₦airaland Forum

Firefire:
The state of anarchy to be seen would be unprecedented in the history of Niger Are called Nigeria.

The earlier this government take the bull by the horns, the better for Nigeria and Nigerians.

God, please deliver your people.

dokiOloye:
I dreamt where d dollar got to 700naira and d old cow man raised up his hands and said he's done,handed over Osunbade and headed to Daura to tend to his cows

ifyalways:


Ike obodo a a gwugom final. A na a patchi, o na e leaki

Lilimax:
[quote author=onatisi post=42963331] You predicted these before hand.
Are you a prophet?

Bevista:
The exchange rate (price) is, primarily, determined by supply and demand for dollars. The question is, if CBN devalues, will that increase the supply of dollars or will it curb demand? Apart from a number of foreign portfolio investors who might move into the country with their dollars, devaluation will have little impact on supply. On the other hand, the continued demand for dollars, even at N330/$ also shows that devaluation may not curb a lot of demand. And if the CBN were to meet all these demand in the face of limited supply, then it's only a matter of time before we run out of Reserves, and then we will face the mother of all crises.
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Also, once essential items like critical raw materials and fuel imports become expensive due to devaluation, then headline inflation will hit double digits immediately.
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For the records, I still believe that the appropriate course of action for the CBN is to devalue, but it is not silver bullet and I am fully aware that it's a catch-22 situation. There will be a myriad of unintended consequences like organized labour embarking on industrial action and calling for wage review due to the impact of devaluation on REAL wage.
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The most effective course of action for the country is massive import Substitution programmes. There should be massive reorientation to encourage corporates and individuals to source alternative items locally. When next you are buying a car or laptop, maybe you should consider Innoson and Zinox. In the meantime, we can pray for temporary respite in oil prices to increase supply of dollars.

MathsChic:
Of course, there's no doubt the best course of action is "import substitution". The more innovative this becomes, the less sluggish the national economy goes. The government needs to do a lot in terms of policy making and regulations creation in order to stimulate the economy in this direction. You'd expect the national parliament to be hard driven in this area or to be immediately spurred to action by the realities on ground. Unfortunately, that doesn't seem to be the case, at least as far as I can see.

By being economically tardy, the country continues to encourage all kinds of irregular demands for foreign exchange for purposes not all too dear, not to talk of the different manipulations which have undesirable consequences. As you noted, demand and supply drive price. By making foreign exchange continually scarce, the government is unwittingly increasing demand for it. The resultant effect could be a run that'll see the dollar continually become expensive in the parallel market unfortunately rendering unreal its actual value to the naira. A run meanwhile is dependent on human reactions and feelings, nothing to do with actual facts. A run can only go so long as to erode confidence in the nation's currency. And if that happens, too bad it'll reflect current realities and the national Bank may be unable to defend the naira any longer. Only heaven knows what the outcome will be. That import substitution thing better work fast and work well, and that's hoping the lawmakers key into it.

I'm also not unwaveringly for devaluation. However, the current economic flip-flopping isn't looking very much good replacement.

Malawi was one country that resisted devaluation for a while, with the president pretty much rendering the same arguments Buhari is tendering now. Their economy continued on its shabby course and multiple devaluations had to follow. Same with Azerbaijan until they depleted their foreign reserves and had to devalue. Perhaps Pakistan is even a better example. Tough and insistent, the country refused to devalue. However it had no choice but to buckle after China and other neighbors devalued to make exports cheaper.

We risk getting isolated from trade partners by making the value of our exports larger than it "actually" is and this can't have a positive effect on trade balance. While I do not see an outright devaluation, I see a possible downwards revision of the naira value to a little above 200ngn (still a devaluation sha) and I think that may just be a good enough thing. But better early than too late.

... Just my opinion

Bevista:
This is not just your opinion, but very valid views on the current economic / FX situations in the country.
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One area where this administration has failed woefully is its inability to articulate and communicate its economic (fiscal & monetary) policies. The uncertainties creates a lot of problems, which validate your RUN theory.
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Just to comment on the bolded part. I don't think the government is deliberately making dollars scarce. Dollars is, indeed, scarce and limited due to the realities of oil prices. Are you suggesting that government should make the $28b in the Reserves available for importers? What happens when we eventually run out of Reserves - Do we then approach IMF to borrow SDRs with all its attendant conditions?
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My view is that the exchange rate has been technically allowed to float as evidenced in prices in the parallel market. The official exchange rate, in my opinion, is government way of subsidizing the rate for essential items like fuel imports, critical raw materials, manufacturing and agricultural machinery, etc.
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As you noted, the Executive and parliament should be aggressively pushing for clearly defined import substitution policies and programs. Every government official car and computers should sourced from locally assembly plants, Medical tourism should be drastically reduced, Self sufficiency in food production and production of refined Petroleum products, policies to encourage OEMs to setup production and assembly plants in Nigeria, etc.
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Just my 2 cents!

lastpage:
When you have too many EVIL SABOTEURS like the one above, in a country, expect things to get worse, before it can get better.

But the good thing is, the IPADs are only "cutting-off their own very nose, just to spite their faces"!

Wetin concern me with exchange rate, if e like, make e be #1000/$, l will still buy and sell it, whenever l need it!

"If and when we pound yam ...on a LEAF and cook stew ...on a Nut's SKIN, those who will be filled, ....will be filled" - Yoruba adage (translated literally)



Lastpage!

Firefire:


The suffering is real.

Who are the people sabotaging this country

'Oil Cabals' or 'Budget Mafias' ?

Who shall deliver Nigeria ?

kahal29:
See my brother "my people" will find a way to bring it in and people will even pay double to buy them. It's a psychological thing and until that orientation is changed we are going nowhere. Am also part of the problem cause I also default in some areas (ie taste for foreign made goods). Take the case of imported leather seat's.... This things are produced here and with 200k and above you can get a good one but you see our people complaining about the finishing, saying the sowing its not good, its not neat and the rest of them and prefer to buy a those foreign made ones that cost as much1.5 and 2.8 million thereby exporting jobs to those countries that produce them and in turn importing Unemployment and exchange rate crises into our country. However if we patronise these locally produced ones with time they will improve on the sowing and finishing and also their market size, sales and revenue base will also increase leading to more jobs and even exporting to those other countries we were previously importing from.

jamst2:
U guyz should just keep quiet for God sake,the reason we are in this mess is cos buhari has not bow to IMF & World bank pressure(if you know what i mean).
Is it a coincidence that a whole IMF leader came to nigeria No...she didnt come here to play but to beg & persuade us to take their evil-money(debt)...they are punishing us via devalution of the naire.

rebranded:
Emefiele should be removed ASAP and replaced with SOLUDO

babydioku:
Let the military take over and save this country before its too late.

iamodenigbo1:
The way Naira is falling, it will soon ..........

iamodenigbo1:
The way Naira is falling, it will soon ..........

madjune:
On this matter eh...

I don't know whether to regret supporting Buhari or not but one thing...

Jonathan was worse among the two.

dcambition:
Dig up Bitumen or discover anada OYEL?!

Dig up Bitumen or discover anada OYEL?!

dcambition:
Dig up Bitumen or discover anada OYEL?!

Dig up Bitumen or discover anada OYEL?!

godoluwa:
pele tie, we warned u guys bt una no listen

madjune:
I'm not regretting abeg.
Na Jonathan start the naira free fall.
I do remember that.

punkyellla:
As a civil servant, feeding from monthly Oil money, nothing should concern you! Where are the so called student and labour leaders, TUC and NLC, when the common man that dos not collect salary need them; busy laughing and sharing money either in Sheraton or Nicon Noga hotels. Nigerians deceiving themselves since 1999.

rebranded:
Emefiele should be removed ASAP and replaced with SOLUDO