₦airaland Forum

I am no economist but I see some cherry picking in some of his points. There's a difference between a rule and am exception. Using Vietnam, south korea, russia and Japan as examples doesn't show if they are the rule or the exception and and as such to equate them with the Nigerian situation considering the different socio economic factors make his arguments vague. For every country he used to justify his arguments who is to say there are not other countries that can be used to counter his argument ? Cherry picking at its Best. I must however agree that some of his points are valid

Devaluation has and will always be a scam. Even in countries like China and South Africa it never works out as these countries are having to devalue their currencies over and over again, in the end sound economic policies and a restriction on exports while diversifying the economy is the way to go. If the price of Oil increased all the way to $60 or $80 per barrel nobody would be talking about devaluation, this is the biggest evidence that the whole thing is a scam!

Ok...nice article

abbey621:
Devaluation has and will always be a scam. Even in countries like China and South Africa it never works out as these countries are having to devalue their currencies over and over again, in the end sound economic policies and a restriction on exports while diversifying the economy is the way to go. If the price of Oil increased all the way to $60 or $80 per barrel nobody would be talking about devaluation, this is the biggest evidence that the whole thing is a scam!

On imports you mean?

I do understand your skepticism. Japan embarked on a series of devaluation of the Yen in other to make its exports cheaper, while that policy worked, it created another problem. It led to stagnation in the domestic economy and they have not recovered after so many years. Right now, the Japanese economy is bleeding heavily and its market suffering losses in value

On the other hand, in theory, devaluation can help to stimulate the export economy, my problem is how it is managed in Nigeria.

All I know is that the economy is getting worse.When someone earns N90,000 as a salary and used to spend N45000 for foodstuffs but now spends N55000 for the same foodstuffs.

Even to a lame man,he knows is bad.

I will disagree with the author regarding exchange rate. If your currency cannot compete favorably against the dollae compared to other countries, it is weak. Take for instance zimbabwe.

The countries he gave as examples are able to grow in gdp because they are manufacturing economies. They manufacture lots of commodities and export as well. But Nigeria and most African countries only export crude oil and import every other thing, that is why exchange rate changes significantly affect cost of commodity in the country.

If according to the articulate difference between official and black markets rates causes inflation what are the suggestions to reduce the difference to the barest minimum? Also, I believe alot of our imports goes unrecorded, consider the massive corruption at the seaports and ever porous borders (Seme), but one have to agree we have an export issue though.

Nice article but got nothing to do with the above article

GoldenDr:
Anayo Okpara
·
She is always at the church premises by 6am wearing some faded jeans, an old T shirt and some slippers. She always comes to clean the chapel and arrange the seats. For six years she has never missed a single Sunday coming to clean the place. On this faithful day a young man walked into the chapel while she was still cleaning. He went and sat down watching as the lady cleaned. He was impressed that a lady who looked quite good even in the old cloths and a scarf over her hair could be so dedicated to her work in church. He thought within himself that this was an unfortunate lady who probably had not gotten anyone to take care of her schooling and now she would probably be an orange seller or some petty trader struggling to make ends meet. He watched and within his heart he felt he now knew what God wanted him to do. When he had felt a compulsion to come very early to church he had not understood but now he thought he did. He went back to his car and took out two 50 cedis notes and when the lady finished her work and was about to leave he called her and commended her for her service and gave her the notes. She respectfully declined the gift but he insisted pressing it into her hands. He asked if she lived close by or if he could go drop her so she would not be late. She thanked him and told him that her car was nearby, but he did not comprehend or even try to understand what she had just said. He walked her out determined to find out all he could about this lady that God wanted him to help change her level. They walked out of the chapel with him telling her where he worked and how God had asked him to come early to church that day and how he believed God is directing him to help make a big difference in her life. He was so busy talking he had not realized they had walked directly to a car parked under some trees in the parking lot. The car made his one year old Benz look like a worn out wheel barrow. The lady opened the driver’s door stepped in and handed over her card to the man and said, “I believe God sent you here for a purpose, but I do not think it was to change my level, May be it was to change yours.” I am tempted to say it took a forklift to shut the young man's mouth and move him from the place he was glued to as the lady drove off. God had a purpose for bringing him to church that morning and that purpose was to teach him humility which he learnt well because now two people always clean the chapel when everyone fails to show up. Many times we think so highly of ourselves that where God sends us to learn we go trying to teach. We may be men created in the image of God but at one time ants shall be the professors seeking to impart knowledge to us only if we are humble enough to learn.
Stay blessed, be humble, trust and obey.

Topeakintola:
On imports you mean?

I do understand your skepticism. Japan embarked on a series of devaluation of the Yen in other to make its exports cheaper, while that policy worked, it created another problem. It led to stagnation in the domestic economy and they have not recovered after so many years. Right now, the Japanese economy is bleeding heavily and its market suffering losses in value

On the other hand, in theory, devaluation can help to stimulate the export economy, my problem is how it is managed in Nigeria.

good argument.
The question is: has/can anything been/be properly managed in country(by government)? We play politics with almost everything. I just tire.

I don't support devaluation, no!

seunmsg:
Very revealing article. I agree with most of the arguments of the author except the issue of importation not being a problem and devaluation not resulting in serious inflation.

Except the author is right on both points, and you're wrong - which is as to be expected, seeing as the author has a PhD in economics. Still, good work in finding and posting the article.

Topeakintola:
On imports you mean?

I do understand your skepticism. Japan embarked on a series of devaluation of the Yen in other to make its exports cheaper, while that policy worked, it created another problem. It led to stagnation in the domestic economy and they have not recovered after so many years. Right now, the Japanese economy is bleeding heavily and its market suffering losses in value

On the other hand, in theory, devaluation can help to stimulate the export economy, my problem is how it is managed in Nigeria.

Japan's economic problems have nothing to do with devaluation, and everything to do with Japan's aging demographics. The ratio of retirees to working-age Japanese continues to expand, while the total population has been in decline for the last few years. Fewer workers means that even though productivity per worker increases, total output may not expand correspondingly.

Topeakintola:
On imports you mean?

I do understand your skepticism. Japan embarked on a series of devaluation of the Yen in other to make its exports cheaper, while that policy worked, it created another problem. It led to stagnation in the domestic economy and they have not recovered after so many years. Right now, the Japanese economy is bleeding heavily and its market suffering losses in value

On the other hand, in theory, devaluation can help to stimulate the export economy, my problem is how it is managed in Nigeria.

When I say restriction on exports I meant our dependence on oil. We need to restrict this and force diversification. Imports I'm not worried about because when compared to other countries Nigeria still ranks average on imports and our imports are mainly for things we could grow locally such as tomato paste, rice and so on. When we diversify and look into other natural resources our economy automatically becomes stronger like it was in the 1960s and 70s. For example, what ever happened to the export of palm oil, cocoa and tomatoes? Now that Oil is inching closer to $20 per barrel, it makes sense to look into alternatives before it is too late. Devaluation would only give us a false sense of hope and security, it would only prolong the inevitable doomsday!

ladyF:
Educating article.

It's [size=15pt]LadyF[/size] again

Educative not educating

All you had to do was pay a little bit more attention to your submission instead of rushing to post your usual jargon

seunmsg:
...
The poster child of why weakening currencies do not imply slow growth is South Korea. South Korea grew its GDP per capita from about 1100 US dollars in 1960 to about 24,500 in 2014. What happened to its currency over the period? In 1960 one US dollar exchanged for about 63 won. Today one US dollar exchanges for almost 1200 won. In short, over the period where South Korea has “developed”, its currency has also weakened consistently....

This is just half the story! South Korea weakened their currency to make their goods cheaper abroad. Same with other East Asian countries! Can you imagine if South Korea has a really strong currency? That may mean that Samsung Galaxy will be more expensive than an iPhone and Kia will be more expensive than a Mercedes Benz. When you don’t make anything, you want a stronger currency as evidenced by Kuwait, Bahrain, Pounds, etc. A stronger currency means cheaper imports.

seunmsg:
...
The third myth is the idea that devaluations lead to runaway inflation, an idea that is not technically true. To be clear, devaluations do lead to inflation but not nearly as much as people think.

For example, the South African rand has devalued by about 40% in the last year yet inflation has ticked up by less than one percentage point to 5.2% from 4.4% a year ago. The Russian rubble has devalued by 126% since the middle of 2014 yet inflation has gone from 8% in mid-July of 2014 to about 13% today, although it peaked at around 16%. A significant increase, but nowhere near catastrophic.
....

Maybe not in those countries but it will in Nigeria because we import everything.

seunmsg:
...
The final myth to bust is the idea that Nigeria has an import problem. You typically hear statements like “How can we be importing everything from toothpicks to fish. It is unsustainable.” Often left out of such statements is the fact that we have a N90tn economy. And you cannot have a N90tn economy that does not import. Is it odd that a N90tn economy would import N100bn worth of building materials or N26bn worth of shoes? No it’s not.

According to comparable data compiled by the World Bank, Nigeria imported only about 12.5% of GDP in 2014. Of the 160 countries for which the World Bank has data available, Nigeria had the lowest imports to GDP ratio. Côte d’Ivoire imported about 38.9% of GDP in 2014, Ghana imported about 48.9%, Mauritius imported about 63%, Belgium about 83.1% and Ireland about 95.4% of GDP.
....

You know what they say about statistics.... To get a meaningful comparison with Nigeria, I would think you'd want to look at countries with similar trade deficits and not import to GDP ratio.

I disagree with the Op on many areas

seunmsg:
Very revealing article. I agree with most of the arguments of the author except the issue of importation not being a problem and devaluation not resulting in serious inflation.

The level of importation in Nigeria today is not sustainable considering the inadequate foreign exchange earnings. Again, if we are serious about creating jobs and becoming a major global economic player, we need to reduce our over dependence on importation and stimulate our manufacturing industry. China and India did not become the second and third largest economy by importation, they achieved the feat by manufacturing almost all their local needs and still manufacturing enough for exportation to other countries. He identified exportation as a problem but the fact is, we can't export when we are not even producing enough to meet local needs. We need to discourage importation to stimulate local production.

The argument that devaluation does not cause serious inflation is just weak. The truth is, the real rate of inflation that the people contend with is not really reflected in the inflation figures that the NBS comes up with. When we devalue, the first thing that will go up is the cost of fuel importation and that is what the present administration can't afford. In calculating the inflation rate, NBS takes a lot of items into consideration and so, the real effect of the increase in petroleum products is watered down in the overall rate.
Again, minimum wage of workers has remain the same since 2011 and inflation has risen by over 5%. Adding another 1-2% to the inflation rate as a result of devaluation without increasing workers salary is wickedness.

you don't seem to get what the PhD is saying. naira value has halved. have prices of goods doubled?

only the rich import (very small minority)
our goal should be increased productivity (factories and farms)

omohayek:
Except the author is right on both points, and you're wrong - which is as to be expected, seeing as the author has a PhD in economics. Still, good work in finding and posting the article.

I have modified my post to give reasons for my position. The major reason why I opened the thread is to expand the discussion and read the views of others. So, my opinion is just my opinion.

mikolo80:
you don't seem to get what the PhD is saying. naira value has halved. have prices of goods doubled?

only the rich import (very small minority)
our goal should be increased productivity (factories and farms)

And where do you get the machinery, seed, raw materials, clothing you need to survive? Take a look around you, you'd be hard pressed to name two things that are wholly manufactured in Nigeria.

Devaluation of a country's currency is not good economics.

Your currency is your power, hold unto it..

Ever wondered why developed countries are still a safe haven, its due to their currency. All countries experience decline in currency at some point but your ability to stabilize it makes that huge difference.

Devaluation of Naira is not acceptable, exercising control of Forex trade is the key, the stakeholders in the market need to be scrutinized. Opening up the economy for foreign investors to bring in businesses will strengthen the Naira.

SAYNOTODEVALUATION...

seunmsg:
The naira issue has been the topic of debate for a while now. Should we devalue or not? Can we cope with the effect of a devaluation? What happens if we don’t? And so on. Over the next few days, I and other colleagues-experts in their fields-will give views on a variety of issues regarding the naira devaluation debate.

To kick things off, it is useful to discard some bad ideas which have been tossed around for a while.

Bigger Number = Stronger Currency?

The first myth to debunk is the false idea that if you exchange a bigger number for a smaller number then the currency with a bigger number is weaker than the currency with a smaller number. You typically hear people say: “Wow, one dollar is exchanging for 16 rand. The rand is weak. The dollar is strong.” That kind of thinking is faulty mostly because it doesn’t take into account the purchasing power behind the currency.

For example, if an individual living in the US earns 300 dollars a month, then that is technically identical to an individual in South Africa earning 4800 rands a month, given that 1 US dollar exchanges for 16 rands. So long as that exchange rate holds then the rand is not weak or strong, it’s just the rand.

In reality, the strength or weakness of a currency has little do with what the actual exchange rate is. So although one Ghanaian cedi exchanges for 30 Japanese yen, you cannot say the cedi is stronger than the yen. Similarly, although one Turkish lira exchanges for six Mexican pesos, you cannot say the lira is strong and the peso is weak. That would be wrong.



In reality, the strength or weakness of a currency has little do with what the actual exchange rate is. So although one Ghanaian cedi exchanges for 30 Japanese yen, you cannot say the cedi is stronger than the yen. Similarly, although one Turkish lira exchanges for six Mexican pesos, you cannot say the lira is strong and the peso is weak. That would be wrong.

What then determines a currency that is “weak” or “strong”?

A weak or strong currency is one that is changing, or that everybody expects to change soon. For example, if the naira changes from 150 to the US dollar to 165 to the US dollar, then during the period the change is taking place the naira is relatively weak and the dollar is relatively strong. The same applies if the currency is expected to change soon. If everyone expects the naira to change from 197 per US dollar to 300 per US dollar, then the naira is weak relative to the dollar. The weakness persists as long as the expectations about the change persist. If the change eventually happens, the naira moves to 300 to a dollar, and everyone believes that is the end of it, then the naira is no longer weak. It is just the naira.

Weak Currency = Bad Economy?

The second myth to dispel is the idea that a country whose currency weakens consistently over time cannot grow. This could not be further from the truth.

The poster child of why weakening currencies do not imply slow growth is South Korea. South Korea grew its GDP per capita from about 1100 US dollars in 1960 to about 24,500 in 2014. What happened to its currency over the period? In 1960 one US dollar exchanged for about 63 won. Today one US dollar exchanges for almost 1200 won. In short, over the period where South Korea has “developed”, its currency has also weakened consistently.

…a currency that loses value over time is not the doom it is made out to be.

Similar patterns can be seen for some of the other fastest growing economies over the period, such as Chile, Vietnam, and Indonesia. The majority have grown relatively quickly even with weakening currencies. In fact, many countries try to weaken their currencies to boost growth. One of goals of Abenomics, a fancy name for policies implemented by the Japanese Prime Minister, was a devaluation of the yen to boost growth. China was accused for years of artificially weakening its currency.

There are many other examples from around the world. The Vietnamese dong trades at 22300 per US dollar today from about one dong per US dollar in 1983 and Vietnam still managed to grow at an average of 6.5% per year over the period. The Indonesian rupah trades at 11,800 per US dollar today from about 600 rupahs per US dollar in 1980 and Indonesia also still managed to grow at an average of 7% per year over the period. Bottom line, a currency that loses value over time is not the doom it is made out to be.

Devaluation = Uncontrollable Inflation?

The third myth is the idea that devaluations lead to runaway inflation, an idea that is not technically true. To be clear, devaluations do lead to inflation but not nearly as much as people think.



For example, the South African rand has devalued by about 40% in the last year yet inflation has ticked up by less than one percentage point to 5.2% from 4.4% a year ago. The Russian rubble has devalued by 126% since the middle of 2014 yet inflation has gone from 8% in mid-July of 2014 to about 13% today, although it peaked at around 16%. A significant increase, but nowhere near catastrophic.

…the reality is, devaluations do cause inflation but not that much… Ironically, according to some studies, the black market premium, i.e. the difference between the official exchange rate and the black market exchange rate is a bigger driver of inflation than devaluations.

Finally, we can look at Nigeria where the naira lost about 20% of its value between October 2014 and March 2015. Despite the devaluation, inflation, which was about 8% then, is still below 10%. If you add the fact that the dollar prices of some of our largest imports, fuel and wheat, have fallen to almost record lows then the inflation worry is minute.

So the reality is, devaluations do cause inflation but not that much. Despite a devaluation, the Central Bank still has lots of tools at its disposal to keep inflation in check. Ironically, according to some studies, the black market premium, i.e. the difference between the official exchange rate and the black market exchange rate is a bigger driver of inflation than devaluations.

Does Nigeria Have An Import Problem?

The final myth to bust is the idea that Nigeria has an import problem. You typically hear statements like “How can we be importing everything from toothpicks to fish. It is unsustainable.” Often left out of such statements is the fact that we have a N90tn economy. And you cannot have a N90tn economy that does not import. Is it odd that a N90tn economy would import N100bn worth of building materials or N26bn worth of shoes? No it’s not.

According to comparable data compiled by the World Bank, Nigeria imported only about 12.5% of GDP in 2014. Of the 160 countries for which the World Bank has data available, Nigeria had the lowest imports to GDP ratio. Côte d’Ivoire imported about 38.9% of GDP in 2014, Ghana imported about 48.9%, Mauritius imported about 63%, Belgium about 83.1% and Ireland about 95.4% of GDP.

Of the 160 countries for which the World Bank has data available, Nigeria had the lowest imports to GDP ratio.



So according to the data, we do not have an import problem. Even if you assume that 50% of our imports go unrecorded, that still leaves us at a healthy 25% of GDP, which is still not a problem.

However, we do have an export problem, highlighted by the fact that crude oil accounts for 90% of our recorded exports and crude oil prices are volatile. Recognising this key difference between an import problem and an export problem is very important because it determines that kinds of policies that should be implemented. Import substitution policies and policies that look to limit imports probably won’t work because they do nothing to tackle the real problem, which is an export one.

Nonso Obikili holds a PhD in economics and works as a researcher and consultant. He has published peer-reviewed articles in various international academic journals and blogs frequently on Nigerian economic issues.


http://blogs.premiumtimesng.com/myths-about-devaluations-by-nonso-obikili

The analysis is incomplete. It does not try to give a policy advise, given the peculiarities of the Nigerian economy.
The analysis in a way has the ability to make people think the writer supports devaluation.
My question for the writer is, what impact would devaluation have given our economic structure.
Also, you have not just an export problem when import values exceed export values. That is also an import problem. Cos the ideal is for your exports to pay for you import.
Now it can't.
So you can say it's an import problem, or call it an export problem and still be right. I.e. Import problem can be same at export problem.
Your choice of what to call it only shows the school of thought and policy choice you support.

Good article.....but countries like South Korea and Japan devalue because they have something to export.

Nigeria has nothing to export but oil....whose price we cannot control.

That's why this government has to focus a lot on getting the power sector fixed, and getting us back on the manufacturing path.

seunmsg:
I have modified my post to give reasons for my position. The major reason why I opened the thread is to expand the discussion and read the views of others. So, my opinion is just my opinion.

Thanks. I've gone back and re-read your modified post. My problem with your first point is that any worthwhile exports will require the importation of the necessary inputs, which means that in the short term inputs may well increase, and that increase may happen even faster than exports do. Countries like South Korea, Japan and Taiwan have next to no native natural resources, not even iron ore, and if their politicians had insisted on keeping imports as low as possible, these countries would never have become export powerhouses.

The Nigerian prejudice against imports - one clearly shared by Buhari - is incredibly damaging to economic growth, and his import-restricting policies are actually opposed by most of the domestic manufacturers on whose behalf the policies are supposedly for, especially the smaller manufacturers without government connections to get around the restrictions. The claim that it is being done to restrain inflation is utterly wrong: as Obikili points out, the feed-through effect of a devaluation isn't 1-to-1, and central banks have other tools at reach for fighting inflation. On the other hand, what happens when domestic manufacturers can't import the materials and tools they need to keep producing? Their goods become scarce on the market, and the prices skyrocket correspondingly - producing the very runaway inflation the anti-importation policy was supposed to combat.

pls sirs how doea the difference between the official exchange rate and the black market exchange rate drive inflation

omohayek:
Japan's economic problems have nothing to do with devaluation, and everything to do with Japan's aging demographics. The ratio of retirees to working-age Japanese continues to expand, while the total population has been in decline for the last few years. Fewer workers means that even though productivity per worker increases, total output may not expand correspondingly.

It is a contributory factor, at least a precursor to the challenge of an aging population.

The devaluation of the Yen helped them to improve competitiveness and gain a comparative advantage to their competitors a la S.Korea etc. It however changed the economic dynamics, the Japanese became a low consumption and high saving economy- which means the country cannot stimulate its economy by domestic demand. Additionally, other innate causes include the heavily bureaucratic nature of governance of the economy.

Lyoncrescent:
I am no economist but I see some cherry picking in some of his points. There's a difference between a rule and am exception. Using Vietnam, south korea, russia and Japan as examples doesn't show if they are the rule or the exception and and as such to equate them with the Nigerian situation considering the different socio economic factors make his arguments vague. For every country he used to justify his arguments who is to say there are not other countries that can be used to counter his argument ? Cherry picking at its Best. I must however agree that some of his points are valid

One of these brain washed and selfish textbook economist once used Russia as a case study.
Russia , a country who laughed off western sanctions . Even though it hurts , their patriotism to their country made them look inwards to the neglected sectors of their economy.
A country capable of manufacturing almost everything on the planet.

I could not go tru the leght of the piece, solely because it won't make #1=$1.
Now we know that PMB was metaphoric when he promise #1=$1, all he meant was free fall of the naira

Topeakintola:
It is a contributory factor, at least a precursor to the challenge of an aging population.

The devaluation of the Yen helped them to improve competitiveness and gain a comparative advantage to their competitors a la S.Korea etc. It however changed the economic dynamics, the Japanese became a low consumption and high saving economy- which means the country cannot stimulate its economy by domestic demand. Additionally, other innate causes include the heavily bureaucratic nature of governance of the economy.

The thing is, old people who fully own their homes and are done raising their children aren't going to be doing much active consuming. Without a baby boom or an increase in immigration, nothing Japan does will change the overall picture, devaluation or otherwise.

omohayek:
Thanks. I've gone back and re-read your modified post. My problem with your first point is that any worthwhile exports will require the importation of the necessary inputs, which means that in the short term inputs may well increase, and that increase may happen even faster than exports do. Countries like South Korea, Japan and Taiwan have next to no native natural resources, not even iron ore, and if their politicians had insisted on keeping imports as low as possible, these countries would never have become export powerhouses.

The Nigerian prejudice against imports - one clearly shared by Buhari - is incredibly damaging to economic growth, and his import-restricting policies are actually opposed by most of the domestic manufacturers on whose behalf the policies are supposedly for, especially the smaller manufacturers without government connections to get around the restrictions. The claim that it is being done to restrain inflation is utterly wrong: as Obikili points out, the feed-through effect of a devaluation isn't 1-to-1, and central banks have other tools at reach for fighting inflation. On the other hand, what happens when domestic manufacturers can't import the materials and tools they need to keep producing? Their goods become scarce on the market, and the prices skyrocket correspondingly - producing the very runaway inflation the anti-importation policy was supposed to combat.

I've never heard the anti-import policy is meant to check inflation, rather it's meant to reduce demands for Forex for some items.
Raw materials and essential imports still get FOREX.

mikolo80:
you don't seem to get what the PhD is saying. naira value has halved. have prices of goods doubled?

only the rich import (very small minority)
our goal should be increased productivity (factories and farms)

Prices of goods doesn't have to double before the ordinary people begin to feel the impact of inflation. Wages have been stagnant since 2011 so, any percentage increase in inflation will result in hardship for the people.

abbey621:
When I say restriction on exports I meant our dependence on oil. We need to restrict this and force diversification. Imports I'm not worried about because when compared to other countries Nigeria still ranks average on imports and our imports are mainly for things we could grow locally such as tomato paste, rice and so on. When we diversify and look into other natural resources our economy automatically becomes stronger like it was in the 1960s and 70s. For example, what ever happened to the export of palm oil, cocoa and tomatoes? Now that Oil is inching closer to $20 per barrel, it makes sense to look into alternatives before it is too late. Devaluation would only give us a false sense of hope and security, it would only prolong the inevitable doomsday!

Ok I get you now.

I agree that diversification is crucial. However, diversification to what? Commodities? It will lead to the same problem in future if there is fall in price. With the world economy gradually embracing sustainability and reduction in fossil fuels, a focus in solid minerals will have consequences in the long term. You mentioned agric products, this is a good point but we still import some of our food commodities so an increase in domestic production will at best reduce imports and fill the domestic demand gap.

I will opine that Nigeria focuses on technology, manufacturing and gradually graduate to a smart economy. I was reading an article earlier, the author explained that if Mark Zuckerberg was Nigerian, his facebook project would have failed because of the export oriented syndrome of Nigerians. Nigerians are not patient and do not allow local businesses to improve the value of their products over time.

They may be Islamists and trouble makers but The Saudis are already thinking ahead. In the last 10 years, they have invested billions of dollars in IT and their Universities, especially STEM courses to increase their competitiveness. A lot of R& D activities are going on in the country. I'm not too sure what the outcome will be but they are making an effort.

Nigeria is blessed with talents, locally and internationally. I dont see any reason why we cannot engage in innovation which incidentally might not require as much capital as investments in oil exploration or solid minerals.

omohayek:
The thing is, old people who fully own their homes and are done raising their children aren't going to be doing much active consuming. Without a baby boom or an increase in immigration, nothing Japan does will change the overall picture, devaluation or otherwise.

You are correct. Japan's insular perspective is a major flaw

They might also argue that it has enabled them to maintain a cohesive society.