Femi8586:


The truth is, Nigeria can be like(or more than) UAE but corruption and greediness will not let us. We sell the same oil, but why are they progressing and we regressing? CORRUPTION.

Apart from oil, UAE exports other mineral products, machniery, electrical equipments, transportation equipments, precious metals, precious stones(gold, diamond etc they have it in excess), aluminum etc..

And the fact that they make a lot of bucks attracting tourists every year.. Now every padi wey touch one enter Dubai cruise.
Still can't believe Nigeria and UAE were actually mates.

What does Ghana and south Africa produce the problem is Buhari and osibanjo who drives joy in keeping Olodos in power

dont listen to all these people. the reason the dollar is strong and the naira is falling is because the demonic white man has rigged the system in his favor. thats the only answer. this is why china is starting an economic war on the west. china produces so much more than the west and exports much more than the whole world so why is the yuan weaker than the dollar ? THATS TELLS YOU RIGHT THERE IT HAS NOTHING TO DO WITH HOW MUCH YOU BUY OR SELL. The fact of the matter is that the man with the biggest weaponry gets to rig the whole system in his favor and thats why america is always buying and accumulating more weapons because they know the minute another nation surpasses them in weaponry acquisition ? they will challenge the rigged process and thats why china too is hell bent on building up its military and arsenal of weapons because they want to challenge this rigged system. and on chinas side is russia and iran and north korea. these nations want to knock down the west so as to eradicate this rigged system. the system is rigged to where africn nations are at the bottom of the pile and that way with just little of there money they can buy up your whole country. its highway global robbery. its the draconian system of intimidation and robbery

We don't need naira again

Nezzjnr:

You ended up saying Nothing

u want me to say that

The country is largely a mono-economy largely dependent on the export of oil for Forex revenue.

That the import is far greater than export.

These two on a broader perspective.

But the 7 points i mentioned are the things bothering the country the most at present.

Another serious impediment is lack of infrastructure such as, electricity, potable water, good transportation/roads

Global Manipulators in the financial district of the 'City of London'. More specially the Rothschilds central banking conglomerate.
Do your googles/research if you have the time.

zubydave:
Let me try to explain the best I can; like some rightly put up there, the value of your currency is directly affected by the amount of the international legal tender; say the dollar for instance, that you have in your foreign reserve. Now the CBN determines the value of your naira to dollar- you hear cbn devalues the naira every now and then. They do this so as to control how much dollar you can take in bid to control what is left in the reserve. If they set a naira to a dollar for instance, now imagine how much will be left in the reserve if every tom and dick comes with a naira to collect a dollar. How much will be left for dangote and otedola who wants to import one thing or the other into Nigeria. My bad , I meant to say how much will be left for you and I that wants to import one laptop or iphone because if they set a dollar to a naira, the likes of dangote and otedola will empty the reserve in maybe a month, and there will not be enough to go round. So you see the secret to having a strong local currency value against the dollar, is to export more so that will can get more dollars into our reserve and the central bank will bring the value of the naira up against the dollar; as we would have had enough to go round. Now don't get it twisted, even if we have more than enough in our foreign reserve, the central bank can still put the value of the naira down against the dollar, which could be done maybe due to one economic policy or the other- china is a typical example. The want to control how much dollar they release back to the world.

Kudos to you for this explanatory answer. Sorry to ask, are you sure this really determines the country's currency before I start telling others the same?

Country foreign Reserve

Hismasterpiece:
Hello.

Recently i have been hearing about the dollar going up in value.

And this has brought about a hike in the prices of commodities in the market and has also brought about a hike in the cost of living of the average Nigerian.

So things are tough in the country now because of this dollar phenomenon

So i would like to know what determines the value of a country's currency and why the Nigerian Naira appears to constantly reducing in value while that of America keeps going higher and higher.

Anybody with meaningful information is welcome. Thanks.

Hismasterpiece:
Hello.

Recently i have been hearing about the dollar going up in value.

And this has brought about a hike in the prices of commodities in the market and has also brought about a hike in the cost of living of the average Nigerian.

So things are tough in the country now because of this dollar phenomenon

So i would like to know what determines the value of a country's currency and why the Nigerian Naira appears to constantly reducing in value while that of America keeps going higher and higher.

Anybody with meaningful information is welcome. Thanks.

ultimately it boils down to demand and supply and the currency is an indicator of confidence in an economy. if an economy is seen as safe/stable/predictable (or less risky than others) them people will prefer to buy the currency/assets/investments in that country for safety, if a country is seen as risky/unstable/unpredictable then people will sell the currency/assets/investments in that country.


The dollar is strong because in times like this people flee to the safety of the dollar and dollar assets/investments, similarly with all the uncertainty of Nigeria not only are foreigners not investing in Nigeria (demanding naira) but Nigerians themselves are divesting from Naira assets and investments (demanding dollars). because the sources of dollars for Nigeria is limited (our only major foreign exchange earner is Oil since we don't export anything) High demand for dollars and low supply will push the naira price higher

The factors that affect the demand and supply, include interest rates (if the interest rate in one country is much higher than in another then there will be demand for that currency because you will get a better return...though this benefit often doesnt last), inflation (if there is inflation in a country then the currency of that country will buy less so the value will go down as people will not want to hold that currency) , political instability (if there is unpolitical instability in a country then residents will sell the currency and keep their wealth in a safe currency to protect their wealth because they dont know what will happen tomorrow), Venezuela and Zimbabwe are good examples of extreme cases where residents hold dollars and change to local currency as and when they need to buy something because the currencies were depreciating at rapid rates by the hr! If you consume more dollars to finance imports (demand) than you export (supply) then your currency will be under pressure! The factors affecting demand and supply are too numerous to list here but but they are simply drivers of demand and supply. Demand and supply is what drives price...be it dollars, houses, tomatoes.

it all boils down to demand and supply....not Aboki fx like that fool at CBN is saying lol

This UAE guys have sense ooo that is why the turn all their cash make from oil to build tourist attraction. So with this the economy is stable. Everybody want to go to Dubai for holiday, business trips and pleasure.

Hismasterpiece:


so the reason for our currency devaluation is because we don't export anything besides oil? But what about UAE? Isn't it the money they make from oil that's the reason their country is the way it is?

Buhari

Ray07:
And they are not even bothered to invest in human resources. Take Japan for instance, this guys built heavy machines for America which in turn bring plenty of $ into their country.
Human resource should be the number thing.

God bless you

Hismasterpiece:


So you're saying Nigeria does not produce anything and we don't have enough foreign reserve? Please explain what foreign reserve is. Thanks

Country foreign Reserve :
provide a level of confidence to markets that a country can meet its external obligations; demonstrate the backing of domestic currency by external assets; assist the government in meeting its foreign exchange needs and external debt obligations; and maintain a reserve for national disasters or emergencies.

yusuf0876:
But when Nigeria hasn't discover crude oil the NAIRA was valuable.

Because then, we were export-focused economy through which we earn forex. No free lazy money like oil. Most forex are from cash crops then.

This is Economics 101.... Demand and Supply.

Actually the question should be relative value and not just value.

To understand it very well. Let us see Dollar as a commodity. If there is a shortage of Dollar and we don't want it to finish, what will be done is to increase the amount of money to buy it.

If I need 2 naira to buy 1 dollar, the way the dollar will finish... infact within two days all our dollars in our foreign reserve will get depleted. But if I need like 10 naira to buy 1 dollar, the demand for it will reduce. If I increase to like 100 naira, the quantity of dollar that will be bought will reduce.

So what CBN does is to regulate the amount of money needed to purchase the dollar so that it won't finish faster and can also be commensurate to how the dollar flows in. So its a balance of rate at which dollar flows in and flows out.

Therefore the reason why naira is low compared to dollar is simply because:

1. There is low supply of dollar

Solution
a. We need to increase our export by becoming more heavily industrilized. Exporting raw materials won't make us achieve this. We need to export more finished goods and services.

2. There is high demand for dollar

Solution
We need to decrease our import by becoming industrialized also which will make us produce and consume locally without the need to import everything we consume in the country.

Facts

Things that take away our dollar

1. IT: Phones, Electronic gadgets etc are imported

2. IT: Hosting websites, buying domain name etc

3. Many sends their children abroad to go and school

4. Medical Tourism

5. Some people uses their naira ATM to withdraw dollars abroad. The deduction falls on our foreign reserve.

6. We export crude oil and import refined oil. It's terrible

And so on...

Measures Used by CBN to control this

1. The CBN tries to control this by reducing the amount that can be transacted in dollars per day which is 100 dollar.

2. Refusing to give dollar to importers who wants to import what we produde already in the country

3. Banning of illegal forex organizations

And so on.

Another Solution to this

1. The government should encourage remote work by encouraging people in the IT space to do remote work with foreign companies.

2. The government should ban some imported goods to allow locally made goods to thrive

3. The government should study the goods and services we import, then try and get a foreign investor to come and establish the company that produces such or render such services here in the country.

4. The government should stop politicians from seeking medical support abroad.

And so on

Thanks.

Oju4190:
Dis guy na student.....He won gather ideas for here take write he project for school

and that shows he's such a good one if your premise is correct.
Trust me a high percentage of citizens even knows little about this discussion

Hismasterpiece:


so doing business in Nigeria isn't easy? how do you mean?

how does insecurity affect the country's currency value

doesn't nigeria export oil among other things?

Insecurity = No FDI...or foreign direct investment.

Say for example, you have a house where you sell goods. But on the next street, there is a house where the tenants are much. So you decide to start selling your goods in that house.
But the problem is every time you send your worker to the place, they get robbed or killed...and you make losses.

Now, in this analogy, you are the seller from a foreign country, the house on the other street is Nigeria. The money and goods you take to the other house is the FDI...your workers getting robbed constantly is the insecurity

China decided to keep her currency weak to the dollar to favour its economy and attract foreign companies for the sake of cheap labour.

Often, the US has accused China of currency manipulation to keep it weak (try and Google this).

HEAVEN4444:
dont listen to all these people. the reason the dollar is strong and the naira is falling is because the demonic white man has rigged the system in his favor. thats the only answer. this is why china is starting an economic war on the west. china produces so much more than the west and exports much more than the whole world so why is the yuan weaker than the dollar ? THATS TELLS YOU RIGHT THERE IT HAS NOTHING TO DO WITH HOW MUCH YOU BUY OR SELL. The fact of the matter is that the man with the biggest weaponry gets to rig the whole system in his favor and thats why america is always buying and accumulating more weapons because they know the minute another nation surpasses them in weaponry acquisition ? they will challenge the rigged process and thats why china too is hell bent on building up its military and arsenal of weapons because they want to challenge this rigged system. and on chinas side is russia and iran and north korea. these nations want to knock down the west so as to eradicate this rigged system. the system is rigged to where africn nations are at the bottom of the pile and that way with just little of there money they can buy up your whole country. its highway global robbery. its the draconian system of intimidation and robbery

Hismasterpiece:


so the reason for our currency devaluation is because we don't export anything besides oil? But what about UAE? Isn't it the money they make from oil that's the reason their country is the way it is?

No. UAE sells tourism to the world, the money Dubai only makes from tourism is far more than oil revenues

Exports
Imports
Level of indebtedness

In Nigeria's case you can also include:
Bubu
Emefiele

twosquare:
China decided to keep her currency weak to the dollar to favour its economy and attract foreign companies for the sake of cheap labour.

Often, the US has accused China of currency manipulation to keep it weak (try and Google this).

so bsically what you are saying is that there is no global mechanism that determines currency but a country can manipulate its own currency. CASE CLOSED. THATS MY POINT, ITS ALL RIGGED.

Quite sufficient

VeeVeeMyLuv:
It is not that Dollar is going up

Instead it is your naira that is diving downwards.

@ topic

1. Fisical responsibility and accountability.
2. The level of greed & corruption.
3. Human rights law.
4. Foi.
5. Ease of doing business
6. Level of insecurity
7. Amount of export to import.

I think these points are sufficient

These re questions Google can answer. Pls do ur research privately. Thks

Hismasterpiece:


So you're saying Nigeria does not produce anything and we don't have enough foreign reserve? Please explain what foreign reserve is. Thanks

Hismasterpiece:


so the reason for our currency devaluation is because we don't export anything besides oil? But what about UAE? Isn't it the money they make from oil that's the reason their country is the way it is?

The invested their oil in tourism and made their country peaceful and business friendly for investors.

Not just oil, anything that makes another person or company to bring their currency and exchanges with yours so that they use it to buy from you either as tourist or product or services

For your information the weak yuan give China the edge over Dollar that is one their strategies. If dollar is equal to yuan most west that do thier production in China will move back home, that is why trump was not happy with China. Can you use yuan to buy something in China no. You must change it to Dollar if China get mind let them start to do international business in yuan. The truth is that any nation the import way to much than export will fail in her currency. Nigeria is a consuming nation. We need to start produce, you would believe what people import into this country with dollars

HEAVEN4444:
dont listen to all these people. the reason the dollar is strong and the naira is falling is because the demonic white man has rigged the system in his favor. thats the only answer. this is why china is starting an economic war on the west. china produces so much more than the west and exports much more than the whole world so why is the yuan weaker than the dollar ? THATS TELLS YOU RIGHT THERE IT HAS NOTHING TO DO WITH HOW MUCH YOU BUY OR SELL. The fact of the matter is that the man with the biggest weaponry gets to rig the whole system in his favor and thats why america is always buying and accumulating more weapons because they know the minute another nation surpasses them in weaponry acquisition ? they will challenge the rigged process and thats why china too is hell bent on building up its military and arsenal of weapons because they want to challenge this rigged system. and on chinas side is russia and iran and north korea. these nations want to knock down the west so as to eradicate this rigged system. the system is rigged to where africn nations are at the bottom of the pile and that way with just little of there money they can buy up your whole country. its highway global robbery. its the draconian system of intimidation and robbery

Siramen2001:
For your information the weak yuan give China the edge over Dollar that is one their strategies. If dollar is equal to yuan most west that do thier production in China will move back home, that is why trump was not happy with China. Can you use yuan to buy something in China no. You must change it to Dollar if China get mind let them start to do international business in yuan. The truth is that any nation the import way to much than export will fail in her currency. Nigeria is a consuming nation. We need to start produce, you would believe what people import into this country with dollars

its all manipulated lies. china and usa are bedfellows in this lie. thats why the USA owes china trillions of dollars. the only reason china is trying to usurp the usa now is because they feel they are now militarily stronger. but all these first world G7 countries are all bedfellows in manipulating 3rd world nations currencies. why do you think they never invite any third world country to their G7 meetings ? thats where they do all their manipulations and schemes to rob the poor 3rd world countries through their currency manipulations via IMF and WORLD BANK. economic hit men.

What Nigeria can do to strengthen the Naira
1. Security of lives and property
Inasmuch as your equipment has to be safe, your workers down to cleaner must feel safe both at work and home .

2. Eliminate nepotism
When merit is sacrifice for friends and family, investors will lose their confidence to invest.

3. Expand your industrial base

4. Eliminate multiple taxation.
VAT was unified under federal control to reduce multiple taxation but it became abused as the sharing formula favoured huge docile population instead of productivity

5. Corruption, of course

VeeVeeMyLuv:
It is not that Dollar is going up

Instead it is your naira that is diving downwards.

@ topic

1. Fisical responsibility and accountability.
2. The level of greed & corruption.
3. Human rights law.
4. Foi.
5. Ease of doing business
6. Level of insecurity
7. Amount of export to import.

I think these points are sufficient

correct economist

Femi8586:


The truth is, Nigeria can be like(or more than) UAE but corruption and greediness will not let us. We sell the same oil, but why are they progressing and we regressing? CORRUPTION.

Apart from oil, UAE exports other mineral products, machniery, electrical equipments, transportation equipments, precious metals, precious stones(gold, diamond etc they have it in excess), aluminum etc..

Population too
What is the population of UAE, SAUDI and other oil producing countries

olalekan1:
Many people don't understand the effect of exchange rate speculation on the price of goods and services in this country. See below

Assuming you buy and sell phones, the phones are all foreign manufactured phone; by implication, you need to convert your hard earned Naira to the foreign currency e.g. dollar. Assuming you invested 20 million naira and this was when 1 dollar is being exchanged for 300 naira. This implies that your 20 million naira when converted to dollar is 66,667 dollars.

Your goods arrived and you decided to sell them within the possible shortest period so that you can re-stock. While waiting for buyers, you started hearing that one dollar is now 400 naira or 500 and so on. As a business man that does not want to run out of business, what will you do?

As business man, you will definitely increase the price of your old stock. If you failed to do this, the 20 million naira you invested will not be able to purchase the quantity of phones you had initially bought when the exchange rate was 300.

As a business man, you have done the right thing to protect your investment but this action will have effect on the purchasing power of the consumer.

That is how the trend will continue because the consumer too will increase their own price of whatever goods or services they are offering so that they can be able to get what they need.

This is inflation and the only solution is that we patronize our own products and services else we will continue to cry while we enrich foreign economy.

well analysed...

Just imagine Nigeria has up to 10 grade A refineries producing for local consumption and exporting refined petrol to most of the African countries. We can become a hub for refined petrol and other allied petroleum products. Our Naira will rise because those who want to buy refined products from us will seek to buy Naira. It is simple but corruption won't these lazy leaders do the right thing.

Ask Buhari why we are not refining petroleum products six years after he came to power and see how foolish a leader he is.