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Nairaland Forum / Nairaland / General / Business / Wow! This Explains The Fall Of The Naira. (1392 Views)
What Happened To The Naira Swap / CBN Floats The Naira, The Implications For You And I / These Are The Nigerians Benefiting From The Fall Of The Naira (2) (3) (4)
Wow! This Explains The Fall Of The Naira. by lepacious: 11:12pm On Feb 21, 2016 |
Nurdin Temitayo Busari ECO 101. 10 things to understand before you react to the present economic imbroglio. 1. Nigerian Currency loses value based on two major things: low income generation from oil sales and high dollar spending. 2. Selling crude oil at the international market is not lucrative anymore and our economy is oil-based. Dollar is the international currency denominator and our economy is also import-based 3. Oil-based economy means we do not rely on any other thing to make money other than oil. Import-based economy means we import everything we use into the country, supporting dollar strength, we do not export anything outside the country, weakening Naira strength. 4. Nigeria is both consuming nation and civil servant nation at the same time. This means, we do not have the capacity to consume/spend without waiting for the government to pump money into circulation. Most states of the Federation spend 85% of their monthly allocation on salary earners, who are just 15% of their respective populations. 5. It also means over 100million people wait every month for the government to feed them, clothe them, buy them cars, marry for them, bury their dead ones, celebrate their birthdays and naming ceremonies, build house for them without paying taxes or vats and without allowing the money to go back into circulation. 6. The foreign reserve is our primary source of dollar, it will keep dwindling the more we spend to sustain the populace through federal allocations and sustain importation. 7. Our currency will also continue to lose values because we will be placing it beside a stronger dollar every time. Whatever we decide to sell or raise economically will be so cheap. Imagine a TV that is being sold for $100 with the Naira rate at N400. 8. During the last dispensation, especially during the campaigns, a large amount of dollar came into circulation and are still in circulation. Naira will continue to be worthless if those dollars are allowed to come back into the economy without adequate monitoring and appropriate channeling 9. Nigerian banks benefited from free access to money in the last dispensation. In fact, governments (federal and states) are the most valued customers of banks. Now with TSA and blockage of free money, banks need to sustain their capital base through Forex. Government needs to strengthen Naira by controlling forex then there is a problem. That's why you will receive dollar from the bank at N199 official rate but pay it out via the same bank at N385 or more black market rate 9. Nigerians outside the country or all who transact with dollars via Nigerian banks actually think the problem is from the government. The banks are Hawks. 10. The only way to stop free Naira fall and strengthen our currency is to drastically minimize our dollar spending, reduce our dependency on importation/foreign products and take away the economy from being oil dependent. There is no magic button to be pressed by the government. PS: This breakdown is inspired by Dr. Ahmad Holderness' comments on my rant updates last night https://m.facebook.com/whereistayo/posts/10154567478492306 2 Likes 2 Shares |
Re: Wow! This Explains The Fall Of The Naira. by jaybanfa(m): 11:39pm On Feb 21, 2016 |
@Poster succint analogy.. Imagine Nigerians importing container loads of house furnishing from China.. There is practically nothin we use that is home grown.. We need to press reset on our values.. |
Re: Wow! This Explains The Fall Of The Naira. by LRNZH(m): 11:42pm On Feb 21, 2016 |
Tonyebarcanista.... Come and learn something and stop blaming Buhari or Emefiele for the current Dollar scarcity and Naira fall. 1 Like 2 Shares |
Re: Wow! This Explains The Fall Of The Naira. by modath(f): 11:54pm On Feb 21, 2016 |
EoD... This encapsulates it.... As for that false dollar scarcity theory, it was a knee jerk reaction to prevent the "beneficiaries" of the election dollar torrential rainfall/flooding from being able to do wire transfer out of the country!!! It wasn't to create a false naira appreciation... Bank rate held steady at 197-199, why then would any rational + logical being swallow that theory ![]() Nigerians however are criminal minded & they either kept them in safes or septic tanks, they also got couriers to travel with out of the country with cash... *mic drop* ... I wan do vigil for oil price to rise ![]() 1 Like 1 Share |
Re: Wow! This Explains The Fall Of The Naira. by LRNZH(m): 12:03am On Feb 22, 2016 |
modath: For the part in red, I literally owe you a drink or whatever thing under $50 that tickles you fancy. I mean it. Lalasticlala, Mynd44 |
Re: Wow! This Explains The Fall Of The Naira. by oyinkinola: 12:09am On Feb 22, 2016 |
lepacious: [b]OIL AND LFR IS THE TWO MAIN MEANS OF INCOME FOR NIGERIA ECONOMY TODAY! .....with the determination of Nigeria president Buhari and the trust of world leaders toward nigeria, from America, Europe, Asia and gulf nation, the down price of oil and the rising of $ is a blessing to nigeria because rising of $ hike LFR for Nigeria! Among the oil producing countries, and OPEC only nigeria have what other didn't, we have oil in common but nigeria have the looters as well, this opportunity raise nigeria above other oil nation and when all these countries are frustrated with oil down price, nigeria have turn to her looted fund reserved (LFR) to keep her economy running. Nigeria is bless with oil and (LFR) looted fund reserve, when the oil price is down, the rise-up of dollar $ hike the value of our LFR, if government injected the LFR recovered on the economy, it will revamp Nigeria economy! at rate of ₦370 to $1 today's rate, if government managed to recovered $1 trillion LFR it will give us: $1=₦370, $1trillion=₦370trillion! Note (LFR is looted fund reserve)[/b] 1 Like 1 Share |
Re: Wow! This Explains The Fall Of The Naira. by Adonis3: 12:11am On Feb 22, 2016 |
it'll be well by GOD's grace #Adonis3HasSopken |
Re: Wow! This Explains The Fall Of The Naira. by Sibrah: 12:18am On Feb 22, 2016 |
LRNZH:You hit the nail right. |
Re: Wow! This Explains The Fall Of The Naira. by Emekamex(m): 12:20am On Feb 22, 2016 |
Nice write up ->Our foreign reserve which is currently at $27 billion dollars won't last for six months if we don't perform some magic to shore it up. ->We need foreign investments for foreign currencies more than ever and this can be done by opening up mining of other lucrative natural resources such as gold and coal. ->Agricultural products which are presently lucrative in the international market should also be explored to augment our foreign exchange. ->Doing this will greatly improve our forex reserve after which should be used to heavily trigger power and infrastructural development which in turn will trigger an economic boom in the country if done correctly. |
Re: Wow! This Explains The Fall Of The Naira. by Sibrah: 12:22am On Feb 22, 2016 |
lepacious:TonyeBarcanista come and learn economics behind Naira devaluation. No useless analysis, straight to the point. This baby food for wailers who think Buhari is their P. |
Re: Wow! This Explains The Fall Of The Naira. by modath(f): 12:57am On Feb 22, 2016 |
LRNZH: ![]() ![]() Make I then calculate how many liters of milk & juice e go reach,.. ![]() 1 Like |
Re: Wow! This Explains The Fall Of The Naira. by LRNZH(m): 1:02am On Feb 22, 2016 |
modath: Hehe. I am trying to hold value for you. A today's value, that is N15K at GTB's rate. If you want to cash out today, you get half- N7,500 because it is drinks money. You do not drink alone do you? ![]() |
Re: Wow! This Explains The Fall Of The Naira. by modath(f): 8:08am On Feb 22, 2016 |
LRNZH: I do drink, fresh juice & miliki na drink too nah. ![]() ![]() |
Re: Wow! This Explains The Fall Of The Naira. by ada2604(f): 8:38pm On Feb 22, 2016 |
please o op all dz u wrote lookz like trash to me, because our leader and those in power are indeed the ist hand users of imported goods and services. they are even part of those that have companies abroad, so before they come to blame the public or u@ OP even support them, u should suggest to them to introduce strict polices to curb or stop imports but they can't effectively do because they are so soaked in guilty. |
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