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Nairaland Forum / Nairaland / General / Business / The Naira In 2016: To Devalue Or Not To Devalue? (19698 Views)
Recession: EU Advises Nigeria To Devalue Naira. / EXCLUSIVE: CBN Will NOT Devalue Naira, Mulls Proposal For New Forex Window / Pls, What Does It Mean To Devalue Naira? (2) (3) (4)
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Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 3:07pm On Feb 20, 2016 |
Reference: Devaluation between 1985 and 1993 and indeed in most Nigeria's history has not forced us to any meaningful solution. Don't forget that we are still import based. If I may ask what do you export? I am only curious. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by cckris: 3:14pm On Feb 20, 2016 |
Reference:1000 Naira to the dollar is the stimulus that can help Nigerians out of Economic Slavery. Why? Majority are not even willing to think. Let the white man do the thinking, as we maintain many wives, generators, & false claims to wealth. 3 Likes |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 3:16pm On Feb 20, 2016 |
undisputedk: Below are two links on the basics of how to start a BDC business. You will get some insight on how the BDC business works. https://www.wealthresult.com/2013/11/bureau-de-change-business-nigeria.html http://www.mytopbusinessideas.com/starting-a-bureau-de-change/ This link explains black market, parallel market and floated currency. http://www.investopedia.com/articles/investing/031213/currency-trading-black-market.asp Good luck my friend. When you start earning big bucks from that BDC don't forget me. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by Reference(m): 3:17pm On Feb 20, 2016 |
LRNZH: Don't mind these senseless people. Top exporting countries like China and Japan struggle to keep their currencies WEAKER than set levels so as to make their goods competitive. Productivity and market share is the key. Foolish Nigerians struggle to keep their currency strong and so cannot attract or sustain productivity thoughtless of exports. Devaluation is not the destination but the key to killing wanton importation and inflation only affects unproductive lazy bones. Productivity is the counter to inflation. Nigerians are just to lazy mentally and physically but they love good things. The result is either poverty or theft. Two things in abundance here. Tell me why Buhari doesn't want to devalue and I will tell you that he is protecting his constituency, people of low productivity but of high taste. Sorry for this country. 4 Likes |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by omonnakoda: 3:18pm On Feb 20, 2016 |
Factually it is not true that the period of parallel was brief. During Buhari's tenure the dollar exchange for 3-4 Naira so I do not see where the 1.70 quoted in Babangida's time came from.It is not true |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 3:23pm On Feb 20, 2016 |
omonnakoda: In 1980, if was Shagari not Buhari and it was for a brief period. I put in a reference there. Kindly dispute this with your own reference let's fact check. Thanks for reading though. It is along article. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 3:24pm On Feb 20, 2016 |
Reference: We have to keep educating ourselves. Open threads and reply comments to enlighten others. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by Reference(m): 3:33pm On Feb 20, 2016 |
danjumakolo: What do you need power for. Abeg go siddon. Do you need power to farm, to raise the chicken you are importing. Do you need power to mix cement and build your roads and bridges. Nigeria doesn't need all these high-wire industries to develop. It is the basics that build economies and it is the lack of basics that destroy. Our biggest import bill is fuel, then food. Two things we have potentials and should produce abundantly if we can restructure and be hardworking. Your quest for electricity is just a lazy excuse. The average youth uses the little power available to charge phones to chat. Electricity has not benefitted most and 24hr power will not make a millionaire out of a sloth. How do I know this. The price of electricity has gone up and people are shouting. A productive person will not because he can easily swap costs. A industrious exporter will desire a devaluation to enable him remain in the game despite rising costs. 2 Likes |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 3:38pm On Feb 20, 2016 |
Reference: We need power in many industries that small and medium scale enterprises function. Textiles mills, Barbing salons, flour mills, Car Manufacturing, Cement production, Garment Industry just to mention a few need power. We cannot industrialise our economy and become net exporters if do not have sufficient power supply. Generators will not cut it. Power greatly drives productivity. 2 Likes 1 Share |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by cckris: 3:39pm On Feb 20, 2016 |
LRNZH:Devaluation is not only to aid exports. Producing match sticks can create jobs, & save Forex. How about Machetes for millions of farmers, or MUST USE kitchen knives, or shovels & head pans & other construction tools. IBB started on the path of Structural Adjustment, but when he & his political friends saw that the South had more & better infrastructure for immediate take off, they backed out.Why? You may have heard such nonsense as EVEN DEVELOPMENT, by which IBB & his political allies presume that they can hold down the South until the North catches up. Unfortunately Economic Development is not about how much money people have, otherwise Saudi Arabia & Brunei would possess patents on IT & Rocket Maths. Today all Economic Indices, even in the Core North, is now COMPELLING Nigerians to use the FREE OIL MONEY to create jobs, instead of creating KINGS in every hamlet. 1 Like |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 3:45pm On Feb 20, 2016 |
cckris: I am referring to how to aid export which is a must if we want to save our economy. Devaluation has nothing to do with local goods manufacturing for local consumption. They are two different things. But you are right that increased local.manufacturing should reduce dependence on export and that too saves Forex. Perhaps you want to shed more light on IBB and the 'Even Economy' theory. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by omonnakoda: 3:46pm On Feb 20, 2016 |
LRNZH:I did not say Buhari was there in 1980? I said the dollar was 3-4 Naira under Buhari in the Parallel market and Buhari was there before Babangida You wrote that it was 1.70 under Babangida. This is untrue and was never the case. In fact the deterioration started under shagari and never reversed. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by 989900: 3:51pm On Feb 20, 2016 |
Reference: Why hasn't it "flogged us to a solution" since 1986: from 65kobo = $1, to N197=$1? You're exporting . . . so devaluation; you win now, but you have forgotten you won't swallow the cash, you will still spend it in the same inflation ridden market. Why is it always about self-interest only for y'all? I earn income from other countries asides Nigeria, but I wouldn't wish the burden of further devaluation on my people, even though not even one of my immediate family lives in Nigeria. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 3:55pm On Feb 20, 2016 |
omonnakoda: My references state otherwise but I will not argue this point as it doesn't take away from the crux of our discourse. Thanks for sharing. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by omonnakoda: 4:00pm On Feb 20, 2016 |
LRNZH:Please share those references.They may be talking of the official rates but I BOUGHT dollars at Bristol hotel in 1984 for 3 Naira and 4 Naira early 85 before Babangida took over in August. I did not read it up..... |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by onatisi(m): 4:03pm On Feb 20, 2016 |
Ijaya123:
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Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 4:07pm On Feb 20, 2016 |
omonnakoda: It is in the main article. https://en.m.wikipedia.org/wiki/Nigerian_naira By this reference, it was in 1986 that the black market rate got to around 4 Naira to a USD. Since you experienced it, I defer to you. As I earlier stated, it doesn't change our conclusions on the subject matter. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by cckris: 4:10pm On Feb 20, 2016 |
Reference: The price of electricity is supposed to be reducing. Like in the Telecoms Industry, most infrastructure are already in place. But some people want to confiscate National Assets, & force everyone to serve them. Just like Operation Feed the Nation was turned to Obasanjo Farms. During privatisation Vice President Namadi Sambo, Emeka Offor, General Abdulsalam, et al, who have neither desire nor interest in running Industries, just hijacked the Power Industry & shared the it among themselves, & then requested CBN Bail Out Funds like Obama gave to Chrysler & GM. They then transferred the billions abroad and started asking for price increase. Ngozi was just laughing. It's an easy Maths to forecast Nigerian Economy in the next 18 months. Now TOMORROW HAS COME. If Buhari doesn't manage well what is unfolding, there will be kata kata. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by InvertedHammer: 4:12pm On Feb 20, 2016 |
LRNZH: Devaluation is like a medication. Because a certain drug cures malaria does not mean it will be effective for Typhoid fever. Notice that the two diseases seem to have similar symptoms. In other words, Nigeria is fvcked. NA should force Buhari from stepping out of Nigeria till further notice. / |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by Musicminista(m): 4:13pm On Feb 20, 2016 |
mrphysics:if this is not biased then I'm not Nigerian |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by omonnakoda: 4:24pm On Feb 20, 2016 |
LRNZH:If you look at it it says CITATION NEEDED and does not provide a source but the figures do not look real to me . Again I recall the £ in 1988 was 12 naira and dollar about 18 |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by andy24(m): 4:25pm On Feb 20, 2016 |
I read ur write up. Thanks for sharing such knowledge... 1 Like |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by cckris: 4:25pm On Feb 20, 2016 |
Reference:Forex rate below 700 Naira to the dollar will still make it more PROFITABLE to import I PASS MY NEIGHBOUR, than to WORK for domestic solution, which still keeps Nigerians in Economic bondage of importing RICE & match sticks, & unemployment, even in Agriculture. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 4:26pm On Feb 20, 2016 |
omonnakoda: I suspect you may be mixing up some of the dates. 18 Naira to 1 USD cannot be the official rate in 1988. I too remember this period. Anyway, thanks once again. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by omonnakoda: 4:27pm On Feb 20, 2016 |
LRNZH:I did not say it was the official rate,Did I ? Are we discussing official rates? I am telling you what I was paying |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by azikiweironsi(m): 4:29pm On Feb 20, 2016 |
OP, God Bless you for the writeup. Well educating. Hope other NLs will follow this step rather than using abusive words. Nigeria will be great again. God Bless Nigeria. 1 Like |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by cckris: 4:39pm On Feb 20, 2016 |
mrphysics:I'm a dyed-in-wool defender of Pres Jonathan. But Buhari promised to solve all the problems, so HE MUST. It's POLITICAL SUICIDE for any leader in Economic Depression. The French Revolution. It's horrible Economic conditions that threw up Hitler, & led to WW2. I must admit that people like Amaechi who talk before thinking would not know all that. Now they MUST carry the can, of what? Fela's shit.
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Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 4:44pm On Feb 20, 2016 |
azikiweironsi: Amen o. We must survive and then thrive in this country. |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by Xerum(m): 4:44pm On Feb 20, 2016 |
@OP Nice write-up and analysis. I do miss the term arbitrage though (spread between bid and offer price), it is the gap between these prices that parallel market operators take advantage of. Arbitrage is very common in most 3rd world / developing economies as a result of the fact that most are extremely import dependent / netto importers like Nigeria. The Nigerian economy is still at the very basic stage (extractive), we still import refined oil which entails incurring huge expenses in the process (Transportation & insurance) all paid for you USD. It is almost beginning to sound like a cliché; we need to create enabling environment in which our SME’s will thrive, by so doing creating employment and increase purchasing power which will boost internal consumption. If we are able to boost our internal market this will reduce our yarn for imported goods & services that are available in Nigeria. Importation of unnecessary goods and services should be made expensive. Nigeria is not an isolated market, the government and CBN can stick to their current policies of not doing the needful and wait it out hoping for a miracle, at the end of the day it is the market that determines the value of the Naira (taking into consideration our over dependency on import) It is rather weird, that the official position of the government & CBN is that the Naira is pegged between 190 – 200 which is the price commercial banks buy USD from CBN. And the commercial banks in turn charges their clients who make purchases on the net / make withdrawals abroad close to the black market rates (excluding bank charges). Commercial banks are making huge profits here and we wonder why the parallel market still thrive? Which brings me to my next question which is, why isn’t any of the Financial regulatory bodies doing anything about this? cos this action of the commercial banks is tantamount to jeopardizing the exchange rate policies of the government. That the Nigeran government is reluctant to go the way of devaluation is understandable as this will increase the prices of imported refined oil products (with its multiplier effect on inflation) & will also make our debt more expensive. But something must be done to discourage over-dependency on importation and must be structural too. 1 Like |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by cckris: 4:51pm On Feb 20, 2016 |
onatisi:Microeconomics is difficult for some people, but Econometrics-based Political Economy is difficult for everyone. You can see that some opinions here even desire to flood Nigeria with the Dollars that belong to a World Power. 1 Like |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by LRNZH(m): 4:53pm On Feb 20, 2016 |
Xerum: You just summarised a large part of my epistle in less than 10 paragraphs. Arbitrage, is what I was referring to as percentage premium in the analysis. Remember say I no go makaranta for Economics. I will miss out some key jargons of the trade. Thanks for the clarity you just provided. I agree that a certain privileged few are making a killing from the ongoing arbitrage. The economic team has its work cut out for it. 1 Like |
Re: The Naira In 2016: To Devalue Or Not To Devalue? by paschu: 4:55pm On Feb 20, 2016 |
LRNZH: Maybe you need to know that Wikipedia is NOT an authoritative source of information. Any dick can edit any content on Wikipedia. And Wikipedia does not maintain an archive or history of edits that I know of. Don't be suprised if the stuff you are citing now is not there again tomorrow. |
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