Can you defend your June 2023 prediction on Naira, post-floating? Yes, what was your prediction when Nigeria floated the Naira in June 2023? Here are samples.
“The Fund greatly welcomes the authorities’ decision to introduce a unified market-reflective exchange rate regime in line with our long-standing recommendations. We stand ready to support the new administration in its implementation of FX reforms.” – IMF.
“While it will take a few days for USD/NGN spot to settle, we fully expect an initial overshoot towards the parallel market rate of -750 or higher, after which, we expect USD/NGN to settle in the high 600s over [the] coming months.” – JP Morgan.
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“our analysis suggested that at current oil prices, the naira adjustment needed to rebalance the current account into a sustainable surplus would entail a devaluation to around NGN 750 vs. the USD.” – Goldman Sachs.
“Nigeria’s floating of its currency, while progressive, will cause severe perturbations in the economy – and a stable state may not come as most experts have predicted.” – Ndubuisi Ekekwe.
It’s Beyond Floating Naira, Nigeria Must FLOAT Industries To Stabilize Naira
Naira is hitting N1,600/$ and a stable state is still far because Nigeria cannot float Naira without the pillars to hold Naira. Those pillars are factories and warehouses (the old and the modern).
According to ChatGPT, a village boy named Ndubuisi, was closer to its prediction than most experts. It went further, positing that Nigeria widened the gap, instead of closing the black and official rates: “According to Tekedia, the unstable state of the Naira is more dangerous to the economy than a mismatch in pricing between official and black market currency rates. Tekedia also says that the Naira floating did not close, making the core reason for the floating largely unrealized”
Can you defend your June 2023 prediction on Naira, post-floating? Yes, what was your prediction when Nigeria floated the Naira in June 2023? Here are samples.
“The Fund greatly welcomes the authorities’ decision to introduce a unified market-reflective exchange rate regime in… pic.twitter.com/oF7kAJLyQX
— Ndubuisi Ekekwe (@ndekekwe) February 17, 2024
Comment on Feed
Comment 1: “If CBN Governor can stop Nigerians from saving money in dollars and open Nigeria bank card for international transaction, Naira depreciating everyday will stop automatically, but since it won’t favour the Elite, they won’t do it. But one thing it sure, as the masses are crying everyday, so shall everyday making the elite happy shall continue to depreciate everyday.”
My Response: ‘If CBN Governor can stop Nigerians from saving money in dollars and open Nigeria bank card for international transaction,” People who make this point do not spend time looking at data. Over more than 3 decades we may have had dorm accounts, Nigerians and their companies have saved/kept $30b on moving average. If you run the numbers, less than $2B is saved/kept in dorm accounts per year. Assume there are no dorm accounts, $2b will not handle Nigeria’s balance of payment for two weeks. Nigeria’s import was close to $70 billion in 2023.
Rather, the dorm accounts are FREE funds Nigerians are using to defend our banks, making it possible for them to be accepted for correspondent banking globally. If Nigeria has great political leaders with business sense, the dorm accounts should be seen as POSITIVES because nations will savings get benefits.
Dorm is not our problem. Send this response to those attacking the dorm. I can speak with more data to show that dorms are irrelevant. Our problem is clear: we do not produce anything for export except oil.
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“Good judgment has more to do with practical wisdom than the schools one attended and certifications acquired. What you don’t know and don’t make effort to comprehend will appear like a wonder and impossible.
When you are silent, you can easily create the impression of being wise and articulate, but once you open your mouth or make any move, you clear all doubts.
Those telling you that the naira is still finding its true level, ask them what is fueling the everyday depreciation and what should be naira’s true stable state, you discover that they have no answers. People who can’t differentiate reality from speculation are giving opinions on leadership and economic management, and you can see the result.
To get things right, you also need the right people. We can choose to spend couple of years explaining our failures and miseries, but the moment we admit and allow the right people to lead, you will witness one more miracle in your lifetime.
Both making things easier or harder are choices, what you choose is what you get.”
That was my second submission in October when the June decision was brought up.
They didn’t ask for our native opinions, rather they were listening to ‘experts’. And the downward movement keeps accelerating.