₦airaland Forum

maupe:
The President would do everyone a favour, if he ran certain statements by his Technocrats, before releasing them to the public. It was very obvious that this was not possible, especially, in a time of recession

Spot on, in this government everyone seems to be a spokesperson leading to conflicting statements everywhere. Although in most cases the president seems to be in a "let there be light and there was light" mode, without minding the realities surrounding the implementation of those directives.

Jesusloveyou:
did u even read at all, where did u see denial and counter. thank God for change, God bless pmb

But you looked at the technicalities involved, the process they have to pass through before payments are effected.
Anyways tomorrow is 25th we will be looking out for alerts on here and next month's 25th isn't too far either.

SeverusSnape:
Can you see the incompetent nitwits?

During the last administration, Salaries were paid on or before 25th of every month, But since the coming of this dullardic administration, They are now being paid on the second week of the next month (you may call it 45th if you want). Now isn't that "change"??...

Fratello you stroooong

Let's see how the result of the test goes for our brothers in the civil service. Btw tomorrow is 25th.

After what appeared to be good news for Nigeria’s Federal Government workers, it is not hunky-dory after all as Ahmed Idris, Accountant-General of the Federation (AGF), has said that President Muhammadu Buhari’s directive that federal workers be paid on the 25th of every month was not possible, because there was no cash to pay on that date every month.
This would come as a surprise to Federal Government workers as it was for Idris, who disclosed this on Wednesday to journalists in Abuja.
He said, paying salary on the 25th of every month would “be given a test, I believe, by this month.”
“There is a standing instruction of Mr. President to pay salary on or before the 24th or 25th of every month and we will try as much as possible to comply and to abide by that.
“We are taking a step further to make a provision whereby we can accommodate salary payments even before FAAC.
“We will go to seek for necessary approval of our political masters to make sure that at least salary and other statutory payments are made even before FAAC.
“Because we can project how much they are and therefore we can prepare and hit the ground running to make them realisable and actualised.
“Even where we delay FAAC, we can still pay salary,” he said.
However, in a swift about-face, a statement by Mrs Kene Offie, Deputy Director of Press, Office of the Accountant General of the Federation, said: “There is an instruction from Mr. President that workers be paid on or before 24 or 25, but compliance has been hampered by the limited resources available to government, which can only be determined after the monthly FAAC (Federation Account Allocation Committee) meeting.”
The Federal Government has failed to meet its salary obligations, blaming the situation on falling oil prices at the international market.
And the AGF gave vent to this view after last week’s FAAC meeting when he opined that, “Nigeria is practically making about 30 to 40 per cent of what it used to make by way of revenue from oil and that has affected inflow generally.
“These inflows are what the federal, state and local governments receive to service the economy.
“It is when we receive these resources and sit at the end of the month for FAAC that the resources are shared among the three tiers of government,” he said.

Source: http://independentnig.com/2016/04/buharis-directive-salary-payment-impossible-agf-2/

http://emerge-ng.com/newsletter-editr/how-sanusi-put-the-naira-in-trouble/

The writer of this article already did some good expose.

GworoChewinMaga:
This is why I supported the removal of fuel subsidy and also the deregulation of the down stream sector that could only come to pass with the passage of the PIB.

If these two policies were allowed by now we would have had hundreds of small to medium scale refineries in every state.

Sometimes I just wonder how some of you think. Opposing the deregulation of the down stream sector and the subsidy removal was like Opposing the licensing of GSM operators in place of nitel only.



You see how we are light years ahead of you zombies.

Tell them bruv tell them. Everything pointed out here by most of us about the government has been coming to pass with clockwork precision (Rolex ) "but them no go just wan gree"

Now government has put forward a budget that they are afraid of signing. Seeing that Nigeria Is producing at 1.6+ million barrels per day against benchmark of 2.2 million, currency controls stifling economic activities causing reductions in customs earnings, FIRS nothing much to tax etc.

http://www.bloomberg.com/news/articles/2016-04-22/nigeria-s-revenue-drops-to-five-year-low-as-tax-oil-income-fall

They put a 6 trillion naira budget with reduced earnings which will likely increase deficit to almost double their already anticipated values.

These irrational supporters will drag us all into avoidable mess.

musicwriter:
Go and google the history of slavery, and how your ancestors made the west rich.

Go and google how the IMF and world bank made Africa poorer.

In fact, go and ask IBB how IMF and world bank destroyed the Naira and Nigeria economy in the 80's.

This issue of IMF and the world bank has been largely overflogged. If we are excellent at what we do then they should be coming to borrow from us and not th other way round. The IMF programme then failed for political rather than economic reasons. That is what the west learnt never to trust these blacks again with their money but to be largely involved. They released moneys and recommendations to put leaders who were happy to squander it without recommendations. The same IMF loan saved Ghana from the comatose state it was to the nation it became especially in the 90's to 2000's. Ghana was already a failed state then they took the IMF loans devalued from 3 cedis to a dollar, to 450 cedis to a dollar, pruned down the overbloated workforce plus implemented several recomendations and at the end became structurally better off. Imagine them when offices had 10 drivers to a car, 3 typists to a typewriter, 130000 workers producing less cocoa than 50000 workers did in the 60's and 70's. My brother we all know the truth, and system inefficiencies that need to be tackled but rather want to shy away from it.

IMF pushed for the factors of production to be owned and largely controlled by the private sector these generals saw it as a means to sell off state institutions to themselves. That was the period all the "unexplained" millionaires were born, the generals and their fronts. The very reason students of post independent Africa refer to the 1980's as the lost decade.

I suggest you put your certificates in a photo or picture frame where they can be easily removed at will. Lamination is a NO!!! If you ever have any international plans.

Please take it from me.

Quakertellicus1:
Matters arising

1.The Civil service is overbloated....so the bloat has to be cut. We do not have the cash

2.Seems many of the staff were not employed properly. Good they have to go.

3.And before someone jumps on me.....CBN et al still has to be looked into.

this was one of the highpoints of SAP, I mean your point 1 above. That so many nairalanders keep healing blames on the west for. The western donors through IMF have loans to African countries with recommendations to increase economic efficiency but our leaders "chopped" these loans and refused to do anything that will lead to loss of goodwill. Thing is there was supposed to be a trade-off somewhere but they chose to eat their cake and couldn't have it. Thus those loans became a huge curse to African countries. The reason the 80's in African history is referred to as the list decade. All the gains of the 60's and part of the 70's were eroded.

blueAgent:
True. blacks just don't understand cause and effect . just like to blame others for the failure.

Yea never taking responsibility, rather blaming everyone but themselves.

Saturn213:
Seun Lalasticlala Mynd44

This is the second thread with similar content that our Russian friend Navierstokes has created and it has made FP. Why do we have the same topic on the front page?

This is a similar one you put up yesterday- by the same poster:

https://www.nairaland.com/3061453/nigeria-economics-loses-politics-buhari

Dear Saturn, like you rightly said "it's similar " but not the same content. I am not aware of any rule on nairaland that says pressing issues of the state should not be out on the FrontPage. And on behalf of the mods there is a rule 20 somewhere I think.

Mods please do the needful.

Although it isn't Rukky Sanda news

I will state again and again, penultimate administration did two devaluations back to back and the effect was not felt by the populace. Prices of things remained roughly the same, the inflation rate was single digit. Obviously someone was doing something well.

Today we have refused to do an official but apparent devaluation ( despite the real devaluation taking place) and inflation is double digit.

Obviously someone isn't doing something well.

Nigeria’s foreign exchange crisis and the insistence of President Muhammadu Buhari to conduct an inflexible exchange rate policy now better define the struggle for survival in Africa’s largest economy where economic activities have slowed considerably with resultant job losses as investors watch in despair.

Nigeria failed to take advantage of the goodwill and momentum generated by the successful elections last year by releasing its peg on the naira and sending the right signal to attract foreign investors, and today the opaqueness and fragmentation of the FX market means that investors are confused and intrigued, according to analysts.

Investors do not have to look far to know that things are not right with the Nigerian economy and its management.

Inflation at 12.8% is rising far above asset yields, including T. bills at 7%, interbank overnight rates at 4% is far below the Central Bank’s MPR of 12%; crimping credit creation, banks are reporting lower earnings and non-performing loans look set to continue to rise, as harsh market conditions weigh down on the performance of businesses operating in Nigeria.

With foreign investors said to be avoiding the country until the FX controls are removed, Nigeria’s local bonds are the only ones to have made losses this year among 31 emerging markets tracked by Bloomberg. Nigerian average yields have risen 161 basis points to 12.31 percent since the end of 2015, whereas Russia’s have fallen 26 basis points to 9.29 percent and Colombia’s 28 basis points to 7.77 percent.

The market has waited nervously for the outcome of the review of the FX market Nigeria’s Central Bank says it is conducting.

After the January MPC meeting, the Central Bank said, “in the medium term within which monetary policy is cast, the need to allow policy to produce the desired outcomes becomes a key consideration in the policy mix. Consequently, the bank is fine-tuning the framework for foreign exchange management with a view to ensuring a more effective and liquid foreign exchange market. ”

After the March meeting of the MPC, the apex bank issued a statement in which it said, “however, the Committee (MPC) charged the bank (CBN) to speed up reforms of the foreign exchange market to improve certainty and eliminate noise and opportunities for arbitrage…”

One month after, there is no word on the said review despite the urgency in the MPC statement of March.

Senior lawyers and bankers told BusinessDay they still believe the apex bank will respect relevant provisions of the foreign exchange act of 2004 that established the autonomous foreign exchange market and the rules governing its operation.

The FEA 2004 by virtue of the provision of its section 9 specifically states that “the rate at which each transaction in the Market are to be executed shall be at the rate MUTUALLY AGREED between the APPLICANT PURCHASER and the AUTHORISED DEALER or AUTHORISED BUYER concerned”.

Surprisingly, this market was frozen by a change to Order based 2-way quote market and the effective closure of CBN’s RDAS window on February 19, 2015.

The lawyers say the question of devaluation can become an issue if Nigeria operated a fixed, single exchange rate regime.

This should not apply to Nigeria where the law provides that rates on the autonomous market should be determined by the principle of a willing buyer and a willing seller.

It’s not the first time Buhari has resisted market driven policies. When he last ruled Nigeria from 1983 to 1985, a time when, like today, oil prices had just crashed, he ignored advice to adjust the naira and refused financial assistance from the Washington-based lender, the IMF.

Buhari says adjusting the value of the local currency will amount to killing the naira.

However, for investors today, such thinking makes little economic sense. Most businesses are already trading at the black-market rate since the government’s policies are choking off dollars in the official market, according to Exotix Partners LLP, a London-based investment bank focusing on frontier markets.

PZ Cussons Plc, the Manchester, U.K.-based soap maker, said last week its Nigerian unit is forced to pay a 50-70 percent premium on the official rate to source foreign-exchange.

Nigeria’s government “just doesn’t get it,” Kato Mukuru, the London-based head of equity research at Exotix Partners LLP, said in an interview. “There comes a point where you need to understand that the whole country has already devalued.”

Source: https://businessdayonline.com/2016/04/nigerias-economy-choking-under-pangs-of-politics/

SirShymexx:
However, "facts" can be deceiving sometimes when the reality doesn't give credence to these "facts", especially when dubious characters are in-charge of collating them, in a country where folks are allergic to keeping proper records. You can correlate it with the Nigerian football age syndrome. Based on "fact" and the birth certificate issued by naij, Taye Taiwo is 31 years old...but in reality, he isn't anywhere near 31 and should be over 40. Another classic example is the bogus naij GDP that accorded an industry like nollywood billions of dollars, just to make up numbers, when in reality, the industry isn't worth anything - apart from junk.

A country that doesn't manufacture anything, apart from oil, low agricultural produce export yields, and food items and other miscellaneous things to its huge diaspora population - but imports basically everything, including refined crude - can't have trade surplus in reality based on logic. The numbers don't add up and you can't compare MENA country with small population/consumption ratio vis-a-vis their huge oil export - to a naij with huge population ratio vis-a-vis its disproportionate oil export. So if naij has been enjoying real trade export for that long, its economy won't be perpetually messed up as it is. The figures are dubious and I doubt they record what they import. How can you even export more than you import when you are not even self-sufficient in anything and not even oil, which is naij's primary foreign exchange earner?

http://www.dailytrust.com.ng/news/business/forex-scarcity-pushes-nigeria-toward-trade-deficit/143586.html#ru6kDy2F3416eMzW.99


Cc omonnakoda

eduj:
exactly. I don't understand why many Nigerians distrust imf and other western financial agencies while happily applauding the Chinese.The substandard products flooding our markets today and knocking out the little indigenous companies present in naija are mostly Chinese. China is just exploiting US like the British back in the day-which is hardly any cause for euphoria. this is the case of a slave trading masters.
it's a given that for those top economies to prevail (China and Europe) , other countries would be underfoot (3rd world countries) but, that doesn't stop us from laying the blame on the appropriate doorstep. if our govt misuses the Chinese loan, we would also end up being dictated to by them because, we can't repay it.

Exactly, many countries took these loans or expert advice and became better for it, our leaders take it and mix it with corruption then dilute with ITK get bad results and point their dirty fingers at the west. I always repeat we don't like their advice but we love their money. We must be thieves then. If everytime we have deficits we run to them IMF, World bank etc for funding, or medical related issues such as simple vaccines etc we run to them and still use them. My fiancee once was like that, by the time she got to Oxford and got on the policy side she realized how we as a people handicap ourselves with this our cynical attitude.

Ugosample:
Thank you.

IMF loans have helped countries like South Korea in recent past. Why do we vilify them all the time

Even Dubai was built with loans, manage these loans properly and you go. "Wack" it like IBB and coterie did, the end result will be Nigeria as we know it.

19naia:
This is the comparison to make and thanks for it.
The real issue is productivity of a nation, Japan is very productive and prefers it's currency stay low value so that the entire world can afford it's very viable products.
Venezuela is not a very productive country in the same way Nigeria is not very productive. Sure in terms of oil, they produce a lot. But it is not a good economy when it rests mostly on one product while not being in control of that product market internationally. Nigeria even takes lack of productivity to another level by not even being able to supply petrol to fuel vehicles or generators already compensating from lack of productivity in electricity supply. And let me not even mention piped potable water supply.
USA also relies on Oil and is a huge producer of oil. USA economy did not suffer so bad. Why? USA is a very productive nation so much so that china owes its immense productivity to productivity sent from USA to reside in China for the advantage of cheap labor. And even china seeks to keep it's currency devalued to make it's productivity accesible to all foreign markets.

Venezuela is so bad that even the productivity to make enough toilet paper for the country has been very low. And they think manipulating the paper currency will improve the economy? Nigeria is making the same mistake and flushing down the same toilet. It will be harder for the Naira to recover from the damage caused to the economy under the current currency policies than it would be to recover from allowing naira devaluation and more international currency flow(The natural devaluation would likely meet somewhere between 199 and 320). Because the restirction of currency flow stops all that flows with it, investments into productivity.
Local productivity is growing but in the same hand ,other previous productivities are falling out such as the airliners.
Leave currency alone and focus on productivity, coruption and recovering loot of past longer throats who started naira into trouble.

I notice how most citizens look at this whole issue from a very small lens. It's better to look at the big picture but through a larger lens. Sorry for my typos, using my phone on the go.

omonnakoda:
Please explain how devaluation would have kept Iberia back in Nigeria. Right now nothing stops them from buying in the black market.
Your offering is emotional twaddle totally bereft of logic or analysis. What significance is it that Maduro is or was a conductor and why are you so fixated on that.
Devaluation is not an event it is a process and once you start you do not stop as Babangida found out still it solves nothing.
The problem is our economy is not diversified and we rely too much on imports. We also have serious power deficit issues
Solving those are long term issues and would have been fixed by now if devaluation was the solution. It is not. Why have the Chinese who are the most significant investors in Nigeria outside OIL not insisted on devaluation? they keep coming to invest
Going on a protest march with Venezeluans makes you an economist? Don't be ridiculous.

Now your mind strikes me as warped. I'll leave here now for a meeting and hopefully can talk afterwards. Don't keep changing the goalpost or making somethings out of nothings. You said I watch Venezuelan events on CNN, and I have told you how I have strong relationships to the point of also marching with them. About SAP and I have already stated that IBB didn't follow through on what was required of him. You pick faults about me saying Maduro was a conductor, as though a conductor you pick on the streets today is capable of making sound economic decisions.
If you are interested for a civil discuss, I will be at my computer later tonight, or can chat you in between meetings.

Thank You SIR

.

AZeD1:
This is all speculation.
How did IBB's sap work out for the country?

You still don't get the point about IBB's SAP we have stated it on this thread, for IBB it was more about the corruption to "chop" the money than to truly make any reforms. IBB was the problem if you think otherwise tell me what the IMF recommended at the time that seemed stupid.

AZeD1:
The government doesn't have enough dollars that's why it is rationing. Devaluing the Naira would not increase the price of Oil so the government would still not have enough.

with devaluation more dollars comes in, from foreign investors, speculators as well (remember $20 billion is sitting idle in banks), plus if we also get our diversification well, increased exports etc. moreover you are still fixated on Oil, as a suggestion how about the government grows our production at least to the benchmark production of 2.2 million bbls per day from current 1.6 million bbls per day, that's also increased dollar revenues.

Abagworo:
Do you think Ghana is better than Nigeria? I doubt that assertion. Is there history of any economic success of an African country linked to IMF policy? Libya during Ghaddafi, Egypt during Mubarak or South Africa during apartheid.

Ghana is a country I have listed, they made tremendous progress from where they were in the 80's to where they were in the 90's and 2000's before the current spate of corruption etc is threatening to cripple them. Nigeria on the other hand...

if in doubt google Ghana and Nigeria economic indices, and compare the stats on a per capita basis.

Truth234:
Look at what they did with South Africa, Australia, Israel, etc but look at what our man did with Zimbabwe, even Papua New Guinea, Melanesia after Dutch left. The problem is not the West, all deals have agreement, we have the right to review and make adjustments according to our needs but our issues is lack of knowledgeable leaders.

For instance, UK wants a new deal to continue to be part of EU, the draft was completed since 24 Feb for a June 23 referendum. Currently being review by experts, our FG sign deal same week in China, if in few years something is wrong with that deal. Nigerians will blame China.

Zimbabwe was a progressing society, The original plan of the West was to live side by side with the locals, but that old comedian single handedly based on pride and to the detriment of his country changed all of that. We as followers can cheer them on that we have a man giving it to the west, but at the end of the day who suffers inflation on the streets, Mugabe? or the common zimb, who has to carry trillions to buy bread.lol

AZeD1:
By the time the official value is N350 the mallam would sell to you at N450 so you would still lose.

Nope at 350, only he who needs foreign stuff will go for it, a good deal of the demand will drop, and the government can to a much larger extent satisfy the then demand

Abagworo:
IBB devalued Naira and accepted IMF loans but the outcome was disastrous. Each country has it's own peculiarities.

IBB saw the loan as free money to chop, and chop he did, he and his boys ate the money like there was no tomorrow, without following through with the structural adjustments that were recommended, in essence it was a half and half implementation.

SAP was for about 34 African countries at the time, and sadly till date only one example is told of a country that followed through, Ghana. Thats the reason why there was a shift by the 1990's from Ghana must go to Nigerian's need visa to visit Ghana(which has been flatly denied by the Ghanaians though), but truth is we travel there for vacations, send our kids to school and even the US called them a country committed to growth some time ago, and people like you and me, roundly celebrated that call, at the detriment of our own government of the day.

AZeD1:
Wide spread poverty and unemployment did start today and won't end today.
Companies leave everyday for various reasons e.g Virgin Atlantic but don't tell me companies are leaving because we refused to devalue. That's crap.
Venezuela has devalued it's currency but that hasn't helped their economy, same with Russia and most Oil dependent economies.

You'd have to convince me with an Oil dependent country which has been helped by devaluation.

Venezuela devalued as at when? When things are already gone awry, Buhari could have devalued much earlier he stubbornly refused.

Jonathan and Okonjo devalued twice in a period of falling oil prices, with Oil price and production below budget benchmark, still there was no noticeable effect in the price of goods in the market, inflation was single digit etc. Buhari refuses to officially devalue and inflation is at double digit, pure water is selling at a price of *** (to be honest i don't know).

The paragraph above tells us that someone isn't doing something right, and someone in the past was managing something right.

Having delayed (like in everything this government does - which to me is based on fear) to devalue, our gains are already reduced, but there are gains all the same as things will begin to move on once again. Whats the point of going out to look for investors, when you haven't swept the house clean, They Like Hitler, will agree to everything but will not even honour those agreements. After all the travels which investor has put any money on ground in Nigeria? I cant remember any, all we hear is we will invest X and Y billion pounds into Nigeria, but nothing on ground.

Thing is all investors, speculators etc including Yours truly, are patiently waiting for the Naira to find a floor, before anything form of investment, can be done.


This is from the article you posted:

"PepsiCo recently started valuing some of its assets in Venezuela at that rate, after being unable to repatriate money at the 6.3 rate for years"

Truth234:
They like to flex their muscles to exercise their independence, but true freedom comes with greater responsibility not abject poverty.

Imagine Mugabe hatred is so much, he forgets winning the West means achieving more for Zimbabwe and not when inflation rate reached 79,600,000,000%.

The same west that was instrumental to his getting into power in the 80's. Africans should blame their useless leaders and leave the west alone. They are not perfect but still, one to one, the average western leader still has an accommodating heart than the average African leader. Imagine vexing for a country that they refuse to give you their own Ebola Vaccine. Na wa Oh na Thief you be ?, the same Paranoia that allowed HIV/AIDS to spread to the level it currently is, when African Leaders refused to heed to all the warnings of experts at the time, only for us to still till date be managing it with free vaccines they donate to us. The same way they selectively implemented the SAP and corruptly administered the whole process, today every one has forgotten IBB, but still remember the IMF.

My Woman studied at Oxford, and she had these views of the average Nigerian but when she got in there she had no option than to shake her head in pity at her earlier ignorance and stance,because most times they try to give advice to these African or third world leaders, one well fed ignoramus will be the one stifling implementation not based on any fundamentals other than his miserable opinion. Truth is they look out for their interests, like everyone else, but good thing about them is they also have enough to spare looking out for those who have repeatedly not been able to look out for themselves.

Truth234:
1) Devaluing would not pushed black market rate up but normalize it. It means instead of majority of us buying it at speculators' price we will be buying at official rate or something closer.

2) By fixing naira at 197 -199, we are losing money because the major means from which we generate foreign reserves is not fixed and has fell more than 70% so far, but we refused to make realistic adjustment to contain such changes. Saudi Arabia is enjoying the Riyal fixed because her foreign reserves is huge, $744,440,558,276 and can cover over $200 billion deficit created by the current oil glut.

3) Not for their own interest but a more conducive working environment.

I had added a text to the original piece up there. A lot of Nigerians sorry Africans have this paranoia about anything west or IMF . The west have their humanitarian sides and their business sides, and in all they understand one thing that they do what is best for them self and for the group. Nigerians expect the IMF to do the job of the UNO or UNICEF, they are all set up for different reasons.

In all they protect themselves by giving us earnings because when we flip, we will still come to them to borrow or send refugees across or ask for hand outs you see either ways we are their problem.

omonnakoda:
There is no explanation.He heard someone on CNN criticize Maduro so it has to be true but ultimately he cannot proffer any alternative course

Sorry mister, you really believe Maduro is the best thing to happen to Venezuela, well I have gone on a protest match with Venezuelan friends and have Venezuelans that are very dear to me, just like I do have friends in almost every country of the world. You can keep ranting while the former bus conductor (Maduro) has stubbornly driven the country aground.

Sad thing is we have another one without certificates here in Nigeria threading the same path.

janellemonae:
Its a simple question really. I have actually been following this discussion to get ur reasoning as well. I for one, dont know about maduro or the venezuelian economy and would have liked an explanation.

It seems u are of the opinion, along with the IMf, that buhari shouldnt have tried to stop the freefall of the naira due to the crash in oil prices. Is that ur submission? Would dt have been a wise decision in the interest of nigeria or in the interest of other countries trading wt us? How would things have eventually stabilized, without an increase in oil price in sight? Should we have continued till N2000=$1 and then just see wht happens.

Im not sure dt is also a good pill to swallow. My opinion is dt its a balancing act & quite complicated. Theres no easy solution dt wont pinch us all. The problem is dt i also dont see how this buharis policy wont have an adverse effect on the economy.

Ive still not seen a perfect solution from anywhere though, cos none of the plans are perfect and problem free. Maybe its just a price we have to pay for our past foolishness. Or maybe someone brilliant can see an outside-the-box choice apart from naira devaluation vs currency protectionism.

Maduro represents everything that shouldn't be in governance, literally bringing a country down to get knees. Venezuela's problems a not tied to this period of oil prices, their problems had begun way before that but the oil prices further worsened things for them. A corrupt bus conductor that was out forth as Chavez's replacement against the havard trained economist leopoldo lopez. Well the country did everything Buhari is doing right now currency controls. Fixing the value of the bolivares and letting its value depreciate greatly in the black market, like in Nigeria, with that happening the economy began to fall apart, airlines couldn't repatriate their funds like In Nigeria now, they had to leave manufacturers had no ready access to forex this companies began to close down jobs became lost, the bolivares became devalued in the hands of the citzens while the government was maintaining a hard stance, salaries became meaningless, good and house hold items disappear from stores, You spend hours queuing up to buy simple things like tissues and have to visit several stores to get all the items in your shopping list, government introduced a means of using your unique numbers to go shopping on particular days that's if your id ends with a particular digit you can stop on a particular day and stores ration the product to buyers, not like you finally see what you want and buy as much as you want. Then to top it all the man is squaring off with the west at the same time and looking eastwards.

Well a pointer to one thing as they say, currency controls in a period such as this is the second fastest way to destroy an economy after the atomic bomb.


Coming down to Nigeria, the IMF plus investors plus experts warned severally that we do a devaluation, instead the government stubbornly held on to a false value (which you erroneously term, halting the slide) while the naira dropped rapidly to #320 at the parallel or real market. A marked devaluation.

I see you referring to okonjo iweala, she already gave us answers in the past by doing quick and timely Devaluations. Our currency was twice devalued under Jonathan in a period of falling oil prices, Even selling below budget benchmark And no body noticed it, inflation was single digit pure water sold for its normal price almost every thing sold for their normal prices, a marked pointer that someone was managing our economy well. Now Buhari refuses to devalue a decision backed by politics and emotions and not by any economic fundamentals And we see increases in prices everywhere we see double digit inflations.

This administration as in every other thing, stayed and watched the Naira depreciate so much in the parallel market before they could step in, (if it means nothing to them why did they try to stem the tide, they should have pretended its not their business and allow the currency to exchange at 1000). Rather they pretend Naira is 199 to a dollar, when only Dangote, Garba Shehu and Aisha have access to it at that price.

Coming now to devaluations proper as advised, a timely devaluation would have closed the gap between the parallel and the official markets, a huge chunk of the $20 billion dollars claimed to be held by Nigerian citizens would have found itself in the market, Foreign investors would have been able to come in (at this point I ask a question, will you as a business man pay full price for something you have already been informed or you know is worth less?) These foreign investors moneys would have still been circulating within the system, flowing into the hands of manufacturers etc plus everything else will proceed as it should be. to be arguing inflation, when the greater majority of businesses satisfy their demand for forex from the parallel market is a false argument, the prices at which we buy things today already reflects the value of the Naira at the parallel market, thus the anticipated inflation is already here with us.

I could go on but let me pause here...

tuniski:
The value of the naira by purchasing power parity is determine by a simple Concept thus; if the cost ccommoditiy A in USA is 3$ and same commodity A in nigeria cost 1000naira, the naira to dollar value is 1$/333naira. QED

Any official control/pegging only ensure poor economic performance and rent seeking. The premium of the naira via control is what is driving inflation.

It is not poor economy if 400naira goes for 1$, no it is not! What is wrong is creating incentives for black-market via subsidy on Forex thereby impeding economic activities.

By this false valuation of naira, we officially are losing about 35% in naira what it should be. If we earn 1bn$ and value it at 197bn naira instead of 320bn, the 123bn subsidy is reflected in cost to manufacturers, inflation to consumers and rent to round trippers. It helps only the round trippers who gain only currency transaction value without economic value backing!

Buhari simply doesn't get! Let himm continue to romance the Yuan thinking two peggers of their currency (China n nigeria) live in isolation of global economy.


Bottom line, the naira is already devalued with the sustained depreciation and the continue insistence by buhari not to yield to reality has created reality in job losses, inflation and overall recession. A govt that mouths diversification on one breath and stifle it On the other promoting dumping and importation!


May God help us.

AZeD1:
Those people who say we should devalue the Naira have never said what the country stands to gain from devaluation.

.