₦airaland Forum

Lanruze:
The IMF has magnified what average Economist with expertise in Public Finance have known since PBAT became President and after his FX Reforms kicked-in.

The CBN can never give the Naira it's true value based on the volume of Eurobonds and Open Market Auction (O.M.O) instruments in the hands of Portfolio Investors.

Once the true value of the Naira is obtained,
most Portfolio Investors would immediately EXIT Nigerian Investments as they would have lost a chunk of their investments if converted to FX.

An example is an Investor investing $500m @N1,400 -$1 = N7B worth of Investment.

Naira exchange rate now appreciates to N1,000 -$1 on same $500m = is N5B. Client loosing over N2B on a strengthen Naira.

PFIs account for over 65% of our $51B foreign reserves. Watch the money go into thin air when the Naira strengthens.

Your calculations are biased againt the IMF.

$500m at 1,400 is N700b. If the Naira strengthens N1,200, that 700b will now be worth $580m.

A strengthening currency actually benefits FDI, and not the opposite.

Guestmale:
What an ignorant question, during Jonathan's regime it was been highly subsidies,it can come down to that level first if this regime go back to artificial rate through subsidies. Secondly by reducing our over reliance on imported goods,by producing what we consume and consume what we produce. Thirdly by demanding dollar or pounds equivalent of our crude oil or any of our domestic product we sold outside the country in Naira

You are very smart by half. In fact , using ignorant would be an understatement. You guys keep giving unnecessary flimsy excuses . Ameh park jor

Some have called it "hot money" i.e the FPIs. It's the only sensible thing to do in order to keep the portfolio investments coming, at least, for now.

Lanruze:
The IMF has magnified what average Economist with expertise in Public Finance have known since PBAT became President and after his FX Reforms kicked-in.

The CBN can never give the Naira it's true value based on the volume of Eurobonds and Open Market Auction (O.M.O) instruments in the hands of Portfolio Investors.

Once the true value of the Naira is obtained,
most Portfolio Investors would immediately EXIT Nigerian Investments as they would have lost a chunk of their investments if converted to FX.

An example is an Investor investing $500m @N1,400 -$1 = N7B worth of Investment.

Naira exchange rate now appreciates to N1,000 -$1 on same $500m = is N5B. Client loosing over N2B on a strengthen Naira.

PFIs account for over 65% of our $51B foreign reserves. Watch the money go into thin air when the Naira strengthens.

The multiplication calculation was wrong. I acknowledge.

But how does the investor gain when he is converted to naira. And his exit position will be on a Naira position as at day of liquidation.

grandstar:
Your calculations are biased againt the IMF.

$500m at 1,400 is N700b. If the Naira strengthens N1,200, that 700b will now be worth $580m.

A strengthening currency actually benefits FDI, and not the opposite.

Lanruze:
The multiplication calculation was wrong. I acknowledge.

But how does the investor gain when he is converted to naira. And his exit position will be on a Naira position as at day of liquidation.

If the Naira is stronger today than when he invested, he would make an extra profit.

If hw invested $1,000 at 1400, Thats 1.4m.

If the Naira strengthens to 1,200, he will cash out 1,400,000/1,200 which will give us around $1,150

So, he has made an extra $150 profit..

Now, if he invests $10,000 into Eurobonds, the money remains in dollars. So, a weaker or stronger Naira does not affect him in anyway. Whatever yield he will get is in dollars.

mesmer:
It is a normal saying when a currency falls, against the other, when Naira was losing value, what every economist said was USD gaining against the Naira and when USD loses value, automatically ones currency gets strengthen because if one goes down another appreciates.

This is a response to your sentence which says "Naira didn't appreciate against the dollar but USD bows down to Naira"

I make that assertion becos nothing from economic end enforces the naira should gain, my point is if the US iran crisis didnt happen, nothing from us suggest Naira will gain value. 1130

I wil be more confident to use the word Naira gain, when our economic inputs are wats reflecting the change, thats d way forward, cos present naira gain is short term

No. It does not work that way. Investors would be paid in the denominations of their investment. You invest $1Million, you would get your one million dollars back with + your capital gain in dollars

Lanruze:
The IMF has magnified what average economists with expertise in Public Finance have known since PBAT became President and after his FX Reforms kicked in.

The CBN can never give the Naira it's true value based on the volume of Eurobonds and Open Market Auction (O.M.O) instruments in the hands of Portfolio Investors.

Once the true value of the Naira is obtained,
most Portfolio Investors would immediately EXIT Nigerian Investments as they would have lost a chunk of their investments if converted to FX.

An example is an Investor investing $500m @N1,400 -$1 = N700B worth of Investment.

Naira exchange rate now appreciates to N1,000 -$1 on same $500m = is N500B Client loosing over N200B on a strengthen Naira.

PFIs account for over 65% of our $51B foreign reserves. Watch the money go into thin air when the Naira strengthens.

On top fx wey we manage borrow?... lol

bentenny:
This has been done long before the establishment of the development commission which in my opinion is just a repetition of already established agencies....why has it not been operational knowing fully well that it's one of the key reasons why local products are more expensive than the imported products?

We keep hearing about plans without corresponding actions for more than 3 years of this incompetent administration!

Even when operational,it doesn't serve those who need it most because the system isn't effective and efficient!

Until the key components like effective security,reduced transport cost,accessible roads etc are proactively and aggressively addressed,imported products unfortunately will keep dominating local products!

The successive governors in the SW have been either incompetent or distracted, it's only in the last 6years that many of them have been able to settle their reoccurring expenses within their states, and ultimately they lacked grand vision and conviction

Lanruze:
The IMF has magnified what average Economist with expertise in Public Finance have known since PBAT became President and after his FX Reforms kicked-in.

The CBN can never give the Naira it's true value based on the volume of Eurobonds and Open Market Auction (O.M.O) instruments in the hands of Portfolio Investors.

Once the true value of the Naira is obtained,
most Portfolio Investors would immediately EXIT Nigerian Investments as they would have lost a chunk of their investments if converted to FX.

An example is an Investor investing $500m @N1,400 -$1 = N700B worth of Investment.

Naira exchange rate now appreciates to N1,000 -$1 on same $500m = is N500B Client loosing over N200B on a strengthen Naira.

PFIs account for over 65% of our $51B foreign reserves. Watch the money go into thin air when the Naira strengthens.

wont it also help govt loan in dollars

Urgent1Million:
Absolutely.
They've been doing that for ages.
I wonder how they manage to make the government believe their lies every single time.
Maybe government official are part of the cartel benefiting from the scam.n

They are in it together. You saw how Trump and his goons make a killing from the Iran crisis

Afrojuju2017:
The successive governors in the SW have been either incompetent or distracted, it's only in the last 6years that many of them have been able to settle their reoccurring expenses within their states, and ultimately they lacked grand vision and conviction

As much as state governors have their blame,due to the structure of the country, everything falls at the doorsteps of the president!
Security
Resource control
Sea port
Funding
Economy
All fall within the control of the president!
So far he hasn't handled it well.
If he wants to get less of the blame,he should decentralize very important structures to the states!

Charlie2020:
IMF just want Nigerians pauperised. Haven't we suffered enough? 25% undervalued!!! IOW, the want the Naira to exchange at approx $/1800

Omoh Comprehension hard die

Cfa should be more valuable than the naira because it is pegged to the Euro through the French Treasury and is regulated by the BCEAO central bank of West Africa.
The pegging of cfa to the Euro is why cfa is stable because the Euro is a very stable currency.
The exchange rate for cfa to Euro has not changed even by 1 cent in the last 20 years.

Naira is pegged to nothing, not the dollar not the Euro.
Worse still, the CBN is political and Tinubu can wake up once morning like Buhari did and order Meffy to print more naira and add more color to the naira.
In cfa and BCEAO, it's impossible because politics is not involved and the cfa and BCEAO belongs to multiple countries and not one country like Nigeria and CBN.

VeeVeeMyLuv:
There is absolutely no reason why 1 dollar should be N1380

And cefa will be $1 US dollar to 572.25 West African CFA franc

There is no reason cefa should be more valuable than naira

I have told you guys that this devaluation is not organic, this is a deliberate inordinate manipulation masterminded by very wicked selfish greedy individuals that don't care if the whole country tanks as long as their interests are protected, oiled, consolidated, expanded.

franvincoop:
Cfa should be more valuable than the naira because it is pegged to the Euro through the French Treasury and is regulated by the BCEAO central bank of West Africa.
The pegging of cfa to the Euro is why cfa is stable because the Euro is a very stable currency.
The exchange rate for cfa to Euro has not changed even by 1 cent in the last 20 years.

Naira is pegged to nothing, not the dollar not the Euro.
Worse still, the CBN is political and Tinubu can wake up once morning like Buhari did and order Meffy to print more naira and add more color to the naira.
In cfa and BCEAO, it's impossible because politics is not involved and the cfa and BCEAO belongs to multiple countries and not one country like Nigeria and CBN.

If a foreign entity can determine the value of your currency then you are not really sovereign, no matter the benefits you are getting from such an arrangement

Is it not better for a foreign entity to determine the value of the naira with benefits than for Baba Sope politics to determine the value without benefits?

lawani:
If a foreign entity can determine the value of your currency then you are not really sovereign, no matter the benefits you are getting from such an arrangement

franvincoop:
Is it not better for a foreign entity to determine the value of the naira with benefits than for Baba Sope politics to determine the value without benefits?

No it is not better. If those foreign countries had a government revenue to GDP ratio like five percent, their own currency will not be a hard currency too as they will be printing money to shore up revenue. There is no magic and there is no need nor is it right for one country to be directing the monetary policy of another

The choice is not yours to make.
CFA is pegged to the Euro.
Cfa to Euro exchange rate has been the same for the past 20 years, in those same 20 years naira to Euro exchange rate has summersaulted.
Do you think the President of Senegal can wake up one day and decide to devalue the CFA?
No, the money belongs to the community.
CFA means African Financial Community.
BCEAO is the Central Bank for 8 countries all ECOWAS members.
A decision to devalue the CFA vis a vis the Euro would be subject to a vote by the 8 member countries representative in the Bank.
In case you don't know there are 2 cfa - XOF and XAF.


I used to think like you a few years ago but I finally understood why 8 countries would choose to use 1 Central Bank and peg their money to the Euro.

When they were pegged to the French franc there was a very real threat of manipulation as occured when Sekou Toure opted to leave the CFA franc and create the Guinean franc - read Operation Persil.

Today due to the political instability in West Africa having a monetary policy without influence of local politicians is a safeguard against economic collapse even during a civil war like in Ivory Coast or via the numerous coups in Burkina, Mali, Guinea and Niger,
Desspite these coups, the economy is still standing strong because of BCEAO.

Can you imagine what would happen to people's savings in Nigeria is there was a coup or war broke out and the CBN is looted?
Even now, the political influence from Buhari ordering Meffy to print and loan to the government through ways and means to Tinubu devaluing the naira shows that these guys are smarter than us.
The devaluation of the naira decimated the middle class, made savings worth less than the paper it is printed on and created galloping inflation in which 100 naira can't be used again for transport fee.
Unfortunately I cannot entrust my money to Nigerian or African politicians, that is why they went the BCEAO route and who is benefiting today?
Who is crying that fuel is being smuggled out of Nigeria?
How come Niger can comfortably afford Nigerian fuel with or without subsidy but Nigerians can't?
How come Niger a poor sandy desert country with numerous coups and political instability is using a currency in 2026 that has atleast 2 times more value than the naira? How come?
During GEJ time was fuel not being smuggled?
Who should a bag of rice cost 27k cfa in 2015 still be 27k cfa in 2026 but it cost 9k naira in 2015 but 90 k naira in 2024?
The same 50 kg bag of rice.
How can Niger be paying minimum wage of 100k naira and Nigeria paying 70k?
How many billionaires did Buhari created via BDC during his time? Where is that billionaire the former recharge card seller?

I can bore you all day with the benefits if you pretend not to know or maybe you don't know.
NB: I am using just Niger, one of the poorest, if I should use Senegal, Gabon, Ivory Coast or Equatorial Guinea, you would know how much politics has damaged the naira, the CBN and the Nigerian economy as it's politics that drives the monetary policy of Nigeria, nothing else.

It would be best for us to dump the naira and use the CFA so we remove politics from finance.

For the past 20 years citizens using the CFA know the Euro to CFA rate is 655-656 CFA per Euro but in Nigeria you have speculators, BDC, politically connected persons receiving Forex at preferential rates, naira rates fluctuating like the tide and the President can decide whatever value he wants to ascribe to our savings in the bank. What investment climate is this?

All the above are not possible with the CFA franc, Senegal and Niger are the same and equal before the CFA, it does not matter who has a higher growth rate or GDP.
We are all equal and that's real African unity.

lawani:
No it is not better. If those foreign countries had a government revenue to GDP ratio like five percent, their own currency will not be a hard currency too as they will be printing money to shore up revenue. There is no magic and there is no need nor is it right for one country to be directing the monetary policy of another

franvincoop:
The choice is not yours to make.
CFA is pegged to the Euro.
Cfa to Euro exchange rate has been the same for the past 20 years, in those same 20 years naira to Euro exchange rate has summersaulted.
Do you think the President of Senegal can wake up one day and decide to devalue the CFA?
No, the money belongs to the community.
CFA means African Financial Community.
BCEAO is the Central Bank for 8 countries all ECOWAS members.
A decision to devalue the CFA vis a vis the Euro would be subject to a vote by the 8 member countries representative in the Bank.
In case you don't know there are 2 cfa - XOF and XAF.


I used to think like you a few years ago but I finally understood why 8 countries would choose to use 1 Central Bank and peg their money to the Euro.

When they were pegged to the French franc there was a very real threat of manipulation as occured when Sekou Toure opted to leave the CFA franc and create the Guinean franc - read Operation Persil.

Today due to the political instability in West Africa having a monetary policy without influence of local politicians is a safeguard against economic collapse even during a civil war like in Ivory Coast or via the numerous coups in Burkina, Mali, Guinea and Niger,
Desspite these coups, the economy is still standing strong because of BCEAO.

Can you imagine what would happen to people's savings in Nigeria is there was a coup or war broke out and the CBN is looted?
Even now, the political influence from Buhari ordering Meffy to print and loan to the government through ways and means to Tinubu devaluing the naira shows that these guys are smarter than us.
The devaluation of the naira decimated the middle class, made savings worth less than the paper it is printed on and created galloping inflation in which 100 naira can't be used again for transport fee.
Unfortunately I cannot entrust my money to Nigerian or African politicians, that is why they went the BCEAO route and who is benefiting today?
Who is crying that fuel is being smuggled out of Nigeria?
How come Niger can comfortably afford Nigerian fuel with or without subsidy but Nigerians can't?
How come Niger a poor sandy desert country with numerous coups and political instability is using a currency in 2026 that has atleast 2 times more value than the naira? How come?
During GEJ time was fuel not being smuggled?
Who should a bag of rice cost 27k cfa in 2015 still be 27k cfa in 2026 but it cost 9k naira in 2015 but 90 k naira in 2024?
The same 50 kg bag of rice.
How can Niger be paying minimum wage of 100k naira and Nigeria paying 70k?
How many billionaires did Buhari created via BDC during his time? Where is that billionaire the former recharge card seller?

I can bore you all day with the benefits if you pretend not to know or maybe you don't know.
NB: I am using just Niger, one of the poorest, if I should use Senegal, Gabon, Ivory Coast or Equatorial Guinea, you would know how much politics has damaged the naira, the CBN and the Nigerian economy as it's politics that drives the monetary policy of Nigeria, nothing else.

It would be best for us to dump the naira and use the CFA so we remove politics from finance.

For the past 20 years citizens using the CFA know the Euro to CFA rate is 655-656 CFA per Euro but in Nigeria you have speculators, BDC, politically connected persons receiving Forex at preferential rates, naira rates fluctuating like the tide and the President can decide whatever value he wants to ascribe to our savings in the bank. What investment climate is this?

All the above are not possible with the CFA franc, Senegal and Niger are the same and equal before the CFA, it does not matter who has a higher growth rate or GDP.
We are all equal and that's real African unity.

I did not say the choice is mine to make but that a foreign entity determining their monetary policy is an undermine of their sovereignty no matter the benefit. It will also mean they must trade in Euro and who does that benefit? Power over monetary policy is a fundamental part of sovereignty. Their population is over half of the Eurozone I believe

Does foreign entities not determine the monetary policy in Nigeria?
Does Nigeria trade in the naira?
In what currency does Nigeria trade or take loans? Who does that benefit?
The Naira is so useless as soon you get to a Nigerian land border.
No sub Saharan African country is sovereign.



Nigeria monetary policy under the CBN is influenced by Sai Baba - Baba Sope politics.
It is this insertion of politics into monetary policy that has made investors to have more confidence in the CFA than the naira.
Imagine Meffy the CBN governor in office buying a 100m naira form to contest a Presidential election in Nigeria.
What more proof do we need to see that the CBN is a political weapon?
Even if we Nigerians pretend not to see it, the world sees it.

The average Nigerian does not care about the sovereignty of Nigeria when his savings are involved, na educated people dey check that side.
Their main problem is that the exchange rate btw the dollar and the naira should be stable because any rise (sudden or brief) will trickle down right to even the cost of toothpicks in a heavily import dependent country like Nigeria.

An average Burkinabe for decades, wakes up every morning and knows that the exchange rate is not something to check on a website, there are no electric signposts and billboards advertising exchange rates, yesterday was the same as yesterday and is the same as tomorrow. 655/656 Cfa to Euro.
If given away my sovereignty to keep the value of my money away from my fellow educated thieving compatriots - politicians, then it is a price worth paying because in Nigeria - who refused to pay that price, the experience there is really paranormal because you imagine minimum wage in 2011 was 18k/115$ in 2019 was 35k/84$ and today 70k/52$.
Is this not voodoo economics?
The more the naira increases the dollar reduces, who is chasing who?
Within this same period of time, CFA did not step back even an inch, that's how the naira went from 1000 naira to 3000 CFA in 2011 to 1000 naira to 1600 CFA in 2019 to 1000 naira to 400 cfa today.
From +3000 to -400, from 1:3 to 1:1.6 to 1:0.4
na crash be that ooo

Let Nigeria keep holding onto that sovereignty argument being parroted by politicians while they annihilate life savings of fellow Nigerians and their investments.

If I were President of Nigeria, I would only want to be remembered for doing 2 things:
OPEC is gone
Naira is gone - CFA now

lawani:
I did not say the choice is mine to make but that a foreign entity determining their monetary policy is an undermine of their sovereignty no matter the benefit. It will also mean they must trade in Euro and who does that benefit? Power over monetary policy is a fundamental part of sovereignty. Their population is over half of the Eurozone I believe