Yenefer:
Now if I said anything like the CBN governor is a criminal, corrupt they will tag me tribalistic. But even I said so. u and I know I-pigs that the CBN governor is a criminal and corrupt

kikero:


Well the oil prices have been on a downward trend for some time (Brent was $63 in December 2019, now $24.51).

Add the fact that our breakeven oil price, the price that oil should be for Nigeria to have a surplus budget is $139 per barrel.

At the end of the day, our reserves will fall. If we wanted to raise our reserves right now, government would be owing everyone salaries, senators inclusive, and it would be finding it difficult to pay for bills.

Buhari is not a good leader, granted, but he wasn't responsible for making Nigeria's economy oil dependent either.

BruncleZuma:


Actually he was, Minister of Petroleum in the early years of our dependency on oil , himself and his band of merry gentlemen made sure we focused on oil because of the quick gains.

sammysmiles:
I I should be insulting government every day what's the probability if I enter government I will not be worst?

galadima77:


Until then, we have to keep criticizing constructively with utmost loyalty to the state and not persons in power.

It will be unpatriotic not to.

kikero:


Certainly.

One of the reasons why we have a reserve is for times like this...

The problem is, for how long can we rely on the reserve? Part of the reason why we are taking loans is because we don't want to eat too much into the reserve.

That's why Nigeria should stop relying on selling oil, and selling agric produce and minerals. Best to sell industrial products.

kikero:


In the late 1970's we still earned a lot from agriculture...the oil dependency though was rising.

Plus as Minister of Petroleum, Bubu won't have been the one writing economic policy then. That would have been the job of the Minister of Economic development/finance.(a certain M.T Akubo)

In my opinion, though the problem with Nigeria's economy is that we always look for something to sell, share the revenue, and use the revenue to import stuff at a value higher than the value of our exports. And with the high oil prices of 1973-82, that was very easy to do with oil .We have been doing that since independence. In the 1960's it was agriculture, today, oil.

(Buhari, since he came in had the chance to change course...in 2015, starting with removing fuel subsidies completely....and removing power subsides...but he didn't. Old economic habits die hard)

Yenefer:
Now if I said anything like the CBN governor is a criminal, corrupt they will tag me tribalistic. But even I said so. u and I know I-pigs that the CBN governor is a criminal and corrupt

Bevista:
Unfortunately, you're not entirely correct. The Foreign Reserves is used by the CBN primarily for balance of payment. Basically, that means using the dollars to support importers, travellers, foreign students, foreign investors who want to repatriate their funds, etc. The FG doesn't just go there to withdraw. It's not a "savings account" of the FG.

So, this is how it works. FG total revenue from oil sales L for April is - say - $500 million. The money is paid into an FG account with CBN. CBN then gives the FG a Naira equivalent of that amount. The CBN keeps the $500m so it can use to support imports and other international transactions. The FG has collected all its money in Naira. It cannot just go back to withdraw dollars again.

Foreign Reserves drop when the average inflow is more than outflow. Since Nigeria is an import- dependent nation, there's always demand for USD to meet those import demands. At any time the USD supply reduces but the demand is still constant or even increases, the Reserves will start to drop.

The Truth is - the only reason why the Reserves has not dropped far beyond that is the fact that the global economy is on shutdown and international borders are closed, so there's no much import transactions happening.ok I see, thanks alot for the detailed explanation, Kikero thank you too a lot of people might have learnt from here too.

iluvdonjazzy

Yankee101:
Lol. Dollar 500+

And we've been shutdown for the last 4weeks

Imagine when the economies open and demand for dollar begins

Convert Yahoo boys to IT specialists and earn FX

kikero:


Certainly.

One of the reasons why we have a reserve is for times like this...

The problem is, for how long can we rely on the reserve? Part of the reason why we are taking loans is because we don't want to eat too much into the reserve.

That's why Nigeria should stop relying on selling oil, and selling agric produce and minerals. Best to sell industrial products.

Bevista:
Unfortunately, you're not entirely correct. The Foreign Reserves is used by the CBN primarily for balance of payment. Basically, that means using the dollars to support importers, travellers, foreign students, foreign investors who want to repatriate their funds, etc. The FG doesn't just go there to withdraw. It's not a "savings account" of the FG.

So, this is how it works. FG total revenue from oil sales L for April is - say - $500 million. The money is paid into an FG account with CBN. CBN then gives the FG a Naira equivalent of that amount. The CBN keeps the $500m so it can use to support imports and other international transactions. The FG has collected all its money in Naira. It cannot just go back to withdraw dollars again.

Foreign Reserves drop when the average inflow is more than outflow. Since Nigeria is an import- dependent nation, there's always demand for USD to meet those import demands. At any time the USD supply reduces but the demand is still constant or even increases, the Reserves will start to drop.

The Truth is - the only reason why the Reserves has not dropped far beyond that is the fact that the global economy is on shutdown and international borders are closed, so there's no much import transactions happening.

iluvdonjazzy

chigoizie7:
And as it keeps shedding, the more the exchange rates changes and devalues. And it will keep shedding as long as our BOP is going down as a result of decrease in the prices of oil. Let us also get ready for inflation. Since we depend solely on imported goods.

sassysure:
One of the strength of every country especially developing countries is foreign reserve.
Make they kukuma finish the whole thing na.
Buhari has bad luck written all over him since the1980s.

They said if some people enter in a house, their aura make it glow while when some enter the same house, it look haunted.
Buhari's aura has been haunting Nigeria. Very bad market. Those way dey go see those people wey dey see future, none of them told them.buhari is bad market?

From being a robot( the drama surrounding him even make me doubt if he is alive) to being a burden.

Yenefer:
Now if I said anything like the CBN governor is a criminal, corrupt they will tag me tribalistic. But even I said so. u and I know I-pigs that the CBN governor is a criminal and corrupt

fid4fid:


Guy, you think say this money go hit 500? The thing been drop to 455 this morning ... I come dey regret why I rush convert my small "change" to USD at 460 on Monday.

I been sey reason say if market open thing fit worse, but again CBN fit start to dey sell dollar give BDC to stabilize naira.

What you think?

kikero:


Certainly.

One of the reasons why we have a reserve is for times like this...

The problem is, for how long can we rely on the reserve? Part of the reason why we are taking loans is because we don't want to eat too much into the reserve.

That's why Nigeria should stop relying on selling oil, and selling agric produce and minerals. Best to sell industrial products.

Yankee101:


If market opens and they try selling too much USD to control rates the country will be broke in 90days


They'll allow some free market play, cut imports massively.

Gtb reduced dollars transactions from 3k to 1k to 500$ within the last 40days

kikero:


Well the oil prices have been on a downward trend for some time (Brent was $63 in December 2019, now $24.51).

Add the fact that our breakeven oil price, the price that oil should be for Nigeria to have a surplus budget is $139 per barrel.

At the end of the day, our reserves will fall. If we wanted to raise our reserves right now, government would be owing everyone salaries, senators inclusive, and it would be finding it difficult to pay for bills.

Buhari is not a good leader, granted, but he wasn't responsible for making Nigeria's economy oil dependent either.

fid4fid:


You know say for this mini -importation we do.. usd dey important well.

As I buy dollar 460 this week...use the money buy things from abroad to sell...So in 3 weeks time, I go still dey on safe side and my wares and prices go still dey competitive.

My fear be say if dollar come fall to 430 next week, those wey import at 430 go sell pass me because their goods dey cheaper.

Abeg reason the matter with me... I no too go school.

Bevista:
Unfortunately, you're not entirely correct. The Foreign Reserves is used by the CBN primarily for balance of payment. Basically, that means using the dollars to support importers, travellers, foreign students, foreign investors who want to repatriate their funds, etc. The FG doesn't just go there to withdraw. It's not a "savings account" of the FG.

So, this is how it works. FG total revenue from oil sales L for April is - say - $500 million. The money is paid into an FG account with CBN. CBN then gives the FG a Naira equivalent of that amount. The CBN keeps the $500m so it can use to support imports and other international transactions. The FG has collected all its money in Naira. It cannot just go back to withdraw dollars again.

Foreign Reserves drop when the average inflow is more than outflow. Since Nigeria is an import- dependent nation, there's always demand for USD to meet those import demands. At any time the USD supply reduces but the demand is still constant or even increases, the Reserves will start to drop.

The Truth is - the only reason why the Reserves has not dropped far beyond that is the fact that the global economy is on shutdown and international borders are closed, so there's no much import transactions happening.ok I see, thanks alot for the detailed explanation, Kikero thank you too a lot of people might have learnt from here too.

iluvdonjazzy

Yankee101:
Governor, oil minister, head of state, petroleum trust fund chairman, president first term, now second term president....


Please if he's not part of the dependency culture on oil then who is the cause of the problem?

kikero:


Simple.

1.We cut subsides on petrol completely, and allow marketers set the price.

2.This brings in more investment in refineries and in gas production facilities

3.This improves power supply

4.Which means more factories and industries would be set up

5.Which means more jobs, and more income for the government.

Profmaojo:
you are really enlighten sir..please may I ask who the marketers are??

Are we to privatize all oil blocks??

I am a bit confused. If you are not too busy. Pls educate me on the process in a simplified manner sir.

I understand what subsidy is. But I don't really understand the place of marketers

fid4fid:


You mean as reserve dey go down dollar rate go dey high?

That means this money go shot pass 460 na?

But what of that money wey IMF give them? E no go help balance reserve?

Bevista:
Unfortunately, you're not entirely correct. The Foreign Reserves is used by the CBN primarily for balance of payment. Basically, that means using the dollars to support importers, travellers, foreign students, foreign investors who want to repatriate their funds, etc. The FG doesn't just go there to withdraw. It's not a "savings account" of the FG.

So, this is how it works. FG total revenue from oil sales L for April is - say - $500 million. The money is paid into an FG account with CBN. CBN then gives the FG a Naira equivalent of that amount. The CBN keeps the $500m so it can use to support imports and other international transactions. The FG has collected all its money in Naira. It cannot just go back to withdraw dollars again.

Foreign Reserves drop when the average inflow is more than outflow. Since Nigeria is an import- dependent nation, there's always demand for USD to meet those import demands. At any time the USD supply reduces but the demand is still constant or even increases, the Reserves will start to drop.

The Truth is - the only reason why the Reserves has not dropped far beyond that is the fact that the global economy is on shutdown and international borders are closed, so there's no much import transactions happening.

iluvdonjazzy

kikero:


Certainly.

One of the reasons why we have a reserve is for times like this...

The problem is, for how long can we rely on the reserve? Part of the reason why we are taking loans is because we don't want to eat too much into the reserve.

That's why Nigeria should stop relying on selling oil, and selling agric produce and minerals. Best to sell industrial products.