Ken4Christ:


I do not agree. It will only limit looting but it will have no effect on the exchange rate. The countries you made references to didn't have a terrible economy like Nigeria does.

The major reason why out currency is low in values is because Nigeria is not a producing country. We import virtually everything.

If we want our currency value to appreciate, what we should do is;

1. Ensure all our refineries are working. It will save us lots of foreign exchange.

2. We need an industrial revolution.

3. We need to invest more in Agriculture.

4. Every local government chairman should be productive rather than administrative.

5. Corruption should be punished.

6. Our tax system should be made more effective.

7. Out railway should be developed to reduce cost of transportation of food items.

8. Our borders should be closed. If possible, fence the country round.

Export should exceed import if our currency must appreciate. After all these is done, then we can take away the high currency notes.

Bull's eye!
This is the koko of the currency value bruhaha. Other suggestions are voodoo economics and grammar.

Nigerian government does not own the Naira. They cannot dictate to the owners how the money should worth.

monerozi5590:



Big lie... Ghana currency is not more valuable than Naira.

what planet is this fool from

Initially, I thought you had something tangible to say,
I was wrong..

OK, bye

Cromagnon:

oyo






OYO



kudos




demand pass supply


not enough
tractor
fertiliser
irrigation from their pocket or die

dozieo:
SCARCITY WITHOUT END



Have they told you that we are paying premium on the fuel we are importing presently because it is Summer Grades, that is one of the reasons they are finding it difficult to maintain price at N145?

Have they told you that the fuel they are importing can’t even berth because of the multiple inefficiencies they created at the port?

Have they told you that they are doing Ship-to-Ship trans-loading at the ports to be able to bring the product into the facilities available?

Have they told that they are paying $20,000 per metric tonne as demurage each day for the vessels that are stranded since arrival but can't berth due to draft restrictions and congestion?

Have they told you that NNPC does not have capacity, expertise, and know-how to ensure availability of petrol in Nigeria. Yet same organisation is wasting over a billion daily to do a job is has failed woefully to do?

Have they told you that Nigeria is spending about 20% of its annual budget on "subsidy" yet they told you there is no fuel subsidy?

Have they told you how much that is being paid as Petroleum Equalisation Fund to keep the price uniform, yet it is only in Lagos and Abuja that fuel is sold for N145.

They won't tell you because you do not even know the right questions to ask.

MY TAKE

And do you know why they keep lying to you? Because they've been able to deceive you time and again so they've set the PRECEDENT (that word!) for deceit in your mind.

This govt clearly doesn't think much of you, the citizen.

Has any past Govt thought about us?

Another matter, How come when obasanjo was president, crude sold for about 60 dollars per barrel, yet we could buy petrol at 75 naira. now that it is 60 dollars again, we are buying fuel at 210 naira. This implies the naira has lost about two-thirds of its value in the last 10 years. What a shame.

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Samleen:
This is a very simple truth and need to be put into consideration.

Money is a value created in our mind and ascribe to currency notes and coins.

These currencies in themselves have no value except for the values we created in our mind for them.



Edited:
To those economics and financial Gurus calling me names and miscontruing my writeup, you are weldone!

Maybe you people need to read my write up again and consider what you wrote in your comments.

Everybody is contributing their opinion here to find a way forward for the Nigeria economy, some people are here derailing the thread with their You-are-not-an-expert comments.

Your research is sound, but your conclusions and application of the findings from your research is faulty.

Very simple, you are putting the cart before the horse. It is not the denomination of a Nation’s country that determines it’s value, inflation plays a central & dominant role.

When a country starts experiencing hyper inflation, the buying power of her currency takes a nose dive, e.g. and using some of desired outcome...what use to cost 1x 20 kobo coin, with inflation will now cost 250x 20 kobo coins, which is = 1x 50 Naira note.

As you can see, it will cost the country more to produce and maintain 250x 20 kobo coins vs just 1x 50 Naira note. Also imagine the lost in productivity, performance, efficiency and time in counting, carrying, storing, securing 250x coins vs just 1x 50 Naira note.

Imagine the drag that this will be on the whole country, imagine carring 250,000x 20 kobo coins along with you to school just to pay your 50k school fees. Yes, I purposely made this example for you to see the impracticability of your solution. You will say, but for a high value transaction like that, larger notes should be used...which begs the question, what is the use of these coins then, if we can’t use them in every day transactions?

But, look at it....if our government gets their acts together and inflation start taking a nose dive, the buying power of our currency will increase...all of a sudden, you can buy a car with just 1,000 Naira note, people will definitely start refusing to carry 1,000 around or keeping them at home, because it becomes a huge security risk...Also in this scenario a carton containg 24 pure waters now selling for 5 Naira and you only want to buy one bottle or sachet...the market woman will reject your 5 Naira note, because she can’t afford to give you change...or try give the bus conductor your 5 Naira note for a 20 kobo trip and see how he will curse your generation while throwing your money back at you.

All these combined effects will drive the demand for higher notes down and demand for lesser notes and coins up and through the roof and CBN will response by gradually reducing the circulation of higher notes and introduction of lower ones and coins.

If you notice, this value and buying power downwards and upwards movement is related to a single currency, when you plot this movement against other currencies e.g. the dollar, which didn’t have this type of dramatic shift, you will notice that the value of the Naira has increased against these other currencies.

Ken4Christ:


I do not agree. It will only limit looting but it will have no effect on the exchange rate. The countries you made references to didn't have a terrible economy like Nigeria does.

The major reason why out currency is low in values is because Nigeria is not a producing country. We import virtually everything.

If we want our currency value to appreciate, what we should do is;

1. Ensure all our refineries are working. It will save us lots of foreign exchange.

2. We need an industrial revolution.

3. We need to invest more in Agriculture.

4. Every local government chairman should be productive rather than administrative.

5. Corruption should be punished.

6. Our tax system should be made more effective.

7. Out railway should be developed to reduce cost of transportation of food items.

8. Our borders should be closed. If possible, fence the country round.

Export should exceed import if our currency must appreciate. After all these is done, then we can take away the high currency notes.

Please explain further how export will exceed import if our borders is "fenced"

Ken4Christ:


I do not agree. It will only limit looting but it will have no effect on the exchange rate. The countries you made references to didn't have a terrible economy like Nigeria does.

The major reason why out currency is low in values is because Nigeria is not a producing country. We import virtually everything.

If we want our currency value to appreciate, what we should do is;

1. Ensure all our refineries are working. It will save us lots of foreign exchange.

2. We need an industrial revolution.

3. We need to invest more in Agriculture.

4. Every local government chairman should be productive rather than administrative.

5. Corruption should be punished.

6. Our tax system should be made more effective.

7. Out railway should be developed to reduce cost of transportation of food items.

8. Our borders should be closed. If possible, fence the country round.

Export should exceed import if our currency must appreciate. After all these is done, then we can take away the high currency notes.

if this are the solution, then whey are you people causing buhari?

Samleen:


Ghana currency GHS ( 1 GHS = 80.4096 NGN )
Banknotes GH₵1, 2, 5, 10, 20, 50
Coins 1, 5, 10, 20, 50Gp, GH₵1

what's the excuse? Ghana currency is still performing better than wht we have here in Nigeria


compare this:

1 USD = 4.4770 GHS vs

1 USD = 360.500 NGN

Well said, but did you compare the purchase value of that 1Ghc?
Ghana did redecimalization whereby they removed some zeros from their currency.
Phasing out of higher denomination can't work if Inflation rate is high. [15.1%]. It is when we have a lower inflation that the purchase power goes up which will reduce the need for higher denomination currency.
Over dependence on foreign products too is a factor. When you are buying from people, they fell you what currency they want to be paid in. Although dollar is the most acceptable means of payment in the international market. Your currency don't have value if it's not in demand. Please don't compare naira with cedis. A 5000 cedis then has a value of around 5 cedis now. So what's the difference. Moreso, what will be bought with 5000 naira cost like 50 cedis in Ghana or more.

You cannot increase the value of your currency just by printing lower denominations. The question is, what is the value of your currency at the moment and what do you want it to be in the next say 5 years?
Take Ghana for instance where the currency was decimated. It was almost 1Cedi = $1 but what happens afterwards? 1Cedi < $1.
Suggested solutions:
1. Produce more goods in your country than what you need.
2. Innovate, research, develop & provide solutions to identified problems.
3. Identify the world needs and make them available.
4. Invest in education and infrastructure.
5. Provide a conducive environment for citizens.
6. Read and learn from mistake of other countries.
7. Active participation in politics.

Above all, uphold integrity in all dealings.

I disagree with you, Nigeria should be more of producing country than consuming. And once these is done, naija go smile again.

This write up should be forwarded to the right quarters, especially the ministry of finance and Nigerian minting company etc. This country can only be great if we do the needful

seunlayi:
soludo proposed this during the last tenure of OBJ, it was already announced but the whole senators and Reps kicked against it

yea,I remembered the removal of soludo,I knew they were going to change him after he made that statement.

gurunlocker:
Which kind Bullshit outline is this? You think USA will be watching for 1naira to equal 1 dollar? You really think your suggestions will solve the problem? Hell no!

it is possible but it can happen if the u.s govt benefit from anything rich you bring to the table,that is how countries survive......you chop,I chop biz.

OP lacks economic education.

It's not even a desirable thing for Nigeria to make $1 equal to 1 Naira. That strong economies like japan and Korea are not bothered by the nominal value of their currencies and the relatively high exchange rate to the dollar should tell the OP that a strong currency is not necessarily desirable.

Secondly, that the OP uses the numerical value of bank notes as an argument for his point is a sign of the economic illiteracy that would definitely permeate the rest of the write up. Given the lack of sound economic thinking in the initial paragraphs, i didn't waste my time reading the rest.

Soulless:



Hope you know that Ghana's currency is more valuable than naira?

hope you know 1cedis was once equal to $1,but it's now losing ground against the dollar

Agree with you............

One more thing is that we just have to start using what we produce and stop using what we don't produce.......

.

einsteine:
OP lacks economic education.

It's not ven a desirable thing for Nigeria to make $1 equal to 1 Naira. That strong economies like japan and Korea are not bothered by the nominal value of their currencies and the relatively high exchange rate to the dollar should tell the OP that a strong currency is not necessarily desirable.

Secondly, that the OP uses the numerical value of bank notes as an argument for his point is a sign of the economic illiteracy that would definitely permeate the rest of the write up. Given the lack of sound economic thinking in the initial paragraphs, i didn't waste my time reading the rest.

Sir,
Who is more illiterate here with your statement of "I didn't waste my time reading the rest"?

Go back to the topic and read it just once. Only after you do that, is when we can trust your judgement here.


Soo true is the statement: "If you want to hide anything from a black man, put it in white and black"

The African man is proud he knows everything and there no need for new knowledge input

Samleen:



Sir,
Who is more illiterate here with your statement of "I didn't waste my time reading the rest"?

Go back to the topic and read it just once. Only after you do that, is when we can trust your judgement here.


Soo true is the statement: "If you want to hide anything from a black man, put it in white and black"

The African man is proud he knows everything and there no need for new knowledge input

If your premise is faulty, your entire argument is faulty. We can for instance make $1 equal to N1 naira by redeominating the Naira at a rate of 360 naira to 1 USD (which by the way is what your entire faulty idea is about), but that would be gross foolishness. More importantly, the nominal value of currencies is never a way to judge the health of economies. The fact that you haven't accepted that (as seen in your comments on this thread) is a pointer that you haven't studied enough economics.

Junior66:

Exactly what I told him.

I'm actually not worried about the OP"s view, but rather the 100s of young people who "liked" it. It shows that if the affairs of this country is entrusted in the hands of these, we are doomed.
---
Once you diagnose a problem wrongly, you are most likely going to proffer the wrong solution.

einsteine:
OP lacks economic education.

It's not ven a desirable thing for Nigeria to make $1 equal to 1 Naira. That strong economies like japan and Korea are not bothered by the nominal value of their currencies and the relatively high exchange rate to the dollar should tell the OP that a strong currency is not necessarily desirable.

Secondly, that the OP uses the numerical value of bank notes as an argument for his point is a sign of the economic illiteracy that would definitely permeate the rest of the write up. Given the lack of sound economic thinking in the initial paragraphs, i didn't waste my time reading the rest.

I couldn't agree more. That writeup is not even elementary economics, it's layman economics or worse.

einsteine:



If your premise is faulty, your entire argument is faulty. We can for instance make $1 equal to N1 naira by redeominating the Naira at a rate of 360 naira to 1 USD (which by the way is what your entire faulty idea is about), but that would be gross foolishness. More importantly, the nominal value of currencies is never a way to judge the health of economies. The fact that you haven't accepted that (as seen in your comments on this thread) is a pointer that you haven't studied enough economics.

Our understanding differs.

I don't need to trade words with you as you intentionaly chose to miscontrue my writeup and only focus on the summary.

Has what was written in the writeup differ from what you stated here?

Didn't I stated other factors to improve the performance of a currency?

Didn't I wrote about difference between the face value of a currency and it real performance?

I agree!

You win!

By now you should be happy.

ajl:


The value of a country currency is a measure of its productivity. It has nothing to do with denominations of the currency.

That's the truth

Nice+one+OP+and+all+the+awesome+comments.+Fundamentally%2c+the+problem+is+inflation+and+which+the+OP+indirectly+stated+in+his+opening+piece.+We+are+witnessing+a+situation+where+total+money+supply+is+constantly+far+greater+than+total+output.+As+this+continues+the+value+of+money+continually+diminish.+Now+to+FOREX%2c+I+want+to+suggest+you+all+read+the+writings+of+Prof+Henry+Boyo+%40+http%3a%2f%2flesleba.com%2c+then+you+will+agree+CBN+has+been+the+major+obstacle+to+a+better+Naira+compared+to+the+major+currencies+of+the+world.+The+explanation+is+just+not+easy+to+type.+Nice+thread+once+again.

Okoyeebos:
Exactly 10 years ago, someone in the CBN wanted to do something similar but the economic blockheads ruling us frustrated it.

http://www.cbn.gov.ng/redenomination/newpolicy.asp

Shut up there,are they not your masters? Did you people not vote for them?

ZmB

Freeman50:
Charles soludo recommended this analysis (1$ = #1) some time ago to the federal government when he was still the governor of CBN, but obasanjo and cohorts turned him down.
Simply because probably it might not favour some of them in terms of Western transfers.
If paraventure this analysis existed, Some Nigerians won't bother travelling to overseas. Hence, dollar and naira are at same exchange rate.

Is Yar' Adua not Obasanjo

fados4sure:
Is Yar' Adua not Obasanjo

thanks man

Forceup:
Initially, I thought you had something tangible to say,
I was wrong..

OK, bye

who gives a rats asss what you thought

Nigerians always tend to think all we need to do is simply to export more than we import. Such resolution is too vague to be understood. What do we really mean by more export than import? This is prevalent on the screens, papers and forums like this. Well, it is good we are talking about this. At least, it will wake that thinking giant in us.

Though I am not an economist, I believe whenever we are talking of 'more export than import' we should always consider the clause 'adding more value'. I am of the opinion that we are already exporting much goods but we are just doing it the wrong way. The solution to strengthening the naira is not necessarily to re-denominate the naira or close our borders. Instead we should stop unnecessary exportation of our raw produce and make sure we add value by processing/refining them into finished products before exporting such. Belgium has already advised Nigeria on this. This is where the Nigerian government supposed to be very tough if we are to move forward. There is no reason why we should be exporting most of our crude oil, cocoa, maize, etc if we can actually turn them into fuel, beverages, and cornflakes before exporting. In doing this, we would earn more forex than we would have if we simply exported in their raw state.

Again, we must also know that no country is an island in itself. We must strengthen our economic ties with other countries for easier penetration. If we are talking of exportation, we should also realized that other countries also need where to export to. Now, that brings us to importation. Importation in itself is not a bad thing but we have made it look like a 'no go area'. Importation can actually help to boost our economy if we do it in the right way. Let us say, for example, our soil is not good for growing apples. In this case, nothing stops us from importing apples from other countries and adding value to it by processing it into more valuable products. We, in turn, can now export these products to other countries in exchange for much more forex than we spent in importing apples.

We cannot deny that there are those goods that we will not be at an advantage producing them in our country. That is why countries cooperate with each other. Therefore, no matter how much we fight importation of a good, we cannot succeed in it until there is a reliable and cheap enough substitute. That does not mean our borders should be left so porous that our goods do not even have a chance to breath. I mean our goods should be of high quality! Or how else is it supposed to compete favourably in other countries? I have heard some Nigerians talk about been nationalistic with regard to consumption. This is never going to solve our economic problems because the man with money will purchase whatever he likes.

The bottom line is this: export finished goods, import raw materials, concentrate on your areas of advantage, and our economy will boom.