Folks, the Naira/Dollar exchange rate is not determined by wishes for if wishes were horses, beggars would ride.

The exchange rate of the naira is determined by the amount of goods and services produced in Nigeria and sold outside the country in exchange for dollars. Unfortunately for Nigeria, crude oil is about the only commodity that gives us all our dollars. It therefore makes perfect sense that once that commodity's price crashes, with our ever insatiable appetite for imported goods on the increase, the naira will continue to lose its value.

I found this piece interesting and decided to share it perhaps one or two wailing critic will find it educating and informative.


HOW DID THE DOLLAR STAY AT N170 FOR 4 YEARS UNDER "MASSIVE LOOTING OF SURPLUSES"? HOW IS IT NOW AT N510 UNDER "MASSIVE SAVINGS"?

Sir, this is understandable and could be explained.

The period being referenced under 'massive looting of surpluses' met a forex reserves of about $60billion. It equally witnessed the longest period of oil boom in the country where crude oil was being sold at an average of $100per barrel.
According to a report, Nigeria as at that time was the third country having high dollar liquidity in circulation aside USA -the owner of the dollar. So, technically, dollar was almost made to be a legal tender in Nigeria. Many institutions and business premises were almost rejecting Naira for the dollars because of its availability. Then, our CBN has enough dollars to defend the Naira. We were just spending dollars as if tomorrow would never come.

You could recollect sir, that when the reality of our collective folly was beginning to dawn on us late 2014 as a result of crash in the price of crude oil, they devalued naira twice. However, due to our profligate nature, the 2015 elections year witnessed the fall of dollars like rains. Right from the primary elections to the main elections, it was dollar rains by our politicians. Afterall, we were all here when they bombarded Lagos with enough dollars. That even our revered Kabiyesis were falling over themselves because of dollars. We were duly warned of the consequences but we failed to heed the call. Unfortunately for us, our forex reserves was depleted to about $30billion. And to worsen the tragedy, oil was at a time being sold as low as $28per barrel.

The last straw that broke the camel back was when the militants made sure that despite the low oil price, when all other oil producing countries are massively increasing their productions, Nigeria's own reduced to about 400,000barrel per day from almost 2.2million barrel per day during the period being referred to.

This is simple logic, even if we want to use dollars to defend the naira, it's no longer available. Secondly, the little ones we have will have to be prioritized hence the ban on some imported items. But those who were responsible for our problems would no let us rest. They just want us to keep lamenting that we chased them out of power. And how could one explain when the judges who are supposed to protect us are the ones hoarding dollars in their homes.

The shortest answer is WE CANNOT EAT OUR CAKE AND HAVE IT. So basically, we have found ourselves in this cesspit, by determination and grace of God, we will weather the storm. So sir, when you hear have we not told you, just know that the person is among those who are responsible for our current situation and by the power of the Omnipotent God, we shall defeat them once again. All their evil machinations against this country will come to nought.


Mynd44 Lalasticlala Seun

It was a great mistake that Nigerians voted for Jonathan in 2011.

The truth, the whole truth and nothing but the truth. God bless the op. However, the children of baby factories will not be happy with this obvious fact and as such, they will soon come with their usual funny noise but that shouldn't bother you, it is part of their propaganda.

Spin master on rampage... Dude, when you are in a hole, you stop digging. The present economic mess is as a result of buharis economic policies. Period! This country earned less under Abubakar, Abacha and even during Obasanjos first term. buharis prehistoric economic policies got us here. Nothing else. I believe this has been over-flogged. Thread should be allowed to die the miserable death it richly deserves..

Another pro-Buhari on the move to make us cast aspersions on *saint* GoodLuck and turn us blind to the folly of his excellency the clueless missing president.

Try again daft one........you only succeeded in convincing shallow minds about the heading

Pro- APC spotted.

Please oh, what is responsible for the more than 5 exchange rates? Educate me.

I have never seen a country that will be spending foreign currency as if its their own like our former officials did.
I pray we dont make this type of mistake again, May God help us,

owobokiri:
Spin master on rampage... Dude, when you are a hole, you stop digging. The present economic mess is as a result of buharis economic policies. Period! This country earned less under Abubakar, Abacha and even during Obasanjos first term. buharis prehistoric economic policies got us here. Nothing else. I believe this has been over-flogged. Thread should be allowed to die the miserable death it richly deserves..

You obviously don't know the effect of population growth, increase in economic needs, demand and supply effects on the economy; and above all, the importance of saving as well as negative effects of lack of it.

Do you?

PassingShot:

You obviously don't know the effect of population growth, increase in economic needs, demand and supply effects on the economy; and above all, the importance of saving as well as negative effects of lack of it.

Do you?

zaimeg:
Please oh, what is responsible for the more than 5 exchange rates? Educate me.

Please answer my question.

zaimeg:

Please answer my question.

I don't know about more than five exchange rates.

I know of only two. The official govt rate and the black market rate.

This thread is to shed lights on why the naira crashed.

PassingShot:

You obviously don't know the effect of population growth, increase in economic needs, demand and supply effects on the economy; and above all, the importance of saving as well as negative effects of lack of it.

Do you?

Just as you don't know the direct effects of population growth on increased productivity, increased earnings, increased consumption, increased tax accruals and so on and so forth.. Chinas population is her streghnt.., ditto India and you are here moaning.. Give me a break zoneb

owobokiri:


Just as you don't know the direct effects of population growth on increased productivity, increased earnings, increased consumption, increased tax accruals and so on and so forth.. Chinas population is her streghnt.., ditto India and you are here moaning.. Give me a break zoneb

Population is strength only when it's a productive one. Not when it's senselessly wired to consume imported goods with zero production ability.

Think!

owobokiri:
Spin master on rampage... Dude, when you are a hole, you stop digging. The present economic mess is as a result of buharis economic policies. Period! This country earned less under Abubakar, Abacha and even during Obasanjos first term. buharis prehistoric economic policies got us here. Nothing else. I believe this has been over-flogged. Thread should be allowed to die the miserable death it richly deserves..

what was buhari policies that put you into this mess,
When you were praising the avengers of your ineffectual buffoon, to you the bombing was part of buhari economy policies

This is still the same old **** passingshot!. Yes! We all know the PDP caused all this nonsense we see today, but the question remain, what is this government doing to fix this mess?

So far, all I see is just blame this and blame that. We've gotten pass the stage of blaming, cos we know who is responsible, now is the time for acting and unfortunately, this government isn't acting, from all I can see, they still want to blame because blaming doesn't make them act, rather it makes them look like town criers.

Please, enough is enough. It is high time this government move into action and dispel this evil call recession we see in the country.

SalomonKane:
This is still the same old sh1t, passingshot!. Yes! We all know the PDP caused all this nonsense we see today, but the question remain, what is this government doing to fix this mess?

So far, all I see is just blame this and blame that. We've gotten pass the stage of blaming, cos we know who is responsible, now is the time for acting and unfortunately, this government isn't acting, from all I can see, the still want to blame because blaming doesn't make them act, rather it makes them look like town criers.

Please, enough is enough. It is high time this government move into action and dispel this evil call recession we see in the country.

I don't even know where to begin with you.

You and your likes would prefer we don't talk about the past, yet you won't stop blaming a govt working tirelessly to redeem a very bad situation it inherited.

Guy, there are certain development that must occur for us to return to the path of growth and prosperity, no matter how one tries. The current recession cannot be avoided no matter what. We had it coming and the govt of that time refused to listen to Sanusi, Biswack Rewane and even its own Iweala.

One of the solution is to spend our way out of recession and I am sure you're one of those opposing the govt's plan for borrowing.

Ol boy, you cannot eat your cake and have it back. We ate ours long ago, we need to borrow to invest in the economy so as to exit recession earlier than envisaged, yet we oppose the govt in such efforts!

What do Nigerians want?

Oil output has never been 400,000 bpd. The lowest since this administration came in was 1.4 mbpd.

However, what sustained 170/$ exchange rate wasn't the reserve, it was the looting. Imagine in 2013 when oil prices was $107 a barrel and output was 2 mbpd, just $2 billion was added to the foreign reserve, bringing total reserve to $29 billion.

That was when about $33 billion was generated in oil revenue, what happened to the rest? Looted, shared and find it way back into the economy through luxury consumer spending, investment in real estates, extravagance life styles and of course olosho enjoy too. I wrote an article called Nigeria: A nation that thrive on loots. It details everything.

But under the current administration foreign reserve is $28.9 billion. A period when oil prices has been averaging $33 a barrel for the past 12 months and plunged to 25 year low in Feb 2016 to trade at 26 a barrel. All this was achieved with 1.4 mbpd output.

PassingShot:

I don't even know where to begin with you.

You and your likes would prefer we don't talk about the past, yet you won't stop blaming a govt working tirelessly to redeem a very bad situation it inherited.

Guy, there are certain development that must occur for us to return to the path of growth and prosperity, no matter how one tries. The current recession cannot be avoided no matter what. We had it coming and the govt of that time refused to listen to Sanusi, Biswack Rewane and even its own Iweala.

One of the solution is to spend our way out of recession and I am sure you're one of those opposing the govt's plan for borrowing.

Ol boy, you cannot eat your cake and have it back. We ate ours long ago, we need to borrow to invest in the economy so as to exit recession earlier than envisaged, yet we oppose the govt in such efforts!

What do Nigerians want?

Excuse me, what has talking about the past ever solved? You say the government is working tirelessly, however, they seem to blame more than they work.

Yes, the recession can't be afforded, but still, what is the government doing to cushion the harsh effect on the citizens, never forget, it is the masses who are feeling the effect of the recession, not the government, so I ask again, what is the government doing?

Yes we can borrow to end this, following the history of this country, what has borrowing ever solved? It always seem the money borrowed find its way into the pocket of a minute few.

Oh yes, we can't eat our cake and have it, excuse me, this is Nigeria, the country where corruption is a virtue and honesty is a vice, people have been eating their cake and having it since before I and you were born.

This government have shown they're not better than the last, all they do is blame and give us rhetoric upon rhetoric.

It's now a known fact that the government know majority of the nigerian masses are uneducated, that's why they can spew this much hogwash and not receive any backlash.

Truth234:
Oil output has never been 400,000 bpd. The lowest since this administration came in was 1.4 mbpd.

However, what sustained 170/$ exchange rate wasn't the reserve, it was the looting. Imagine in 2013 when oil prices was $107 a barrel and output was 2 mbpd, just $2 billion was added to the foreign reserve, bringing total reserve to $29 billion.

That was when about $33 billion was generated in oil revenue, what happened to the rest? Looted, shared and find it way back into the economy through luxury consumer spending, investment in real estates, extravagance life styles and of course olosho enjoy too. I wrote an article called Nigeria: A nation that thrive on loots. It details everything.

But under the current administration foreign reserve is $28.9 billion. A period when oil prices has been averaging $33 a barrel for the past 12 months and plunged to 25 year low in Feb 2016 to trade at 26 a barrel. All this was achieved with 1.4 mbpd output.

Given all this, don't you think the government should look inward, rather than borrowing like oga passingshot is singing? Cos I know a man who borrows to feed himself, will end up borrowing again to continue feeding himself.

Remember, instead of giving me fish, teach me how to fish.

I believe borrowing will not solve anything, rather it will make it worse. People are still looting you know, not that it's obvious, but this is Nigeria.

[s]

PassingShot:

I don't even know where to begin with you.

You and your likes would prefer we don't talk about the past, yet you won't stop blaming a govt working tirelessly to redeem a very bad situation it inherited.

Guy, there are certain development that must occur for us to return to the path of growth and prosperity, no matter how one tries. The current recession cannot be avoided no matter what. We had it coming and the govt of that time refused to listen to Sanusi, Biswack Rewane and even its own Iweala.

One of the solution is to spend our way out of recession and I am sure you're one of those opposing the govt's plan for borrowing.

Ol boy, you cannot eat your cake and have it back. We ate ours long ago, we need to borrow to invest in the economy so as to exit recession earlier than envisaged, yet we oppose the govt in such efforts!

What do Nigerians want?

[/s] the problem with you zombies is that you're always shifting goal posts and never owning up to your failures. someone asked you an intelligent question concerning this confused buhari's government and its wack policies and you still picked up the same one and only defense line you know: the past administration is to blame. and by past administration you mean GEJ's administration, not the OBJ's and Abdusallam's. everything turned upside down because of GEJ and is still turning even after buhari's second year in office.
you're very smart, sir!!

Jesusloveyou:
what was buhari policies that put you into this mess,
When you were praising the avengers of your ineffectual buffoon, to you the bombing was part of buhari economy policies

The Avengers were right to have done what they did... In-fact my grouse with them is that they stopped abruptly.. There was a programme in place to help them learn new skills and be better men and your daura king came in and stopped it. He was doing so while looking for an amnesty programme for boko haram vampires. The avengers came in and introduced some sanity into his thinking. I am in support of that. If their actions messed up your economy, then next time try to elect better men who will treat every section of the country equally and not myopic upstarts who are sectional and petty in their thinking. It was buharis maladministration that caused their action not the other way round..

And this thrash would make it to the promise land

[s]

FTbomb:
the problem with you zombies is that you're always shifting goal posts and never owning up to your failures. someone asked you an intelligent question concerning this confused buhari's government and its wack policies and you still picked up the same one and only defense line you know: the past administration is to blame. and by past administration you mean GEJ's administration, not the OBJ's and Abdusallam's. everything turned upside down because of GEJ and is still turning even after buhari's second year in office.
you're very smart, sir!!

[/s]
I don't address wailing, pained, frustarted zombies.

PassingShot:

Population is strength only when it's a productive one. Not when it's senselessly wired to consume imported goods with zero production ability.

Think!

You start as a government by training your population to be productive enough and channel their energy and skills into economic activities capable of impacting positively on the countrys export. Turn your huge population into an advantage and export more,. That's the duty of any serious government. Not to sit on their hands and whine and blame and hiss and point fingers and irritate every soul to no end..

This Nigeria is dying gradually like I predicted. My analysis were very simple. The weght of anomalies coupled with an unproductive population will lead to her demise. It is simple logic. Let me say another one again. Before 2017 runs out, a dollar will exchange for a thousand naira. Forget about all the lies Buhari's government will dish out. Kemi Adeosun does not even know what to do. The whole economic team is bereft of ideas. Expect the increase in crime as few money will be in circulation. This Nigeria is going to coma. This is all I'll say now.

owobokiri:


You start as a government by training your population to be productive enough and channel their energy and skills into economic activities capable of impacting positively on the countrys export. Turn your huge population into an advantage and export more,. That's the duty of any serious government. Not to sit on their hands and whine and blame and hiss and point fingers and irritate every soul to no end..

And exactly what this govt is trying to do by asking lazy youths to go back to the soil, be productive through farming.

In your warpped mind, it's Buhari's fault that we have largely lazy, unproductive, moaning youths.

PassingShot:
[s][/s]
I don't address wailing, pained, frustarted zombies.

1984 recession comes to mind. zombie explain

[s]

Hiploko:
1984 recession comes to mind. zombie explain

[/s]
Ask your dad. If you were not born, he surely was born and probably alive then.

Usual thrash from usual thrash masters.



Next !!

[s]

PassingShot:

And exactly what this govt is trying to do by asking lazy youths to go back to the soil, be productive through farming.

In your warpped mind, it's Buhari's fault that we have largely lazy, unproductive, moaning youths.

[/s]

SalomonKane:
Given all this, don't you think the government should look inward, rather than borrowing like oga passingshot is singing? Cos I know a man who borrows to feed himself, will end up borrowing again to continue feeding himself.

Remember, instead of giving me fish, teach me how to fish.

I believe borrowing will not solve anything, rather it will make it worse. People are still looting you know, not that it's obvious, but this is Nigeria.

You are right but borrowing is inevitable because of the nature of our economy. We are petrol-dollar economy and both are not readily available now.

Another thing is this administration added to the woes through their monetary policy. For instance, they introduced Forex flexibility policy 3 days to Brexit, that was CBN first mistake. In a crude oil dependent economy, you can't formulate monetary policy without factoring in global occurrence. Hence, the reason the forex flexibility policy failed, because that was when global risk was at post recession high. No reasonable investor will ignore the obvious and jumped in an economy with high level of uncertainty.

On realizing they couldn't lure investors with Forex flexibility policy, they were force to hike interest rate by 200 basis points to 14 percent in order to lure investors via bond sales. It is the same reason the FG is selling $1 billion eurobond soon, again they are doing it at a high premium. This is dangerous because it put the money in the hand of the greedy investors at the expense of the masses.

IVORY2009:
.

Frustration!