₦airaland Forum

babosky2008:
it is only in Nigeria , where govt supply foreign currency to bureau de change .we should stop dz illegal speculations and face the reality on ground.if you need $..and other forex .approach ur bank...u will definitely get it at the official xchange rate plus 5%commission on transactions . govt should withdraw all the bdc licences and declared their activities illegal.

wink2015:
[size=18pt]Let Nigeria learn to manufacture the things we need here in Nigeria and our currency will appreciate in the international market. Our market is flooded with too much chinese mobile phones, chinese radios, chinese rechargable lamp etc. This helps to drain Nigeria of its foreign exchange as so much of our money is going outside and less is coming in into our economy.

instead of chinese flooding our market with chinese products, let those chinese manufacturer set up manufacturing plants and assembling plants in Nigeria with Nigerians gainfully engaged to their workforce and we will see our economy growing and our naira appreciating in value.

Each of the 36 states of the federation must have a private sector driven industrial farms for modernised agriculture.

We must learn to eat what we grow and you will see our nations moving forward. There are so many under-utilized and un-untilized lands lying fallow all over the northern part and southern part of nigeria and we have a large number of graduate without jobs.

The national youth service corps should be re-organized to make corp members serve in industrial farms no matter your discipline.

The government in Nigeria must sustain it anti-corruption war to stop looters from draining our nations financially.

It is high time we review the cost of governance in Nigeria. We have too much wasteful structures in government that are increasing the cost of governance.

We should make laws to enable our national house of assembly ( senate and house of rep ) sit on part time including that of the state legislature in the 36 states of the federation.

I think it is a monumental waste to see a governors like Emmanuel Udom of Akwa Ibom states and senate minority leader Godswill Akpabio organise wasteful christmas carol night when a lot of akwa ibomites are without jobs.

We must go back to our senses and drastically curb wastages.

[/size]

razortruth:
Its part of the "change" . Its just starting

Kikero112:
Yes.....and our only route out of this is by diversifying.

Into industries....not by selling raw materials whose price we do not control.

Industrial development , however , is not attractive to most Nigerians because it means they have to work for their money. Under our resource dependency.....we just earn money and share the resources.

What the government is doing now is just steadying the ship.I wait for them to start focusing on getting our power situation improved...while raising taxes removing subsides, and ending corruption to increase our treasury's size.

Kikero112:
Well, that still indicts your PDP particlualry as most of the governors who agitiatied for the sharing of the cash....were in PDP too.

And anyway.....we also failed to remove subsides completely. We also did nothing about the importataion of fuel, and the GEJ govt was making unauthorised withdrawals from the account....which we now see revealed via dasukigate.

But it doesn't matter. Even if GEJ had saved like Scrooge.....we would be in this mess next year. The best we could have done would have reached $100bn.

The real issue is that we have to raise taxes, end corruption and tighten the seatbelts......which the govt has done the first two already (No 3 is not being done....BMW things sadly).Eventually, we are going to have to go the austerity route. If it is any consolation to you....we shouldahve made those choices back in the 1970's....and gone industrial too.

Sorry....but your PDP is partly to blame. Your governors in PDP were part of the sharing. Your government back then was not strong enough to make the hard choices that were needed, as well as to stop the massive leakages in our revenue.Pretending that it is all APC's fault is flawed thinking.

But...beyond politics.....we have to diversify away from oil.

GenBuhari:
No need to panic.

This will only discourage imports.

FG is still maintaining fuel price N86 per litre.

No shaking !!

frisky2good:
May God punish all the governors that insisted that excess crude oil money must be shared. Now we have nothing left to depend on except whatever Abacha sends to us from the grave.

Kikero112:
In 2008....we had over $60bn in our accounts...plus we had our debts forgiven, and our banks were in a healthy state thanks to Soludoquine.And oil prices began rising again the following year.

In 2015....we have less than $30bn in our accounts, we have heavy debts, oil prices are falling, and furthermore....there is no chance of their rising again in the next five years.

Sorry....but hardly the same situation.

frisky2good:
May God punish all the governors that insisted that excess crude oil money must be shared. Now we have nothing left to depend on except whatever Abacha sends to us from the grave.

ichidodo:
[color=#1980BC] [b] As we recalled Ngozi Okonjo Iweala shouting herself hoarse on the need to diversify the economy and save far back as 2012. Maybe you also cast your mind back on her instituting the SWF on the backdrop of vitriolic oppositions from political elements -who,ironically,are now 'saints' in this admin e.g Amaechi,Saraki etc and most gullible Nigerians- Heck, we even remembered the constant yearly fights btw NOI and the political class especially those of the opposition back then on what point to peg our budget about a certain oil price so as to fund it and also save for the rainy day....whilst NOI insisted on pegging way below the crude oil price so as to have excess dollars to save,amaechi and his rabid dogs insisted and pegged it higher so as to have that excess dollars to loot.At a point the Federal Government was taken to court and that was the end of it for NOI,but as bad as it is right now, NOI could have steered this economy away from this global downturn just as her policies auto piloted us away from the 2008 financial meltdown....but who are we kidding when we are stucked with janjaweede propagandists,imbecilic,illiterate tyrants from daura with zombies as their fanatic supporters and wait for it......a rookie and a horribly mentally limited finance minister whose last gig was impoverishing a state into begging for bail out funds, let us leave the topic of her getting the job via tribal and regional sentiments for another day.....And you wondered why we laugh?! Thank goodness we relocated back to France in time.[/b][/color]

2rutalk1:
I am shedding tears of joy right now. i never knew there are people who still reason like this in a country full of hypocrites and tribal bigots. I can recall when the States Governors sued the Federal Government for not sharing the money from Excess Crude Account. Oshomole and co who are shouting up and down today for mismanagement of the economy by the previous government were at the forefront of that agitation. Obasanjo who is also criticizing PDP for mismanaging the economy in the last 16 years personally ruled the country for 8 good years out of the 16 years. Who are now the PDP members that mismanaged the economy? It is so pathetic that instead of finding a lasting solution to this economic quagmire, our leaders are busy playing blame game. What we need now is unbalanced/lopsided growth model, that is, developing some selected sectors of the economy with a view to achieving multiplier effect on other sectors in the long run. And to achieve this, we should concentrate on providing infrastructure especially Power and road networks in order to accelerate growth in the manufacturing and industrial sectors.

Kikero112:
As you are laughing....remember that we are in this situation because the other guys ....PDP.....forgot to save enough money in the account, and forgot to diversify our economy sufficiently.

And if they were STILL in charge .....they would be doing the same thing.

The elephant in the room is AUSTERITY.....and it remains to be seen whether Nigerians and the current government are ready to make that sacrifice.

So don't laugh. Seven months is hardly enough time to reverse the mess of four years of failure to save.....and of failure to properly diversify.

Nigeria must now work for its money.

Kikero112:
As you are laughing....remember that we are in this situation because the other guys ....PDP.....forgot to save enough money in the account, and forgot to diversify our economy sufficiently.

And if they were STILL in charge .....they would be doing the same thing.

The elephant in the room is AUSTERITY.....and it remains to be seen whether Nigerians and the current government are ready to make that sacrifice.

So don't laugh. Seven months is hardly enough time to reverse the mess of four years of failure to save.....and of failure to properly diversify.

Nigeria must now work for its money.

egbonnla:
Do I here you say no shaking? I will quote you again in three months time. Some of us are so blinded by cult like worship of our Leaders that we failed to see fact and figures. If this continue, in the next three months, we won't even see toothpaste to buy. I remember that during Buhari's time in 1983, some people were using salt and charcol to brush their teeths.
PMB is no doubt sincere,but he is limited when it comes to understanding our Economy. His present economy team are delibrately misguiding him!

tonychristopher:
Can we just stop blaming pdp and dwelling in the past and focus at the situation at hand

What is wrong with Nigerians ?

GenBuhari:
What is wrong with not buying toothpaste?

May be it would hasten our own production of toothpaste in Nigeria.

jusRadical:
So saving is the solution.

But your heroes like Amechi and co forced the fg to share money to the states.

Even the savings will still get exhausted. Was GEJ not diversifying our economy?

wiseoneking:
What on earth is the kikero girl saying.

Dcaliphate:
Still waiting for Buhari's mindless promise to make N1=$1

Kikero112:
GEJ and company too were also making deductions from the account....plus.....the same ECA was not being replenished because....

And all those new factories GEJ built.....where were they getting the raw materials from? (Outside the country).

And why did your PDP governors....join the sharing? Why did they not say 'Stop....we no gree?'

But as I said....it does not matter any-more. Even if we saved.....we would still have to go austerity. We are not a rich nation and we never were.

fasbio:
You got it wrong
N1=$1000 lol

jjman2322:
People that don't understand economics always say Nigeria is rich. YES NIGERIA is RICH if we had a population of 30 million people. Then we could afford free health, college, etc.

But Nigeria has over 170 million people.

We are the 7th most populated country. 6 of the countries with higher population than us trump us on GDP(India, Indonesia, China, Brazil, etc). We only have a higher GDP than Pakistan on that list.

Basically if you divide our GDP by our population, we are sadly one of the "POOREST COUNTRIES" in the world. We just like flashing too much.

So many people are hungry, sick, needy, cant afford primary school, etc. Rich countries have welfare systems for all those people, we dont, and we simply can't afford it.

That N5000 promised was a sham, how can we fund it? Meanwhile some countries in Europe give $1000/month to their unemployed citizens. Thats called being rich

Kikero112:
You did not read my post properly.

I outlined what needs to be done.

Thanks.

jjman2322:
Ive been following these threads on CBN/$/Devaluation and there is a lot of misinformation.

Let me offer some details as I am a manufacturer and I also have experiences with importation and all that.

First of all, Nigeria does not produce much, we import everything.. All the raw materials our company here needs for production has to be imported.. Now the CBN official rate is N200/$, but it takes months to get that money from the bank.. Years ago, you could import goods on bill for collection(credit) , and submit the documents after clearing, and CBN will pay it in 2 weeks. Now we have some bills pending for 4 months, and have to resort to "black market" to keep business going.

Our product prices have gone up 50% since last year, and this will be similarly felt across all companies. By the middle of this year every imported product will cost at least 50% more. Actually even now go and price a TV, how much was that same TV two years ago, how much is it now, go and price an AC, etc.

The CBN is not fully to blame. I read their 2015 report and the CBN had requests for $60 billion from importers/manufacturers, and they could only meet $6 billion.

If the CBN was to give every manufacturer or importer the dollar they need, the reserve would be depleted in one day.

Oil prices are very low now, hovering around $30/barrel. Here is how the Nigerian government works:

#1. We sell oil, and get paid in dollars.
#2. Local importers/manufacturers now request for those dollars for their imports.
#3. CBN remits dollars to them, and in turn collects the Naira equivalent.

The problem we have now is the Naira will be devalued by the next CBN Monetary meeting this month. They have no choice, as the difference between black market and official market encourages fraud. Let me explain how the fraud happens.

A business man will go and buy a machine from another Nigerian partner in China.
The machine's true value is only $5,000.
The value is inflated to $50,000, and the goods are received and submitted to banks for payment.
CBN gives this importer $50,000. He in turn sells the machine locally, and the balance of $45,000 in China is wired back to Nigeria as "INFLOW".

"INFLOW" means he can sell it to any person who can easily wire it abroad.

So if you do the math, he got $50,000 at N200., CBN/Bank debited him N10,000,000. He now comes back and sells the $45,000 balance for N285 (current inflow rate as of this morning), and makes almost N13,000,000. Easy profit.. Now imagine people are doing this and inflating values by $500,000 , etc. My estimate is that at least 30% of pending bills the CBN has are just round trippers who are cheating the system.

I hope now you understand what's going on.

#1. CBN does not have enough dollars to fund pending and past due bills and obligations from importers and manufacturers. This is why the naira card is now useless abroad as the funds spent by us have to be remitted to Visa & Mastercard in USD. Naira can not be wired outside Nigeria, only foreign currencies can.

#2. Now as you can see that CBN is rationing the dollars, the black market demand has now flourished. We and hundreds of other manufacturers have been steadily buying at black market since last year to stay in business, as our suppliers in India and China will no longer ship raw materials if they are owed for 4+ months.

#3. The end result is that we have to increase our prices to match black market rate. If you import $100,000 worth of raw materials at N200 vs N285, the difference is over 40% , and this is factored into the cost of the product.

#4. Iran has a lot of oil, and sanctions have been lifted and they will flood the market. Saudi arabia is OK flooding even more oil into the market as their cost of drilling is one of the lowest in the world. What this all means is that oil prices will stay very low for a long time to come. There is excess supply and not enough demand.

#5. Everyone keeps saying Nigeria needs to manufacture, however this climate is nonsense for manufacturing. We can't compete with China made products. I'm a manufacturer but there are many products our company doesn't make, not because we can't but because we can't compete.

For example, as I type we have not had NEPA for the past 2 days and we are running 1000KVA Perkins generator. It uses about a drum of diesel per hour. You can do the math.

You can't buy raw materials from China, pay duty, produce, and compete with China that has low energy cost.

There is a reason why Nigerians aren't making all these petty items locally. The money is there to start it, but you cant compete with China. Everything is made in China

As I type, ive found about 4 industries I could easily import machines for and start producing locally. However, everytime I do my final costings, it is always at least 20% cheaper to directly import it from China. Nobody is an idiot. Would you start a toothpick factory locally if your manufacturing costs (including diesel) are $1 per 1000 toothpicks, and meanwhile China is selling it for $0.40 per 1000 toothpicks..

You would just order 10 containers and sell. In my opinion, we are going into a deep recession. The fact that our reserves cant even cover pending bills (imports, bills for collections, LC's waiting, Mastercard, Visa, etc), means that we are almost done.

The current CBN governor is just patching the wounds.. There is no easy fix, naira will probably be N400 by end of the year and the drug you bought for N500 last year will now be N1000, meanwhile you are making the same salary. This is what inflation & recession is and it is going to hit Nigeria really hard.

One more thing people keep saying is ban imported items, produce locally.. Well it takes a long time to setup land, import machines, (if complicated need to hire foreign staff).

Where will the machine come from?
Where will the raw materials come from?

At the end of the day, lets assume they ban a certain item, what that means is that you will just pay more for it locally, as our local guys CAN'T compete with China. Some companies in Nigeria spend upwards of N1,000,000 for electricity(diesel/nepa costs) per day. That's N30,000,000 a month. How can you compete with a developed country?

God help us.

Kikero112:
Common sense , just common sense.

And while I am not a girl, it is no insult if i was one.

jjman2322:
Ive been following these threads on CBN/$/Devaluation and there is a lot of misinformation.

Let me offer some details as I am a manufacturer and I also have experiences with importation and all that.

First of all, Nigeria does not produce much, we import everything.. All the raw materials our company here needs for production has to be imported.. Now the CBN official rate is N200/$, but it takes months to get that money from the bank.. Years ago, you could import goods on bill for collection(credit) , and submit the documents after clearing, and CBN will pay it in 2 weeks. Now we have some bills pending for 4 months, and have to resort to "black market" to keep business going.

Our product prices have gone up 50% since last year, and this will be similarly felt across all companies. By the middle of this year every imported product will cost at least 50% more. Actually even now go and price a TV, how much was that same TV two years ago, how much is it now, go and price an AC, etc.

The CBN is not fully to blame. I read their 2015 report and the CBN had requests for $60 billion from importers/manufacturers, and they could only meet $6 billion.

If the CBN was to give every manufacturer or importer the dollar they need, the reserve would be depleted in one day.

Oil prices are very low now, hovering around $30/barrel. Here is how the Nigerian government works:

#1. We sell oil, and get paid in dollars.
#2. Local importers/manufacturers now request for those dollars for their imports.
#3. CBN remits dollars to them, and in turn collects the Naira equivalent.

The problem we have now is the Naira will be devalued by the next CBN Monetary meeting this month. They have no choice, as the difference between black market and official market encourages fraud. Let me explain how the fraud happens.

A business man will go and buy a machine from another Nigerian partner in China.
The machine's true value is only $5,000.
The value is inflated to $50,000, and the goods are received and submitted to banks for payment.
CBN gives this importer $50,000. He in turn sells the machine locally, and the balance of $45,000 in China is wired back to Nigeria as "INFLOW".

"INFLOW" means he can sell it to any person who can easily wire it abroad.

So if you do the math, he got $50,000 at N200., CBN/Bank debited him N10,000,000. He now comes back and sells the $45,000 balance for N285 (current inflow rate as of this morning), and makes almost N13,000,000. Easy profit.. Now imagine people are doing this and inflating values by $500,000 , etc. My estimate is that at least 30% of pending bills the CBN has are just round trippers who are cheating the system.

I hope now you understand what's going on.

#1. CBN does not have enough dollars to fund pending and past due bills and obligations from importers and manufacturers. This is why the naira card is now useless abroad as the funds spent by us have to be remitted to Visa & Mastercard in USD. Naira can not be wired outside Nigeria, only foreign currencies can.

#2. Now as you can see that CBN is rationing the dollars, the black market demand has now flourished. We and hundreds of other manufacturers have been steadily buying at black market since last year to stay in business, as our suppliers in India and China will no longer ship raw materials if they are owed for 4+ months.

#3. The end result is that we have to increase our prices to match black market rate. If you import $100,000 worth of raw materials at N200 vs N285, the difference is over 40% , and this is factored into the cost of the product.

#4. Iran has a lot of oil, and sanctions have been lifted and they will flood the market. Saudi arabia is OK flooding even more oil into the market as their cost of drilling is one of the lowest in the world. What this all means is that oil prices will stay very low for a long time to come. There is excess supply and not enough demand.

#5. Everyone keeps saying Nigeria needs to manufacture, however this climate is nonsense for manufacturing. We can't compete with China made products. I'm a manufacturer but there are many products our company doesn't make, not because we can't but because we can't compete.

For example, as I type we have not had NEPA for the past 2 days and we are running 1000KVA Perkins generator. It uses about a drum of diesel per hour. You can do the math.

You can't buy raw materials from China, pay duty, produce, and compete with China that has low energy cost.

There is a reason why Nigerians aren't making all these petty items locally. The money is there to start it, but you cant compete with China. Everything is made in China

As I type, ive found about 4 industries I could easily import machines for and start producing locally. However, everytime I do my final costings, it is always at least 20% cheaper to directly import it from China. Nobody is an idiot. Would you start a toothpick factory locally if your manufacturing costs (including diesel) are $1 per 1000 toothpicks, and meanwhile China is selling it for $0.40 per 1000 toothpicks..

You would just order 10 containers and sell. In my opinion, we are going into a deep recession. The fact that our reserves cant even cover pending bills (imports, bills for collections, LC's waiting, Mastercard, Visa, etc), means that we are almost done.

The current CBN governor is just patching the wounds.. There is no easy fix, naira will probably be N400 by end of the year and the drug you bought for N500 last year will now be N1000, meanwhile you are making the same salary. This is what inflation & recession is and it is going to hit Nigeria really hard.

One more thing people keep saying is ban imported items, produce locally.. Well it takes a long time to setup land, import machines, (if complicated need to hire foreign staff).

Where will the machine come from?
Where will the raw materials come from?

At the end of the day, lets assume they ban a certain item, what that means is that you will just pay more for it locally, as our local guys CAN'T compete with China. Some companies in Nigeria spend upwards of N1,000,000 for electricity(diesel/nepa costs) per day. That's N30,000,000 a month. How can you compete with a developed country?

God help us.