₦airaland Forum

Jessyjeff:
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.

You forgot that Revenue from crude oil Nigeria major souce of income was still at an all time high during Obasanjo government unlike now that we almost can't even get buyers for our crude oil.

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

abi... Those guys are still alive and kicking, business is even booming more for them

Go to Wuse zone 4, u can't pass that place freely due to heavy vehicular and human traffic.

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 how many have come to Nigeria since the devaluation? I think this government messed up through that May 29th Statement. Tinubu need to act fast to change things by stoping the floating of the currency, etc, else he may not even see Nigeria to govern in the next one year is the rot continues.

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!

Out of all the points highlighted above, only one (inflation) can notify the others and make them useless.

Inflation can cripple the economy in no time. It can reduce purchasing power and push alot into abject poverty. Inflation is deadlier than other points you highlighted in your post. The purpose of government is to ensure a good standard of living for her citizens and not to please foreigners.

The best approach would've be to eradicate BDC by creating Dollar to Naira App for registered importers and those that genuinely needs international transactions. Physical dollar trading by BDC must be stopped to stabilise the naira. Place monthly heavy charges on all domiciliary accounts to discourage savings in dollars. Floating or devaluation won't solve anything as long as we still have people that trade currency like commodity.

PoliteActivist:
*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!

Silly.

No benefit.

if there was, the dollar, rub Le and even rands will be cheaper than the naira.

paid influencer

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

Please kindly explain "Round Tripping"

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!

Well articulated

In Nigeria the case is the opposite , instead of new investors the old ones are closing shop

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

PoliteActivist:
*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!

What happens now that Nigeria cannot produce anything again cos of expensive energy. Who will come an invest in inflation.
Removing subsidy and floating Naira is a contradictory policy.

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

You can't compare Nigeria's exportation value to that of China.

China exports all kinds of products to Africa and other parts of the world.

Nigeria literally depends on imported goods to function effectively as a country. So devaluing the currency would only lead to more hardship cos aside oil, we basically have almost nothing we export that can attract buyers from all over the world.

Jessyjeff:
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.

What is the pupulation of Nigeria in 1999. How Many ppl were buying new cars,TV and other gadgets.
Think about the numbers of political office holder we av had since 1999 from minister to senator,honourable, commissioner to local govt and tell me how many of them r using ordinary local furniture. Our taste for imported things is outrageous and this is putting enormous pressure on forex

It is a foolish policy by a foolish man.

PaZwoD:
Please kindly explain "Round Tripping"

Nigerian Banks will buy from CBN at official rate and sell to black marketers

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

Just remember, during fuel scarcity, black market boys always have fuel. Through banks, through pilgrimage or whatever, black market will get their supply

Jessyjeff:
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.

What was Nigeria population in 1999? With that you will have your answers.

Floating of naira benefits countries that are producing countries..more exportation of goods and less Importation of goods...more earnings of dollars in the country and less demand for dollars...but nigeria is a consuming country...and we do not earn much in dollars..the supply of dollars is low...but we demand for the scarce dollars for Importation of goods, travel abroad to attend and school at foreign universities, medical treatment abroad, vacation abroad...so all this put pressure on the dollars and make the dollars to keep on rising and naira losing value...that is why floating of naira... the economic policy is not working in nigeria or not beneficial to nigeria and nigerians

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!

When there is insecurity,bad roads and no electricity then all of these you have mentioned will not work and can onload to the way of Venezuela.
Hope I am right

PureFace1:
You forgot that Revenue from crude oil Nigeria major souce of income was still at an all time high during Obasanjo government unlike now that we almost can't even get buyers for our crude oil.

When Obasanjo took over in 1999, crude oil price was about $30 per a barrel. Later in the years of his administration, prices improved but it was not over $70 per a barrel.

Learn your history and stop being fed propaganda by a clueless APC government.

Obasanjo and his team were just damn good in managing the Nigerian economy.

PoliteActivist:
*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!

actually you'd be giving me a very small amount while taking away all I have for almost nothing

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

Have you seen the people and investments? Do you have stable power to manufacture cheap goods that you will export? Or is the country that is sabotaging itself that you expect to benefit the way China benefited,

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

@ PoliteActivist: You re very correct.

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.

Lol you got this from your kitchen...lol

For people saying it will improve exports, for a country that's imports-centric. Floating the naira was a poor move. Any gains we make from exports is eaten up by inflation and we still lose. It's not wise because our current rate of inflation is like the 16th or 17th highest in the world. There has always been federal reserve (CBN) rates and private market (floating) rates for currencies anywhere in the world. Now making your floating rate equal to federal reserve rate in a state of high inflation like we have will inadvertently be catastrophic.

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?

Man, you deserves some accolades

[quote author=thedio post=128450107]What is the pupulation of Nigeria in 1999. How Many ppl were buying new cars,TV and other gadgets.
Think about the numbers of political office holder we av had since 1999 from minister to senator,honourable, commissioner to local govt and tell me how many of them r using ordinary local furniture. Our taste for imported things is outrageous and this is putting enormous pressure on forex[/quote


What about millions of Nigerians who have died since 2000? People and businesses even sale more goods and services when economy is stable.

Bad government is bad government. Give APC 1 trillion dollars today, in 7 years they will squander the whole money and give you 1 thousand reasons why it wasn't enough for development. They are just too wasteful!

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.

I will give you a practical example this past Xmas and new year celebrations resulting from the floating.

I don’t know where you are based but in Lagos and most parts of Nigeria you will notice an influx of people from especially UK and US and other European countries. They came in and spent like they pluck the money at their base.

I was force to caution one of my friend from UK seeing how he was gettin reckless with spending. At this point he had spent 1.6m naira in buying drinks, food and whatever. Drunken and carelessly he said “Ak, the much I have spent so far is just about my 2 days wage, don’t I know what the exchange rate is? “. I laughed and continued with what I was doing. All this happened at Rapsody in Ikeja. They were called IJGB’s (the I just got back) that’s how crazy it was.

The influx was as a result of the floating of the currency. On the island at that period you will hardly see hotels with vacant rooms. This is the case in other parts of the economy with time I’m sure we will see the result.

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

Bureau de change.... Or Bureau de Thieves

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

Investment where there is no power supply? The problem with Nigeria is that we like looking for esoteric solutions to problems. The real problem with Nigeria is lack of power supply to power industry. Imagine what regular power supply can do to economy if our atisans - welders, tailors, etc can be assured power? Imagine how the productivity of productive minds can be tapped to if they have power that allows them experiment? The government should provide power, they have invested billions into it, yet what is on ground doesn't match the investment, and they are here floating naira as if that's the will solve lack of investment issue.

See as people dey write nonsense constructivelySee as people dey write nonsense constructively...

Jessyjeff:
When Obasanjo took over in 1999, crude oil price was about $30 per a barrel. Later in the years of his administration, prices improved but it was not over $70 per a barrel.

Learn your history and stop being fed propaganda by a clueless APC government.

Obasanjo and his team were just damn good in managing the Nigerian economy.

Even back then how many foreign goods and technology was Nigeria importing compare to now ?

Mobile phones was just getting to Nigeria unlike now that everyone want to use the latest gadgets, the demand for forex wasn't really high.

Jessyjeff:
When Obasanjo took over in 1999, crude oil price was about $30 per a barrel. Later in the years of his administration, prices improved but it was not over $70 per a barrel.

Learn your history and stop being fed propaganda by a clueless APC government.

Obasanjo and his team were just damn good in managing the Nigerian economy.

It's not about price but the production of crude oil. We were doing 2.2 million bpd with enough foreign investments. Today we just increased it to 1.4 million bpd for the first time since 2021. NNPC only has about one third of that at the moment and even most of it have been sold already during Buhari era and recently also to collect loans. That's why we can't even supply Dangote. So price is not the main factor here.