₦airaland Forum

trillville:
Shadeyinka, you are right in stating our current mess is as a result of over importation and lack of foreign exchange earnings. You are also right in stating that nigeria needs to develop industrially and what is needed for an industrial revolution is electricity.

You believe nigeria needs to increase its foreign exchange earnings to get out of this mess, the federal government believes nigeria needs to reduce importation and has thus devalued our currency, reducing the purchasing power of the naira, there by reducing importation.

The main issue with fg's devaluation policy is that it has made the unit price to generate electricity more expensive for nigerians because the natural gas, our main fuel source, is sold in USD. As a result of the devaluation, the business case to increase generation of electricity has been screwed up and it may take nigeria many more years to have electricity to meet our industrial needs.

I personally agree with the fg, that the way to go is first to reduce importation, as in stop the bleeding, what I would do differently is would run the country like I would a business. When the economy is down, you layoff people. The fg needs not just lay off civil servants, but also delay payments of their gratuities. Basically sacrifice today for a better tomorrow. We currently spend over 70 percent of earnings of recurrent expenditure, how are we ever going to get electricity? The money saved from laying off stomach infrastructure should be spent on electrical infrastructure. Again by laying off workers, fg may not have to further devalue the naira as the number of people purchasing foreign goods will drastically reduce.

Another importation reduction policy the Federal government can make is to increase taxes. By taxes I mean income taxes, estate taxes, vehicle taxes, luxury taxes. These taxes affect the rich who by the way import a lot more stuff than the poor. Government shouldn't tax petrol and increase the vat as it would affect the masses much more than the rich.

PS
Sorry for any typos. No time to review.

No sir. The major cause of this mess is failure to act when action was desperately needed

kaboninc:
No sir. The major cause of this mess is failure to act when action was desperately needed

Please explain. Who failed to act? Jonathan not saving or buhari not employing ministers?

[color=#000099][/color]

plaetton:
I repeat, you don't cut your to spite your face.
There are no rooms for sentiments in managing an economy, especially medieval mindsets.

In case you didn't know, the CBN sets interest rates, not the banks.
The CBN sets monetary policy, not the banks.
The federal government sets the agenda of where investments should flow, not the banks.

In case you didn't also know, high interest rates are almost the norm in third world economies, and not peculiar to Nigeria.
Banks are in the business of risk management, and cannot afford to throw money at every John D. Public that walks into their halls.

There is nothing to gloat about in draining the life force from an ailing economy.
Not matter how much you loathe the banks, every one is paying the price for this financial misadventure.

Oga free money you seem not to know that it is not standard practice to have government funds lying idle in the bank while the bank recycle it for profit.
You need to pick up a book to understand what banking is all about before making a mess.
You sincerely think it is cool for government funds to be recycled by the banks but not me abi? you think my buisness does not know what to do with idle funds abi? You think other Nigerians who own businesses dont know what to do with idle funds abi?

I can't remember telling you who fix interest rates unless you will permit me to add poor comprehension ability to your myriad of problems, MPR was what I mentioned I never said who fixed it, how you concluded I said interest rate is fixed by the banks calls for deliverance.

You are only sad that Buhari took your free money but you forgot that most of us buisness owners dont have access to idle funds.
Buhari has created a level play ground, the banks will hustle for deposit just like all of us hustle for opportunities, the banks will be forced to lend to the real sector and that is when the problem of start up capital will be solved.

If you can not point to big businesses that employ labour supported by our banks with government funds then you are just making noise.
I deserve idle funds more than the banks who is already richer than myself.

Bros Buhari applied common sense not sentiments, I understand the feeling though!! Kpele, the lord giveth and taketh!!

plaetton:
You don't cut your nose to spite your face.

The ability of banks to create credit is extremely vital to economic growth.
Look at how the Bank of Japan, the European Central Bank, the US Federal Reserve, Bank of England, etc, etc, pump unlimited liquidity into their banking systems on a monthly basis to stimulate economic growth.

Pulling N3tr from the banking system at period of economic weakness was nothing but suiciding the economy to fight corruption.

It's like applying a jackhammer to your Scrotum to fight off a pesky fly.
At the end of the day, both the fly and your Family Jewels are history.

That's not very smart at all.

A few years ago, tonnes of money went down the drain in the name of banking consolidation: you know the era of N30 billion Naira minimum capital base.

Till today, few people know why the promised ability of banks to support industries failed.

There was no industry on ground to put the money to use. Excess money led to bankers giving out bad loans...we know the conclusion!

jpphilips:
Funny enough, the Shell operating in Nigeria have no technology to share with you, SGS who is the custodian of Shell's technology have no business in Nigeria or anywhere else, stop hoping.

You probably got me wrong. We are saying the same thing: Technology Transfer does not exist anywhere!

jpphilips:
Indigenous oil companies are mere middle men, they have no technology to implement, if the need arises, the technology owners will implement it and get paid.

Till today after more than 50 years of oil companies services in Nigeria, not one indigenous oil company can
1. Prospect for oil
2. Drill for oil

Its a shame. Common building of the third Niger bridge, the government will call Julius Berger!

MadamExcellency:
You just gave me an assignment. I just got the reply thus:

The technology they were exposed to include transmission/distribution systems, chemical reactors, furnace, plodder, hydrants, stamping machines, chillers and high-pressure mixers among others

They bought equipments abroad to set up a buisness and you call that posessing technology? lol
So when you buy a Lexus you assume you have the technology that made it?
pls dont choke me with laughter.

...No wonder why Nigerian have unsolved problems, all what people say here wont work in the very nearest future, many people didn't realize that everything move in very high velocity nowadays including market, if you are to plan for a program that will be effective for 5 years today before get to it's ripe time thing will be changed and the effort and resources made for the program rendered useless, that what make our country backward! vision of 20,50 years can never work!
only what can work is a quick response to actual problems and move along, in Saudi , Angola all the big project of 20,30, years vision have stopped and the resource just wasted there, when do you know the oil boom will return, today they need those money wasted badly, where to get it?
In case of Nigeria, Nigeria is a luckiest country among oil producing countries, because we have an alternative fund we can turn to(the looted fund) although many Nigerian didn't want us to talk about it, but they were wrong, if we have those fund and wisely use it we are gone!
The second is like the first, by luck Nigerian misuse currency, that when we introduced those worth money abandoned into circulation things will change drastically!there is a big gab that can be bridge and the hardship will be ease!

jpphilips:
Your Wasso analogy is called redenomination, why most countries are scared of it is because it erodes foreign reserves and shrinks the economy.
Soludo proposed it but OBJ refused it, in my opinion, we have not gotten to that point, if the recession last for another 2 to 3yrs such that our foreign reserve is completely lost, we will be forced to free float the naira and redenominate, it will come to us naturally once we get to that point. It shouldn't be a policy direction, it is like sleeping with food in your pocket in case you get hungry while sleeping.

Redenomination doesn't add anything to a countrys economy. Its just a change in nomenclature of the real value of the existing cash in circulation.

For me, redenomination makes sense only in the case of a super hyper inflation; when you need a basket of cash to purchase a loaf of bread.

shadeyinka:
Redenomination doesn't add anything to a countrys economy. Its just a change in nomenclature of the real value of the existing cash in circulation.

For me, redenomination makes sense only in the case of a super hyper inflation; when you need a basket of cash to purchase a loaf of bread.

people just rush into post without understanding, I've said the same thing,several times as if people were deaf.
all the ideas you people post here had been implemented several times by the various past regimes, why it didn't yield the desire result!
my opinion have nothing to do with re-denomination of Naira, re-decimal of Naira or devalue of Naira!
Naira is powerful, and it worth what it deserve in the market today.
if Naira is powerful why reform it; reform is necessary because, there is a lot of cheating in the market that dry-up the little amount of money in the pocket of poor, if you have N20 in your pocket and you lost 4% of it, it too heavy for poor to carry, during this time of recession the poor can't afford been cheated of there mediocre income!
look: 1kobo to 100k have gone! N1 to N4 had followed, now we are killing N5 gradually, if it dead it will be abandoned and we will take-on on N10! also no coins in circulation, N1 that is Nigeria exchange currency is not in market, how N1 will compete with $1 active dollar and win!
all these lead to inflation and hardship of poor!

jpphilips:
First what happened to the banks is the business of the banks not ours, the banker's nose what cut not ours so get that part cleared.
Nigerian banks don't create credit so bringing in Japan into the mix is just mischievous, when the MPR was just 12% the banks were lending at 21-25% what kinda credit comes at 25%? meanwhile Japan's lending rate is hovering between 1-2.5%, so my question is, does the Nigerian bank deserve the money in the first place?

They use high interest rates to suffocate borrowers in the real sectors of the economy, then buy up TBN at ridiculous rates, then manage to invest in Politically exposed persons & cronies is that what you call banking?
You have clearly admitted that the Nigerian banks have no clue how to attract idle funds, isn't that supposed to be shameful?
You want the Central bank of Nigeria to pump liquidity into the banks so that you will offer your customers fix deposit at 4% and return the rest to the CBN through TBN sales at 17% abi? Buhari has taught you guys a lesson.

Why can't that Liquidity be pumped into Ajaokuta steel complex through Government intervention funds? that is the real sector that need the funds not the kalo kalo banks.
Why can't we pump it into Dangote's refinery project to increase his refining capacity from 600,000bbls to 1.2m? Most of you interest groups put unnecessary pressure on the government for pecuniary gains even when the Government does the right thing for our common good.
When next a bank wants to charge ridiculous amount on savings accounts, it will remember that the account is the last chance of securing idle funds.

How many successful businesses have the so called banks supported? but Zenith will vomit billions to sponsor Fayose's election, God don catch una. No more free money, if you need it by all means work for it like everyone else.

The traditional way a bank is supposed to make money is by lending businesses and individuals at an interest. However, our Banks in Nigeria make their money mainly from money laundering and charges on deposits especially from government parastatas.

No wonder, nearly all Banks in Nigeria went broke immediately the TSA was introduced and governors could not transfer stolen funds with ease out of the county.

Its a shame!

trillville:
Please explain. Who failed to act? Jonathan not saving or buhari not employing ministers?

What has employing ministers got to do with the situation? I dont get that part..

shadeyinka:
The traditional way a bank is supposed to make money is by lending businesses and individuals at an interest. However, our Banks in Nigeria make their money mainly from money laundering and charges on deposits especially from government parastatas.

No wonder, nearly all Banks in Nigeria went broke immediately the TSA was introduced and governors could not transfer stolen funds with ease out of the county.

Its a shame!

on the way forward; is N5 least denomination is the best suppose to be in circulation?

jpphilips:
What has employing ministers got to do with the situation? I dont get that part..

Absolutely nothing really as far as I can tell. I just wanted to give kaboninc options for his blame game and couldn't phantom a logical reason to blame buhari for.
Funny right? I guess not so funny.

[size=18pt]Make 1 Naira = 1 Barrel of oi[/size]l - https://www.google.co.uk/search?q=barrel+of+oil&espv=2&biw=1920&bih=979&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwjOzIHft8TOAhUD1hoKHai_DKQQsAQISA#imgrc=79raWYsDuX8G_M%3A

[size=28pt]1 Naira = $40.00[/size]

MadamExcellency:
You just gave me an assignment. I just got the reply thus:

The technology they were exposed to include transmission/distribution systems, chemical reactors, furnace, plodder, hydrants, stamping machines, chillers and high-pressure mixers among others

I guess the definition of technology transfer differs between the scientists/engineers and non technically biased professionals.

I may be wrong, but it looks like non techies see technology in term of "use/mastery of advanced technologies" while the techies see technology in terms of "building/manufacture".

For instance, I believe that being able to fly a Boeing 747 does not mean that you have acquired the technology of the plane. You have acquired the technology only if you can build your own version of the Boeing 747

shadeyinka:
Till today after more than 50 years of oil companies services in Nigeria, not one indigenous oil company can
1. Prospect for oil
2. Drill for oil

Its a shame. Common building of the third Niger bridge, the government will call Julius Berger!

Loads of Nigerian companies can do those things however, they get assistance from foreigners when the need arise.

plaetton:
I repeat, you don't cut your to spite your face.
There are no rooms for sentiments in managing an economy, especially medieval mindsets.

In case you didn't know, the CBN sets interest rates, not the banks.
The CBN sets monetary policy, not the banks.
The federal government sets the agenda of where investments should flow, not the banks.

In case you didn't also know, high interest rates are almost the norm in third world economies, and not peculiar to Nigeria.
Banks are in the business of risk management, and cannot afford to throw money at every John D. Public that walks into their halls.

There is nothing to gloat about in draining the life force from an ailing economy.
Not matter how much you loathe the banks, every one is paying the price for this financial misadventure.

Could the high interest rates also be because the business environment is so risky that the probability of a company surviving is low. Therefore, banks want to quickly make their profit before the inevitable happens.

But, is it no the duty of the government to protect the industries?

shadeyinka:
The traditional way a bank is supposed to make money is by lending businesses and individuals at an interest. However, our Banks in Nigeria make their money mainly from money laundering and charges on deposits especially from government parastatas.

No wonder, nearly all Banks in Nigeria went broke immediately the TSA was introduced and governors could not transfer stolen funds with ease out of the county.

Its a shame!

And someone is fighting so hard to convince me that TSA was a wrong move.
Our real sector is comatose while the banks are recycling Government funds.
The way people reason sef.

oyinkinola:
people just rush into post without understanding, I've said the same thing,several times as if people were deaf.
all the ideas you people post here had been implemented several times by the various past regimes, why it didn't yield the desire result!
my opinion have nothing to do with re-denomination of Naira, re-decimal of Naira or devalue of Naira!
Naira is powerful, and it worth what it deserve in the market today.
if Naira is powerful why reform it; reform is necessary because, there is a lot of cheating in the market that dry-up the little amount of money in the pocket of poor, if you have N20 in your pocket and you lost 4% of it, it too heavy for poor to carry, during this time of recession the poor can't afford been cheated of there mediocre income!
look: 1kobo to 100k have gone! N1 to N4 had followed, now we are killing N5 gradually, if it dead it will be abandoned and we will take-on on N10! also no coins in circulation, N1 that is Nigeria exchange currency is not in market, how N1 will compete with $1 active dollar and win!
all these lead to inflation and hardship of poor!

People are bound to misunderstand your post because even though you don't subscribe to redenomination however your description is.

Note that all money is just ordinary paper. What determines the VALUE of a currency is not the number printed on it but how much other countries are indebted to your own country. Eg. If many countries cannot do without our commodities, the naira will be very strong. However, if we as a country are dependent on other countries to survive, our currency will be weak.

In the case of Nigeria, we need more foreign goods than our export can cater for. So, we don't have enough dollars to spend, so the few available dollar will be expensive.

shadeyinka:
Could the high interest rates also be because the business environment is so risky that the probability of a company surviving is low. Therefore, banks want to quickly make their profit before the inevitable happens.

But, is it no the duty of the government to protect the industries?

Yes .
Banks hedge their risks by charging more.

We don't have a credit bureau or credit reporting agencies that can provide reliable information on a borrower's Credit worthiness.

Therefore, every loan is a potential default.
It is no wonder that banks tend to lend more to the already rich, than the struggling person.

oyinkinola:
all these dead theories can take us nowhere, with all the jagons you write here, you want to proof to me that ₦5 the least denomination is the best denomination for our economy? ₦1 missing currency is correct for our economy? when you exchange ₦5 for 3 articles, is this how it should be?

Our problem is not cash! Our problem is a massive reduction of income coupled with over dependence on import.

Let me ask you a question.
Suppose Buhari paid N5,000,000 each to every Nigerian today. How much do you think a tuber if yam will be sold next week? A tuber will probably go for N10000 if not more

trillville:
Shadeyinka, you are right in stating our current mess is as a result of over importation and lack of foreign exchange earnings. You are also right in stating that nigeria needs to develop industrially and what is needed for an industrial revolution is electricity.

You believe nigeria needs to increase its foreign exchange earnings to get out of this mess, the federal government believes nigeria needs to reduce importation and has thus devalued our currency, reducing the purchasing power of the naira, there by reducing importation.

The main issue with fg's devaluation policy is that it has made the unit price to generate electricity more expensive for nigerians because the natural gas, our main fuel source, is sold in USD. As a result of the devaluation, the business case to increase generation of electricity has been screwed up and it may take nigeria many more years to have electricity to meet our industrial needs.

I personally agree with the fg, that the way to go is first to reduce importation, as in stop the bleeding, what I would do differently is would run the country like I would a business. When the economy is down, you layoff people. The fg needs not just lay off civil servants, but also delay payments of their gratuities. Basically sacrifice today for a better tomorrow. We currently spend over 70 percent of earnings of recurrent expenditure, how are we ever going to get electricity? The money saved from laying off stomach infrastructure should be spent on electrical infrastructure. Again by laying off workers, fg may not have to further devalue the naira as the number of people purchasing foreign goods will drastically reduce.

Another importation reduction policy the Federal government can make is to increase taxes. By taxes I mean income taxes, estate taxes, vehicle taxes, luxury taxes. These taxes affect the rich who by the way import a lot more stuff than the poor. Government shouldn't tax petrol and increase the vat as it would affect the masses much more than the rich.

PS
Sorry for any typos. No time to review.

I believe that our economics experts are operating what I call an indirect economic control.

Example:
Aim- Reduce importation and Encourage local production.
Economic Experts: Devalue the Naira
Implication: When Nigerians suffer, they will find local alternatives.

Me: This policy above just succeeded in causing unnecessary hardship for Nigerians.

Why not build a manufacturing base and then progressively reduce importation?

jpphilips:
Downstream sector is the answer but the last time I checked, economies are not diversified in recession.

Downstream sector is a big economic grammer! Its too generalized!
How do we get there?

jpphilips:
Your understanding of currencies and the money market is hilarious, I dont even know where to start with you.
On a lighter note, the reason why your lower denominations are fast disappearing is because of inflation, while you will see transactions in cents in the US, you will not see $200zim in circulation.
Once you deal with inflation, N1 will appear, it is pointless dealing with effect when you can deal with cause.

You have to break down the big economic grammer with real examples so that many will understand that the number written on a currency is not the value of that currency.

dunkem21:
Redenomination of the naira as proposed by Ben Bruce..

.. With utmost sense of patriotism

Redenomination changes nothing. It only make itneasy for the rich to carry cash about.

Redenomination is making bit easy to pay for a brand new Trailer Vehicle with CASH from your small purse!

trillville:

Shadeyinka, you are right in stating our current mess is as a result of over importation and lack of foreign exchange earnings. You are also right in stating that nigeria needs to develop industrially and what is needed for an industrial revolution is electricity.

You believe nigeria needs to increase its foreign exchange earnings to get out of this mess, the federal government believes nigeria needs to reduce importation and has thus devalued our currency, reducing the purchasing power of the naira, there by reducing importation.

The main issue with fg's devaluation policy is that it has made the unit price to generate electricity more expensive for nigerians because the natural gas, our main fuel source, is sold in USD. As a result of the devaluation, the business case to increase generation of electricity has been screwed up and it may take nigeria many more years to have electricity to meet our industrial needs.

I personally agree with the fg, that the way to go is first to reduce importation, as in stop the bleeding, what I would do differently is would run the country like I would a business. When the economy is down, you layoff people. The fg needs not just lay off civil servants, but also delay payments of their gratuities. Basically sacrifice today for a better tomorrow. We currently spend over 70 percent of earnings of recurrent expenditure, how are we ever going to get electricity? The money saved from laying off stomach infrastructure should be spent on electrical infrastructure. Again by laying off workers, fg may not have to further devalue the naira as the number of people purchasing foreign goods will drastically reduce.

Another importation reduction policy the Federal government can make is to increase taxes. By taxes I mean income taxes, estate taxes, vehicle taxes, luxury taxes. These taxes affect the rich who by the way import a lot more stuff than the poor. Government shouldn't tax petrol and increase the vat as it would affect the masses much more than the rich.

PS
Sorry for any typos. No time to review.

kaboninc:
No sir. The major cause of this mess is failure to act when action was desperately needed

You are both correct, ...only from different point of view!

oyinkinola:
on the way forward; is N5 least denomination is the best suppose to be in circulation?

It is not about the least denomination. It is about the relative ease at which the average Nigerian makes enough money to purchase there day to day need.

Let us assume that $1=N1000 but say the minimum wage in Nigeria is N300,000. If finding work is not a problem, then no Nigerian will complain.

Abi, if you earn N850,000 every month will you complain even with the current state of things?

jpphilips:
They bought equipments abroad to set up a buisness and you call that posessing technology? lol
So when you buy a Lexus you assume you have the technology that made it?
pls dont choke me with laughter.

shadeyinka:
I guess the definition of technology transfer differs between the scientists/engineers and non technically biased professionals.

I may be wrong, but it looks like non techies see technology in term of "use/mastery of advanced technologies" while the techies see technology in terms of "building/manufacture".

For instance, I believe that being able to fly a Boeing 747 does not mean that you have acquired the technology of the plane. You have acquired the technology only if you can build your own version of the Boeing 747

We all use mobile phones and computers(we even repair them) yet as far as technology is concerned, we are yet to begin.

oyinkinola:
...No wonder why Nigerian have unsolved problems, all what people say here wont work in the very nearest future, many people didn't realize that everything move in very high velocity nowadays including market, if you are to plan for a program that will be effective for 5 years today before get to it's ripe time thing will be changed and the effort and resources made for the program rendered useless, that what make our country backward! vision of 20,50 years can never work!
only what can work is a quick response to actual problems and move along, in Saudi , Angola all the big project of 20,30, years vision have stopped and the resource just wasted there, when do you know the oil boom will return, today they need those money wasted badly, where to get it?
In case of Nigeria, Nigeria is a luckiest country among oil producing countries, because we have an alternative fund we can turn to(the looted fund) although many Nigerian didn't want us to talk about it, but they were wrong, if we have those fund and wisely use it we are gone!
The second is like the first, by luck Nigerian misuse currency, that when we introduced those worth money abandoned into circulation things will change drastically!there is a big gab that can be bridge and the hardship will be ease!

You are audaciously pragmatic. I like that.

However, suppose we can recover ALL the stolen funds before December what do we do with it?

Spend it?

trillville:
Absolutely nothing really as far as I can tell. I just wanted to give kaboninc options for his blame game and couldn't phantom a logical reason to blame buhari for.
Funny right? I guess not so funny.

LOL...kaboninc options