Based on the catastrophe this floating of naira of a thing by Tinubu is causing to the economy, can anyone please educate me on the ONE benefit of this policy. I want to learn.

*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

*Politeness*
It is not economic jargon, it is common sense. If my money can buy more in your house, I'd like your house and buy stuff from your house... until I realize
I'm giving you all my money!

*Politeness*
Here's just one particular example: i read somewhere that floating has reduced the rate of japa. Who is losing? Those countries that would have gotten money from visa, etc, plus take our youth and brains. Who is gaining in the long run? Nigeria!

*Politeness*
Actually the government just said, let's stop wasting resources trying to artificially hold up naira (with the attendant round-tripping, corruption, black market, hoarding, and speculation) and just let the market decide it's value, with everything out in the open.

*Politeness*
With float and a single exchange rate, diasporan remittances will go through official channels and CBN will get a cut, while before most such remittances never actually made it into the country!

*Politeness*
Floating is different from inflation. Also it depends on the type of country. Nigeria is the the type of country that CANNOT lose in the long run by floating her currency.
The only losers will be those who wish to travel, those who need to buy foreign, round trippers, blackmarketers, currency hoaders and speculators, corrupt government and CBN insiders, airlines, foreign countries who'd get less of our japa youths, brains, and visa money!

PoliteActivist:
It will bring in people and investments

which one is people and investments? I don't want all those sweet economic jargons. Describe any benefit the way a layman will understand it.

It will reduce the price of 50kg shege banza and increase the price of rice which is a foreign food item
We should learn to embrace our own

ckc:
which one is people and investments? I don't want all those sweet economic jargons. Describe any benefit the way a layman will understand it.

*Politeness*
I modified my post. See above. It is not economic jargon, it is common sense. If my money can buy more in your house, I'd like your house and buy stuff from your house... until I realize I'm giving you all my money!

It will reduce the price of cocaine which is the most important commodity to our drug lord

It is like an auction where they bid for dollars. Unlike before when government fixed the rate and supported it by way of subsidy. So no more round tripping

AUSTERITY

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

So, investors are now flooding SW?
Tinubu is a Buffonish President

During Buhari's government, Nigeria, through the CBN, was spending according to some estimates, more than $12billion per year to maintain 2 exchange rates N440, and I think N570 to a dollar.

That $12 billion dollars was effectively a subsidy.

By the time Buhari left, Nigeria had just about $3.5 billion in its account. It is from that amount that we have to pay our debts and pay for imports of goods.

As you can see, Nigeria no longer had the $12 billion dollars required to keep naira/dollar rate at less than N600. So the current government had no choice but to give up on trying to subsidise the naira.

If Atiku or any other candidate had won, they would have had no choice than to follow the same path.

It is like buying a BMW when you had money. If you no longer have money to maintain it, what do you do, you give it up. No be so?

Your friends and neighbours who see you taking Okada will call you stupid for giving up such a beautiful car. But, younno longer have know what they don't know - you no longer have the money to maintain the car.

This is exactly where Nigeria is at present.

ckc:
Based on the catastrophe this floating of naira of a thing by Tinubu is causing to the economy, can anyone please educate me on the ONE benefit of this policy. I want to learn.

It simply means allowing the forces of demand and supply to influence the currency value as against CBN having a fixed the exchange rate.

It is the most realistic but it takes a smart government to take advantage of it. Hence, exports become cheap and imports become expensive.
People who export make so much because u bring in hard currency but when u import, u use ur huge money to get few things.

Kenochi:
Kill off the parallel market and allow all dollars to go through the banking system only
I was informed that Nigeria is the one of the very few countries in the world that has a parallel market
A friend told me a funny story, he said he was explaining to his friend who was not a Nigerian this double rates and the guy kept asking why we have such operations
Also,with this new rule of collecting all dollars in naira,some illegal operations will just collapse
I don't want to mention anybody but these group knows themselves

It is a good step but not enough to tackle naira depreciation. How do we manage the stolen trillions of naira issued as loan by cbn through ways and means of Buhari government

The looters/oppose to Tinubu presidency have cheap naira in their possession and are ready to buy and launder it at any rate.

Cheaper Exports: When the Naira is devalued, it becomes less valuable compared to other currencies. This makes Nigerian products cheaper for people in other countries. Think of it like selling your cool toy cars to friends abroad at a lower price. More exports mean more money flowing into Nigeria!

Expensive Imports: On the flip side, devaluation makes foreign toys (imports) more expensive for you. Imagine your favorite video games suddenly costing more because they’re imported. This encourages people to buy local toys instead.

Boosting Local Industries: When local toys (goods and services) become cheaper for foreigners, it helps Nigerian businesses grow. They can sell more, hire more people, and contribute to the economy.

Tourism Advantage: Devaluation makes Nigeria an attractive travel destination. Foreign tourists find it cheaper to visit, explore, and spend money here. Imagine more tourists enjoying Nigerian culture, food, and music!

Investment Inflow: Investors like to put their money where it grows. Devaluation encourages foreign investors to set up factories, offices, and businesses in Nigeria. This creates jobs and stimulates economic growth.

Balance of Payments: Devaluation can improve Nigeria’s balance of payments. It’s like keeping track of how much money comes in (exports, investments) versus how much goes out (imports, debt payments). A positive balance is good!

Inflation: Devaluation can lead to higher prices for everyday items (inflation). Imagine your pocket money buying fewer candies because prices went up. But controlled inflation can be healthy for the economy.

Reducing Debt Burden: Nigeria owes money to other countries (national debt). Devaluation makes it easier to repay those loans because the Naira is worth less. It’s like paying back a smaller amount.

Competitiveness: Devaluation makes Nigerian businesses compete better globally. Just like you try to win in video game tournaments, our economy competes with other countries. A cheaper Naira gives us an edge!

Learning Opportunity: Finally, understanding devaluation teaches us about economics. It’s like leveling up in your favorite game. By knowing how money works, we can make smarter decisions for Nigeria’s future!

NO BENEFIT AT ALL. IT IS ALL NEGLIGENCE, IRRESPONSIBILITY AND RECKLESSNESS. GOVERNMENT IS UNABLE TO REGULATE THE ECONOMY "COWEL".

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

China, I understand. But Nigeria? Which people and investments?

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

China, I understand. But Nigeria? Which people and investments?

ckc:
Based on the catastrophe this floating of naira of a thing by Tinubu is causing to the economy, can anyone please educate me on the ONE benefit of this policy. I want to learn.

Look at what happened in the last few years when for example, official rate was N450 and parallel rate was N800. Nigeria essentially restricted the people that could get the dollar at N450. What that means is that there is a thriving black market where the rates are much higher. First, International airlines that sold tickets in Naira and wanted to convert their money to Dollars to take it back to their country could not do so because CBN did not have enough dollars to give them. Nigeria became the number 1 country where airlines had their money stuck. So this puts the country in a situation where foreign entities would not want to invest in the country.

Now think about Diasporan remittances which is supposed to be over $20 billion a year. This money will never come through the official changes because no one will change dollars for N450 when parallel rate is N800. So consequently, the CBN reserves became very low. With low forex reserves, the Country was in a position where we almost could not pay our foreign debt back which constitutes is a death sentence to the economy, if we default.

Also, the Diasporan remittances never made it into the country. It was being held by certain Fintech and their partner banks in Nigeria. They hoarded it which made dollars more scarce and led to Naira continuing to lose value. They were seeing crazy gains while the rest of the country suffered.

Compare that to when you float. The official rates and parallel rates are largely harmonized. Now Diasporans can send money through officially licensed IMTOs. These IMTOs will give the CBN a certain percentage of the dollars- let's say 50% - That amounts to about $10 billion.

Second, the people that were speculating and hoarding millions of dollars for gains, now can no longer make arbitrage money because there is no longer substantial difference in rates between official and parallel. Those dollars can now go to productive activity. Last, foreign companies now know they can get their money in and out of the country which will spur investments.

Ultimately, floating allows CBN to grow its reserves, which allows Nigeria to service debts and also procure additional low interest debt that can be used for the desperately needed capital investments in the country.

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

Honestly I don't understand all you saying. Truth be told

Tinubulation chapter 4:5, ,,-The more you look the less you see...

Educative. Thanks for the contribution.

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

so why isn't it working here yet ?

fortunez1:
so why isn't it working here yet ?

ckc:
Honestly I don't understand all you saying. Truth be told

Validated:

So, investors are now flooding SW?
Tinubu is a Buffonish President

*Politeness*
Here's an obvious example: i read somewhere that floating has reduced the rate of japa. Who is losing? Those countries that would have gotten money from visa, etc, plus take our youth and brains. Tell me who is gaining? Remember this is just floating. If you intentionally totally devalue Naira, japa will stop completely and Nigerians will stop buying anything foreign!

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

unfortunately the reverse is the case, more firms ad businesses are packing up on a daily, in fact international companies in their numbers have left the shore of Nigeria due tho this valueless naira e dollar and other factors

Deogratiasfx:


It simply means allowing the forces of demand and supply to influence the currency value as against CBN having a fixed the exchange rate.

It is the most realistic but it takes a smart government to take advantage of it. Hence, exports become cheap and imports become expensive.
People who export make so much because u bring in hard currency but when u import, u use ur huge money to get few things.

ok thank you for the analysis, and also pointing to how much was left in Nigerias coffer

Please can shed more light on how much money saved from subsidy removal, since we stopped defending the naira against dollar, the one recovered from emefiele, edu, former minister of humanitarian affairs, malami abacha recovered loots etc

Because by now we should have over $1b in savings

See as people dey write nonsense constructively

Plenty grammar and theory, how will this improve the life of man on the street


Exporting of agricultural products is a good one but insecurity is affecting productivity.

DeLaRue:
During Buhari's government, Nigeria, through the CBN, was spending according to some estimates, more than $12billion per year to maintain 2 exchange rates N440, and I think N570 to a dollar.

That $12 billion dollars was effectively a subsidy.

By the time Buhari left, Nigeria had just about $3.5 billion in its account. It is from that amount that we have to pay our debts and pay for imports of goods.

As you can see, Nigeria no longer had the $12 billion dollars required to keep naira/dollar rate at less than N600. So the current government had no choice but to give up on trying to subsidise the naira.

If Atiku or any other candidate had won, they would have had no choice than to follow the same path.

It is like buying a BMW when you had money. If you no longer have money to maintain it, what do you do, you give it up. No be so?

Your friends and neighbours who see you taking Okada will call you stupid for giving up such a beautiful car. But, younno longer have know what they don't know - you no longer have the money to maintain the car.

This is exactly where Nigeria is at present.

Please, just say APC mismanaged the Naira by over borrowing and floating of the currency.

When Obasanjo took over in 1999, Nigeria had around 3 billion dollars in foreign reserve. Nigeria was still then heavily dependent on importation; he didn't float Naira, and he didn't stop subsidy on petrol, diesel and Kerosene.

Yet, Nigeria's inflation rate was under 15% and food was affordable too. He assembled able hands who were able to grow the economy and pay Nigeria's debts or negotiate some debt forgiveness.

Why did everything about Nigeria's economy start deteriorating rapidly immediately APC took over government in 2015? APC has no clue about economic management, especially on federal level.

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

So this is an artificial condition, if the government did this on purpose why reassuring the masses on empty promises.
The irony is that this country won't be able to sustain this development cos we adopt American lifestyle which is the consumers type.
This is just like treating malaria with chemotherapy treatment

Gadafii:
unfortunately the reverse is the case, more firms ad businesses are packing up on a daily, in fact international companies in their numbers have left the shore of Nigeria due tho this valueless naira e dollar and other factors

But those are companies who source their raw materials overseas. They'll be replaced by those who can source locally. Example, P&G will be replaced by local manufacturers of those items because people still have to use them. Meanwhile companies based overseas will arrange assemblage in Nigeria due to cheap labour. Devaluation is only bad for citizens wishing to travel or buy foreign. In the long run it is never bad for a country. Of course devaluation is different from inflation, which also affects prices of home-made.

PoliteActivist:


But those are companies who source their raw materials overseas. They'll be replaced by those who can source locally. Example, P&G will be replaced by local manufacturers of those items because people still have to use them. Meanwhile companies based overseas will arrange assemblage in Nigeria due to cheap labour. Devaluation is only bad for citizens wishing to travel or buy foreign. In the long run it is never bad for a country. Of course devaluation is different from inflation, which also affects prices of home-made.

mention any local manufacturer that are likely to replace these foreign ones, are you aware of how many local companies have folded the past one year,??!

If this is the case, why is dangote cement expensive since the source raw material locally??


Why is tomatoes and onions fucking expensive since they are produced locally

In Nigeria locally produced items are more expensive than imported ones.