Stories that touch the heart. We know all these things. Now, tell us your plans, policies and preparations to solve the problem. Is this what you'll keep telling us till 2019? I'm totally disappointed.

Eaa247:


the soln is stop vandalising pipeline installations

You are not serious. Is Nigeria the only country in the world the has problems in her oil and gas industry. Is our life tied to oil. Can't we survive outside oil. It simply shows the incompetence of this govt. Look at Trump, rolling out processes to achieve his target from day one. Has this govt started since may 2015 to roll out effective policies, things would have improved. That are still telling us what we already know. No solution.

obailala:
Oil is the largest source of Nigeria's forex (over 90%), let's not forget in a hurry that oil price crash dealt a blow to the forex supply even before bombing of pipelines started. Regarding the drop in forex inflow from non-oil sources, you should note that forex from oil also influences the inflow from other non-oil sources and I would explain how.

The crash in oil prices which was complimented by reduction in exports (courtesy of bombings) led to a major forex scarcity. The scarcity started way back before even the new government came in and the CBN churned out over a billion dollars monthly to checkmate the scarcity (this led to a sharp drop in reserves from $38.5bn to $28.5bn just before May 2015. Despite this disbursements by CBN, the Naira still crashed from 160 to 230 even though oil still sold over $60 at the time. Of course the continued disbursements wasn't sustainable as oil prices continued to crash, hence forex restrictions started. FOrex restrictions exacerbated the scarcity and this further nailed the naira.

Foreign investors don't rush to take their money to economies at the brink of a crisis, they wouldn't take their money to economies where there is a shortage of forex to repatriate their profits and that's mainly due to the fear of their profits being trapped (several foreign airlines lamented this problem before leaving). Even the common early morning akara & akamu seller wouldn't want to take her wares to a poor neighbourhood where she may either struggle to get sales, or may be owed by her clients; this is simple logic and it explains the primary reason why foreign investors avoid Nigeria today.

The pegging of the Naira value of course isn't helping matters (except of course for the round-trippers), but it definitely isn't anywhere close to the main cause of the forex scarcity.

Nice write up.

However, the uneconomic peg is the prime cause of the scarcity.

There is a difference between a reduction in dollar inflow and scarcity.

The scarcity arose by pegging the naira at a price which did not reflect market realities and especially at a time when oil prices were experiencing a free fall.

Those with dollars refuse to supply the market because its underpriced and there is excessive demand because its cheap. This mismatch caused the scarcity. If the price reflected the true market value, the scarcity will disappear.

Around June 2016, a new forex market was introduced which was supposed to enthrone a floating exchange.

The naira swiftly dropped from 197 to 367 or so before it shot up to around 310. Obviously "someone" prevented the market from doing its job.

As long as that job is left undone, the scarcity will continue.

I have written off the economy as early as June 2015 when I noticed these statist policies

It's not only crude oil sales/production that could drive the economy of a nation but good economic policies to enable/encourage both local n foreign businesses to thrive.The government failed in its economic policies by putting out unfriendly business policies and restricting cash flow which in turn hindered d purchasing power of d average Nigerian thereby killing business.when there is money in circulation an economy booms.Also contributory was poor infastructure(power) growth/stability which is the driving force to the growth of any nation.Not encouraging businesses by poor economics policies/incentives can kill businesses and drive away direct foreign investment which is big source of forex to grow the economy.

Also contributory was the negative talks about Nigerians and people holding official government positions as been CORRUPT.This doesn't paint the nation in good light.There should have been a silent and robust drive to fighting corruption by putting a mechanism in place without making so much fuse about it.

How many times are we going to hear this?

grandstar:


Nice write up.

However, the uneconomic peg is the prime cause of the scarcity.

There is a difference between a reduction in dollar inflow and scarcity.

The scarcity arose by pegging the naira at a price which did not reflect market realities and especially at a time when oil prices were experiencing a free fall.

Those with dollars refuse to supply the market because its underpriced and there is excessive demand because its cheap. This mismatch caused the scarcity. If the price reflected the true market value, the scarcity will disappear.

Around June 2016, a new forex market was introduced which was supposed to enthrone a floating exchange.

The naira swiftly dropped from 197 to 367 or so before it shot up to around 310. Obviously "someone" prevented the market from doing its job.

As long as that job is left undone, the scarcity will continue.

I have written off the economy as early as June 2015 when I noticed these statist policies

Sorry brother, you are wrong. The primary cause of the scarcity is simply because there's been a more than 60% reduction in the supply of forex into the country.

At the last check, about 92% of Nigeria's forex comes from oil; oil prices crashed by over 60% and Nigeria's oil production crashed by over 50% all through 2016 due to resumed militancy. These 2 factors are principally responsible for the mess and you dont need much mathematical or economic analysis to see the clear picture.

Oh yes, removing the pegs would open up some avenue for some extra forex to come into the country via foreign investors and while that would be a very helpful thing to do now, the fact remains that no amount of foreign investments within this short time period can match the sheer volume of forex inflow which the nation is currently losing due to the oil crisis. So I fund it quite weird and out of place for anyone to think that a couple of people hoarding dollars is more responsible for the scarcity than the oil price/volume issue.

obailala:
Sorry brother, you are wrong. The primary cause of the scarcity is simply because there's been a more than 60% reduction in the supply of forex into the country.

At the last check, about 92% of Nigeria's forex comes from oil; oil prices crashed by over 60% and Nigeria's oil production crashed by over 50% all through 2016 due to resumed militancy. These 2 factors are principally responsible for the mess and you dont need much mathematical or economic analysis to see the clear picture.

Oh yes, removing the pegs would open up some avenue for some extra forex to come into the country via foreign investors and while that would be a very helpful thing to do now, the fact remains that no amount of foreign investments within this short time period can match the sheer volume of forex inflow which the nation is currently losing due to the oil crisis. So I fund it quite weird and out of place for anyone to think that a couple of people hoarding dollars is more responsible for the scarcity than the oil price/volume issue.

Nigeria is not the only oil exporter that suffered from the oil price collapse. Russia and Kazakhstan are 2 prime examples.

Both experienced massive depreciations in their currencies but without any scarcity developing! The rouble has lost about half its value but no scarcity.

If the value reflects the 60% drop in oil prices, demand will drop naturally to the new market realities. Those who can't afford the new price, will forgo buying or reduce the quantity demanded.

A point will even occur when there'll be surplus forex in the market

Also,oil only accounts for most of the country's export earnings .

However there are non exports sources such as foreign investments and remittances. Each were around $20b each in 2013.

Foreign investors have now taken flight as they are not ready to bring in dollars and exchange at the underpriced official rates. Remittances too have crashed for the same reason

grandstar:


Nigeria is not the only oil exporter that suffered from the oil price collapse. Russia and Kazakhstan are 2 prime examples.

Both experienced massive depreciations in their currencies but without any scarcity developing! The rouble has lost about half its value but no scarcity.

If the value reflects the 60% drop in oil prices, demand will drop naturally to the new market realities. Those who can't afford the new price, will forgo buying or reduce the quantity demanded.

A point will even occur when there'll be surplus forex in the market

Also,oil only accounts for most of the country's export earnings .

However there are non exports sources such as foreign investments and remittances. Each were around $20b each in 2013.

Foreign investors have now taken flight as they are not ready to bring in dollars and exchange at the underpriced official rates. Remittances too have crashed for the same reason

Lol... You quote the demand and supply theory but you apparently dont even understand it. The value of a currency is typically hinged on demand and supply; you just said the rouble lost half its value but you strangely claim that a scarcity (reduced supply) didnt cause that? I am keen to know what factors you think exactly led to that reduction in value of the rouble since you claim a reduction in supply of fx didnt occur.

To cut the story short, a reduction in supply of fx led to a 'scarcity' which in turn forced down the value of the rouble because more roubles are now chasing fewer fx.

Now back to the Nigerian situation, the russian story is exactly the same in Nigeria but the reason Nigeria is seriously hit is because over 90% of our fx comes from oil and then Nigeria imports virtually everything.

With the value of the dollar at N500, you do not think that has reduced the demand?... Dont you think the number of people schooling or holidaying abroad has reduced?... Whilst the demand for the dollar has certainly reduced, even at N2000 to a dollar, we would still have no choice than to still have a high demand for fx because Nigeria imports virtually everything it needs including 'air'

Non-oil sources of fx make up less than 10% of Nigeria's fx supply, that's virtually a drop of water in an ocean. And something you need to note is that virtually every other source of fx inflow is also influenced by oil fx. Diaspora remittances which isnt directly affected by oil price has increased massively since the value of the Naira dropped.

obailala:
Lol... You quote the demand and supply theory but you apparently dont even understand it. The value of a currency is typically hinged on demand and supply; you just said the rouble lost half its value but you strangely claim that a scarcity (reduced supply) didnt cause that? I am keen to know what factors exactly led to that reduction in value of the rouble since you claim a reduction in supply of fx didnt occur.

To cut the stoey short, a reduction in supply of fx led to a 'scarcity' which in turn forced down the value of the rouble because more roubles are now chasing fewer fx?

Now back to the Nigerian situation, with the value of the dollar at N500, you do not think that has reduced the demand?... Sont you think the number of people schooling or holidaying abroad has reduced?... Whilst the demand for the dollar has certainly reduced, even at N2000 to a dollar, we would still have no choice than to still have a high demand for fx because Nigeria imports virtually everything it needs including 'air'

And you think that an official rate of 305:and black market rate of 500 makes sense? Market mechanism is being frustrated because the president is instinctively anti-market. Thats whats causing the scarcity. The "artificial scarcity" is caused by the lack of market forces.

Why can't manufacturers get dollars? Why is our debited cards limited to $100 monthly? Why are there online exchangers trying to help people circumvent the official rates? Why is Sanusi unrelenting in condemning Buharis forex policies?

Forex reduction need not lead to the dollar shortages plaguing the country. The fault stops at Buharis door. I was there in 1984/85 and his economic incompetence is still undisputed

grandstar:


And you think that an official rate of 305:and black market rate of 500 makes sense? Market mechanism is being frustrated because the president is instinctively anti-market. Thats whats causing the scarcity. The "artificial scarcity" is caused by the lack of market forces.

Why can't manufacturers get dollars? Why is our debited cards limited to $100 monthly? Why are there online exchangers trying to help people circumvent the official rates? Why is Sanusi unrelenting in condemning Buharis forex policies?

Forex reduction need not lead to the dollar shortages plaguing the country. The fault stops at Buharis door. I was there in 1984/85 and his economic incompetence is still undisputed

Supply of forex into the country crashed by almost 70% and you are still asking why there isnt enough to give to manufacturers or why the banks have to reduce the amount of fx it gives to you via your debit card?.... or are you probably insinuating that buhari is swallowing the fx which he has refused to five to manufacturers?... I understand your inclination to just view this myopically from the political angle but then, shouldnt this be common sense?....

Try and understand what Sanusi was referring to. Like I said b4, Yes the peg is affecting confidence of foreign investors bringing in their fx into the economy, but the fact remains that this fx from foreign investments makes up far less than 10% of the total fx inflow into the country. So I am yet to understand the wisdom in your insistence that Naira peg is the main cause of forex scarcity and not oil price/reduced oil production volume.

omenkalives, do you remember laughing at Niger delta Militants and calling them illiterates when they threatened that their actions will crash the naira in early 2016 when Tompolo was being chased around?

I remember because I am IPOB we have long memories.

For your mind. Anything that helps you sleep well @ night tho

[quote author=emmykk post=53706791]Then you and the daura cattle rearer should resign for those who school well should bring that dollar down.






in another news you guys APC promise 1 dollar to 1 naira[/quot

So suggest someone

Handsome777:
Acting-President, Yemi Osinbajo has explained that corruption and the vandalization of pipeline facilities in the Niger-Delta region were responsible for the reduction in the volume of Dollar reserved with the Central Bank of Nigeria (CBN). He said such was responsible for the continuous fall of the Naira against the dollar.

He stated this in Port-Harcourt while chiding members of the opposition who criticize the federal government for the fall of the Naira against the Dollar.

Osinbajo said that Nigerians spent more money to buy Dollars because the currency was scarce and insufficient to go round, triggering the forces of Supply and Demand into play.

He, however, assured that the federal government was putting measures in place to ensure that the diversion of foreign currencies from the National Treasury through corruption, and the vandalization of pipeline facilities that reduce the amount of Dollars accruable to the federal government is brought to end, adding that once the federal government is able to earn more Dollars than it is currently earning, the exchange rate will go down.

Osinbajo said: “Some people have said ‘Ah! When you came the exchange rate was this now it is that.’ What accounts for exchange rates is simple. It is Dollars. If you don’t have Dollars, your exchange rate goes up. If you have dollars your exchange rate goes down.

“If you lose oil revenues through corruption and pipeline vandalism, your exchange rate goes up. It’s very simple. If Dollar is scarce, then the Naira to buy it will be more. That’s a simple thing.

“Exchange rate is not magic. It is just the availabilityof Dollars. Once we are able to earn the Dollars the exchange rate will go down. And we are hopeful that all of what we are trying to put in place, and with cooperation of all of us. We’ll be able to bring the exchange rate down.”

http://dailypost.ng/2017/02/14/naira-keeps-crashing-osinbajo/

We know this Mr "Actor" President.
But since you know the problem, why is it so damn hard to provide timely solution?

Nigerians across all economic class and strata are groaning. The cost of living is unbearable. People are committing suicide more than birthrate. Or is this all a strategy to depopulate Nigeria?

You're the Presidency! Preside well and provide solutions. Excuses are for losers!

mex22:
It's not only crude oil sales/production that could drive the economy of a nation but good economic policies to enable/encourage both local n foreign businesses to thrive.The government failed in its economic policies by putting out unfriendly business policies and restricting cash flow which in turn hindered d purchasing power of d average Nigerian thereby killing business.when there is money in circulation an economy booms.Also contributory was poor infastructure(power) growth/stability which is the driving force to the growth of any nation.Not encouraging businesses by poor economics policies/incentives can kill businesses and drive away direct foreign investment which is big source of forex to grow the economy.

Also contributory was the negative talks about Nigerians and people holding official government positions as been CORRUPT.This doesn't paint the nation in good light.There should have been a silent and robust drive to fighting corruption by putting a mechanism in place without making so much fuse about it.

That's absolutely correct. After painting the entire country as corrupt and evil people, you expect foreign investment, no way. On a second thought, who will like to invest his hard earned resources in an economy that is very unstable without direction. The US stock market started booming unimaginably when Trump won election. The DOW is above 20,000 now because many people invested in the stock knowing that a right thinking man with great policies is in power in USA. That's the power of good leadership with effective driven policies.

Micah360:
I find it so hard to dislike dis man unlike other politicians.. Hope its a good sign

awo reorganization

martooski:


so no other way dey to solve this palava ba....
and u @

how come you always find way to defend this rubbish

If u can suggest a way of creating something out of nothing or giving what u don't have, then certainly, solving the palava is like a child play, otherwise stfu.

grandstar:


And you think that an official rate of 305:and black market rate of 500 makes sense? Market mechanism is being frustrated because the president is instinctively anti-market. Thats whats causing the scarcity. The "artificial scarcity" is caused by the lack of market forces.

Why can't manufacturers get dollars? Why is our debited cards limited to $100 monthly? Why are there online exchangers trying to help people circumvent the official rates? Why is Sanusi unrelenting in condemning Buharis forex policies?

Forex reduction need not lead to the dollar shortages plaguing the country. The fault stops at Buharis door. I was there in 1984/85 and his economic incompetence is still undisputed

Complains upandan even in the face of glaring evidence. Shortage in supply drives cost upward, is this a Rocket Science? Nawa oh!

truthstands11:


[s]That's absolutely correct. After painting the entire country as corrupt and evil people, you expect foreign investment, no way. On a second thought, who will like to invest his hard earned resources in an economy that is very unstable without direction. The US stock market started booming unimaginably when Trump won election. The DOW is above 20,000 now because many people invested in the stock knowing that a right thinking man with great policies is in power in USA. That's the power of good leadership with effective driven policies.[/s]

Sharrap. Tell me who takes his expensive wares to a poor community for sale however good and friendly that community may look. He will either not be patronised or end up selling the wares on credit without hope of getting his money. That is the case with Nigeria. The country has been so milked to the bones (depletion of Foreign Reserve) that investors have cautiously exercised restraints cos there is no certainty of repatriation of profit to own countries. Is this too difficult to understand?

grandstar:


[s]Nigeria is not the only oil exporter that suffered from the oil price collapse. Russia and Kazakhstan are 2 prime examples.

Both experienced massive depreciations in their currencies but without any scarcity developing! The rouble has lost about half its value but no scarcity.

If the value reflects the 60% drop in oil prices, demand will drop naturally to the new market realities. Those who can't afford the new price, will forgo buying or reduce the quantity demanded.

A point will even occur when there'll be surplus forex in the market

Also,oil only accounts for most of the country's export earnings .

However there are non exports sources such as foreign investments and remittances. Each were around $20b each in 2013.

Foreign investors have now taken flight as they are not ready to bring in dollars and exchange at the underpriced official rates. Remittances too have crashed for the same reason[/s]

Sharrap. Those countries saved for the rainy days in addition to robust External Reserve which give investors hope. Same cannot be said of Nigeria.

truthstands11:


You are not serious. Is Nigeria the only country in the world the has problems in her oil and gas industry. Is our life tied to oil. Can't we survive outside oil. It simply shows the incompetence of this govt. Look at Trump, rolling out processes to achieve his target from day one. Has this govt started since may 2015 to roll out effective policies, things would have improved. That are still telling us what we already know. No solution.

What did the "competent" govt depend on? Or u think diversification is similar to selling of spare parts in Ladipo Market? Or selling gala on the streets of Lagos?

Kiakia:
This Osinbajo sef. Who made the dollar scarce? Is America no longer printing the currency? Why should the dollar alone be the dererminating factor in Forex? Is it the only foreign currency available in the international market? Why is everything about the American dollar? Government should be proactive in solving the problem of hyper inflation in the country.

See them, the moment they type more than one letter, u will easily identify them.

Fifthcolumnist:


The prof is a kind good hearted fellow. He's just unlucky to have a bad boss

Pls, what exactly has he done different from the policy in place?

Semper247:


Define policy

Give 2 examples of the policies this govt have made so far?

Give one example of her policies that is anti-people

U think he can answer those questions? U will just be seeing him making some funny noise upandan.

seguno2:
Why must we depend on Niger Delta oil?
Why can't we depend on groundnut oil?

On what did the previous administration depend? And, who told u the oil belongs to nd? If it is their's, they would have taken possession of it long ago, so stop all these daydreams.

kabrud:


If u can suggest a way of creating something out of nothing or giving what u don't have, then certainly, solving the palava is like a child play, otherwise stfu.

Do u really have to tell me to shut up.... chai, like father like son

is a must to rule u people have nothing to offer

martooski:


Do u really have to tell me to shut up.... chai, like father like son

Get the fvck ourrahere

tayo4ng:
I agreed with him,such an intelligent and able body man.

There will always be difference between a professor and a school cert holder

Handsome777:
Acting-President, Yemi Osinbajo has explained that corruption and the vandalization of pipeline facilities in the Niger-Delta region were responsible for the reduction in the volume of Dollar reserved with the Central Bank of Nigeria (CBN). He said such was responsible for the continuous fall of the Naira against the dollar.

He stated this in Port-Harcourt while chiding members of the opposition who criticize the federal government for the fall of the Naira against the Dollar.

Osinbajo said that Nigerians spent more money to buy Dollars because the currency was scarce and insufficient to go round, triggering the forces of Supply and Demand into play.

He, however, assured that the federal government was putting measures in place to ensure that the diversion of foreign currencies from the National Treasury through corruption, and the vandalization of pipeline facilities that reduce the amount of Dollars accruable to the federal government is brought to end, adding that once the federal government is able to earn more Dollars than it is currently earning, the exchange rate will go down.

Osinbajo said: “Some people have said ‘Ah! When you came the exchange rate was this now it is that.’ What accounts for exchange rates is simple. It is Dollars. If you don’t have Dollars, your exchange rate goes up. If you have dollars your exchange rate goes down.

“If you lose oil revenues through corruption and pipeline vandalism, your exchange rate goes up. It’s very simple. If Dollar is scarce, then the Naira to buy it will be more. That’s a simple thing.

“Exchange rate is not magic. It is just the availabilityof Dollars. Once we are able to earn the Dollars the exchange rate will go down. And we are hopeful that all of what we are trying to put in place, and with cooperation of all of us. We’ll be able to bring the exchange rate down.”

http://dailypost.ng/2017/02/14/naira-keeps-crashing-osinbajo/

My goodness! someone needs to give this man and everyone on the economic team a copy of Adam Smith's "The Wealth of Nations" as this guys don't seem to know what to do.

kabrud:
On what did the previous administration depend? And, who told u the oil belongs to nd? If it is their's, they would have taken possession of it long ago, so stop all these daydreams.

Does the groundnut oil not belong to the farmers in the north?
The groundnut grows well in the north due to the soil quality just like the crude oil in the Niger Delta soil.
They have literally taken possession hence militants either blowing up the pipelines or getting amnesty payment.
In America, where Atiku, Sanusi and other northerners who have oil wells keep their money, the land owners also own their oil directly. The way groundnut farmers own their groundnuts.
That is what guarantees sustainable peace.

seguno2:


Does the groundnut oil not belong to the farmers in the north?
The groundnut grows well in the north due to the soil quality just like the crude oil in the Niger Delta soil.
They have literally taken possession hence militants either blowing up the pipelines or getting amnesty payment.
In America, where Atiku, Sanusi and other northerners who have oil wells keep their money, the land owners also own their oil directly. The way groundnut farmers own their groundnuts.
That is what guarantees sustainable peace.

In Nigeria, all lands belong to the govt and that is why u only have cert of occupancy rather than cert of ownership. So stop all these trash of land belonging or not belonging to this and that. Before u bring in all these rubbish of America bla bla bla, which of the oil exporting countries has oil deposit in the whole of the geographical land mass forming the country? Or u think the oil deposit in Bakassi belongs to only the inhabitants of Bakassi, not the whole of Cameroon? In any of these countries, oil is merely deposited in some parts and not the whole of the land mass, so the earlier u stop all these wishful and completely illogical reasoning the better for you. Even ur elders that fought simply requested for something to be done for them in view of the environmental degradation associated with oil exploration rather than laying claims to ownership of the oil.
If the northerners cultivate g/nut, are u a crude oil farmer? Did u plant crude oil? Do u know anything about how crude oil came to be a deposit in nd? Apart from occupying nd region what exactly is ur contribution to the crude oil deposit?- ABSOLUTELY NOTHING. So how do u lay claim to what u know nothing about? Some of u are just dragging this democracy of a thing to annoying limit.
Since na ur own, go collect am na, nonsense.