh so he knows them? What is he doing about them? His enemies are also stopping him from providing social amenities, employment opportunities, etc for us abi? they control the federal purse shey? How come his enemies did not stop him from budgeting N1B for his feeding or the numerous presidential cars and jets he has added to his fleet?

7. It's Their Time. Let Them Complete Their Eight Years.:

Even if it means wiping out the whole country ko?

smh. You all need deliverance hornezley!

I love you babe is all I can say.

ote author=Nihilist post=27779677]

Just make sure your funeral arrangements include significant amounts of alcohol...so I can drink myself to stupor in your honour.[/quote]Good 1 bro. Was waiting to see how it would play out. And u've given me something to laugh about bro.

Thanks

samflex:
They're financially ok not like some poverty stricken comments I'm seeing here

Lol bro. This has cracked me up a little

Jaideyone:
please let's observe a moment of silence for the dying oju iku's party please let's observe a moment of silence for the dying oju iku's party

And we have it here. The winner of the most stvpid comment award.

Please say something intelligent. This is not a beer parlour.

All these people wey they thief plane. God is watching u o

kilokeys:
she succeeded in friendzoning u.. and u are happy?

when it could have been better

now u r just a special adviser, a shoulder to cry on..

more grease to ur elbow o.
and more lube to d guy hitting the spot

Lmao @ the guy hitting the spot. Very nice reponse bro

what happened to the so-called Negotiation?

onatisi:
is this what you have to say?no wonder nigeria have the kind of leaders they have now

Bros the reason I don't argue with people like you is, you cannot have a constructive argument. You read a post and saw only what u wanted to see.

What has the advise am giving to u have to do with the kind of leaders in Nigeria.

U support mediocrity blindly and expect other people to follow suit.

Abeg stop spamming my mentions or my next comments u may not like.