₦airaland Forum

nelklyn:
Japan economy is export dependent and they have to make their products affordable hence they take it upon themselves to devalue their currency against other currencies especially the USD through the BoJ's constant intervention in the foreign exchange market plus their interest rate is negative -0.10% to further encourage borrowing.

In fact one of the core aims of the BoJ is to achieve price stability keeping the Yen at a Limit Low and High, thus a currency's exchange rate cannot be used to measure the performance of an economy.

As you pointed out 1NGN is not equal to 1JPY they won't allow that, I mean Nigeria is not even among their trade partners

Samleen:
Japanish Yen JPY  (  1 JPY = 3.4020 NGN  )
Banknotes ¥1000, ¥2000, ¥5000, ¥10,000
Coins ¥1, ¥5, ¥10, ¥50, ¥100, ¥500



 1 USD = 105.8455 JPY

Sir, alway check your facts before you make your comments.



When did the poor performing NGN become a stardard of measure of performance for other currency?

If 1JPY = 1 NGN, like you wrote, then the both currencies are poor performing and you should retract your statement of classifying Japanish Yen as part of top performing currencies in the world.

The only point you have is the import/export ratio which has helped the Japanish Yen to perform better than the NGN. It in a way nullify the effect of presence of the high face value e.g. 10,000 JYP currency Notes.

Ken4Christ:
I do not agree. It will only limit looting but it will have no effect on the exchange rate. The countries you made references to didn't have a terrible economy like Nigeria does.

The major reason why out currency is low in values is because Nigeria is not a producing country. We import virtually everything.

If we want our currency value to appreciate, what we should do is;

1. Ensure all our refineries are working. It will save us lots of foreign exchange.

2. We need an industrial revolution.

3. We need to invest more in Agriculture.

4. Every local government chairman should be productive rather than administrative.

5. Corruption should be punished.

6. Our tax system should be made more effective.

7. Out railway should be developed to reduce cost of transportation of food items.

8. Our borders should be closed. If possible, fence the country round.

Export should exceed import if our currency must appreciate. After all these is done, then we can take away the high currency notes.

Intrepid01:
Bros, you really tried with your write up and I was relaxed when I saw that Caveat emptor...that guy you quoted and some other guys up there have said it all...if you read their write up carefully , you'll realise they were speaking from the position of undertanding rather than the position of 'mere observation'....you need to understand the difference between the 'face value'and 'purchasing value' of a currency.......

In as much as what you wrote as solution will improve the naira it won't have any significant impovement as you thought, until this fundamental factors mentioned by some writers up there are done.

You should also note thatthe biggest monetary corruption happening in Nigeria is largely "electronic" ...the days of "Ghana must go" is gradually phasing out. so no matter the size of the money to be shared, your denominations will be of no effect.

nextstep:
Nice one and a decent argument, except of course that there are also strong economies with high denominations:
Japan: 10,000 Yen
Europe: 500 Euros
India: 1,000 Rupees
Russia: 5,000 Rubles
Korea: 50,000 Won
Mexico: 1,000 Pesos

As Ken4Christ said: "The major reason why out currency is low in values is because Nigeria is not a producing country. We import virtually everything."

All our troubles - even corruption stems from this. The only way for most people to get stupendously wealthy in Nigeria is control/contact with virtually the only source of foreign exchange - oil. And since it's so easy to control oil money when you're in government...

By the time we buy anything, so much value has been added by the manufacturing countries, with zero-multiplier effect in Nigeria the consumer. Everybody in the value chain in China (for instance) adds their profit and circulates the money within the country several times. In Nigeria's case, oil is exchanged for consumer goods and there's no circulation of that money once it leaves.

Nobody in Nigeria benefited from owning a lithium mine, or a smelting plant, or slurry making, or machine tooling, or anode production, or casing, or assembly or even the packaging industry that benefited from that battery being made and sold. So a Nigerian consumer comes in and with oil money (at the very low end of the value chain), buys a battery (at the very high end of the value chain). There's NO WAY your currency would get strong, no matter the denominations.

The other oil countries on the list that appear prosperous are artificially so because they have much more oil per capita than we do. If Nigeria had as much oil as Saudi Arabia (it has about 1/4 the production), it would still need to use that for is much larger population (6 times as many people), which means no matter what, based solely on money earned from oil, individual Nigerian buying power can only be 1/24 that of a Saudi. It's even more skewed if you consider Qatar (less than 3 million people).

Intrepid01:
Bros, you really tried with your write up and I was relaxed when I saw that Caveat emptor...that guy you quoted and some other guys up there have said it all...if you read their write up carefully , you'll realise they were speaking from the position of undertanding rather than the position of 'mere observation'....you need to understand the difference between the 'face value'and 'purchasing value' of a currency.......

In as much as what you wrote as solution will improve the naira it won't have any significant impovement as you thought, until this fundamental factors mentioned by some writers up there are done.

You should also note thatthe biggest monetary corruption happening in Nigeria is largely "electronic" ...the days of "Ghana must go" is gradually phasing out. so no matter the size of the money to be shared, your denominations will be of no effect.

Samleen:
You raised some points too but

What I wrote up there is just a basic truth!

Ok, why do other african countries with poorer socio-political and business development have better performing currency than what we have here in Nigeria?

Cromagnon:
God has helped you
the land is green
rain is falling
sun is shining
enter farm

Bevista:
@OP, you are erroneously comparing currency strength based based on their numerical value. Nothing could be further from the truth. Currency value is determined by their purchasing power, which is a reflection of the overall health of the economy.
---
Are you suggesting that the Ghanaian Cedi is more valuable than the Japanese Yen, simply because it has a lower comparative numerical value?
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Higher denominations do not cause a currency to weaken, but rather weak currencies (with low purchasing power) causes the need for higher denominations. Solve the weak currency and the need for higher denominations disappears. You solve the problem of weak currency by increasing productivity, having a positive trade balance (export more than imports), etc.

Intrepid01:
Bros, you really tried with your write up and I was relaxed when I saw that Caveat emptor...that guy you quoted and some other guys up there have said it all...if you read their write up carefully , you'll realise they were speaking from the position of undertanding rather than the position of 'mere observation'....you need to understand the difference between the 'face value'and 'purchasing value' of a currency.......

In as much as what you wrote as solution will improve the naira it won't have any significant impovement as you thought, until this fundamental factors mentioned by some writers up there are done.
"
You should also note thatthe biggest monetary corruption happening in Nigeria is largely "electronic
...the days of "Ghana must go" is gradually phasing out. so no matter the size of the money to be shared, your denominations will be of no effect.

Mhyketh:
we can copy the asian tigers, they had worse economy, like ours but adopted a system that has been able to rank them among worlds stable economy now, but i seriously think we lack will power, i mean power to do. Nigerian are naturally psychologically lazy. We don't want to think to solve our own problems.

bloodmoneyspita:
there's no 100 naira right now and things hasn't changed, the CBN has silently withdrawn 100 naira in case you guys don't Kno.

Samabu07:
You deserve a space in the Nigerian Economy team. Thank you for this analysis.

Tggabby:
This is simple truth but the Honourable members may not agree as it will result to bad market for them but God will bury alive as many that refused to let Nigeria be lifted in Jesus Name.

Samleen:
Ghana currency GHS ( 1 GHS = 80.4096 NGN )
Banknotes GH₵1, 2, 5, 10, 20, 50
Coins 1, 5, 10, 20, 50Gp, GH₵1

what's the excuse? Ghana currency is still performing better than wht we have here in Nigeria


compare this:

1 USD = 4.4770 GHS vs

1 USD = 360.500 NGN

pcicero:
A very good head you have on your body. Ori e wa'nbe.

Our problem is that most of our elected leaders do not really have what it takes in terms of knowledge of micro and macro economic theories to take the country higher.

Even when they are surrounded by the best brains in the world as Special assistants/advisers who are often mirred in needless bureaucratic arrangements with the largely incompetent civil service, the result is the backward growth we are experiencing as a nation.

Oftentimes, I wonder if our leaders are truly patriotic.

By the way, I learnt somewhere that in most cases, the directors of finance always end up as Permanent secretaries because they usually have access to more than enough funds to grease their ways to the top.

It is also without gainsaying that our worst always find their ways into the civil service.

omokoladejames:
Like what Ken4Christ said, even if the government stops printing higher denominations, that would not make the naira strong.

What can make the naira strong is if its purchasing power increases. There are more than one factor that increases the purchasing power of a currency but one of the major factors is increase in the productivity level of the country. In simple terms if the productivity level of a country increases, the demand for money will increase thereby causing prices within the country to fall and the purchasing power of the money to increase but this is only valid if the supply of money does not increase.

So even if the government removes 1000 naira from the system but they continue printing 100 naira like say na water, that would not stop the person in the market from charging 15,000 naira from me, it would only mean i would have to carry a lot of 100 naira with me.

But imagine if it becomes alot easier and more profitable to grow rice in Nigeria(by government initiative,technology etc), more people will start growing rice, also if the price of the nylon that they use to package the rice reduces because of increase in nylon manufacturing and also if the cost of transportation of the rice from the farm to the city is reduced because of reduction in fuel cost etc, eventually all this cost reduction will reduce the cost of a bag of rice in the market to lets say 4000 naira. Now if all other production of goods and services increase like this and the government stops printing money like say tomorrow no dey and no one person is given monopoly over any particular industry,then generally the overall price of things will fall, which means you will need less money to buy things. If you dey use 500 naira to buy plate of rice before, because of the general fall in price that 50 naira wey no fit buy you better pomo before go fit buy you full plate now. Its value(Purchasing power) has increased, so you won't even need to carry around 1000 naira in your pocket because it will be too much thereby making the need for 1000 note obsolete.

In terms of the exchange rate of the currency , there are a lot of factors to consider like economic growth,political stability, debt level, interest rate etc. But i believe it all starts with economic growth as i tried to explain earlier because remember our modern currency has no value on its own, its value comes from how people much people trust it's government and its economy. Ghana's currency is better because investors believe ghana's economy is better and alot stabler than ours. If not for the oil and other potentials wey we get, with all the rubbish wey our government dey do since, our currency suppose don worse pass Zimbabwe own by now. But we thank God.

So bros I believe first things first, we need to increase our productivity level to cater for our needs(which will reduce unnecessary excessive importation) and also boost our exports.

Just my opinion but I stand to be corrected

*.Jordanian Dinar JDD: ( 1 JDD = 507,65070 NGN )
Bank notes: 1, 5, 10, 20, 50, Dinars
Coins: 1/2, 1, quirsh, 21/2, 5, 10 Piastras

Enigma1000:
As a financial analyst that I am, this is not true. Stoppage in the printing of high denomination has its advantages though. One major problem it ll solve is inflation

IamaNigerianGuy:
This is the correct answer. The OP is anti-intellectual and his analysis and recommendations are amateurish.
Economics is a field of study - he should hit the books and not spout theories from thin air.

Samleen:
sir, then profer a solution. Don't just condem an opinion.

like I earlier wrote, this is not a scholarly work. They are my opinion base on personal abservations

bloodmoneyspita:
there's no 100 naira right now and things hasn't changed, the CBN has silently withdrawn 100 naira in case you guys don't Kno.