₦airaland Forum

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

Don't you think the reverse is what is happening? The naira is getting worthless instead of the dollar.

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

What does Nigeria have for anyone to come here and buy? Shut up! You devalue when u have something to offer or sell! What does Nigeria have to offer/sell?

Food stuff? Now u are seeing the results in shortage and hyperinflation. Is this a benefits!

Without fixing insecurity and power, no economic policy will work. Moreso it is the guys working in those institutions that is supposed to implement these policies that jeopardizes it by way of corruption. Naija is on a very long ride and I pray it doesn't get to venezuela and Zimbabwe situation. Hunger dey for naija and it's no joke and just starting.

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.

After cheering Buhari for 8 years and blaming GEJ for 8 years. Now, you have started blaming Buhari and cheering Tinubu.
The cycle continues...... Docile Nigerians. Una never see anything yet.

malali:
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!

God Bless you for this explanation

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 kept their currency low to make their goods cheaper to export and it makes them grow economically.

Almost all countries of the world operate in fixed exchange rate.

malali:
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!

Chat Gpt

tommy589:
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

Which one is subsidy again? Hia!

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.

Everything you wrote here I know of except that part about foreign reserve going as low as $3.5Bn. I used to assume it still $30-something billion.
So Nigeria was properly fuckéd under Buhari. No wonder the lanky despot kept singing about "no third term" as if he was doing us a favour.

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.

Policies are made due to a lot of factors. If any of those factors is altered, the possibility of the policy failing is high. That is why, policy makers go back to the drawing board.

A leader who doesn't listen or have policy makers in close to him will fail or average up base on luck.

There is no announcement Tinubu has made based on input from policy makers.

If he new we don't have forex to defend the naira, he won't have allow naira to be floated. Most of the policy makers are arm chair economics aka Lagos celebrity economics.

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

It is a very very bad idea for a country like Nigeria with insensitive and unresponsive leaders that are not proactive and do not take their responsibilities seriously.

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

U mean mallam for sabo exchanging $£€

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.

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

And you think our politicians would make it work? This people would still collaborate with bankers and get the money out.

malali:
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!

So succinct.

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

Exactly, he is just being theoretical, none of these things are working here.

Look at the case of removing subsidy, making it more expensive for us to buy, why? They claim its cheaper for the countries sharing boundaries with us, hence it was smuggled to those countries, okayyyy, let us assume it is so, why not stop at that.
BUT you went ahead to float our Naira, weaken it, and those country's currency became stronger than ours, making everything we have or sell here expensive for us but cheaper for them, now they don't only smuggle our petrol, they also now buy our food crops which is cheaper for them due to our floated Naira. We are now worse off than before, as the food items are now more expensive for us to buy, we can't afford them again
My take, only one of the two actions should have been done now out of necessity, that's perhaps partial (50%) removal of subsidy pending when we can conveniently grow what will be more than enough for us, and have a positive net exportation over importation.

[b]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[/b]
Even our own go increase along side with the foreign products....no be 9ja?...we hail thee...

If this is your ploy to exonerate Tinubu's ineptitude, you've failed

blacknp:
You even dey try to even convince these nomadic minded things, let them be waiting for government to keep giving them a subsidized existence.

Nothing them they export for foreign exchange, 220 million sambos are waiting from 1.4 million barrels per day crude oil receipts, they no get shame, Oblivious minded Things waiting for the CBN to do magic.

Una go wait tire.

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.

If Peter Obi had floated the Naira, it would have had an opposite effect from Tinubu's.

Investors look at the records of the government in question before coming down for business.

With Tinubu's reputation as an international drug trafficker and his show of shame during the elections, only a foolish or foolhardy entity would come here to invest during his tenure.

People like Nuhu Ribadu, Rabiu Musa Kwankwaso, Yemi Osinbajo, Dave Umahi and so on could comfortably float the Naira as presidents and experience economic boom.

Men like Tinubu, Uzodimma, Atiku, etc dare not try it.

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

What does Nigeria produce, and why will anyone go to Nigeria for a holiday?

Floating the Naira when the country is still unproductive is a World Bank policy that has failed.

PoliteActivist:
*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, foreign countries who'd get less of our japa youths and brains and visa money!

How about those who can no longer afford foodstuffs, cement etc. cos of the inpact of this useless policy?
Una go just collect 30k, come online dey yarn rubbish.

How does this useless policy and fuel subsidy removal affect a common man on the street?

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

It will benefit only those in diaspora. Abd exporters. The common man and poor will suffer as a result. Nan your toe they advice tinubu

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

everything Tinubu Tinubu Tinubu. It's almost like a curse.

Can't you people use your brain for second?

sulaak:
What does Nigeria produce, and why will anyone go to Nigeria for a holiday?

Floating the Naira when the country is still unproductive is a World Bank policy that has failed.

It is a very reckless policy

Genius100:
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.

thanks bro

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

But why haven't they collapse yet since over 8months the naira was floated

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.

What is stupid is to give up a BMW, what happens to sales and buy a smaller car you can maintain and use to hustle

Nigeria financial state and idleness is unjustifiable, we are blessed with so many resources we aint exploring enough

Govt keeps reiterating we are broke, but their spending lifestyle is directly contradictory, our politicians are still the highest paid in Africa ... so i ask why can't govt give up their luxurious lifestyle since we all agree we are broke

Investment ? Then Can they explain why more than 10 multinationals left nigeria . Tell Tinubu to swallow his pride that reverse that failed policy of trial and error. A sensible person would first experiment with all the trials and error first , then if it works ,you can then change policy. You removed subsidy without getting your refinery ready to reduce the impact of the removal.

Eliminating scarcity….

We have too many idiots like you on NL and you're one of them! If you don't have anything relevant to contribute to the topic, why not shut up and stop embarrassing your family.

Kenneth4u205:
It will reduce the price of cocaine which is the most important commodity to our drug lord

GBP is floated, USA is Floated, Euro is floated, Qatar pegged for a long time and floated from 2017. Pegged system gives room to economic stability and avoid volatility, Floating reflects the market activities and can only be stabilised through sustained trade balancing where export is either equal to import or higher than import.
The higher the demand for Naira the more it appreciates in value. So what are we exporting but we must first ensure that local consumption is met

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

a perfect example is electric cables.

I support this because Nigeria produces 1st grade cables.

most imported cables are of lower quality and are cheaper.