devalue or no devalue oooo #IStandWithBuhari

TonyeBarcanista:
I don't know who is advising President Buhari but his insistence on not devaluing the Naira to reflect present reality is one decision he would live to regret. The false sense of value we are giving to the naira is not helping anybody neither is political consideration more important than the economy. The suffering we would experience through devalued naira won't be compared to the hopeless situation we are now. in fact, if the country is pragmatic enough, the devalued naira policy would turn to be a blessing.

@bolded, why if? Why hasn't it turn to a blessing ever since Nigeria has been devaluing the Naira?

I have said it times without number. pegging the naira against dollar is a costly mistake. you can't fixed forex. forex is a reflection of market force. devastation is a good ideal for exporting country but not importing country. even at that you need the market force to determined the price. this current peg will affect the economy.

TonyeBarcanista:

SAP flopped because IBB mismanaged the whole thing for his selfish interest.

Already, businesses are operating on a value of the naira that is over 100% more than the official value. in fact, the naira is technically devaluated due to scarcity of the dollar. What we are saying is for the government to allow the naira to be officially devalued so that businesses can freely operated. This will even boost our export as our goods would be cheaper in the international market, and that would help local economy.


however, it will make import more expensive but we can't depend on import forever

barca u have limited knowlegde abt economics.when we devalue, it would help our export because our commodities become cheaper in the international market.pls what and what do we export dat u think would help wen we devalue.

IBB will soon come to overthrow him. The economy is on a lockdown.

From the article:

After Buhari was ousted in a coup amid a worsening financial crisis, his successor Ibrahim Babangida started an IMF-led structural adjustment program, which included a devaluation. It was the first of many that saw the currency’s value drop from roughly parity with the dollar to today’s rate of near 200. Politicians still say the IMF program failed the country.

Yet, they still want us to make the same mistake? The IMF is yet to truly state its intentions.

TonyeBarcanista:

The benefit are enormous though not immediate, it outweighs the suffering we are subjected to at present

Please list these benefits, with a rough timeline of what will happen when. To wave your hands and talk about vague enormous benefits is not enough anymore. Be specific, so we can follow it and see if it makes sense.

We're here arguing about devaluation which in my opinion isn't the problem, our economy is gravely affected because we lack inward fiscal directives. This is as a result of our political and ethnic differences, if different states are allowed to function on their own without handouts from Abuja, we wouldn't be asking ourselves what can we export. Nigeria is richly blessed in all sorts of human resource, financial capital, mineral resources, raw materials and what not which we can't even develop let alone export, and we're talking about devaluation. Until we change our process from a consuming to a producing nation, IMO, devaluation is NOT the solution at this point. Let's talk about devaluation when we get it right first.

TonyeBarcanista:

You are only speculating

that's not speculation, that's simply the law of demand and supply, currently there's shortage of dollars to satisfy the demand, that's the reason for the very high rate from the mallam. Except you can prove to us that devaluation will suddenly make more dollars available to quench the thirst for the demand, then what you quoted is a plain fact.

TonyeBarcanista:

SAP flopped because IBB mismanaged the whole thing for his selfish interest.

Already, businesses are operating on a value of the naira that is over 100% more than the official value. in fact, the naira is technically devaluated due to scarcity of the dollar. What we are saying is for the government to allow the naira to be officially devalued so that businesses can freely operated. This will even boost our export as our goods would be cheaper in the international market, and that would help local economy.


however, it will make import more expensive but we can't depend on import forever

So a business that has to import at the parallel market rate of #320 today, will somehow benefit when the official rate subsequently falls to #320? I don't get it.

jmichlins:
Comparing nigeria with russia is not only stupid but height of foolishness. What do we export to earn the $ apart from crude oil? Our banking sector are on the brink of collapse and it seem devaluation which will leave them with lots of almost worthless # then what next if not borrowing from IMF and her partners. Believe me the worst has already happened and we survived. No power, no fuel, high inflation what else are we expecting to see. Many states have problem paying salaries with the current minimum wage now imagine what will happen when we devalue and NLC seeks more salary. Strike action will cripple what remains of the economy. How then can we pay for the loans that IMF and her partners will give us

simply put we continue with the status quo, I don't trust the west, they are crooks, many nations of the world that are challenging em economically ignored western advice and are doing well on the world stage, look at Iran, China, Russia and Libya under gadaffi

TonyeBarcanista:

let the naira be officially devalued.

imagine your brother sending you $2000 from USA through Western Union, you go to the bank and you are paid a naira equivalent at the rate of N199 to the Dollar and you are given N398,000.00. A week later you decide to order a watch from Dubai at the rate of $1000, you go to an aboki who changes your naira to dollar Ay N350, and made you part with N350,000.00. Do you think you are at loss or gain?

if the Naira was officially devalued to N350, you wouldn't have been at great loss like you were before.

Think....

Everybody knows that the country presently operates a dual exchange rate regime; the official rate and the black/parallel market rate. There are presently several money transfer platforms that transfer money at rates close to the black-market rate (e.g. of some in the UK are Azimo.com, TransferBoss.com, Rhemito.com etc which all transfer the cash instantly to the bank account of the receiver). So why should anyone be silly enough to send money to Nigeria via western union or moneygram knowing fully well that these platforms still use the official rates?... Who still uses westi or moneygram?

We know how the IMF and world bank works, so you all shouldn't be scared.

If you investigate Bloomberg and all the so called foreign investors, you'll discover they belong to a network of companies controlled by the same IMF and world bank. So, their game is usually to make coordinated withdrawal of investments to evoke panic.

I said all these before.

Their next move would be to tighten the noose on Nigeria, until the masses go on to the street to protest against the government. Then, they'll say ''I told you so''. And they'll start funding a stooge political party to over-throw the head of state of their target prey-this time it's Nigeria, unfortunately.

They'll never rest until they worsen the economic crisis in Nigeria.

Western media (CNN, BBC, Bloomberg, Fox, CBS, e.t.c) are part of neo-colonial instruments to demarket Africa, and they're at full throttle now to demarket Nigeria. Buhari have to be strong and never show any sign of surrender, when they get the message they'll back out.

See the Capitalist Network That Control The World's economy http://www.africason.com/2015/05/the-capitalist-network-that-control.html

See disadvantages of the IMF at http://www.africason.com/2016/04/disadvantages-of-imf-international.html

AZeD1:

Like the benefits of SAP?
Also can you list the benefits, short term and long term.

He will list nothing because he does not know. He seeks attention like a newly wed lizard.

Joel3:
I have said it times without number. pegging the naira against dollar is a costly mistake. you can't fixed forex. forex is a reflection of market force. devastation is a good ideal for exporting country but not importing country. even at that you need the market force to determined the price. this current peg will effect the economy.

Actually you can Many countries do so the CFA in West Africa,The Chinese RMB, the Saudi Rial and countless others. So if you have said it times without number you have been wrong times without number.
Our currency was fixed THROUGHOUT the civil war. Indeed our currency was fixed from independence till Babangida came into power. A nation only runs into trouble when it fails to live within its means

Your allusion to market forces is delusional. Have you seen a situation where market causes any currency to appreciate in value by 50 or 100 %? No CBN would allow that. It is very naive to believe market forces alone dictate exchange rates. Why has the Egyptian pound not lost as much value as the Naira in the last 12 months considering the dire state of Egypt's economy and all the turmoil it has witnessed.

Nigeria is too fragile an economy to play the "market forces" game. The currency was stable throughout Abacha's reign and the economy was a lot worse than today by any measure. Why we curbed imports. We need to learn that all over again

blueseacats:
Am not a buhari zombie , but am solidly behind you on this one baba, American $ will cry soon with this China- Nigeria currency deal, baba dullard is playing chess , imf is playing checkers, well done baba.

You see! D dullard is smarter than d Ph.d holder who devalued naira three times in six years.
The truth be told, in as much as we still remain a monoproduct nation our economy is hanging in d balance. Any time there is a little shake in d price of oil, d IMF will advise us to devalue to meet d world economic realities. So d only feasible solution is to hv our own economic bedrock that does not depend and cannot be manipulated by these western nations that never wanted anything good for Africans. Just imagine what economic value Innoson it puting on our tables. Many who would hv patronised Toyota, peogueot, benz, etc are now buying from local manufacturer, thus saving forex. Lets just support n encourage the govt of the day to diversify and liberalise our economy for a better growth, sustainability and freedom from neo-colonialism.

obailala:
Still on external forces mounting pressure on Nigeria to devalue its currency. Since the 80's this has always been the advice to African countries. Nigeria has devalued and devalued and devalued from N1 = $1 to the present N200 = $1 but has all these devaluations in the last 30 years ever helped Nigeria?


And you think devaluing will miraculously take care of the sufferings we are subjected to at present because some oyibo economics textbooks says so?... How much foreign investments can possibly come in instantly to counter the prevalent scarcity of forex?.... With sky-high oil prices and excess forex in the NIgerian system between 2010-2014, how much of forex was really introduced into the country by these 'foreign investors'?.... If they couldn't help or impact so much in Nigeria when the going was good, how are we so sure that if we devalue , enough investors would rush in to help the Nigerian economy now that things are bad?

I saw 30 years there i think you made a mistake

TonyeBarcanista:

The benefit are enormous though not immediate, it outweighs the suffering we are subjected to at present

I didn't want to comment having said enough on this issue but I want to correct a view here.

There is no painless way out of this. When a man is broke it must be as a result of bad habits. Devaluation is not a painless solution and its not a silver bullet. It is not a destination but a way and doesn't ride alone. What it does is that it enables the pain to lead to an expected end by keeping the economy alive, liquid while the transformation happens. What we have at present is unofficial devaluation with no benefit whatsoever. Those with access to cheaper rates will not seek to nationalise productivity, those without access and cannot compete will close shop. Less goods means more inflation.

So in effect the inflation of devaluation is a price/cost inducing one while the inflation of this present system is a productivity inducing one. Access to cash is a lot easier than re-industrialization. Once factories close it is much harder to get them back than when goods are merely expensive.

obailala:
Still on external forces mounting pressure on Nigeria to devalue its currency. Since the 80's this has always been the advice to African countries. Nigeria has devalued and devalued and devalued from N1 = $1 to the present N200 = $1 but has all these devaluations in the last 30 years ever helped Nigeria?


And you think devaluing will miraculously take care of the sufferings we are subjected to at present because some oyibo economics textbooks says so?... How much foreign investments can possibly come in instantly to counter the prevalent scarcity of forex?.... With sky-high oil prices and excess forex in the NIgerian system between 2010-2014, how much of forex was really introduced into the country by these 'foreign investors'?.... If they couldn't help or impact so much in Nigeria when the going was good, how are we so sure that if we devalue , enough investors would rush in to help the Nigerian economy now that things are bad?

Are you not aware that the naira is indirectly devalued with prices of essential commodities skyrocketing by the day. Who and who has access to the official exchange rate being discussed here? Please let's stop deceiving ourselves.

9japrof:


simply put we continue with the status quo, I don't trust the west, they are crooks, many nations of the world that are challenging em economically ignored western advice and are doing well on the world stage, look at Iran, China, Russia and Libya under gadaffi

am happy people are getting enlightened about our economy. The day the president devalues our money, he will lose my support. We still have many things to import especially power, machines and man power

Slow and steady never wins the race ...... 2016

Almajiri1:
We pray things don't get to the level where we queue to get daily rations of sugar and salt.

Well unlike in 1984 thanks to Dangote we produce huge quantities of sugar and salt and are sufficient in cement. Our economy is more resilient and I cannot see Dangote closing (due to sentiments) but there are many more needs out there. That is why it is imperative government puts its interest second and supports industry for tomorrow by liberalising the fx market.

If government is comfortable in this freeze waiting for the thaw of oil price rises, it should know this; industry and investors cannot while bleeding away day by day.

Believe me. Higher prices is far, far better than no goods just as more expensive fuel is better than no fuel at all.

arent88:
barca u have limited knowlegde abt economics.when we devalue, it would help our export because our commodities become cheaper in the international market.pls what and what do we export dat u think would help wen we devalue.

Loads of stuff.
Rubber
Timber
Beans
Man power
Gas
Oil
Cement
Fuits
Tin
Cassava
Yam
Cachew
Maize
Palm produce
I can go on and on
However cos our govt do t export the above don't mean the citizen's don't. .The greatest export from china is not its produce but MANPOWER

What we have at present is unofficial devaluation with no benefit whatsoever.

ibietela2:


I saw 30 years there i think you made a mistake

If my knowledge of history serves me right, Nigeria's devaluation history dates back to the Structural Adjustment programme of the IBB regime in 1986.

I'm always amazed whenever I come here and see never-do-well(s) flexing muscles like economic experts. Someone even went to the extent of boasting about superiority of the west over us just because his wife was opportune to attend a school in the UK where the whites dominated her myopic thoughts. To that fellow, when did your dull.ard of a wife become the standard for good? In fact, I say all of you in support of official devaluation of naira should stuff.

Literally, we're not an exporting nation, and we don't have authority/monopoly to dictate the price of the one main item we export (crude oil), therefore it makes no economic sense for us to officially devalue our currency. Should we do so, we stand to attract portfolio investors - which will only give us short term succor but with long term devastating effect, because the target of any portfolio investor is instant benefit and once they make the profit within a twinkle of an eye they would pull off their investment thereby worsening our already deplorable economy.

FG should continue to resist all pressures and speculations from the west and its agents. They're nothing more than manipulators.

onetouch04:
What we have at present is unofficial devaluation with no benefit whatsoever.

What are d benefits of official devaluation. Thats d point we trying to devaluate.

Devaluation would make sense if it attracts long term investors.
A simple example a house in Nigeria costing 25 million Naira before the oil shock would have been $150-160000

That same house would now be $75-80000 but these so called investors are not satisfied.Having smelled blood they wish to browbeat the government to submission.
Still they are only interested in investing in the stock market. a pump and dump strategy. We do not need those kind of "investors". Their main concern is a very liquid market in which they an jump ship and take out their money very quickly at the slightest sign of trouble.

we need long term investors that will bring skill transfer and infrastructure development and we have that in the Chinese. We don't need vulture fund "investors"


Our currency was stable under Abacha with oil prices under$20 and zero reserves. That tells me that many of these economic theories are guesswork.They did not stop the 2008 crisis. How come when we were sellin oil over $100 IMF never advised that we strenghten the naira. Even then we were devaluing from the 80:1 we inherited from Abacha

omonnakoda:
Actually you can Many countries do so the CFA in West Africa,The Chinese RMB, the Saudi Rial and countless others. So if you have said it times without number you have been wrong times without number.
Our currency was fixed THROUGHOUT the civil war. Indeed our currency was fixed from independence till Babangida came into power. A nation only runs into trouble when it fails to live within its means

Your allusion to market forces is delusional. Have you seen a situation where market causes any currency to appreciate in value by 50 or 100 %? No CBN would allow that. It is very naive to believe market forces alone dictate exchange rates. Why has the Egyptian pound not lost as much value as the Naira in the last 12 months considering the dire state of Egypt's economy and all the turmoil it has witnessed.

Nigeria is too fragile an economy to play the "market forces" game. The currency was stable throughout Abacha's reign and the economy was a lot worse than today by any measure. Why we curbed imports. We need to learn that all over again

you are wrong. I said it again. you don't know economies. the Chinese operations a fixation economy where they peg yuan against dollars is this means they devalued their currency to encourage their export. that's why many Chinese business prefer to bank on the dollars as it's of their interest.

even when IMF request the Chinese to give their yuan more value against dollars they refuse because they learnt if their yuan value is same as the dollar people will prefer America made then their own.

when a government is operating pegging economy it scare away investors. then true reality the naira has already be devalued in the real market. that is the true fact. what the CBN is doing they are cheating the public

Not Buharist, but the article below by my friend is worth reading side by side with the OP's post. Kai Buhari!!!!

City of London Declares War on Nigeria
President Buhrai Looks to China
By Lawrence Freeman,

The Financial Times-(FT), speaking for the City of London, the headquarters of the Western financial system, has declared their intent to break the will of Nigerian President, Muhammadu Buhari, who has up this moment resisted devaluing his nation’s currency. The April 13 editorial of the FT, entitled, “Nigeria’s new start is in danger of derailing” echoes the not so veiled edict to devalue the naira, delivered by Christine Legarde, head of International Monetary Fund, when she visited Nigeria at the beginning of this year.
Ignoring the reality that the Trans-Atlantic economies themselves are in a state of collapse, their orders to devalue the naira would only further bankrupt Nigeria and increase the suffering of its already poor citizens. As a result of years of mismanagement Nigeria has become a totally import dependant economy, thus a decline in the value of the naira would instantly make basic necessities of life unaffordable. President Buhari has wisely shunned these demands, remembering as do many Nigerians, what happened to Nigeria after President Buhari was removed from office in 1985 by Ibrahim Babangida. Following Burai’s ouster, the new government immediately adopted the IMF’s structural adjustment programs-(saps) including devaluing the Naira that resulted in the destruction of the economy from which Nigeria has never recovered fully.

Threats From the West: Devalue Or Else

After stating that support for President Buhari is “evaporating” a year after his election, the FT reports that Nigeria is: “Starved of fuel, electricity and foreign exchange the economy is grinding to halt. Businesses are laying off staff in droves.” Their solution is to devalue Nigeria’s currency that they claim “fixed at an unrealistic level against the dollar.” These financial predators, who thrive like sharks off so called free-trade currency manipulations, falsely claim that the naira’s value is distorting the “free markets” and holding back growth.
President Buhari said no to Lagarde in January, said no the U.S., and has repeatedly resisted all sorts of pressure tactics and arm twisting over the last several months for devaluation. He knows that with Nigeria’s huge dependence on imports, a devaluation from the official rate of 1 dollar for 198 naira towards the black market rate of 1 dollar to 300-350 naira would drive Nigerians further into extreme poverty and death, reminiscent of the conditions 1985-1986 that followed the IMF ordered devaluation of the naira under Babangida. Nigeria’s Minister of Finance, Kemi Adeosun, in response to discussions at the IMF-WB Spring meetings in DC, politely said, no thank you to the western financial institutions, and made clear that Nigeria will not use the IMF loan facility to go further into debt. She went on to say that “Nigeria is not sick” and that this government will rebuild the Nigerian economy by diversification so as not to be dependent on oil as the only revenue source. Adeosun fully backs the president’s policy of supporting the naira and has said she will not implement polices that harm the Nigerian economy “just to be “the darling of the IMF and other multi-laterals.”
The FT on behalf of the western financial oligarchy is threatening Nigeria that without devaluation of the naira western financial institutions will not put their money into the Nigerian economy, even while they admit that such a move will dry up the country’s dollar reserves, and offers “no panacea.”
They write: “It is a tough choice and an even tougher political environment to make it in. Nigerians are impatient for the gains they voted for and have little appetite for further pain. Mr Buhari squandered an opportunity to act early on when he enjoyed the goodwill of the public. But the painful measures required to set Nigeria’s economy on a sustainable growth path (sic) becomes no more palatable the longer he delays.”

Nigeria Looks East for an Alternative

Is it possible that the fulminations from the FT were related to President Buhari’s high level visit to China, where he met with President Xi Jinping and concluded a number of economic and financial agreements? In fact, the rant by Britain’s FT occurred while President Buhari was in China securing a commitment from them for $6 billion in credits to fund critical infrastructure projects. According to Nigerian Foreign Minister Geoffrey Onyeama: “It is a credit that is on the table as soon as we identify the projects.” Minister Onyeama said that China “is not looking for political gain, not looking to dominate any country…they are ready to help us” with our economic building blocks. China is already Nigeria’s largest trade partner
This offer by China is entirely consistent with President Ji’s “win-win” approach and his leadership for the “One Belt-One Road” global infrastructure policy, the launching of the Asia Infrastructure Investment Bank, and the creation of the BRICS nation’s New Development Bank. Increasingly, African nations are realizing that western governments and financial intuitions will not invest in long term, low interest credits to fund Africa’s huge infrastructure deficit, without which, Africa will never experience the level of real economic growth required to sustain their expanding population.
Another feature of President Buhari’s visit was the securing of currency swap agreements between Nigeria’s Central Bank and the Industrial and Commercial Bank of China, the largest lending intuition in the world. Although the amount of the currency exchange has not revealed, its intention is clear; to facilitate trade between the two giants. Nigeria is the largest economy and the most populated nation in Africa and China is the most dynamic economy and most populated nation in the world. To further integrate the two economies, Nigeria will use the Chinese yuan as a reserve currency that will diversify its reserves from strictly relying on the dollar, and allow traders to bypass dollar pricing and dollar conversion for exports and imports.
Not to be overlooked was President Buhari’s visit to the China Aerospace Science and Technology Corporation during his trip. Nigeria is the first international customer of the Chinese corporation, having already purchased two satellites and has signed an agreement to buy two more. Aerospace also made a commitment to build satellite developing facilities in Nigeria to strengthen space cooperation between them. .

Nigeria’s Challenge

Although there are no public reports of an agreement on “panda bonds”- yuan denominated bonds to be sold on the international markets, there were discussions prior to President Buhari’s visit that Nigeria was looking for new mechanisms to raise money to cover its budget deficit, having made clear they will not borrow from the IMF.
President Buhari has proposed an ambitious budget for Nigeria of 6.06 trillion naira ($30.6 billion) a third of which-$10 billion-will be dedicated to capital expenditures which is triple the amount of previous budgets. As a result of the dramatic collapse of the price of oil, which accounted for 70% of Nigeria’s revenues, the new budget will have a deficit of approximately $10-$11 billion. The government intends to raise funds for its deficit both externally and internally and is looking to China and possibly other nations for help.
Nigerians knowledgeable about the government in Abuja believe the new president did not know how seriously underdeveloped the Nigerian economy was when he took control of the nation. Recognizing the failure of previous administrations to build a vibrant economy, and mistakenly relying on oil as its primary revenue source for foreign exchange over many decades, President Buhari now wants to diversify the economy with an emphasis on rebuilding Nigeria’s agricultural sector. He has also stated correctly that: “No country can develop without power.” This is another challenge for Nigeria, which distributes less than 3,000 megawatts of electrical power, leaving half of its 180 million people without access to on line electricity, and daily blackouts through the country including Abuja.
Improving the conditions of life for millions of Nigerians, and creating meaningful productive employment for tens of millions of unemployed youth necessitates a complete transformation of the Nigerian economy. This requires applying the methods of President Franklin Roosevelt, whose top down approach to rebuilding the U.S. economy “miraculously” led to a successful recovery following the Great Depression. Embracing the new paradigm of development put forward by China and the BRICS nations offers Nigeria a pathway to realize its untapped economic potential that has laid follow for more than a half century since its liberation from British colonialism.

onetouch04:

You see! D dullard is smarter than d Ph.d holder who devalued naira three times in six years.
The truth be told, in as much as we still remain a monoproduct nation our economy is hanging in d balance. Any time there is a little shake in d price of oil, d IMF will advise us to devalue to meet d world economic realities. So d only feasible solution is to hv our own economic bedrock that does not depend and cannot be manipulated by these western nations that never wanted anything good for Africans. Just imagine what economic value Innoson it puting on our tables. Many who would hv patronised Toyota, peogueot, benz, etc are now buying from local manufacturer, thus saving forex. Lets just support n encourage the govt of the day to diversify and liberalise our economy for a better growth, sustainability and freedom from neo-colonialism.

GEJ na capital Mumu that one be, his PhD is a waste of time.

Well if you ask me I will say buy Nigeria should be a major national orientation project .let us sing it like a chorus on every Midea outlet, radio, TV , Internet and what have you.

At some point importers will realize the need to manufacture her and not there.