Guys the rate of Naira devaluation is alarming. It seems dollars, pounds and euro wants to sink the naira so fast.

Godbpraised:
Guys the rate of Naira devaluation is alarming. It seems dollars, pounds and euro wants to sink the naira so fast.

Highly alarming.....inflation is increasing rapidly.
Pls informed members should discuss this continuous dollar hike.

Devaluation of naira is artificial and most insensitive action by those who should know better.
Why should there be dollar scarcity during total lockdown when economic activities declined or at its lowest?

civilserva:
Devaluation of naira is artificial and most insensitive action by those who should know better.
Why should there be dollar scarcity during total lockdown when economic activities declined or at its lowest?

When you say devaluation of naira is artificial,what do you mean?

civilserva:
Devaluation of naira is artificial and most insensitive action by those who should know better.
Why should there be dollar scarcity during total lockdown when economic activities declined or at its lowest?

Have you checked the price of crude oil?

Have you checked the volume of sales?

All since say, April?
Therein lies your answer

OgogoroFreak:
Alot of them just have business ideas but deep down, they know it can either fail or succeed so they only want to take the risk with someone else's money.

When it's time to pay back they start talking about how their case was a spiritual attack and how "arrow" was fired at them.

Came across this excerpt in Millionaire Next Door and I remembered your position and oga Emma's...

Team
I have an argument over here and so I decided to get a wider view / contributions

Please is there any difference between the black market rate and parallel market rate in terms of currency exchange?

emmanuelewumi:

Oga here I am

deepwater:
Team
I have an argument over here and so I decided to get a wider view / contributions

Please is there any difference between the black market rate and parallel market rate in terms of currency exchange?





Oga here I am

Parallel market and black market are both unofficial markets

emmanuelewumi:



Parallel market and black market are both unofficial markets

Thanks

Are these words (parallel and black) interchangeable

Or

While both being unofficial rates, can parallel rate differ from black market rates at same given time?

If parallel and black market are both unofficial markets, they could as well be termed illegal markets in a sane society. Why is our govt or CBN not cracking them down and still allows them to operate as if they are officially legal?

emmanuelewumi:



Parallel market and black market are both unofficial markets

This is beacause Nigeria is a developing country that depends on import and export for development. The economic activities such as handling the volume of transactions cannot be handled by the CBN, the technologies are not there so they rely on these markets to bridge that gap but ofcourse the gap is filled with crooks.

In developed countres these sort of markets don"t exist due to robust system of the financial systems.

Donbrig:
If parallel and black market are both unofficial markets, they could as well be termed illegal markets in a sane society. Why is our govt or CBN not cracking them down and still allows them to operate as if they are officially legal?

Is balogun market an official market? If no, does that make it illegal?
Not being official does not make a thing illegal.

Donbrig:
If parallel and black market are both unofficial markets, they could as well be termed illegal markets in a sane society. Why is our govt or CBN not cracking them down and still allows them to operate as if they are officially legal?

ojesymsym:
Is balogun market an official market? If no, does that make it illegal?
Not being official does not make a thing illegal.

Great!
I like how you simplify it.
It's like they don't know Bureau de change is also parallel/unofficial.
And we all know CBN use to supply BDCs directly,so where is the illegality in all this?

A more reasonable point.

TotoNaRubber:
This is beacause Nigeria is a developing country that depends on import and export for development. The economic activities such as handling the volume of transactions cannot be handled by the CBN, the technologies are not there so they rely on these markets to bridge that gap but ofcourse the gap is filled with crooks.

In developed countres these sort of markets don"t exist due to robust system of the financial systems.

What is not officially recognised by the govt is illegal, but due to the high level of decadence in Nigeria, we often see illegal markets or companies or organisations as legal, because the govt does not question their activities. Have you ever wondered why govt hardly take necessary actions if a market like Balogun should burn down to ashes? Perhaps the govt knows very well that they are not operating officially and anything that is unofficial is illegal in a sane society.

ojesymsym:
Is balogun market an official market? If no, does that make it illegal?
Not being official does not make a thing illegal.

Donbrig:
What is not officially recognised by the govt is illegal, but due to the high level of decadence in Nigeria, we often see illegal markets or companies or organisations as legal, because the govt does not question their activities. Have you ever wondered why govt hardly take necessary actions if a market like Balogun should burn down to ashes? Perhaps the govt knows very well that they are not operating officially and anything that is unofficial is illegal in a sane society.

If Lagos Island market or Balogun market or Alaba or computer village burns down completely today,even Buhari will go there personally or send an envoy there to sympathise with market players and look for ways to revamp them.
So what do you mean by the government wouldn't care because they are illegal?
Parallel market is very much legal and is a structured body recognised very well by the government.Maybe you never hear of ABCON before
What they do is legal,however they they also abuse their legalities by engaging in money laundering and currency/economic sabotage by patronising currency smugglers and arbitrators.
This is the only activity the government cracks down on concerning their activities and also destroy unlicensed parallel market players.
This is the case mompha was facing,not that he being a black market currency player is illegal but his BDC was unlicensed.
Make una no dey talk wetin una no know

Investment misnormals for Nigerians based aboard....my Lagos landlord is uk based and rented a property to me 14 years ago at 500k =4166 dollars (at 120)......14 years later am still renting same property at now 800k (at 470 or 400 )= 1684 dollars or 2000 dollars ......he so bitter and had several property in Lagos ....investments in Nigeria keeps giving negative returns in the long term ....if he attempts to move the rents to reflect this changes then rent should be aroind 1.6m....but property will remain empty..........

This the biggest threat to fdi flow into Nigeria and it affects everthing.....some firm will not invest in Nigeria unless return are above 40 peecent per anum....some will never invest in long term project only short term items like omo auction,euro bond etc ....this form reeason why total refused to build in refinery in Nigeria that r.o.i could take 20 years while cash flow are in very unstable currency

ahiboilandgas:
Investment misnormals for Nigerians based aboard....my Lagos landlord is uk based and rented a property to me 14 years ago at 500k =4166 dollars (at 120)......14 years later am still renting same property at now 800k (at 470 or 400 )= 1684 dollars or 2000 dollars ......he so bitter and had several property in Lagos ....investments in Nigeria keeps giving negative returns in the long term ....if he attempts to move the rents to reflect this changes then rent should be aroind 1.6m....but property will remain empty..........

What is the value of the property 14 years ago, what is the current value of the property?

He must have earned rental income of about N9 million from the property in the last 14 years.

Since he earned dollars, he should have reinvested the rental income by buying Eurobonds or other dollar denominated investments

In the past investor can predict the future of the currency within 10 years gap with relative stabilities but right now Naira devalued almost ever months since buhari /emefele took charge .........no investor can predict the value in 2025 may 500,750 1000 or non exising,this uncertainty has dry up investments....investor now are from dirty money and shaddy group from India,and china and labasene...that pose as manufacturers but are runing rackets like ivory smuggling,forex round tripping , tax evasion ,duty underpayments ,slave wages ,illegeal logging ,export grany abuse etc .....

emmanuelewumi:



What is the value of the property 14 years ago, what is the current value of the property?

He must have earned rental income of about N9 million from the property in the last 14 years.

Since he earned dollars, he should have reinvested the rental income by buy Eurobonds or other dollar denominated investments

also negative the property was wort 12m in 2004 (100k dollars ) now around 18m (42k) ......plus the earned 9m rent would still be around 60k dollars max .......he retire train driver in the uk might not know about euro bond ....euro bond is new item issue by Nigeria state

ahiboilandgas:
also negative the property was wort 12m in 2004 (100k dollars ) now around 18m (42k) ......plus the earned 9m rent would still be around 60k dollars max .......he retire train driver in the uk might not know about euro bond ....euro bond is new item issue by Nigeria state

Dollars investments are not new in Nigeria.

The 400k paid as rent in 2014 if invested at 12% would have grown to N2.4 million in 2020.

400k is about $3200 in 2004
N2.4 million is about $5100 in 2020.

Imagine if he did the same thing to the rents collected in 2005, 2006 ,2007, 2008, 2009 and 2010.


An investor should diversify and have his own strategy of mitigating risk of inflation and currency devaluation.

I guess that is not his only Investment in Nigerian?

Will he relocate to Nigeria after his retirement, his naira and forex investments should be able to give him a comfortable retirement

If we keep doing this direct comparison, the person will just have headache. Best approach for now, use your forex investment where you are and only naira investment for naira.
If the money you used to build that property was in Naira, and since then you have increased rent from 500k to 800k, then nothing to really worry about.
But you sef, u wen na Abuja u mostly de, why rent a house in Lagos that you do not stay in all the time, do you have other people living there?

ahiboilandgas:
This the biggest threat to fdi flow into Nigeria and it affects everthing.....some firm will not invest in Nigeria unless return are above 40 peecent per anum....some will never invest in long term project only short term items like omo auction,euro bond etc ....this form reeason why total refused to build in refinery in Nigeria that r.o.i could take 20 years while cash flow are in very unstable currency

ojesymsym:
If we keep doing this direct comparison, the person will just have headache. Best approach for now, use your forex investment where you are and only naira investment for naira.
If the money you used to build that property was in Naira, and since then you have increased rent from 500k to 800k, then nothing to really worry about.
But you sef, u wen na Abuja u mostly de, why rent a house in Lagos that you do not stay in all the time, do you have other people living there?

Abi ooo.

His Naira investments will take care of his Naira expenses in Nigeria.

ojesymsym:
If we keep doing this direct comparison, the person will just have headache. Best approach for now, use your forex investment where you are and only naira investment for naira.
If the money you used to build that property was in Naira, and since then you have increased rent from 500k to 800k, then nothing to really worry about.
But you sef, u wen na Abuja u mostly de, why rent a house in Lagos that you do not stay in all the time, do you have other people living there?

nope it save me cost of hotel bills i spend a lot of time in Lagos

emmanuelewumi:


Dollars investments are not new in Nigeria.

The 400k paid as rent in 2014 if invested at 12% would have grown to N2.4 million in 2020.

400k is about $3200 in 2004
N2.4 million is about $5100 in 2020.

Imagine if he did the same thing to the rents collected in 2005, 2006 ,2007, 2008, 2009 and 2010.


An investor should diversify and have his own strategy of mitigating risk of inflation and currency devaluation.

I guess that is not his only Investment in Nigerian?

Will he relocate to Nigeria after his retirement, his naira and forex investments should be able to give him a comfortable retirement

i cant tell he seem lost ....he above 60 and own another house in Manchester but made several attempt to move back to Nigeria but wife no agree follow ,kids done marry to uk .......any time he comes after 2 weeks na to run for next 3 years .....nepa dey show am shege ...last time transformer blow 40 days no light

ojesymsym:
If we keep doing this direct comparison, the person will just have headache. Best approach for now, use your forex investment where you are and only naira investment for naira.
If the money you used to build that property was in Naira, and since then you have increased rent from 500k to 800k, then nothing to really worry about.
But you sef, u wen na Abuja u mostly de, why rent a house in Lagos that you do not stay in all the time, do you have other people living there?

Gbam. I always wonder why this comparison and conversion is always done. Anybody investing in a foreign country should always factor in exchange rate risk into it. If the owner of that property was in Nigeria, he would not be bother about exchange rate if all his spendings are in Naira.

emmanuelewumi:



Abi ooo.

His Naira investments will take care of his Naira expenses in Nigeria.

N120 to $1 in 2004

N476 to $1 in 2020.

Gave a compounded annual growth rate of 9% in the last 16 years.

Any Investment that gave a compounded annual growth rate of over 10% in the last 16 years will break even the currency devaluation risk..


The most important thing is that our money should never be idle by not earning anything.

ojesymsym:
If we keep doing this direct comparison, the person will just have headache. Best approach for now, use your forex investment where you are and only naira investment for naira.
If the money you used to build that property was in Naira, and since then you have increased rent from 500k to 800k, then nothing to really worry about.
But you sef, u wen na Abuja u mostly de, why rent a house in Lagos that you do not stay in all the time, do you have other people living there?

meaning people with foreign income (exclusively)should not invest in local income generating aspect

ahiboilandgas:
meaning people with foreign income (exclusively)should not invest in local income generating aspect

They can/should but exchange rate risk should be factored into it especially when the investment is in a developing country.

ahiboilandgas:
also negative the property was wort 12m in 2004 (100k dollars ) now around 18m (42k) ......plus the earned 9m rent would still be around 60k dollars max .......he retire train driver in the uk might not know about euro bond ....euro bond is new item issue by Nigeria state

The property bought for N12 million in 2004 which is currently worth N18 million in 2020 over a period of 16 years.

Gave a poor returns of about 2.5% per annum compounded over a 16 year period, either the property was overpriced when he bought it

That N12 million invested in a very conservative money market fund at a below average return of 8% would have compounded to N40 million in 16 years..

You can do the maths.


Compound interest, this is what some people don't know. But fixed income Investors understand it so well.

I suggest they have two portfolios, one denominated in their forex and the Naira one. The Naira one should/ can be invested in Nigerian investments and instruments, ditto for the forex portfolio.

That was why I was asking the other day if there was a global form of Mutual funds or investment. Eurobonds and co are good, but you are at the mercy of the nation's Forex inflow which means the government can default.

ahiboilandgas:
meaning people with foreign income (exclusively)should not invest in local income generating aspect