unlike China and Japan, we do not have good innovative locally produced products. So we'll just end up paying more for those imported goods.
Already my online programme fees have almost doubled

snakie86:


Which tools do they have?

can you please educate me more on that?

Taxes and levies will be a start.

atlwireles:


Imported food and imported underwear are not problems for millions of Nigerians. Neither is a sound card a problem. Buy made in Nigeria, it will reduce your stress.

So what is the problem of most Nigerians, food?

giantstrides:


So what is the problem of most Nigerians, food?

Every man has his own problems. This thread is about the exchange rate of the Naira.

malikmoreni:
I earn in USD , so ko kan aye

I know bruv, I know #£team

atlwireles:


Imported food and imported underwear are not problems for millions of Nigerians. Neither is a sound card a problem. Buy made in Nigeria, it will reduce your stress.

I see your point you treacherous betrayer of Nigerians and killer of the Nigerian dream. If you impoverish the masses badly enough so that they can only afford garri and local vegetables then they will be oblivious of the free falling naira but if I may ask will the clueless leader from otuoke also stick to garri and local vegetables.

Babalegba:
I see your point you treacherous betrayer of Nigerians and killer of the Nigerian dream. If you impoverish the masses badly enough so that they can only afford garri and local vegetables then they will be oblivious of the free falling naira but if I may ask will the clueless leader from otuoke also stick to garri and local vegetables.

Whoa, so buying Nigerian is now impoverishing the masses? Like I said 99.9% of you people complaining about the exchange rate cannot tell us why they are worried. I thought you were a manufacturer or a business owner directly affected by the exchange rate. You have turned a simple economic discussion into political insults, no wahala. Have a nice evening.

Rawani:

I know bruv, I know #£team

The Op has a very high IQ.
The lower the value of a country's currency, the cheaper it becomes to export.

giantstrides:
Don't compare us to China or Japan, China has to keep it's currency down so tht everyone can keep importing from them, that is why the quality of their products are not as high as their western counterparts, if their currency starts appreciating people will wonder why they re paying much for goods of lower quality. Meanwhile Japan has to keep its currency lower to the dollar because their electronics and automobiles are not on the same level with European or American vehicles, they only come cheaper because of the lower cost of production. Every technology japan has, US has it too, the only problem is USA can't compete with the japanese because they spend higher in production, if japan currency goes up and those cars become more epensive , they will lose their customers due to high price. Now what does Nigeria have in common with this two? what do we produce besides oil , wht do we produce and export tht makes the cost of production cheap.

^^^^
Not sure what you mean by Japanese products not being 'on the same level with European or American vehicles'.

When u c an educated Apc fan you will know, i love opposition Govt. But the Apc type can cause civil war.

I know very little about economics, I am actually an engineer by training.

But I know that two production lines in my company are down for about two weeks now because people are not buying these products...

I know that 20% of the total contract staffs are currently been handed their stay at home letters as I type this...

I know that there is a loud uneasy because there are rumors that some staffs will have asked to leave...

It is not so difficult to understand economics after all. ..

atlwireles:


Imported food and imported underwear are not problems for millions of Nigerians. Neither is a sound card a problem. Buy made in Nigeria, it will reduce your stress.

It's not only about imported foods....Even gaari sellers would up their price with the excuse that they too depend on profits from it to buy from other markets to meet other needs and they must increase price of their Gaari to meet up with the price of meeting their other basic needs.

In addition if you're living abroad, the few dollars you send home will support your loved ones more than its previous value.

Cool

KevinBrown:

Kai, Nigerians we are funny o. Whenever we hear that the value of the Naira has fallen more deeper, we will start panicking. "Ah jonathan see what you have done to us...." Some are even saying Buhari will make $1=N30. (Mind you I'm a buhari supporter).

A lot of people don't know how economic works. Have you ever wondered why countries like China and Japan are artificially devaluing their currencies?




Advantages of a Weak Currency:

* Imports become more expensive:

It's an advantage, believe you me. If our currency becomes weaker, importing goods and services from abroad will become expensive, and this in turn will cause demand for local goods and services (which will be relatively cheaper). Some will say local goods (and services) are inferior, but over time, it will develop.
Some critics will also be against a weak currency because now the iPhone 6 they are supposed to buy for N150,000 now cost over N200,000. Yeah that's good. Spend the money on nigerian made products, and perhaps with local patronage, they will also be able to develop an iPhone-quality product.

* Traveling outside the country will also become expensive:

This is also good. All those people (depleting our foreign reserve) sending their kids abroad to study, perhaps its time to come home.

All those dubai crazed shoppers, perhaps it's time to visit Tinapa in Calabar.
The list goes on and on...

If you should look at it with an unbiased mind, u will realize its the rich that has more to gain with a strong naira.

Now is time to develop our own local industry and economy. So join me to pray that 1 barrel of oil falls to $5.

Now is the time to get off the oil driven economy

bestestgirl:
unlike China and Japan, we do not have good innovative locally produced products. So we'll just end up paying more for those imported goods.
Already my online programme fees have almost doubled

It could be improved upon. Necessity is the mother of invention.
If we import easily, we will never see the need to improve our own products.
That said, aba made products last more than some designers even. We just over look them because to nigerians anything foreign is better.

Aba can become the China of west africa if money is pumped into the productivity of those young enterprenuers over there.

I hope the govt considers and urges them to come take easy and low interest rate loans to boost their productivity. plus measures to promote a certain level and standard of goods only.

It can be done.

cococandy:

It could be improved upon. Necessity is the mother of invention.
If we import easily, we will never see the need to improve our own products.
That said, aba made products last more than some designers even. We just over look them because to nigerians anything foreign is better.

Aba can become the China of west africa if money is pumped into the productivity of those young enterprenuers over there.

I hope the govt considers and urges them to come take easy and low interest rate loans to boost their productivity. plus measures to promote a certain level and standard of goods only.

It can be done.

you are quite right sha, but our standards org would have to stop taking bribes and really sit up. I guess the rest of us will just have to endure the hardship until the local manufacturers get their act together. I pray that that other prediction of the naira falling to 280 does not come to pass

Depreciation has it's economic benefit,but it is not in anyway a good economic policy for the country at this time.

@OP, before those countries you cited as examples delibrately embark on depreciatoon of their currencies, they've put various measures into consideration before embarking on such policy.

In a country that lacks basic infrastructure, sufficient power supply among other economic challenges, how do you expect a boost in the capacity to export?

It will all be hardship upon hardship. #myopinion

If it does come to pass, it won't ruin lives.
It will just provide us with the push we need to go Into the extensive production of what we need for ourselves.

Many economies were built this way.
By the time productivity is at an all time high and quality is great, we would be less dependent on outside products giving us upper hand we need for our currency to be rated high in the international market.

I know my explanations are kinda simplistic but I guess I'm getting my points across

A simpler example.
Imagine if Nigeria didn't have limestone reserves? We would be importing the heck out of cement. Making us more and more dependent on foreign resources.

But countries like USA make use of wood to build their mansions because that is the resource most available to them instead of importing.
And they do it so well it is awesome.
I doubt Nigerians would favor wooden houses over cement if we didn't have limestone.
Na. We would import.

Too bad.

bestestgirl:
you are quite right sha, but our standards org would have to stop taking bribes and really sit up. I guess the rest of us will just have to endure the hardship until the local manufacturers get their act together. I pray that that other prediction of the naira falling to 280 does not come to pass

Economic illiterate spewing rubbish. This is what i wrote earlier on the thread on Oluwaseun's views on Naira devaluation;

This piece shows Oga Seun is ignorant in economic matters and history. Devaluation of the Naira would cause inflation and affect industries struggling to survive now because Nigeria depends on importation both for finished goods and raw materials. Importers and manufacturers would just adjust their prices to reflect the current naira value. It is suicidal for a wholly importing and open port nation (where every junk from china is allowed in) to devalue its currency. Even the cost of energy will increase as we import 100% of our petroleum products (Petrol Diesel and kerosine). So how do you expect made in Nigeria products to compete with made in China products.

If Readers are old enough, they would know that this was the same arguments given by Falae for introducing SAP under the Babangida administration, that the devaluation of the Naira would stimulate local production and boost export by making local production cheaper, but the reverse was the case, inflation skyrocketed as naira fell from about N1 to 1 to about N22 to 1. Later the IMF itself declared SAP a failed policy after it wrecked many African economies.

Devaluation would work only if you are a self reliant and net exporting country.

We are going round in a full circle. This was the same situation when Buhari took over government in 1983, the naira was falling in value and our import bill was skyrocketting. Buhari too drastic measures to try and reduce our level of import by closing the ports and restricting the demand for dollars. (that was why fela was jailed for allegedly travelling to Germany with undeclared dollars). He rationed imported essential commodities like milk. Although i do not agree with his methods, i know he has the right ideas and intentions.

OP is very ignorant and oblivious of the fact that many manufacturing companies are groaning under the current exchange rate and are laying of workers, and subsidy on fuel has not been removed yet. When inflation finally finds its level, i doubt there would be many Nigerian maunfacturing companies standing.

KevinBrown:

Kai, Nigerians we are funny o. Whenever we hear that the value of the Naira has fallen more deeper, we will start panicking. "Ah jonathan see what you have done to us...." Some are even saying Buhari will make $1=N30. (Mind you I'm a buhari supporter).

A lot of people don't know how economic works. Have you ever wondered why countries like China and Japan are artificially devaluing their currencies?




Advantages of a Weak Currency:

* Imports become more expensive:

It's an advantage, believe you me. If our currency becomes weaker, importing goods and services from abroad will become expensive, and this in turn will cause demand for local goods and services (which will be relatively cheaper). Some will say local goods (and services) are inferior, but over time, it will develop.
Some critics will also be against a weak currency because now the iPhone 6 they are supposed to buy for N150,000 now cost over N200,000. Yeah that's good. Spend the money on nigerian made products, and perhaps with local patronage, they will also be able to develop an iPhone-quality product.

* Traveling outside the country will also become expensive:

This is also good. All those people (depleting our foreign reserve) sending their kids abroad to study, perhaps its time to come home.

All those dubai crazed shoppers, perhaps it's time to visit Tinapa in Calabar.
The list goes on and on...

If you should look at it with an unbiased mind, u will realize its the rich that has more to gain with a strong naira.

Now is time to develop our own local industry and economy. So join me to pray that 1 barrel of oil falls to $5.

Now is the time to get off the oil driven economy

My prayer na make crude fall below $1 per barrel.

giantstrides:
OP, the question you should ask yourself is that ' is our production capacity as high as the chinese' do we have local products which can serve as substitutes? We don't produce electronics, ceramic tiles, phones, our food production can't meet our demand, even our crude is imported bck in it's refined form because we hv no functioning refineries. so how is the exchange rate a blessing since we hv to pay expensive dollars for all this trades.

You are underestimating the money in the hands of Nigerians and the fact that a capitalist driven economy isnt piloted by the government,niether does government sustain it on the long run. Op is right,the more essential commodities that can be sourced locally the more jobs we have in Nigeria.Imports will soon become less of essential commodities and majorly luxury products.

atlwireles:


Taxes and levies will be a start.

Taxes and levies in what form? Reduction i guess........


If thatz ur solution of government easing the negative effect of falling naira on manufacturing company then i guess to say u dont really know much abt whats happening.......

Do u know we av been running on deficit budget for like how many years now and the deficit for last year was over one trillion naira and a debt service of over N712billion

We have been having cummulative increase deficit budget over the past five years and 2015 debt service is projected to be almost N1trillion (interest payment alone and not principal repayment)....all this have been happening despite boom in oil prices over these years.

The question is now, what will happen with decline in oil revenue? How will govt generate revenue to finance budget?DEFINITELY IT WILL BE INCREASE IN TAXES BOTH INDIVIDUAL AND CORPORATE.
Hope u heard when the coordinating minister of the economy said there will be increase in taxes for luxurious goods this year. The same way i forsee an increase in value added tax to 10% after election.

Continuos devaluation will affect evry aspect of the economy and lead to hardship majorly because we 80% import dependent without commensurate export.
U sighted garri as example, which ideally d price shouldnt increase bt u fail to factor in factors of production which also determines the final price of local commodities.
Someone also sighted Aba product which are locally made but forget to add that the leather used in producing Aba shoes are imported into the country, the cotton used to produced cloth are also imported into d country. Raw materials are imported into Aba to produce all these locally made Aba goods. This means that exchange rate will also determine d price of locally produced Aba products.

To the investors which bottom line is to make profit, they are faced with challenges of lack of infrastructures like electricity which gulp averagely of N1.5billion annualy, multiple taxation (u can googke how much mtn nigeria paid as tax and regulatory fee last financial year),falling naira dat will affect cost of production which will increase price of final products. To cut cost, they available option is to laid off staff or close down some business aspect.

I dont engage in partisan politics, i say things with the way i feel it affect common man on the street.........Things cannot continue like this sincerely (those who knows the true working of the economy will attest to this) but is APC the way forward? Thats what am seriously thinking about and undecided

ckmayoca:
Disagree! Rich will always travel even if naira is 500 to 1$. Its d masses who collect loan to send their children abroad that will suffer it. If no foreign competition, our local product won't step up and we have no price regulation in d country.... We increase price with the higher in demand. Our fuel depratment will suffer it since we don't refine here. So how is this a blessing sir?.

Bros God bless you. Same sentiments I share

Nice one OP! But I personally prefer a valued Naira.

snakie86:


Nice economic postulation.......................

But can this work for a country that is 80% import dependent

What have we done in the past years for infrastructural development to enable local production of goods and services?

Organization producing here in Nigeria import their raw materials for production.......do u know what effect this will have on the price of commodity?

Is it until we start buying tin of peak milk for N250? cos it will still get there if care is not taken with the way we are going......................

Do u know DSTV just increased their subscription fee? Why?.............................They pay for licence in $ and collect Naira from us, this means that they are paying more now cos of our devalued naira.

The same thing will happen to multinational companies that buy raw materials abroad with dollars as means of exchange, cost of production will be high and this will affect price of goods and services.


Systematic depreciation of currency is good cos it will improve patronage of locally produced goods and services but not in a situation we find ourselves now which was due to lack of foresightness by our leaders.................

They thought the raining days will be forever, no adequate planning...........................................


Cant just stop thinking about what will happen if things continue like this.....................................................It will be disastrous

Nice observation but this is exactly where a smart central government comes into play to help these local manufacturers offset the currency plunge by eliminating import tariffs or creating favourable policies and strategic tax regimes pending when the raw materials can be sourced locally. The GEJ is already doing it with the automotive industry which i belong to.So please dont panic;this devaluation of the Naira coupled with the hightened investments in power generation/distributions is the best possible that can happen to Nigeria.Impatience and poor investment attitudes of those with the big bucks is why we are where we are.

major466:
The Op has a very high IQ.
The lower the value of a country's currency, the cheaper it becomes to export.

The gain or profit becomes much too!!!

Good thinking!! Good product!!!

Hung!! Ching Chua!!!

giantstrides:
Don't compare us to China or Japan, China has to keep it's currency down so tht everyone can keep importing from them, that is why the quality of their products are not as high as their western counterparts, if their currency starts appreciating people will wonder why they re paying much for goods of lower quality. Meanwhile Japan has to keep its currency lower to the dollar because their electronics and automobiles are not on the same level with European or American vehicles, they only come cheaper because of the lower cost of production. Every technology japan has, US has it too, the only problem is USA can't compete with the japanese because they spend higher in production, if japan currency goes up and those cars become more epensive , they will lose their customers due to high price. Now what does Nigeria have in common with this two? what do we produce besides oil , wht do we produce and export tht makes the cost of production cheap.

That's why I think the present devaluation has more negatives than positives.

snakie86:


Taxes and levies in what form? Reduction i guess........


If thatz ur solution of government easing the negative effect of falling naira on manufacturing company then i guess to say u dont really know much abt whats happening.......

Do u know we av been running on deficit budget for like how many years now and the deficit for last year was over one trillion naira and a debt service of over N712billion

We have been having cummulative increase deficit budget over the past five years and 2015 debt service is projected to be almost N1trillion (interest payment alone and not principal repayment)....all this have been happening despite boom in oil prices over these years.

The question is now, what will happen with decline in oil revenue? How will govt generate revenue to finance budget?DEFINITELY IT WILL BE INCREASE IN TAXES BOTH INDIVIDUAL AND CORPORATE.
Hope u heard when the coordinating minister of the economy said there will be increase in taxes for luxurious goods this year. The same way i forsee an increase in value added tax to 10% after election.

Continuos devaluation will affect evry aspect of the economy and lead to hardship majorly because we 80% import dependent without commensurate export.
U sighted garri as example, which ideally d price shouldnt increase bt u fail to factor in factors of production which also determines the final price of local commodities.
Someone also sighted Aba product which are locally made but forget to add that the leather used in producing Aba shoes are imported into the country, the cotton used to produced cloth are also imported into d country. Raw materials are imported into Aba to produce all these locally made Aba goods. This means that exchange rate will also determine d price of locally produced Aba products.

To the investors which bottom line is to make profit, they are faced with challenges of lack of infrastructures like electricity which gulp averagely of N1.5billion annualy, multiple taxation (u can googke how much mtn nigeria paid as tax and regulatory fee last financial year),falling naira dat will affect cost of production which will increase price of final products. To cut cost, they available option is to laid off staff or close down some business aspect.

I dont engage in partisan politics, i say things with the way i feel it affect common man on the street.........Things cannot continue like this sincerely (those who knows the true working of the economy will attest to this) but is APC the way forward? Thats what am seriously thinking about and undecided

While you see the need to generate government revenue via higher taxes, I see the need to reduce them to zero. Importers affected by the currency displacement will be greatly helped, if their taxes and levies are reduced. This thread is about the effects of the Naira. Please stay on topic.

atlwireles:


Imported food and imported underwear are not problems for millions of Nigerians. Neither is a sound card a problem. Buy made in Nigeria, it will reduce your stress.

Are we producing ??
Stop justifying mediocrity
Now to seek quality education abroad is difficult for parents earning in naira to sponsor their wards ...
I don't know why we are so retrogressive

wirinet:
Economic illiterate spewing rubbish. This is what i wrote earlier on the thread on Oluwaseun's views on Naira devaluation;


We are going round in a full circle. This was the same situation when Buhari took over government in 1983, the naira was falling in value and our import bill was skyrocketting. Buhari too drastic measures to try and reduce our level of import by closing the ports and restricting the demand for dollars. (that was why fela was jailed for allegedly travelling to Germany with undeclared dollars). He rationed imported essential commodities like milk. Although i do not agree with his methods, i know he has the right ideas and intentions.

OP is very ignorant and oblivious of the fact that many manufacturing companies are groaning under the current exchange rate and are laying of workers, and subsidy on fuel has not been removed yet. When inflation finally finds its level, i doubt there would be many Nigerian maunfacturing companies standing.

Oga Wirinet, folks like you are too intelligent for this forum. You know many Nigerians run on the fuel of sentiments and bias. They will therefore say the most illogical things to support their corner or affiliate. Naturally TANdroids and Jonathanian will try to spin anything negative under GEJ into a positive even if this involves saying the most senseless thing a well-educated 8 year old can discredit easily.

How can any intelligent person claim falling value of the Naira is a good thing for the so-called biggest economy in Africa that is entirely import-dependent? To be honest, I am flabbergasted at the arguments peddled here sometimes to the extent I am rendered speechless. I am not even willing, like you, to explain to sentimental folks the many disadvantages to Nigeria of the Naira losing value drastically over a short period of time.

The clue, for those still willing to learn, lies in investigating the effect of drastic currency drop in value for a Nation, like Nigeria, that takes far more from the world (import) than it gives to other nations (export). There are many case studies to help our fellow sentimental Nigerians. People who cannot understand the very important synergy of economic interdependence that makes import-reliant nation very vulnerable to drastic drop in currency value will simply not get the huge risk this situation poses for Nigeria.

adaweezy:

Are we producing ??
Stop justifying mediocrity
Now to seek quality education abroad is difficult for parents earning in naira to sponsor their wards ...
I don't know why we are so retrogressive

You have said nothing.

cococandy:

It could be improved upon. Necessity is the mother of invention.
If we import easily, we will never see the need to improve our own products.
That said, aba made products last more than some designers even. We just over look them because to nigerians anything foreign is better.

Aba can become the China of west africa if money is pumped into the productivity of those young enterprenuers over there.

I hope the govt considers and urges them to come take easy and low interest rate loans to boost their productivity. plus measures to promote a certain level and standard of goods only.

It can be done.

It seems you've not been following the happenings in the importation business, the so called aba made are actually made in china based on the aba boys standard, which they now import to nigeria.
These transactions with the chinkos are in dollars, which makes the price of the supposed aba made to increase.