₦airaland Forum

2rutalk1:
The President is hesitant because our economy may not actually reap the benefits of devaluation for now because we are import dependent economy - we have little or nothing to export to other countries. Therefore, even if our currency is devalued and import is discouraged as it is always the case, can our importers source the products locally? This will worsen the situation. What we need to do now is to diversify our economy, make the business/macroeconomic environment conducive, and ultimately, pursue import substitution strategy of industrialization. Import substitution strategy is a situation whereby goods and services that are hitherto imported from foreign countries are manufactured locally.

drss:
because he doesn't understand economics. he's a cattle rearer by profession.

2rutalk1:
Devaluation is a DELIBERATE reduction in the value of a country's currency in relation to the currencies of other countries. Devaluation is different from depreciation. Whereas devaluation is deliberate, depreciation of currency is caused by some macroeconomic factors.

However, Devaluation is used to discourage import and encourage export of goods and services across borders.

How do we achieve this? When a country's currency is devalued, foreign goods (imports) become so expensive because the value of the country's currency has been reduced making the value of the currency of her trading partner to go up. In this case, the foreign country will be enticed to import from Nigeria (for instance) and our hitherto importers will equally buy Nigerian made products because of high cost of foreign goods. This makes our balance of payment to become favourable.

In the long run (in future), the high rate of export from Nigeria and low import of foreign products by Alaba guys (lol) will incryease the value of our naira.

2rutalk1:
Devaluation is a DELIBERATE reduction in the value of a country's currency in relation to the currencies of other countries. Devaluation is different from depreciation. Whereas devaluation is deliberate, depreciation of currency is caused by some macroeconomic factors.

However, Devaluation is used to discourage import and encourage export of goods and services across borders.

How do we achieve this? When a country's currency is devalued, foreign goods (imports) become so expensive because the value of the country's currency has been reduced making the value of the currency of her trading partner to go up. In this case, the foreign country will be enticed to import from Nigeria (for instance) and our hitherto importers will equally buy Nigerian made products because of high cost of foreign goods. This makes our balance of payment to become favourable.

In the long run (in future), the high rate of export from Nigeria and low import of foreign products by Alaba guys (lol) will increase the value of our naira.

Ama80:
Lalasticlala will never consider dis topic fp worthy bcs it tends to enlighten.it's only political vituperations dat see fp.

Ama80:
it sounds positive but why is d president hesitant?

uchennamani:
You missed the point bro. Devaluation is desirable when some certain conditions exist in the economy for it to be done. Premium amongst these conditions is that the country must have a solid and growing export base. Could you say that of the Nigerian economy at this point? Whether we like it or not, this country is an import dependent economy. We import more than 90% of things we consume in Nigeria. Yes, accepted, devaluing our currency will add the advantage of freeing our export base, but we don't have much for countries to buy from us except our oil and the best brains in this country. On the other hand, devaluation will increase the cost of importing those essential things this economy can't produce after more than 50 years of independent rule, and you know what, the deterrent this is excepted to produce - discouraging importation - will be lost because there are no effective government plans to boost our exportation. Devaluation of our currency is not good at this point, until, at least, the government has diversified the economy with the ultimate goal of boosting our exports to other countries.

2rutalk1:
Devaluation is a DELIBERATE reduction in the value of a country's currency in relation to the currencies of other countries. Devaluation is different from depreciation. Whereas devaluation is deliberate, depreciation of currency is caused by some macroeconomic factors.

However, Devaluation is used to discourage import and encourage export of goods and services across borders.

How do we achieve this? When a country's currency is devalued, foreign goods (imports) become so expensive because the value of the country's currency has been reduced making the value of the currency of her trading partner to go up. In this case, the foreign country will be enticed to import from Nigeria (for instance) and our hitherto importers will equally buy Nigerian made products because of high cost of foreign goods. This makes our balance of payment to become favourable.

In the long run (in future), the high rate of export from Nigeria and low import of foreign products by Alaba guys (lol) will increase the value of our naira.

musicwriter:
Until African nations invest in mass science education, there's no other way to achieve development. This talks of devaluation, inflation, depression, recession, e.t.c will continue to be here until we embrace science.

Wealth doesn't come from importation, but from manufacturing. Dangote was an importer for years without getting so rich. Only when he began manufacturing all those things he used to import, like; cement, spaghetti, sugar, e.t.c did he become one of the richest man on earth.

At the heart of Dangote cement is a CHEMIST making better cement mixtures than others. Get it?.

Ban English and French in all African schools and usher in true education, and we'll be forever prosperous. The difference between development in first world countries and third world is SCIENCE. One know science, while one don't.

Africa cannot develop without investment in grassroots science.

Ama80:
For the benefit of those of us who do not know much about economy.Can the Economists in the house enlighten us on naira devaluation, the implications and the ripple effects and why the president is reluctant in doing that.in a simple language pls.

Ama80:
Lalasticlala will never consider dis topic fp worthy bcs it tends to enlighten.it's only political vituperations dat see fp.

Emmeritus:
@d one who explained devaluation:Do u knw what happened to Zimbabwe after their currency was devalued?

2rutalk1:
It happened to Zibabwe because their economy is not ripe for devaluation. Any country that has little or no products and services for export has no business devaluing her currency.

allanphash7:
Google is your friend

So4baba:
Professor,,, you shud have read what the guy said before commenting,, and why ur comment long like that,,, that's what everyone bn saying in just 2 lines...

NJPot:
it is the act of devaluing naira

falseman:
Soon those calling Aba shoes fake will have no option than to patronize it.