Olusegun Odunewu

Rema makes history atop billboards Afrobeats’ chart

By Orukpe Rebecca Rema, the Nigerian music sensation, has taken the global music industry by storm with his mega-hit record ‘Calm Down.’ This chart-topping track...

Five female celebrities with amazing weight loss transformation

Entertainment3 years ago

Five female celebrities with amazing weight loss transformation

By ugbokholen Angel. Whether through surgery or adhering to a healthy lifestyle, these female celebrities have left many spellbound with their amazing weight-loss transformations....

Social media Platform X to introduce video, audio calls

Business3 years ago

Social media Platform X to introduce video, audio calls

Elon Musk, tech billionaire, says audio and video call feature will be added to X (formerly known as Twitter), soon. In a post shared...

Umahi replies Obaseki on Edo dilapidated roads

News3 years ago

Umahi replies Obaseki on Edo dilapidated roads

The Minister of Works, Mr. David Umahi has reacted to a statement credited to Governor Godwin Obaseki where he pleaded with people to help...

FG to shut Third Mainland Bridge for repairs

News3 years ago

FG to close Third Mainland Bridge for emergency maintenance

The Federal Government said it has embarked on an underwater investigation of the Third Mainland Bridge in Lagos as it works toward an emergency...

Telecom tariffs have remained stable in Nigeria --NCC

Business3 years ago

Telecom tariffs have remained stable in Nigeria –NCC

The Executive Vice Chairman of the Nigerian Communications Commission, NCC, Prof Umar Danbatta, has noted that despite the rising costs and the forex instability,...

Kigame, Biya reshuffle countries’ military chiefs amidst coup scare

News3 years ago

Kigame, Biya reshuffle countries’ military chiefs amidst coup scare

As coups continue to spread on the African continent, President of Rwanda, Paul Kigame and his Cameroonian counterpart, Paul Biya are taking proactive steps by...

CRITICAL POINT IN NIGERIA’s FX MANAGEMENT: By Victor Ogiemwonyi This week has finally pushed the Naira / Dollar exchange rate closer to N1000 to the Dollar. Most people who spoke to me this week all seemed understandably scared, they fear we are going to run into a currency crisis. I have always been a long term advocate of letting the Naira find its value in the market and I have not changed my mind.There are all sorts of problems with allowing market forces work to find the true value of the Naira; but we have to get to a point where the cost of buying Dollars will change our economy for good. That is how the laws of economics work.lt will be worse before it gets better. We are at that critical point now. To be able to harness the gains, we must stay the steady course. My contribution to the FX debate since the new unification policy was put in place, was an article I wrote, a few weeks back , where I stated that the challenge now, was to maintain policy consistency That is what I am still reiterating.The only thing we have to fear is fear as President FDR Roosevelt once said.If the CBN gets into panic mode and do anything other than letting the Naira find its value, we will get into a bigger currency crisis, that will do even more harm. We should not worry about what the Naira Exchanges for, even at N1,500 to the Dollar. We should worry more about what it can purchase locally. For context, the South Korean currency, the “WON “ exchanges for 1,320 to the Dollar as I write. Why should you expect the WON to exchange for that much , despite all its industries, productivity and strong GDP and with a population much less than Nigeria, yet we are expecting Nigeria’s non productive economy , to exchange its Naira for less. It is irrational to expect our currency to out- perform our economy. Our American Nixon moment. On August 15, 1971 President Nixon of the United States, severed the link between the US currency, the Dollar and Gold. In effect, he declared that the Dollar will no longer be backed by its Gold reserves but by the American economy, which he claimed was stronger than any other economy in the world. It was a gamble, but it worked. More than 50years later, the Dollar is the dominant currency in the world, and has nothing backing it, but the American economy. Let the Nigerian economy back the Naira even though I am not saying we have much of any economy now, we will have to grow it, because the potentials are there. We are currently, the largest economy in Africa. China was poorer than us relatively, given their population in 1970. We should work toward an economically driven Naira currency value. It will be painful for 5 years, because we left it too late.All the defending of the Naira, the CBN have done with our Dollar Reserves, in the last 10 years was pure waste . It is never late to be right. If we pursue this policy diligently, we will forever be off the yo-yo rate fluctuations the Naira is currently experiencing. Let the Dollar Demand Destruction complete its course. The artificial lifestyle of consuming foreign goods when we are not productive and we do not export much, must gradually change. We must allow importation to moderate itself. The higher demand for FX will eventually weaken, when we are unable to afford some of the things we buy with FX now, the demand and supply for Fx, will align. We are spending money to educate our children abroad, spending what we can use to improve our own educational institutions locally. We neglect investing in our Health care because we can buy it abroad, when most of the people can not go to the US or the UK, they do the cheaper option of India. We spend billions of Dollars every year to import petroleum products,because we chose to neglect our Refineries at home. If we want any development here, we must focus on developing our local industries. The irony is that those who benefit from the little FX Reserves we generate, represent a very tiny percentage of the population. Any industry that can not find alternatives, for most of its raw material here, is not ideal for our economy. The only known efficient allocator of resources, is price. Let higher prices determine who and which industries get FX. Any one or entity paying anything, outside of the market price for FX, is being subsidised and we have come to know, that is not good for any economy, especially when we become dependent on it. As importation gradually goes down, local manufacturing will take up the gap and even the replacement, that may be inferior now, will eventually improve in quality and competition with other local manufacturers , will force them to make better quality goods. Higher local currency receipts as we exchange dollars for Naira, will also make more money available to the States and local governments to share, thereby re-distributing the new Naira wealth to areas where development will be nearer the people. We are already seeing this happen in the last few months. The Nigerian policy making and reforms to get the Naira stabilized, must start from creating a good enabling economic environment. Inconsistent policy making must stop. Regulators in every aspect of our economy, must be made to understand that their role, is that of enablement for the area they regulate, not to constantly play police. This will result in rapid growth, for our economy. We will need double digit growth for the next 10years. This is the only way to reduce the current massive unemployment and create wealth that will lift our people out of poverty. We already have all the positive factor inputs to enable this: fertile land for Agriculture, large population for self sustaining market to support whatever our industries produce and large literate labour market, that can easily be skilled up. We must also address the soft issues of heavy investment into education, healthcare and the present challenge of Security. We must fight corruption head on, it has corroded every sphere of life in our country. Some immediate steps that may help. The fact that the black market has now gained over N200 premium to the official rate at the I&E window, at the FMDQ, since the alignment with the black market rate in July, tells me the market , in that window is not an efficient allocator. I will advocate that, the CBN should impose a N200 premium on any price determined at the I&E window daily, until it aligns its price with the black market rate , which the people seem to perceive as the real market. This will be a way to quickly find out, who are the real economic users for FX. The CBN should come to an arrangement with all the Deposit Money Banks, to lend it all their current holdings in Domiciliary Accounts, to be used to settle verified backlogs , something tells me the media reported Backlogs, have some fluff, that need proper verification . The Banks must be incentivized to to do this, at rates to be agreed. The CBN will also accommodate this as Fx holdings for the Banks. The CBN should allowed them, value quarterly balances with the CBN at whatever the current rates are, for reporting purposes . The CBN should also guarantee the the Banks, they will be ready to provide it, with liquidity to meet depositors request, at any time so there is confidence for depositors . And finally, the CBN must find a way to rid the economy of the excess liquidity floating around, which is also the reason for the unquenchable Dollar demand. Mr. Victor Ogiemwonyi is a retired Investment Banker and writes from Ikoyi Lagos

Business3 years ago

Naira exchange rate closes at N738.18/$1 at official market

The exchange rate between the naira and the United States Dollar (USD) closed at N738.18/$1 in the Investors’ and Exporters’ window on Wednesday. In...

MTN’s digital business gains traction as MoMo active wallet users hit 5.3m

Business3 years ago

MTN raises N125 billion for short-term working capital

Over N125 billion was raised by MTN Nigeria through the Commercial Paper Issuance Programme, the telecommunications company revealed on Wednesday. MTN Nigeria said the firm’s initial...

Chukkol charges media on watchdog role in fight against cybercrimes

Crime3 years ago

Chukkol charges media on watchdog role in fight against cybercrimes

The Acting Chairman of the Economic and Financial Crimes Commission, EFCC, AbdulKarim Chukkol has urged the media to beam its searchlight on rising cases...

National Daily Newspaper

Stories By Olusegun Odunewu

Rema makes history atop billboards Afrobeats’ chart

Five female celebrities with amazing weight loss transformation

Social media Platform X to introduce video, audio calls

Umahi replies Obaseki on Edo dilapidated roads

FG to close Third Mainland Bridge for emergency maintenance

Telecom tariffs have remained stable in Nigeria –NCC

Kigame, Biya reshuffle countries’ military chiefs amidst coup scare

Naira exchange rate closes at N738.18/$1 at official market

MTN raises N125 billion for short-term working capital

Chukkol charges media on watchdog role in fight against cybercrimes