₦airaland Forum

mikeapollo:
This analysis is funny!
Why don't you blame Obasanjo, Yardua and all previous presidents for not floating the naira as well? Why blame GEJ alone? What about Buhari, did he float the naira?
What has been the result of floating the naira? Has it improved the lot of Nigerians and the economy at large?
If you care to know, you weaken your economic base to the advantage of external stakeholders when you float your currency but clueless governments in Africa do it because they think they would earn more from their exports and forgetting that their imports will be more badly affected with greater multiplier effect.
Have you asked yourselves why most European countries like UK refuse to float their currency? The Asians e.g. Chinese don't even float their currency even though they have excess local capacity and can afford to produce at very cheap prices and export. We in Africa import virtually everything so we cannot afford such.

Abacha did not float, he left the official rate at 22 naira to a dollar until 1998 but the gap between the parallel market and official market only widened. The parallel market was then 88 naira to the dollar (4 times the official rate) as at 1998. The rates were unified in 1999. Why wasn’t it left at 22 naira?

Buhari also had to float the currency in 2016 after his adamant refusal to float in 2015 but he panicked when the parallel market rate moved again in 2017.

Buhari would have floated eventually in 2024 because the reserves were drying up and he even had to tie 7 Billion dollars out of it to JP Morgan in order to keep sustaining the naira.

Nobody wants to float, the problem is lack of dollars liquidity. This is why nations allow their currency stay at thesame level as the open market rates. With that, investors are sure that they could come in at the Bank rate and go out at the bank rate without losses. When there is dollar inflow, the open market rate would eventually converge with the official rate but how do you get the inflows short term if you can’t attract FPI’s consistently? How do you attract FPI’s consistently if you don’t float?

UAE is not floating. They are operating a fixed exchange rate but because they have the dollar reserves, their parallel market rate is thesame as the official rate.

So dollar liquidity is the key.

mikeapollo:
If you do not realize, only a clueless president would float the currency of an import-dependent, developing nation. It is never done unless such country is ready to destroy its economy. Do yo know how many lives and dreams have been shattered by the reckless floating of the naira e.g. those who could no longer pay tuition fees etc?

So what positive adjustments to lifestyles have you had now with:
a. unprecedented poverty in the land ?
b. untold inflation and high cost of living?
c. destruction of the purchasing power of the people?
d. increased and unprecedented unemployment?
e. companies declaring losses and folding up in droves?
f. massive downturn in the economy, especially the informal sector

Under GEJ, the minimum wage could buy 2 bags of rice. How many bags can you buy now with the ''bold'' president?. Boldness can only be a good thing if it leads to positive results! Foolish boldness leads to negative effects. An armed robber must be bold to act or operate, but do you praise him when he inflicts pain or kills someone?

Of what benefit if a nation records double digit growth and the people are dying of hunger and poverty? What is the essence of such useless growth? Growth for dead people to enjoy?
It is only a clueless president that would implement policies that would record double-digit growth and still plunge the majority masses into unprecedented poverty, hardship and suffering, while the same president budgets billions for his feeding, entertainment expenses and buys a new jet.
Subsidy is not a crime, and most developed countries have subsidy schemes for their people especially in key areas or sectors of the economy, which also helps to boost growth and redistribute wealth. Even at that, there was still subsidy being paid after the fuel price was increased, until Dangote refinery started operations.

So if he didn’t float the currency like he did in 2023 and early 2024, how would he then open up the market to allow dollar inflow to see us keep servicing our debts and to pay airline backlogs?

Under GEJ, we had record high oil prices at an average of 100 dollars per barrel from 2011 to 2013 and very high production of at least 2.2 million bpd. We had never earned like that in our history. It was an opportunity to build our reserves from the $45 Billion he met it in 2010 to at least $60 Billion but no, it was depleted to $29 Billion in 2015. ECA account also depleted from $20 Billion to $2 Billion, debt moved from $15 Billion to $67 Billion yet this was the time we had our highest earnings in history. Buhari may have been clueless but GEJ gave him too much work to do.

Remember GEJ experienced no external threat like global economic meltdown Yaradua experienced in 2008 that saw him defend the naira and deplete the reserves from Obasanjo’s $64 Billion to $45 Billion nor did he experience COVID in 2020. GEJ had plenty and it was an opportunity for us.

WantsandMore:
interesting. How comes this is lost in the sensitization campaign and moreover I haven’t heard about the tax reform in a while. Still in the pipeline or DOA?

It has scaled second reading at the Senate. Now is the time for open hearing and it would likely be passed before March and come into effect July.

We are currently present across 8 countries – Nigeria, Ghana, Kenya, Uganda, Tanzania, Ethiopia, Senegal, and Côte d’Ivoire. We recently launched Premium Services in Ethiopia. In terms of regional expansion, we’re exploring further growth in East and West Africa while also being committed to deepening our presence in Nigeria.

- Jiji e- commerce.

toyeoye:
"Seplat brand new hires. Zero experience
3m+ a month."

I beleive this is part of the reason

Some people are already converting the 3 million to dollars, saying it’s thesame salary as 700k of 2019.

Irony1:
Ask people in the banking industry from 2022 ending, how CBN was recovering funds from those who took PTA illegally. the margin is more than 5% at the moment check the official NAFEM rate and parallet market rate there is almost 500naira difference which is more than 5%.
Please you have a moral responsibility to not misinform people.

This was closing rate of official and parallel market yesterday. The official rate at the top at 1515, parallel market just under it at 1560. That’s just 45 naira difference, so where are you getting your 500 naira difference from?

Irony1:
Ask people in the banking industry from 2022 ending, how CBN was recovering funds from those who took PTA illegally. the margin is more than 5% at the moment check the official NAFEM rate and parallet market rate there is almost 500naira difference which is more than 5%.
Please you have a moral responsibility to not misinform people.

What are you saying? The official market is currently at 1510, the parallel market is at 1560. That’s a difference of 50 naira and not up to 4%. Where did you get 500 naira difference from?

Ihengwu:
This is only the declared and recorded production. I bet you we produced a lot more.

True. They are likely hiding some as condensates to prevent issues with OPEC for going past the quarter.

Irony1:
No one has ever bought dollars from Banks Oga, Form A is done and the rate is given from CBN. where the FX corruption came from is BTA and PTA, even at that the CBN recovered most of the funds. Please stop misinforming the people.
The unification really did not end it, because they are still doing it right now as the margin between the official and parallel market has started widening again.

Whether from CBN or Banks, it came from the official market. That it was from CBN even made it worse.

What proof do you have that CBN recovered most of that? It just made liquidity in the parallel market stronger and where Airlines and big businesses wanted to go through official channels, they struggled because they couldn’t get FX there easily.

The margin between the official and parallel market is not more than 50 naira currently, that’s not even up to 5% compared to the 40-50% margin of 2022.

Irony1:
How did he kill subsidy corruption?
How did he kill forex corruption?

Speaking of forex corruption, I think he meant people no longer buy FX from Banks at 450 for things like university enrollments abroad, only to sell it at 750 at the parallel market. This was mostly prevalent in 2022, although this unification of the FX rates came at a cost.

Owologbo:
Do you work in the oil sector or you are just one of those low life nonentity propagandists?

Learn, read, una nor go gree. Na to just type rubbish una sabi. Research what I wrote there and if you don’t know something, you learn.

UHLmoving:
Wow

With a barrel of crude oil currently at 71 USD

That means Nigeria will be making a total of

$71 times 1,500,000

= $106,500,000 Daily

In Naira!

181 Billion Naira Daily.

Now the big question is, where will all these money go to?

Cost of production in Niger Delta is high. It cost up to 48 dollars per barrel in 2024 ( highest ever) due to unpredictability in the region. So at $71, both Nigeria and the foreign companies get just $23. So that’s 60 Billion naira daily. From that 60 Billion, NNPC gets about 30% only. That’s 18 Billion naira daily.

Dangote Sugar Backward Integration Efforts

The President of Dangote Group, Aliko Dangote, has said the company is committed to ensuring that Nigeria ends the importation of raw sugar by “actively intensifying its execution of the Sugar Backward Integration.”

Dangote said the group has committed over $700 million to land acquisition, machinery, infrastructure, manpower, and other impactful activities to boost local production.

He said: “The company is committed to ensuring that Nigeria ends the importation of raw sugar by actively intensifying its execution of the Sugar Backward Integration. In this regard, it has committed over $700 million to land acquisition, machinery, infrastructure, manpower, community relations, corporate social responsibility, CSR, and other impactful activities.

“Similarly, to support the government in food security, we are also investing in the agricultural sector. These agricultural products will soon be in the market

Nigeria is by far the largest producer of palm oil in Africa.

In December 2024 alone, Flutterwave processed over 26 million transactions totalling $500 million, equivalent to nearly ₦750 billion Naira!

Fast growing Jahi district of Abuja.


https://www.youtube.com/watch?v=MKK2XvrHFDo?si=F-lxM1dHxiAx0_m3

Ojuntana:
Stop lying bro. Fintech was captured in the 2014 GDP rebasing and so was telecoms and all those other sectors you mentioned.
You're right on some points especially the expansion of telecoms and fintech but the basic one is that Nigeria's GDP has shrank. This is more due to less fDI and currency devaluation and increase in cost of doing business.
You heard the NBS SG saying they intend to capture prostitution and drugs as well as other illicit trades in GDP. That's because they know that while frontiers like fintech has expanded, the sum total has shrunk.
Besides, the claim was that they wanted to release it by January ending. What's the cause of the delay? Why is WB the one announcing the result instead of NBS?

Fintech was at very nascent stage in 2010 to 2014. Nigerian GDP since 2020 has been growing and did not shrink for a moment. Even the GDP based on PPP has also grown.

The real GDP (when you remove inflation) since 2020 has also never shrank. So the only thing that has shrunk here is the nominal GDP in dollars which makes no sense because the resulting inflation from devaluation should put the economy at par once the purchasing power catches up.

GDP PPP is still growing, and companies have already started making huge profits that beat the devaluation losses of H1 2024, which shows that the purchasing power has caught up already. So the rebasing should put Nigeria at around $490 Billion.

Argentina also devalued their currency just last year from 370 to 1000 currently. Why didn’t their economy shrink by half? It shows why Nigeria must rebase to show the true value of the economy in naira. Devaluation shouldn’t automatically shrink your GDP by half, and even if it does, it shouldn’t be down for up to two years if you are not in a recession.

Proshare did a study recently of the recapitalisation of the Nigerian Banking sector and with the recapitalisation, it already slightly beats what it was before in May 2023 in dollar terms. The Banking sector always gives a mirror view of the economy.

jaxxy:
This is nonsense. u are wasting my time.

Because you have no rebuttal to it. You asked what constitutes the other 92% in GDP? There you have it.

jaxxy:
Tell me what makes up the 92%? Whatever do u produce?

u can just talk without backing it up and expect us accept ur statement cos u are who?

In fintech ( the biggest in Africa with moniepoint and flutterwave, opay), we have 4 out of the 6 unicorns in Africa. This is not captured in our current GDP because during the base year 2010, they were at infant stages or didn’t exist.
Telecoms have increased their customer base so much that only MTN has over 130 million active customers. No african country comes close and the revenue is only matched by SA.
Banks have huge customer bases. Dangote cement industry is the largest in Africa. Our Agricultural production is one of the largest in Africa (yam, rice, sesame, soybean, etc). Our informal trade sector is by far the largest in Africa and competes with the likes of Indonesia. We produce a lot of things. The Lekki free trade zone is full of industries producing a lot.

Hemanwel:
What's our GDP currently? What's South Africa's, Egypt's, Algeria's. Because we want to rebase our GDP this year, it now automatically translates to us been the highest in Africa? Go research about the history of the largest economies in Africa from 1960 and see that South Africa had been number one right from time imo river, except on two or three occasions in the year 2000s. Since 1960 oh! Have we not been rebasing ever since?

We hardly rebase actually. When we rebased in 2014, we had not rebased since 1990 until then.

SalamRushdie:
Before you rebase there must be some substance and growth in the economy.. currently all the related numbers show economic disaster

In Obasanjo’s first term, economy was growing rapidly but people could not see it because the inflation was high (remember complaints then and songs by Idris and African China). There was devaluation from Abacha’s fixed 22 naira to USD in 1998 to the parallel market rate of 90 naira then ( that’s 4 times devaluation).

But in his second term especially from 2006, we began to see the rise of a new kind of middle class and the naira stop depreciating fast at around 120 to 150 to USD.

Tinubu’s economic reforms would bear fruits faster because the situation in 2023 was not as bad as 1999.

"Higher crude receipts at Dangote would boost Nigerian gasoline output as the refinery is configured to maximise gasoline production and its 250,000 b/d residual fluid catalytic cracker is the largest in the world. The cracker underwent a planned three day maintenance program last month, but no gasoline cargo loading delays were reported during the work"

We Nigerians, we are getting there. Lowest import of petrol since 2017.

Yankee101:
Only one PTA is 4000 dollars

As far as CBN is concerned you can also get BTA/PTA from your Bank. Bank rate is currently 1497.

Basicend:
Hmm. In effect, they are honestly trying to face out BDCs.

If banks activate their debit cards for FX, they always have a cap on it. Maximum $200 to $500 daily or $1,000 / month.
That cannot be sufficient for SMEs that do daily importation. And, since they cant access it from CBN or any other approved trading window. The liquidity challenge still prevails.

Good point. For this, Banks can request for the tax numbers of these SME’s or any other means of identification then set higher limits for them. Those who want to just shop in Dubai should have their limits much lower.

NothingDoMe:
Basically, we want to lose the gains?

A steady downward drop is not a good economic indicator, especially for foreign investors.

But it’s just a one month trend who says it won’t pick up again soon?

NothingDoMe:
And we lost over $1bn in fx reserves.

Yes but we also gained $8 Bn in 8 months.

Irony1:
The government sell dollars to the BDCs via the authorised dealer banks. That is why it is limited to $25k

BDC’s are supposed to get from Banks. That’s how it’s done all over the world and that’s what Cardoso is implementing. Banks too are encouraged to bring in their own FX and when they do BDC’s would definitely also buy from them.

vaxx:
There is a policy being promoted by Ghanaian government called "Ghana Beyond Aid" it was initiated in 2017,The aim is to encourage domestic economic development and reduce dependence on foreign aid. It is actively working. And Ghana has indeed moved from poor country to middle income country, making it less welcoming to aid just like the likes of Botswana and Cape Verde .

Ghana receiving less aid is a deliberate act from the govt, coupled with its real domestic economic progress . Fact has shown foreign assistance aid doesn't developed a nation but promoting domestic economic act can leads to self sufficiency and sustainable goal

Ghana beyond aid has nothing to do with it. The countries with the most aids are either fighting wars, conflicts, or diseases. Ghana have naturally very peaceful people and so would hardly instigate conflicts.

Basicend:
How can dealer banks and BDCs work with $25,000 weekly? Is that not unrealistically too small?

Cardoso and all these trial and error schemes.

It should be enough for BDC’s. All Cardoso has to do now is encourage Banks to activate their naira cards again so people can use dollars directly at the official rate from the Banks. Then ban dollar cash of more than $200.

masseratti:
This policy will only take us back to where we are before now...just let the Fx flow freely...allow the market to determine the price ,allow buyers and sellers to do transaction with minimal interface..has the largest forex contributor into the economy allow the IOCs to pay you in naira ..while.they buy the naira and pay the government..they can only buy the naira from the general public...this economy thing is not a rocket science..just do thinga the right way and the system will stabilize it's self .. simple..all this regulations I just to make some ppl rich .

Lol. If IOC’s pay CBN in naira, then how do we build our reserves to service foreign debts? You see why what you wrote there makes little sense?

Chevrolet076:
Exactly

To be sincere, i see no reason why the FG is selling dollars to BDC. If anyone needs dollars for business, let them use the bank payment method to make the purchase. If you want to invest, buy gold, real estate, or agriculture. FOREX shouldnt be used as a store of value! They just create unnecessary scarcity and make it look like the demand is high whereas its just sitting in some people's bank account or wardrobe.

The same jagajaga economics is why Nigerians are buying Naira from POS. Why the fvck can't the bank fvcking do their damn jobs! Why should POS agent have cash and banks do not? Why can't I fvcking withdraw cash at the ATM. And instead of the stupid govt to even make epayment seamless, they're adding EMTL fee and the transfers that used to be free now requires you to add money to it.

Very stupid govt.

The Government is not selling dollars to BDC’s. If you read the article, you would see the BDC’s are to go buy from the Banks.