grandstar:


You are right. However government still keeps the other rate for God knows what! Just throwing money away!

Different rate for pilgrimage.

Different rate for importing fuel.

Different rate for oluwaDangote.

If there already is an investor exporter window , why do investors hate the multiple exchange regime ?

budaatum:

I do want the Naira to fall to its true market rate actually, but I recognise first that Nigeria is not and never has been a "free-floating currency regime", and second, I doubt you'd be happy at the hardship you'd face when you have to pay market prices for the rice and petrol and baby milk you import.

Do buy Made in Nigeria please so I employ more Nigerians to make it for you and tax you for purchasing it along with the pay you earn instead of creating employment in UK and increasing their tax base.

And how exactly does subsidizing US Dollars for the likes of Dangote help me buy rice and petrol at cheaper prices? In any case, I would in fact be happy to pay the market price for rice and petrol, if only Buhari would allow me to do so by refraining from arbitrary import bans, cutting import duties to sensible levels, and deregulating the oil sector; the most maddening thing about the man's economic illiteracy is how his policies consistently reduce living standards for the masses he claims to support, with his fanatical northern supporters being the worst affected, as they already have the lowest incomes.

"Buy Nigeria" will never work, just as all of the similar schemes over the last 50 years have never resulted in a single success: all the hollow slogan does, beyond appealing to the "common sense" of those with no understanding of economics, is take money out of the pockets of millions of the already barely surviving, in order to give a temporary boost to farmers stuck in the middle-ages, while encouraging all kinds of lawlessness and corruption by increasing opportunities for smuggling, bribery and embezzlement through import exemptions etc; if Nigerians were taught history, more people would see a great irony in the fact that Umaru Dikko - the very man Buhari tried to kidnap from the UK in 1984 - made his money precisely through an "import license" scheme for rice. Had it been possible to freely import rice at the time, there wouldn't have been any need for "licenses" the likes of Dikko could use for personal profit.

SocialJustice:
He's not comparing, only proving Nigeria is a poor country.

I find it out of place that someone needs to prove that today is the 6th of December.
IMF lists Nigeria as the 55th poorest country, poorer than Ghana and even Rep of Congo.
I'd be surprised if my maths teacher spent his energy trying to convince me 2+2=4. Even a toddler knows this.

urahara:



Different rate for pilgrimage.

Different rate for importing fuel.

Different rate for oluwaDangote.

If there already is an investor exporter window , why do investors hate the multiple exchange regime ?

I'm not too sure. The multiple exchange rate might be a strong indication that quacks are running the economy. Does the pound have 2 exchange rates? Can you mention any country that has it today?

Countries have long done away with multiple exchange rates. Only command economies are associated with them. Without even reading about it, I won't be surprised if Iran has up to 2 or more exchange rates for their currency.

Lamido Sanusi said that the difference between the official rate and the parallel exchange rate should never be more than 3%. So, any country that has such, I simply consider it having having multiple exchange even if it denies it. The parallel exchange rate is the real exchange rate in such a situation. Is normally considered the real exchange as it's where you can get the forex required if you have the cash that matches the price. This is where effective demand can be matched with supply immediately. Try buying at 305 and see how far you will get. You'll probably have to bribe someone 30 naira per every dollar and is if you'll even see. You may wait weeka beforw you get an allocation.

grandstar:


I'm not too sure. The multiple exchange rate might be a strong indication that quacks are running the economy. Does the pound have 2 exchange rates? Can you mention any country that has it today?

Countries have long done away with multiple exchange rates. Only command economies are associated with them. Without even reading about it, I won't be surprised if Iran has up to 2 or more exchange rates for their currency.

Lamido Sanusi said that the difference between the official rate and the parallel exchange rate should never be more than 3%. So, any country that has such, I simply consider it having having multiple exchange even if it denies it. The parallel exchange rate is the real exchange rate in such a situation. Is normally considered the real exchange as it's where you can get the forex required if you have the cash that matches the price. This is where effective demand can be matched with supply immediately. Try buying at 305 and see how far you will get. You'll probably have to bribe someone 30 naira per every dollar and is if you'll even see. You may wait weeka beforw you get an allocation.

You are right , Iran has multiple exchange rates.

grandstar:


I'm not too sure. The multiple exchange rate might be a strong indication that quacks are running the economy. Does the pound have 2 exchange rates? Can you mention any country that has it today?

Countries have long done away with multiple exchange rates. Only command economies are associated with them. Without even reading about it, I won't be surprised if Iran has up to 2 or more exchange rates for their currency.

Lamido Sanusi said that the difference between the official rate and the parallel exchange rate should never be more than 3%. So, any country that has such, I simply consider it having having multiple exchange even if it denies it. The parallel exchange rate is the real exchange rate in such a situation. Is normally considered the real exchange as it's where you can get the forex required if you have the cash that matches the price. This is where effective demand can be matched with supply immediately. Try buying at 305 and see how far you will get. You'll probably have to bribe someone 30 naira per every dollar and is if you'll even see. You may wait weeka beforw you get an allocation.

Legend has it that the cabal takes advantage of this situation to round trip.

grandstar:


I'm not too sure. The multiple exchange rate might be a strong indication that quacks are running the economy. Does the pound have 2 exchange rates? Can you mention any country that has it today?

Countries have long done away with multiple exchange rates. Only command economies are associated with them. Without even reading about it, I won't be surprised if Iran has up to 2 or more exchange rates for their currency.

Lamido Sanusi said that the difference between the official rate and the parallel exchange rate should never be more than 3%. So, any country that has such, I simply consider it having having multiple exchange even if it denies it. The parallel exchange rate is the real exchange rate in such a situation. Is normally considered the real exchange as it's where you can get the forex required if you have the cash that matches the price. This is where effective demand can be matched with supply immediately. Try buying at 305 and see how far you will get. You'll probably have to bribe someone 30 naira per every dollar and is if you'll even see. You may wait weeka beforw you get an allocation.

The reason why investors hate the multiple-rate regime is simple: the Nigerian government wants them to bring in their funds at the artificially "strong" rate, but is unwilling to allow them full and prompt repatriation of their funds at the same rate. Under such circumstances, no one of right mind would invest in the long-term in a country like Nigeria where rank incompetence and runaway corruption already make it much harder to turn a profit than would be necessary elsewhere: imagine facing one of those all-too-frequent arbitrary demands from a government official that suddenly renders your venture non-viable, only to then be forced to take a 20% hit to your principal when you try to take your own money to more welcoming climes.

omohayek:

And how exactly does subsidizing US Dollars for the likes of Dangote help me buy rice and petrol at cheaper prices? In any case, I would in fact be happy to pay the market price for rice and petrol, if only Buhari would allow me to do so by refraining from arbitrary import bans, cutting import duties to sensible levels, and deregulating the oil sector; the most maddening thing about the man's economic illiteracy is how his policies consistently reduce living standards for the masses he claims to support, with his fanatical northern supporters being the worst affected, as they already have the lowest incomes.

"Buy Nigeria" will never work, just as all of the similar schemes over the last 50 years have never resulted in a single success: all the hollow slogan does, beyond appealing to the "common sense" of those with no understanding of economics, is take money out of the pockets of millions of the already barely surviving, in order to give a temporary boost to farmers stuck in the middle-ages, while encouraging all kinds of lawlessness and corruption by increasing opportunities for smuggling, bribery and embezzlement through import exemptions etc; if Nigerians were taught history, more people would see a great irony in the fact that Umaru Dikko - the very man Buhari tried to kidnap from the UK in 1984 - made his money precisely through an "import license" scheme for rice. Had it been possible to freely import rice at the time, there wouldn't have been any need for "licenses" the likes of Dikko could use for personal profit.

Please I think Nairaland should include a feature that makes it possible to double like a post.


A thousand likes for this post !!!!!


Countries don't get rich by producing everything they consume.

Nigeria and Nigerians have failed to understand this fact since 1960.

omohayek:

The reason why investors hate the multiple-rate regime is simple: the Nigerian government wants them to bring in their funds at the artificially "strong" rate, but is unwilling to allow them full and prompt repatriation of their funds at the same rate. Under such circumstances, no one of right mind would invest in the long-term in a country like Nigeria where rank incompetence and runaway corruption already make it much harder to turn a profit than would be necessary elsewhere: imagine facing one of those all-too-frequent arbitrary demands from a government official that suddenly renders your venture non-viable, only to then be forced to take a 20% hit to your principal when you try to take your own money to more welcoming climes.

Thanks so much for this.

I felt so sorry for MTN when it was grilled and punished for repatraiting money. I thought free repatriation of money has been the case for decades.

Did Buhari end it or is there something I don't know?

urahara:


Legend has it that the cabal takes advantage of this situation to round trip.

As Hamilton said, "The existence of subsidies can not be divorced from abuse"

quaintbloke:

I find it out of place that someone needs to prove that today is the 6th of December.
IMF lists Nigeria as the 55th poorest country, poorer than Ghana and even Rep of Congo.
I'd be surprised if my maths teacher spent his energy trying to convince me 2+2=4. Even a toddler knows this.

Don't be so sure. The bulk of Nigerians are ignorant about this.

quaintbloke:

I find it out of place that someone needs to prove that today is the 6th of December.
IMF lists Nigeria as the 55th poorest country, poorer than Ghana and even Rep of Congo.
I'd be surprised if my maths teacher spent his energy trying to convince me 2+2=4. Even a toddler knows this.

Trust me , they are many people that argue that Nigeria is a very wealthy country.

omohayek:

The reason why investors hate the multiple-rate regime is simple: the Nigerian government wants them to bring in their funds at the artificially "strong" rate, but is unwilling to allow them full and prompt repatriation of their funds at the same rate. Under such circumstances, no one of right mind would invest in the long-term in a country like Nigeria where rank incompetence and runaway corruption already make it much harder to turn a profit than would be necessary elsewhere: imagine facing one of those all-too-frequent arbitrary demands from a government official that suddenly renders your venture non-viable, only to then be forced to take a 20% hit to your principal when you try to take your own money to more welcoming climes.

Then what then was the purpose of the investors exporters window ? I thought it was said that this window facilitated foreign investment greatly in Nigeria.

Or was it all lies ?

urahara:


Then what then was the purpose of the investors exporters window ? I thought it was said that this window facilitated foreign investment greatly in Nigeria.

Or was it all lies ?

To the extent that such a "window" serves any purpose other than catering to Buhari's ignorant demand for a "strong" Naira, it is almost certainly to facilitate corruption, by allowing the well-connected to buy USD at the "official" rate and then immediately turn around and sell it at the market rate. So much of Nigerian policy-making only makes sense through such a lens (e.g. the refusal to privatize parastatals which serve as useful tools for handing out pretend-jobs to the favored).

grandstar:


Thanks so much for this.

I felt so sorry for MTN when it was grilled and punished for repatraiting money. I thought free repatriation of money has been the case for decades.

Did Buhari end it or is there something I don't know?

The problem isn't that companies aren't theoretically allowed to repatriate earnings, the problem is the rate at which they'll be allowed to do so, and how quickly that will happen: even with all the goodwill in the world, the CBN only has so much at hand in foreign reserves, and promising full, immediate liquidity at the "official" rate would be extremely risky, whereas with a fully-liquid, market-based float no CBN intervention would be required. Investors realise this reality and avoid the country accordingly.

Agboriotejoye:

Since you know the effect of a rising exchange rate, can you explain how $1 rose to 305 from 197 and what the govt was looking at while it happened.
I hope you're aware at one point in 2017, the exchange rate at the open market was 500 while official rate was 197. Kindly explain why Osinbajo a professor allowed CBN to devalue to 305 then to move closer to the open market value

Government policies through the years and the actions of Nigerians make the exchange rate rise. If government had their way, they'd gladly scrap the expensive official rate as it cost them.

*Why Nigerians May Be Poorer In 2020, By Manufacturers*

*by somtookeke(m): 12:54pm*

*Read More;*

https://speakersden2..com/2019/12/why-nigerians-may-be-poorer-in-2020-by.html

quaintbloke:


Before you try to sound more intelligent than yourself, you can't compare apples and grapes

So UK people are apples and Nigerians are grapes Or we just don't deserve UK style government?

I guess you are correct. UK people wouldn't accept what we do for some odd reason.

Doyin2:


Never mind,UK was not built in a day.

We shall get there,it does not have to be in our life time.

If we work hard and intelligently at it it could be in our lifetime.

amaridigital:


Sad, very sad. UK budget is almost 30 times that of Nigeria and Nigeria's population is almost thrice that of the UK.
Brazil's Budget was $780 Billion.last year. More than 22 times Nigeria's budget and Nigeria has more population than Brazil. Australia with population slightly above 25 million spent $485 Billion last year. That's 13 times the 2020 budget of Nigeria.
We really need to find alternative source of generating income as Nigeria is set to replace the US as the world's third most populous country in the next 30 years. How are we going to provide jobs and infrastructure for the 405million Nigerians by 2050?

You should check the revenue of those countries to see how much more productive they are, then ask why our revenue is so little.

Doyin2:


Kindly do me a favour by confirming the major source of revenue/income for the U K government.

Tax, mainly.

Doyin2:


Thank you.

This same people complaining are the same already complaining about VAT increase.


Tax is the major source of revenue for any developed nation.

Tax on profit, which is related to productivity. You can't tax an income that you don't generate. If I make ₦0, I'd pay ₦0 tax.

grandstar:


Government needs to tax and spend. In order to do that, taxes should be streamlined and be pro-business.. The tax base must also be high

I somehow agree. Iyaloja collects tax but government doesn't see any of it.

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