004gist:


You can't save because ur money is now worthless.
U take 5000 to buy ordinary fish. U take 9000 to 12000 to buy a paint of beans. U take 80,000 to buy a bag of rice. What does that tells u? Soo much money chasing few goods and this is what we call inflation... Galloping inflation.... Stageinflation because right now u guys facing high unemployment and inflation.
Same thing that happened in Zimbabwe.. Where people carry money in whellbarow. People are almost doing it, if not for people POS transfer etc. Imagine u want to buy food stuff for your wedding.. Or u want to buy a tokunbo car... I bet u.. U will carry that money in sacks.

Compare that with UK where I am. U want to buy same car.. Just 400 pounds is enough to get u a sound car unlike Nigeria 10 million.

U hardly see someone with 30,000 pounds hardly that's 2 to 3 year savings.

Germanhunter:
Hello everybody !!.. I need a business loan of 100k as at this moment .. I have good collateral and can pay back in two weeks .. it really got to this but then life is a misery …if possible, I will pay considerable interest ..loan please and I reside in Lagos and can meet up..
Thank you
Yours sincerely

nwirinedu:
One has to ask, what type of inflation are we talking about? Is it Demand pull or Cost push inflation.?

Its obvious that we are dealing with cost push inflation in Nigeria, caused by too much money coming into the country from foreign loans which end up in a few hands and is distributed to sectors of the economy that need it.

Yet the burdened masses are made to bear the brunt of the consequences of bad policy decisions of a privileged few.

RightChanneI:


You are now getting my point, you can't save when you don't have enough. So do Nigeria economy now have enough money in circulation as you claimed? If there's too much money in circulation, people will save because they have enough at hand but a situation where people are crying for food because they don't have enough even to feed themselves so did you think they will save?

Increasing the interest rate is not the best at this time when there is economic great depression in Nigeria. White men policies will never work in Nigeria where corruption has come to stay, we shouldn't follow white men policies because we have different cultures, beliefs, races, etc

MasterJayJay:

Cost push inflation caused by removal of petrol subsidy, naira devaluation. Not the loan you said up there.

004gist:


There is soo much naira in circulation but very low purchasing Power. The money is almost useless.

RightChanneI:


If there is too much money in circulation, people won't be crying for food. Even at higher price, so far more money is at hand, no one will be glamouring for hunger.

One of the causes of low purchasing power is part of what we are discussing since. APC government regulations and policies are not favourable, increasing interest rate is not the best at this time, take it or leave it. Another point is this, if there is too much money in circulation as you said, workers won't have agitated for increment in minimum wage so don't be deceived by APC led government

004gist:



What about if bag of rice is sold at let's say 30 naira? And with 50 naira u get a full pick-up of yams and with 7 naira u get a carton of indomie

And now you are holding let's say 100,000 naira I bet u, u won't be able to finish that 100,000 in 20 years if u just fold ur arms not working. That's the situation of things in UK. To see someon with 5k pounds u are a big person.

But Nigeria 5000 won't even reach for 2 square meal.


So much money in ur hands but it's worthless

2 ways to solve this issue==

Redomination of ur currency by removing multiply zero. 100,000=1 naira.

Or cool dowb or slow down the rate of inflation through raising the interest rate high.

lastkingsman:


That's not how you solve inflation problem with reference to 'redomination'. On increasing interest rate, it won't work in Nigeria scenario as Nigeria is not like Western economics that run largely on credit financing.

Nigeria inflation is cost-pull not demand-pull

"'Demand pull inflation arises when the aggregate demand becomes more than the aggregate supply in the economy. Cost pull inflation occurs when aggregate demand remains the same but there is a decline in aggregate supply due to external factors that cause rise in price levels."' QUOTED

This "cost" in this situation is coming from high FX rate of 1,600/$. Import is so expensive that even petrol is costing FGN 700b naira per month to keep the price at 700-800 naira.

The solution is bringing down the exchange rate through exports (oil in short term) , increasing capital importation (FPIs, FDIs and Remittances), cut down cost of governance and budgetary fiscal discipline.

Unfortunately the Jagaban of Borgu kingdom and the mobil trained accountant does have what it takes to implement these solutions, hence it will get worse. If he like, he can increase the interest rate to 1000% and redonminate naira by factor of 10 ^ -3. Nothing will change

lastkingsman:


That's not how you solve inflation problem with reference to 'redomination'. On increasing interest rate, it won't work in Nigeria scenario as Nigeria is not like Western economics that run largely on credit financing.

Nigeria inflation is cost-pull not demand-pull

"'Demand pull inflation arises when the aggregate demand becomes more than the aggregate supply in the economy. Cost pull inflation occurs when aggregate demand remains the same but there is a decline in aggregate supply due to external factors that cause rise in price levels."' QUOTED

This "cost" in this situation is coming from high FX rate of 1,600/$. Import is so expensive that even petrol is costing FGN 700b naira per month to keep the price at 700-800 naira.

The solution is bringing down the exchange rate through exports (oil in short term) , increasing capital importation (FPIs, FDIs and Remittances), cut down cost of governance and budgetary fiscal discipline.

Unfortunately the Jagaban of Borgu kingdom and the mobil trained accountant does have what it takes to implement these solutions, hence it will get worse. If he like, he can increase the interest rate to 1000% and redonminate naira by factor of 10 ^ -3. Nothing will change

004gist:



What about if bag of rice is sold at let's say 30 naira? And with 50 naira u get a full pick-up of yams and with 7 naira u get a carton of indomie

And now you are holding let's say 100,000 naira I bet u, u won't be able to finish that 100,000 in 20 years if u just fold ur arms not working. That's the situation of things in UK. To see someon with 5k pounds u are a big person.

004gist:


But Nigeria 5000 won't even reach for 2 square meal.


So much money in ur hands but it's worthless

2 ways to solve this issue==

Redomination of ur currency by removing multiply zero. 100,000=1 naira.

Or cool dowb or slow down the rate of inflation through raising the interest rate high.

Neurotika:


Even if the inflation is cost driven, a hike in rates can bring down aggregate demand in such a way that prices will be forced to fall if other factors remain constant. The hawkish stance of the apex bank is mainly concerned about that transmission channel. Besides, CBN may also want to attract more Foreign Portfolio Investment, reduce pressures on FX reserves and to mitigate FX depreciation. On fiscal discipline, I agree with that.

004gist:


How did Ghana and Zimbabwe solve their currency problem . When there is hyper inflation and it affect currency then redomination of the currency comes in

lastkingsman:


Your first paragraph works in a well defined economy, not Nigeria.

[An interest rate is the cost you pay to the lender for borrowing money to finance your loan, on top of the loan amount or your principal. The higher the interest rate, the more you'll pay over the life of your loan.]

From the above definition, how many Nigerians borrow to finance anything (business, mortgage, car and so on)?

Raising interest rate is just a mechanism to suck so cash from circulation and discourage further money supply through borrowing but CBN is still increasing money supply like drug addicts and expecting interest rate hike to work. Lol

MasterJayJay:

Because Dangote will sell petrol at 200 naira per litre?

It wasn't advisable to have increased minimum wage from 30,000 naira to 70,000 naira? So they should have reduced the minimum wage to 5,000 naira.

The only excess money in circulation is the one in the hands of polithievians and those appointed by government to head agencies.

Current inflation is as a result of removal of petrol subsidy and devaluation of naira. There's no way a bag of rice can sell for 15,000 naira when these factors are still there.

The only person sabotaging the government is the government itself.

Bubu4Sea:
The sooner we break nija the better

The SS & SE does not need to be linked to this failed country run by a druglord

Artscollection:


The problem is that it's not induced by high demand of goods or excess liquidity, this is a peculiar issue that should be addressed locally not copying from america, the inflation that america is fighting is a fallout of the excess money they have been printing from convid time used for social programmes and their proxy war in ukraine while ours is as result of the subsidy removal and the naira collapse.

Honestey:
Now that 70k minimum wage will start looking like 15k minimum wage

RightChanneI:


The system that works with White men economy will never work in Nigeria. Do you now have more money in Nigeria economy? If there's more money in the circulation as you said, people will not be crying for hunger. One of what Nigeria needed now is investment that will create more job opportunities but by increasing the interest rate would that be achieved? You have just displayed your ignorance, because more money in circulation means high prices causing hardship.

What you said above can only work in a sane economy but not in a corrupt economy like Nigeria

Gboss247:
I agreed with your first paragraph but disagreed with second, money is said to be excess when there is more money in circulation than the goods and services produced or excess local currency chasing after few forex. The last time I checked, Nigeria had over N30trillion in circulation with minimum wage at N30,000 showing excessive money supply. If there excess money supply, Nigerian GDP shouldn't be growing in naira.

RightChanneI:


I didn't read much what you wrote but I will advice you to study the economy of developed nations, you will understand the reason why they save more and why they encourage savings. Remember, you can't save what you don't have, it is when you have enough that you'll think of saving. So go back and read the short note I typed above!

lastkingsman:


You said it here that because of POS technology, most Nigerians are not carrying cash up and down.

So you can simply press the amount of money you want to send and transfer otherwise people will be carrying cash up and down now in wheel barrow and car boots.

Redenomination doesn't affect the value of a currency against other currency like USD, pounds and so on. It just reduces the amount of cash being carried around but the value of currency remains the same.

For example if your salary was 70,000 before redomination, it becomes, 700 naira after that. Nothing complicated here

RightChanneI:


Are you trying to compare UK economy with Nigeria economy?

UK minimum wage is £11.44 per hour, Nigeria minimum wage per day is ₦750, can you calculate the different? So tell me how the least paying worker in Nigeria can get 100k monthly while his/her monthly pay is 30k

MasterJayJay:

Circulation in the hands of which people? If government says they want to take part of the excess money from your own account, will you agree?

RightChanneI:


You are now getting my point, you can't save when you don't have enough. So do Nigeria economy now have enough money in circulation as you claimed? If there's too much money in circulation, people will save because they have enough at hand but a situation where people are crying for food because they don't have enough even to feed themselves so did you think they will save?

Increasing the interest rate is not the best at this time when there is economic great depression in Nigeria. White men policies will never work in Nigeria where corruption has come to stay, we shouldn't follow white men policies because we have different cultures, beliefs, races, etc

Gboss247:
A lot of African countries have been breaking for many without any results and you know why? The black race gat nothing to offer and prefers to chase shadows and shift blames rather capacity building.

Gboss247:
I disagree with you because you never have enough money, and that is why there is propensity to save and marginal propensity to save. Nigerians having excessive naira is a sign of currency devaluation which increases the inflation rate and hence, high prices of commodities.

Gboss247:

Also, Nigerians not having not food is fiction because the quantity food one can buy is determined by the purchasing power.

Gboss247:
Are aware that Buhari and Emefiele printed trillions of naira into circulation claiming it as oil revenue and Tinubu is doing the same.

004gist:


I was giving example how our economy has failed and to point to u that there is too much naira released in the economy that led to current state we are.

004gist:

In the past like in 2010 earning minimum wage in UK does not make better than average Nigerian workers.
Infact if u are earning 80 to 120k u are better off someone earning minimum wage in UK as at that time.

Gboss247:
Are you aware that saving a lot of money in your bank account is a sign financial and economic illiteracy, because money has a natural tendency to depreciate over time and your savings become worthless. Money is meant to be invested.

RightChanneI:







UK minimum wage in 2010 was £5.93/hour while Nigeria minimum wage as at 2010 was ₦18,000 which is ₦3,600/week and ₦514/day. You can never be better of someone earning £5.93/hour so please get your fact right before dropping false statements here