its a blessing in that with the lack of cheap but better imports our bizmen will have a higher turn over and profit margin. with this increase i sales and more capital, they will reinvest the excess monies accrued so as to maintain or gain more business share.moreover, there will be new entrants in the sector, increasing competion.

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 you have valid points...however, those companies importing the raw materials can harness the local contents here. you see? why should cadbury import certain brands of chocolate in naija when they have a mega factory in lagos? are those choc bars not made from cocoa? is ibadan not the 3rd largest cocoa producing region in west africa? what is so hard in getting the cocoa from ibadan ad then producing local bars for local people in naija?
same thing with oil..why cant nnpc refine our oil?
as for dstv 90% of their contents are imported!! you see why they have to have high prices? they are a 90% import dependent company. why are ait prices ot goig up as well? i do sincerely believe that 75% of ay raw material ca be gotten in naija by any multinational. they just have synergies with companies in their coutries and are lazy to procure the raw materials locally. you, the cameroon government has banned the wholesome felling down of tree. if you want to engage in such, you must employ locals to cut the trees in planks and ship back to your country. the next stage is to force these multinationals to process 40% of these planks into finished products/furniture to export. you see? that good ecoomic policy to be emulated, my friend

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

what is this you are saying? 95% of instant noodles eaten in cameroon from naija, 100% in chad, 100% in equatorial guine, 100 in central africa republic, 5% in south africa and 02% in pekham, in london.
70% of fuel used in northern cameroun is for nigeria.
bobo and dudu drinks have 80% market share of such driks in cameroon.
multa guiness nigeria with nafdac number has 99% market share of canned malta guiness in cameroon.
made in nigeria beauty products have a 45% market share in cameroon.

many more i can talk about, but dont have the time





[quote author=babadee1 post=31822064]

Don't be silly. The entire Nigerian economy is import dependent. At the current rate, local production will never rise to meet demand not even in 100 years.

No country is patronizing made in Nigeria goods at any level that can sustain this current devaluation. Even our oil no longer has a stable international market and sustainable demand. I

eposho:
this case is dead on arrival. op never gave thought to this before coming on line, case of too much apeteshi at night time.

Op has an acute case of tanoiditis.

Sane countries deliberately devalue their currency, when they realise their economy depends mostly on manufacturing and export - that's just common sense.

The naira is at the mercy of poor management of our resources via almighty corruption, not a fall in the price of crude. If crude price is the reason, why didn't the naira appreciate during boom time ?

Name 2 other OPEC nations that devalued their currency in the last 4 months ? You can't ? Why ?

You can only benefit from a weak naira if you earn foreign exchange either through exports or some other activity. Nigeria currently exports close to zero non-oil products, we have no industrial powerhouse or power to run any meaningful manufacturing revolution, so why are some people intent on deceiving themselves ?

You first create the industries and then you devalue, its never the other way round.

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

I respect dudes that think outside the box

KevinBrown:
.

mr Kevin wat is d fate of someone that pays 3.5m for 21,000usd buh now paid 4.5m for d same amount

the two countries that have devalued their currecies are russia and venezuela; i can even throw in a 3rd for bonus, iran......u c a pattern?

stevecantrell:


Op has an acute case of tanoiditis.

Sane countries deliberately devalue their currency, when they realise their economy depends mostly on manufacturing and export - that's just common sense.

The naira is at the mercy of poor management of our resources via almighty corruption, not a fall in the price of crude. If crude price is the reason, why didn't the naira appreciate during boom time ?

Name 2 other OPEC nations that devalued their currency in the last 4 months ? You can't ? Why ?

You can only benefit from a weak naira if you earn foreign exchange either through exports or some other activity. Nigeria currently exports close to zero non-oil products, we have no industrial powerhouse or power to run any meaningful manufacturing revolution, so why are some people intent on deceiving themselves ?

You first create the industries and then you devalue, its never the other way round.

what do you need the dollars for?? cant u get the goods locally? besides, import and then increase or raise your prices

chamboy:
mr Kevin wat is d fate of someone that pays 3.5m for 21,000usd buh now paid 4.5m for d same amount

sorepco:
the two countries that have devalued their currecies are russia and venezuela; i can even throw in a 3rd for bonus, iran......u c a pattern?

Russia isn't part of Opec. At least not as of this morning.

Venezuela have been advised to devalue their currency since 2008, long before Chavez left. Long before the oil slump.

Any others ?

sorry about russia....did you ot see iran? what of angola? you want more?

stevecantrell:


Russia isn't part of Opec. At least not as of this morning.

Venezuela have been advised to devalue their currency since 2008, long before Chavez left. Long before the oil slump.

Any others ?

sorepco
post=31884182:
what do you need the dollars for?? cant u get the goods
locally? besides, import and then increase or raise your prices

its education Mr GEj.

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

nothing will happen,no be nigeria.we will arrange ourselves when we hit rock bottom or when one governor decides to build an industrial park to win votes

sorepco:
what is this you are saying? 95% of instant noodles eaten in cameroon from naija, 100% in chad, 100% in equatorial guine, 100 in central africa republic, 5% in south africa and 02% in pekham, in london.
70% of fuel used in northern cameroun is for nigeria.
bobo and dudu drinks have 80% market share of such driks in cameroon.
multa guiness nigeria with nafdac number has 99% market share of canned malta guiness in cameroon.
made in nigeria beauty products have a 45% market share in cameroon.

many more i can talk about, but dont have the time

You must be joking if you think all those things you mentioned amount to any meaningful exports. All Nigerian trading within West Africa is to satellite economies. It's still more or less part of the Nigerian economy. Meaningful exports will amount to billions of dollars, real foreign exchange earners. All those African countries probably pay in naira or even in their own local currency which amounts to very little in the scheme of things.

I think that the devalued naira will do us more good than harm.Jonathans administration is serious about promoting local content.UWIN,SMES and other schemes are geared towards promoting local production but the most painful thing is that Nigerians are sluggish in making good use of these opportunities.Nigerians have to be positive,with time,we shall get there.China,Japan started from nowhere and they got somewhere.This is the right time to take the challenge and develop our economy.

Immune1:

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.

dis our govt does not look like it will be smart unless apc wins and even then its only the grace of the almighty that will allow buhari to succeed economically

atlwireles:
OP, I like your train of thought. Most people crying about the Naira exchange rate, cannot explain, how it affects their personal life. If segments of our manufacturing & services sectors are negatively affected by the exchange rates, government have tools to ease their problems.

Please, can u mention these tools

What u fail to understand is that most of those factories depend on imported raw materials and chemicals for production.
We need to develop our value chain supply first before we embark on this suicidal mission.

cococandy:
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.

sorepco:
the two countries that have devalued their currecies are russia and venezuela; i qcan even throw in a 3rd for bonus, iran......u c a pattern?

I hope u know the difference BTW depreciation and devaluation of currency.
They are not interchangeable

sorepco:
sorry about russia....did you ot see iran? what of angola? you want more?

Iran is under UN sanctions, many years now. There is severe austerity in that country. Angola devalued their currency? Really ? Any news link or source for that?

Tell me more.

very little in the scheme of things? tell that to indomie when they send 35 40feet containers to central African sub region a month...it gives them latitude to expand and developpe new products. why dont you appreciate the small things, and bigger things will happen in the future. understand that increased level and expansion for indomie meas more employment for naija persons.

babadee1:


You must be joking if you think all those things you mentioned amount to any meaningful exports. All Nigerian trading within West Africa is to satellite economies. It's still more or less part of the Nigerian economy. Meaningful exports will amount to billions of dollars, real foreign exchange earners. All those African countries probably pay in naira or even in their own local currency which amounts to very little in the scheme of things.

who metioned depreciation? ahave we not been harping o about devaluation? i am not an economist, but i do know i am talking about devaluation....

SIRTee15:

I hope u know the difference BTW depreciation and devaluation of currency.
They are not interchangeable

likewise igeria did not in the beginning willing devalued its currency. it just happened....likewise same ith most oil dependent economies. they have no control over the process!!!

stevecantrell:


Iran is under UN sanctions, many years now. There is severe austerity in that country. Angola devalued their currency? Really ? Any news link or source for that?

Tell me more.

sorepco:
very little in the scheme of things? tell that to indomie when they send 35 40feet containers to central African sub region a month...it gives them latitude to expand and developpe new products. why dont you appreciate the small things, and bigger things will happen in the future. understand that increased level and expansion for indomie meas more employment for naija persons.

I think you must have missed the entire point of this thread. The scheme of things I was talking about is in reference to the valuation of the naira. Of course it's a great thing for Nigeria's economy if indomie manufacturers its products here and exports to other African countries. My point is that the level of trade we are talking about has no significant impact on the demand for the naira as opposed to the dollar on the international foreign exchange markets.
The balance of trade of the Nigerian economy has to shift in a massive and truly global way to justify a purposeful devaluation of our currency. What we are experiencing at the moment is the result of economic chaos and lack of planning. Nothing good can ever come out of it.

i do understand where u coming from my friend. i know what you are saying is true; however i also pray and hope we take advantage of this naira misfortune at the moment to restart our manufacturing sector. i do believe any thing that will push us away from importation is welcome. with the unintentional devaluation of the naira, i hope we increase our manufacturing base within the next two years by at least 10% from last year (that will be a massive improvement).
my brother, if this will deter rice importation especially, i will be happy. can you believe that rice is milled in ebonyi state, kogi state, and so on? i mean, we are talking of modern rice millers. what of salt that is like sand in ebonyi state; yet we source for dollars to import rice and salt. this devaluation will make the imported items prohibitive. thats where my interest lies; not in the actual cost of the naira per se. i guess the ripple effects to the economy is my interest.

babadee1:


I think you must have missed the entire point of this thread. The scheme of things I was talking about is in reference to the valuation of the naira. Of course it's a great thing for Nigeria's economy if indomie manufacturers its products here and exports to other African countries. My point is that the level of trade we are talking about has no significant impact on the demand for the naira as opposed to the dollar on the international foreign exchange markets.
The balance of trade of the Nigerian economy has to shift in a massive and truly global way to justify a purposeful devaluation of our currency. What we are experiencing at the moment is the result of economic chaos and lack of planning. Nothing good can ever come out of it.

Very intelligent and informed debate going on here. I agree that devaluation of the Naira is a good one coming at a time when Nigerians are yearning for change. I feel the exchange rate should not be left to float but should be set within a trading window within which it will make local production competitve. Doing this rather than taxing luxury goods will discourage smuggling. On the flip side, We need machineries, expatriates and raw material inputs ( the ones that cannot be sourced locally) to drive the industrial sector. The category of imported goods that is required to drive the industrial sector should be import tax free. Government should also give the companies importing such machineries subsidy in form of tax rebates. Government should also grant tax holiday to any companies with at least 50% local content.

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