GerogeI:


The corruption in CBN has no direct link the exchange rate. There are many other ways to allow banks handle forex flows independently not CBN.

Defending naira means using your export earnings to pay your import demand. This is not the problem, every country is doing this one way or another.

The problem lies in overcentralization of forex controls where all dollars goes to CBN, and is made available for politicians, who prioritize their access to local value. The consequences is that they artificially devalue the local currency every time their is a pressure of higher import than export.

A simple way to understand this is to compare Nigeria Import /Export Ratio in USD. This Ratio in ideal situation should be the exchange rate of naira to USD.
For 2022, Nigeria imported 56.3 billion USD worth of goods. And exported 46.9 billion USD worth of goods.

Our import exceeds our export by 10.6 billion USD., And the Ratio is is 56.3/46.9=1.2. The USD should be worth 1.2 Naira. Let's consider all the imperfections in the system and make this 10 times worse than ideal. 1 USD should be worth 1.2x10=12 naira.

Let's do a similar Analysis for a comparable African country, Egypt. In 2022 Egypt imported 85.76 billion usd in goods, and exported 51.6 billion USD. Egypt Import Export Ratio for 2022 is 85.76/51.6=1.66
Multiply by 10 to consider real world imperfections, Egyptian pounds should exchange at 16.6 To USD. In reality Egyptian pounds traded at 15 to 1 USD in Jan 2022, and 24 to 1 USD in Dec 2022.

Let's look at South Africa.

Imports 2022 was 136.2 billion usd
Exports 2022 was 122.9 billion usd

Import Export Ratio =136.2/122.9=1.10
Multiply by 10, 1 usd should ideally be 11 rands.
In reality in 2022, 1 usd was 16.88 rands.


These comparisons shows you how well the economy is being managed. For Nigeria instead of 1USD to 12 naira in 2022, we had 740 naira.
Our economy and currency is simply being mismanaged for politics and theft, and its been going on for decades. Currency devaluation not only enables politicians to steal, they use it to please the West. It should banned by law.

When was the last time naira exchanged at 12 naira to 1 USD? How much has the Naira been devalued? As at 2022, it was 740/12×100=6166% devalued.
This is the only reason coins have no value any more.

Someone will come to argue we should use forex earning not import and export. They mirror , so it's same thing. Or they can argue that our population is large. It reflects in the size of our imports, vs local production. The summary is that Nigeria earned only 20% less foreign exchange than it needed for purchases in 2022. How that warrants today's exchange rate of N1150 to usd is a mystery. But that forex is scarce I'd a big fat lie we have at least 80% of what we need.

U are very smart and knowledgeable..

We have been made to believe the Naira is losing is value because we don’t manufacture anything..

There are countries worse than us when it’s comes to manufacturing, yet they are doing fine..

We have corrupt, insane, dumb and evil politicians running the country…


Naira should not exceed 20 Naira to a dollar..

And it’s stolen by the politicians, our problem is mismanagement and wickedness in high places.

GerogeI:


The corruption in CBN has no direct link the exchange rate. There are many other ways to allow banks handle forex flows independently not CBN.

Defending naira means using your export earnings to pay your import demand. This is not the problem, every country is doing this one way or another.

The problem lies in overcentralization of forex controls where all dollars goes to CBN, and is made available for politicians, who prioritize their access to local value. The consequences is that they artificially devalue the local currency every time their is a pressure of higher import than export.

A simple way to understand this is to compare Nigeria Import /Export Ratio in USD. This Ratio in ideal situation should be the exchange rate of naira to USD.
For 2022, Nigeria imported 56.3 billion USD worth of goods. And exported 46.9 billion USD worth of goods.

Our import exceeds our export by 10.6 billion USD., And the Ratio is is 56.3/46.9=1.2. The USD should be worth 1.2 Naira. Let's consider all the imperfections in the system and make this 10 times worse than ideal. 1 USD should be worth 1.2x10=12 naira.

Let's do a similar Analysis for a comparable African country, Egypt. In 2022 Egypt imported 85.76 billion usd in goods, and exported 51.6 billion USD. Egypt Import Export Ratio for 2022 is 85.76/51.6=1.66
Multiply by 10 to consider real world imperfections, Egyptian pounds should exchange at 16.6 To USD. In reality Egyptian pounds traded at 15 to 1 USD in Jan 2022, and 24 to 1 USD in Dec 2022.

Let's look at South Africa.

Imports 2022 was 136.2 billion usd
Exports 2022 was 122.9 billion usd

Import Export Ratio =136.2/122.9=1.10
Multiply by 10, 1 usd should ideally be 11 rands.
In reality in 2022, 1 usd was 16.88 rands.


These comparisons shows you how well the economy is being managed. For Nigeria instead of 1USD to 12 naira in 2022, we had 740 naira.
Our economy and currency is simply being mismanaged for politics and theft, and its been going on for decades. Currency devaluation not only enables politicians to steal, they use it to please the West. It should banned by law.

When was the last time naira exchanged at 12 naira to 1 USD? How much has the Naira been devalued? As at 2022, it was 740/12×100=6166% devalued.
This is the only reason coins have no value any more.

Someone will come to argue we should use forex earning not import and export. They mirror , so it's same thing. Or they can argue that our population is large. It reflects in the size of our imports, vs local production. The summary is that Nigeria earned only 20% less foreign exchange than it needed for purchases in 2022. How that warrants today's exchange rate of N1150 to usd is a mystery. But that forex is scarce I'd a big fat lie we have at least 80% of what we need.

This information needs to get out there and the print media is part of the problem repeating what the politicians and imf says without doing proper investigation.

GerogeI:


First our GDP is not insignificant, so we do not have forex issue cause if IOCs remittances, but because of a dumb Government, they have no idea of what a free market is. They floated the Naira against foreign currencies which is creating foreign currency demand, without floating foreign currencies against Nairà to create Naira demand in order to arrive at equilibrium pricing.

That's what you are calling IOC remittances. Basically, for you to float your currency, your exports should be in your currency. So foreign importers will approach your banks to get your currency in order to buy your items. They will have to haggle with your bank for an exchange. Basically your banks will be negotiating for more dollars for less Naira in order to make profit. That drives exchange rate in favour of Naira.

But now, we only have local importers going to ask banks for foreign currency, banks and bdcs must make money hence they will negotiate for more Naira for less currency. That drives the exchange rate against the Naira in a bottomless spiral without counter balance.

If you do not have demand for raw local currency, and demand for raw foreign currency in the market, float one of them is a stupid idea, cause there is no counter balance. It is not a free market. In the Current case, the exchange rate will not favour Naira even at 10,000 Naira to 1 usd it will still be sliding down against USD. The fall is bottomless, that why it's stupid plain and simple.



Why do we not have foreign demand for Naira, the Federal Government and politicians want easy access to USD. It makes money laundering easy. If you visit any ministry in Nigeria. Listen to the directors, they do not talk in Naira anymore. They are all dollarized. So just like Russia started selling oil in Rubbles, Nigeria must first sell oil and all other exports in Naira before floating the Naira. That's why past Govt. Maintained fixed exchange cause they want CBN to collect dollars for them. This one still wants CBN to collect USD, but wants to play with the idea of floating Naira to please western interest in devaluing African currencies to get cheap raw materials. Basically it was to buy for the controversial govt. Legitimacy in the eyes of the West.


Only countries with huge manufacturing like China, or Germany can benefit from currency devaluation. Like
you said, Raw materials exporters like us are better of with commodity based currency like gold, which the West have carefully killed since colonisation. If you use any commodity as money, it is resource based economies like Africa that benefit. If you use paper based manipulative currency, the technology based economies like West Benefit.


This warped decision on floating is my only reason to believe that Tinubu was never an accountant.

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