The superficial impression is one of a central bank lacking a clear strategy. Yet for all the confusion of the last few months, the reality is that the CBN is being asked to carry the burden of a very difficult adjustment on its own.

The government did little to help during the good times, in our view, running down savings when oil prices were high, and is now at a political impasse over the 2015 budget. With parliament on recess until after the poll, it could be July before the eventual 2015 budget is implemented. Until then, any talk of "austerity" should be taken with a pinch of salt.

januzaj:
fresh air

Ymodulus:
I believe the devaluation of the naira will lead to a chain of reactions, many of which may not have the intended results. For a largely monolithic-economy, like ours (Nigeria), the expectation that a devalued naira will drive export of local products, which do not exist in the required volume for now, will create additional burden on the populace. When you juxtapose the consequence of an inflation induced policy on an economy, nay the people who do not possess a corresponding purchasing power, by reason of unemployment, the consequences are better imagined than experienced.

No doubt there is the expectation that the government’s revenue, in terms of naira will move up, because of the wide exchange rate disparity between the dollar and the local currency. However, the point must be made that this expectation may be unrealisable of two variables- the falling oil prices and lower crude production aggregate.


You might say Ymodulus Is there any escape-route?

Certainly, but the question remains if Nigerians have been sufficiently sensitized to brace for this situation. In the developed nation’s when currencies are devalued, it is to encourage exports, because the prices of local products serve as an incentive and a toast for foreign buyers. In the process, they earn foreign exchange, increase production and create additional jobs. Unfortunately, that is not the position with Nigeria. Another issue would be that Nigeria will have greater difficulty in paying its external debts, which are on a growing trajectory. Earning less foreign exchange in the face of growing external debts, is an ill-wind that blows no one good.


I had said earlier on, once on this forum where i cant recall that the sack of Sanusi a Veteran Banker and the Imposition of Zenith Bank Ex MD. Emiefele Godwin is a big mistake. I have never liked Zenith bank cause of their wrong banking policy and ideology and i knew that a man such as godwin coming to the apex seat of the banking sector will pose a problem, but some nairalanders here called me an APC fanatic, i hope they can now learn as its happening. Lastly I see the naira being devalued to official rate of N220 by May 1st, as long as the CBN substitution of the naira allocations for dollar is not STOPED.

Mark my words the naira would be at a rate of N220 officially by May 1st.

I am Ymodulus


We need a Change
#SaiApc
#SaiBuhari/Osibanjo.

ramdris:
GEJ still transforming the naira long after he leaves office .
#babawhenyou getThere please save our dear "Naira'.