December 11, 2017

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BlackBerry putting itself up for sale -

Wednesday, August 14, 2013

FERMA: A convergence of intent, engagement & perception -

Sunday, August 11, 2013

Nigeria Hits CNN’s List of World’s 12 sexiest accents…. -

Wednesday, August 7, 2013

N452t infrastructure funds from capital market coming -

Tuesday, August 6, 2013

Getting the right staff for your business -

Tuesday, August 6, 2013

Nigeria, others to re-evaluate Trans-Saharan gas project -

Monday, August 5, 2013

How Nigerians use social media -

Friday, August 2, 2013

NSIA to manage N3.4tr pension funds -

Friday, August 2, 2013

GOOGLE UNVEILS MOTO X SMARTPHONE… -

Friday, August 2, 2013

Nigerian Troops Return from Mali, Storm Borno -

Thursday, August 1, 2013

Our role in the $1.09b Malabu Oil mess, by Shell -

Wednesday, July 31, 2013

FG Can’t License Hotels, Hospitality Operators, Says Fashola -

Tuesday, July 30, 2013

Why FG Must Urgently Invest in Efficient Rail System -

Monday, July 29, 2013

Lagos community begins energy generation from waste -

Monday, July 29, 2013

FG to privatise BoI, BoA in 2014 -

Monday, July 29, 2013

Cassava takes pride place in Nigeria’s agro-economy -

Monday, July 29, 2013

Future of Africa in food production depends on training, emerging technologies —Kabba college provost -

Friday, July 26, 2013

Will this fresh initiative against cyber crime work? -

Friday, July 26, 2013

Investors prefer Southwest, says LCCI -

Friday, July 26, 2013

Fed Govt stops project variation beyond 15% of initial cost -

Thursday, July 25, 2013

Naira value: The determinants, the challenges

Naira value: The determinants, the challenges

THE Central Bank of Nigeria (CBN) has been insisting that the Naira value determination against other currencies is subject to the forces of demand and supply.

Even recently, the governor mentioned other factor influencing the nation’s Monetary Policy Rate (MPR) to include the state of infrastructure, which would absorb any expansionary monetary policy, this too, affects Naira value. These, in order words, may mean that the nation’s demand for other currencies, for whatever reasons, is a major determinant of Naira exchange rate.

The fourth quarter Economic Report highlighted among other things, how our foreign exchange transactions plummeted within the period due to a fall in the volume of crude oil sales and low utilisation of the Wholesale Dutch Auction System; and how the non-oil sector was boosted, yet fell short of cushioning the effects of the shortfall in oil sector revenues. It also highlighted the demand for foreign exchange and the sectors that consumed most; the performance of local industries, which is a reflection of the state of infrastructure in the country, among other issues affecting the foreign exchange demand and rates.

Naira value The determinants the challenges

Naira value The determinants the challenges

The situation may have highlighted the series of calls for the diversification of country’s economic base- revitalisation of the moribund firms and stimulation of small scale businesses to reduce the high import dependence status of the nation. Of course, the imperativeness of the calls stems from the fact that no economy has ever recorded any great achievement through such parasitic stance on other countries, especially in matters that it can easily solve for itself, perhaps through small business developments. It is rather unfortunate that items like foreign toothpick still sells faster than local ones due to low capacity utilization and mostly patronised by the elites and those in the corridors of power. But whether smuggled or legitimate importation, it has cost the country foreign exchange transactions, which ordinarily should have been avoided.

For emphasis sake, as at now, the nation’s export earnings are basically dominated by oil, accounting for over 90 per cent of the government’s total revenue, while our imports cover virtually all aspects of the national economy, including petroleum products, bitumen, clothing, among others, which we have abundant raw materials. This means that almost all export earnings are consumed, while more are being sourced to complement the supply. The simple economics here is that the country is at disequilibrium in terms of the demand and supply for the foreign exchange, otherwise the dollar or other currencies would not have ‘consumed’ more of the Naira.

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