What exactly is the Nigerian export that'll bring in the foreign exchange which you guys keep mentioning, is it raw materials or finished products

PoliteActivist:

*Politeness*
I modified my post. See above. It is not economic jargon, it is common sense. If my money can buy more in your house, I'd like your house and buy stuff from your house... until I realize I'm giving you all my money!

LAYMAN ECONOMICS , YOU ARE BUYING IN MY HOUSE WHEN AM NOT PRODUCING ANYTHING LOL

THAT WILL ONLY WORK IF AM PRODUCING SO I CAN SELL CHEAP.


SINCE AM IMPORTING EVERYTHING I USE WHAT IS THE NEED OF COMING TO MY HOUSE TO BUY WHEN YOU CAN BUY AT A STABLE PRICE AT WERE YOU ARE







.

sulaak:


What does Nigeria produce, and why will anyone go to Nigeria for a holiday?

Floating the Naira when the country is still unproductive is a World Bank policy that has failed.

Haven't you observed that those supporting it are doing so with theories, that doesnt work in Nigeria, there's corruption, insecurity, and we ain't even a production country, how can those theories work here, they have not mentioned just 1 positive impact the action now has on Nigeirans. Before they complete one sentence 'will' must appear.

It has been months now since subsidy removed and subsequently Naira floated, they should tell us just 1 (one) ease it has brought to Nigerians.

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

Mumu, only a productive economy benefits from devaluation. Nigeria is not a productive country and the purchasing power of her people is extremely low. Devaluation will bring nothing to Nigeria other than poverty and misery. The China you are comparing is the largest exporter of goods in the world, what does Nigeria export other than crude oil?

Jessyjeff:
Please, just say APC mismanaged the Naira by over borrowing and floating of the currency.

When Obasanjo took over in 1999, Nigeria had around 3 billion dollars in foreign reserve. Nigeria was still then heavily dependent on importation; he didn't float Naira, and he didn't stop subsidy on petrol, diesel and Kerosene.

Yet, Nigeria's inflation rate was under 15% and food was affordable too. He assembled able hands who were able to grow the economy and pay Nigeria's debts or negotiate some debt forgiveness.

Why did everything about Nigeria's economy start deteriorating rapidly immediately APC took over government in 2015? APC has no clue about economic management, especially on federal level.

Be sincere with yourself.

Nigeria's economy began to sink under Jonathan.

A barrel of crude oil was above $140, despite, Jonathan misnaged all the money without saving a penny.

Over $70b he met at the treasury was also depleted.

Despite the fact that obasanjo cleared all the foreign debts, Jonathan started accumulating debts again.

PoliteActivist:

*Politeness*
I modified my post. See above. It is not economic jargon, it is common sense. If my money can buy more in your house, I'd like your house and buy stuff from your house... until I realize I'm giving you all my money!

That would work in a nation that is heavily vested into local production, consumption and exports.

Your nation is not anywhere near self-sufficient and export-based.

ckc:
Based on the catastrophe this floating of naira of a thing by Tinubu is causing to the economy, can anyone please educate me on the ONE benefit of this policy. I want to learn.

Something that is floating is not drowning which is a good thing I guess!!!

ckc:
Based on the catastrophe this floating of naira of a thing by Tinubu is causing to the economy, can anyone please educate me on the ONE benefit of this policy. I want to learn.

The truth is that many people underestimated economics and think any dick tom or harry can be appointed to handle an agency or office related to the economy. People think economics is just dd and ss, but it is far more than that.

OP back to your question, their are many reasons why a government will float it currency, economists call floating of the currency a MARKET exchange regime. Though a good exchange regime but should not be used in a MONO ECONOMY like Nigeria. Now, the only reason Tinubu government floated the currency is to make crude oil cheap, crude oil is our only source of fx and by implication the only source of revenue, the government needs money, so it had to make crude oil cheap, remember, we have competitors in the oil market.

I think Buhari did almost same with the currency market when our crude oil has no buyers sometimes around 2020.

Genius100:


Look at what happened in the last few years when for example, official rate was N450 and parallel rate was N800. Nigeria essentially restricted the people that could get the dollar at N450. What that means is that there is a thriving black market where the rates are much higher. First, International airlines that sold tickets in Naira and wanted to convert their money to Dollars to take it back to their country could not do so because CBN did not have enough dollars to give them. Nigeria became the number 1 country where airlines had their money stuck. So this puts the country in a situation where foreign entities would not want to invest in the country.

Now think about Diasporan remittances which is supposed to be over $20 billion a year. This money will never come through the official changes because no one will change dollars for N450 when parallel rate is N800. So consequently, the CBN reserves became very low. With low forex reserves, the Country was in a position where we almost could not pay our foreign debt back which constitutes is a death sentence to the economy, if we default.

Also, the Diasporan remittances never made it into the country. It was being held by certain Fintech and their partner banks in Nigeria. They hoarded it which made dollars more scarce and led to Naira continuing to lose value. They were seeing crazy gains while the rest of the country suffered.

Compare that to when you float. The official rates and parallel rates are largely harmonized. Now Diasporans can send money through officially licensed IMTOs. These IMTOs will give the CBN a certain percentage of the dollars- let's say 50% - That amounts to about $10 billion.

Second, the people that were speculating and hoarding millions of dollars for gains, now can no longer make arbitrage money because there is no longer substantial difference in rates between official and parallel. Those dollars can now go to productive activity. Last, foreign companies now know they can get their money in and out of the country which will spur investments.

Ultimately, floating allows CBN to grow its reserves, which allows Nigeria to service debts and also procure additional low interest debt that can be used for the desperately needed capital investments in the country.

well articulated, are you an economist ?

This is the most stupid Economic policy ever, how do you float a currency knowing fully well you don't produce anything, you eventually import 95% of your goods. This policy will only benefit the rich and render the masses poorer.

The truth is that many people underestimated economics and think any dick tom or harry can be appointed to handle an agency or office related to the economy. People think economics is just dd and ss, but it is far more than that.

OP back to your question, their are many reasons why a government will float it currency, economists call floating of the currency a MARKET exchange regime. Though a good exchange regime but should not be used in a MONO ECONOMY like Nigeria. Now, the only reason Tinubu government floated the currency is to make crude oil cheap, crude oil is our only source of fx and by implication the only source of revenue, the government needs money, so it had to make crude oil cheap, remember, we have competitors in the oil market.

I think Buhari did almost same with the currency market when our crude oil has no buyers sometimes around 2020.

airsaylongcome:


In simple, non-technical, non-jargon English, what does the bolded mean?

Nothing technical about it. The jargon English is online for you to google

DeLaRue:
During Buhari's government, Nigeria, through the CBN, was spending according to some estimates, more than $12billion per year to maintain 2 exchange rates N440, and I think N570 to a dollar.

That $12 billion dollars was effectively a subsidy.

By the time Buhari left, Nigeria had just about $3.5 billion in its account. It is from that amount that we have to pay our debts and pay for imports of goods.

As you can see, Nigeria no longer had the $12 billion dollars required to keep naira/dollar rate at less than N600. So the current government had no choice but to give up on trying to subsidise the naira.

If Atiku or any other candidate had won, they would have had no choice than to follow the same path.

It is like buying a BMW when you had money. If you no longer have money to maintain it, what do you do, you give it up. No be so?

Your friends and neighbours who see you taking Okada will call you stupid for giving up such a beautiful car. But, younno longer have know what they don't know - you no longer have the money to maintain the car.

This is exactly where Nigeria is at present.

the same political jargons they keep pushing out to gullibles. We don't have money to do this and that, but we have money to buy luxurious cars for senators, we also have money to subsidise Hajj pilgrimage. Mtvhew

Jessyjeff:
Please, just say APC mismanaged the Naira by over borrowing and floating of the currency.

When Obasanjo took over in 1999, Nigeria had around 3 billion dollars in foreign reserve. Nigeria was still then heavily dependent on importation; he didn't float Naira, and he didn't stop subsidy on petrol, diesel and Kerosene.

Yet, Nigeria's inflation rate was under 15% and food was affordable too. He assembled able hands who were able to grow the economy and pay Nigeria's debts or negotiate some debt forgiveness.

Why did everything about Nigeria's economy start deteriorating rapidly immediately APC took over government in 2015? APC has no clue about economic management, especially on federal level.

Leave them. Let them be writing beautiful rubbish.

I wonder what Obasanjo could have done in 1999 if he was the one that took over government when the whole Nation was in a downward spiral. Maybe Obasanjo should have sold us to the Chinese because of rot meet on ground

In less than 10years these ones took power,they turned us into the poverty capital of the World yet they still have the effrontery to dey talk rubbish

In a country where you don't manufacture anything,where the energy sector is next to nothing. You float your currency and you're talking beautiful English

Nonesense!

tommy589:
It is like an auction where they bid for dollars. Unlike before when government fixed the rate and supported it by way of subsidy. So no more round tripping

Bid dollars from where? How and which place?

The only place the common man can see dollers to make payment for goods outside the country is through the aboki.

Anguldi:
We've got a huge population but not productive. Industrialization is the way forward

As simple as that...!

This is what makes Buhari's 2 terms a colossal waste.

ckc:
Honestly I don't understand all you saying. Truth be told

Na you wan gree understand...

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

What are you producing that people will export?

uvie66:
well articulated, are you an economist ?

I don't even understand any point in what that dude was saying. Not the answer we were expecting.

[quote author=ckc post=128443657]Based on the catastrophe this floating of naira of a thing by Tinubu is causing to the economy, can anyone please educate me on the ONE benefit of this policy. I want to learn.[/quo

Only God know the kind education some ouna get sha,only God can help you, person dey explain to you in lay man terms but you are still arguing blindly,so you want the F.G to be fixing forex for you so that you can continue the merry go round that have been happening for the past fifty years?.

Just as the rich rule the poor, so the borrower is servant to the Lender. IMF and Co rule us and direct our decisions because they ownes the monies we spend. Na we go borrow money from them. It is the way they wants it. It is never designed to make you leave the boundage rather to continue to destroy the society helped by your looting Politicians and civil servants .

Oga you just talked about the positive side of it how about the bad side and please remember to also talk about the current reality of we the every day Nigerians and also cheap in d escape route.
As for me I don't think such policy will benefit the citizens bcuz we only produce little and with such economic terms we might b forced to sky rocket d price of the little we have just bcuz of the demand from from foreigners in other for us to become rich overnight.

DeLaRue:
During Buhari's government, Nigeria, through the CBN, was spending according to some estimates, more than $12billion per year to maintain 2 exchange rates N440, and I think N570 to a dollar.

That $12 billion dollars was effectively a subsidy.

By the time Buhari left, Nigeria had just about $3.5 billion in its account. It is from that amount that we have to pay our debts and pay for imports of goods.

As you can see, Nigeria no longer had the $12 billion dollars required to keep naira/dollar rate at less than N600. So the current government had no choice but to give up on trying to subsidise the naira.

If Atiku or any other candidate had won, they would have had no choice than to follow the same path.

It is like buying a BMW when you had money. If you no longer have money to maintain it, what do you do, you give it up. No be so?

Your friends and neighbours who see you taking Okada will call you stupid for giving up such a beautiful car. But, younno longer have know what they don't know - you no longer have the money to maintain the car.

This is exactly where Nigeria is at present.

SO HOW DOES THIS BENEFIT THE COMMON MAN? WHAT HAPPENED THAT WE ARE NO LONGER HAVE THE MONEY TO DEFEND NAIRA


WHO EMBEZELLED NATION MONIES IN BUHARIS GOV.



IF PAST PRESIDENTS IS NOT BROUGHT OUT TRIED AND IF FOUND GUITY PROCECUTED , THEN THE COUNTRY WILL BEGIN TO WIBLE TO SHAMBLES



SAME THING HAPPENED DURING JONATAHAN , HE WAS NERE CALLED FOR QUESTIONING OF MISMANAGEMENT


HOW SUCH A CIUNTRY GROW

blacknp:
You even dey try to even convince these nomadic minded things, let them be waiting for government to keep giving them a subsidized existence.

Nothing them they export for foreign exchange, 220 million sambos are waiting from 1.4 million barrels per day crude oil receipts, they no get shame, Oblivious minded Things waiting for the CBN to do magic.

Una go wait tire.

Asin ehn

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

Only if you are a country that is big on exports.

DeLaRue:
During Buhari's government, Nigeria, through the CBN, was spending according to some estimates, more than $12billion per year to maintain 2 exchange rates N440, and I think N570 to a dollar.

That $12 billion dollars was effectively a subsidy.

By the time Buhari left, Nigeria had just about $3.5 billion in its account. It is from that amount that we have to pay our debts and pay for imports of goods.

As you can see, Nigeria no longer had the $12 billion dollars required to keep naira/dollar rate at less than N600. So the current government had no choice but to give up on trying to subsidise the naira.

If Atiku or any other candidate had won, they would have had no choice than to follow the same path.

It is like buying a BMW when you had money. If you no longer have money to maintain it, what do you do, you give it up. No be so?

Your friends and neighbours who see you taking Okada will call you stupid for giving up such a beautiful car. But, younno longer have know what they don't know - you no longer have the money to maintain the car.

This is exactly where Nigeria is at present.

Then did the money to buy yatch and exotic imported cars come from? Plus flamboyant renovation of buildings, foreign trips and lavish lifestyle of the so called emilokans ?

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

/

You don't manufacture anything of importance. You don't produce anything. You can't even refine your oil instead you rely on swap. Yet you want to use the prescription that works for China (a manufacturing and production giant). Devaluation works for exporting countries and stable economies not this rubbish that exist in Nigeria.

Salary earners are the worst hit. Inflation has rendered their monthly salaries insignificant.
/

PoliteActivist:


It doesn't have to be big companies. People will learn how to make their own soaps and cough syrups, plus small mam and pap local manufacturers. Any local company that folds despite lack of competition from foreign-made (due to expensive dollar) should not be in business in the first place

You Sabi as e dey go walai... People just like giving excuses for failing without failing yet... It's just crazy

PoliteActivist:
*Politeness*
It will bring in people and investments.
Don't you see US always accusing China of intentionally devaluing their currency?
Example, if Togo devalues their currency you'd be going there to buy stuff and vacations, but if they inflate their currency you won't go

What benefit did it bring to zimbabwe and Venezuela.

It is not so much about devaluing, it is much more about how the economy is managed and how changes are implemented.

UAE has a flat exhange rate that hasnt fluctuated up to 1% for many years inspite of being a petrodollar economy ans is doing very well.

Many countries run a system where the value of their currency is defended and also offer many subsidies and do well.

The story that Nigeria needs no subsidy and no defended currency is very one-sided as it did not take into account the kind of economy Nigeria runs or what the scenarios will be in the absence of these system.

As it stands, tinubu has unleashed a chain reaction that is largely out of his control. The more naira fails to find a support level, the worse it is for fdi and consumer sentiments. The worse it is for fdi and consumer sentiments, the more naira losses value

malali:
Cheaper Exports: When the Naira is devalued, it becomes less valuable compared to other currencies. This makes Nigerian products cheaper for people in other countries. Think of it like selling your cool toy cars to friends abroad at a lower price. More exports mean more money flowing into Nigeria!

Expensive Imports: On the flip side, devaluation makes foreign toys (imports) more expensive for you. Imagine your favorite video games suddenly costing more because they’re imported. This encourages people to buy local toys instead.

Boosting Local Industries: When local toys (goods and services) become cheaper for foreigners, it helps Nigerian businesses grow. They can sell more, hire more people, and contribute to the economy.

Tourism Advantage: Devaluation makes Nigeria an attractive travel destination. Foreign tourists find it cheaper to visit, explore, and spend money here. Imagine more tourists enjoying Nigerian culture, food, and music!

Investment Inflow: Investors like to put their money where it grows. Devaluation encourages foreign investors to set up factories, offices, and businesses in Nigeria. This creates jobs and stimulates economic growth.

Balance of Payments: Devaluation can improve Nigeria’s balance of payments. It’s like keeping track of how much money comes in (exports, investments) versus how much goes out (imports, debt payments). A positive balance is good!

Inflation: Devaluation can lead to higher prices for everyday items (inflation). Imagine your pocket money buying fewer candies because prices went up. But controlled inflation can be healthy for the economy.

Reducing Debt Burden: Nigeria owes money to other countries (national debt). Devaluation makes it easier to repay those loans because the Naira is worth less. It’s like paying back a smaller amount.

Competitiveness: Devaluation makes Nigerian businesses compete better globally. Just like you try to win in video game tournaments, our economy competes with other countries. A cheaper Naira gives us an edge!

Learning Opportunity: Finally, understanding devaluation teaches us about economics. It’s like leveling up in your favorite game. By knowing how money works, we can make smarter decisions for Nigeria’s future!

On the issue of cheap export and also boosting local production. Let's take the case of rice for example, although when the Buhari administration ban the importation of rice, this was suppose to increase local production at a cheaper rate, what we got to experience was that even the local produced rice was more expensive than the foreign one.

With our large population, we can't even produce for ourselves when it comes to farm produce, farmers would want to export their produce instead of selling to the citizens, thereby causing price increase of these produce due to limited supply. I think this is the cause of what we are currently experiencing. No wounder Niger state had to stop the loading of truck from the farm.

For this floating of currency to work effectively, we need to increase production for the growing population. If not, farm produce will keep increasing in price on a daily basis.

Kenochi:
Kill off the parallel market and allow all dollars to go through the banking system only
I was informed that Nigeria is the one of the very few countries in the world that has a parallel market
A friend told me a funny story, he said he was explaining to his friend who was not a Nigerian this double rates and the guy kept asking why we have such operations
Also,with this new rule of collecting all dollars in naira,some illegal operations will just collapse
I don't want to mention anybody but these group knows themselves

One biggest sources of dollars is remittances and this flows majorly through western union down to Nigeria.
Those countries u talked about might have other sources of getting their FX which might be trade surplus etc.

Finally, the inability of the government to service the FX market led to people going to aboki to buy FX even though government sells less price and aboki sell higher prices.

And as at now, if the government still can't service the FX properly it will create a business for people to source for FX in other ways they device.