1. Nigerian Currency loses value based on two major things: low income generation from oil sales and high dollar spending.
2. Selling crude oil at the international market is not lucrative anymore and our economy is oil-based. Dollar is the international currency denominator and our economy is also import-based
3. Oil-based economy means we do not rely on any other thing to make money other than oil. Import-based economy means we import everything we use into the country, supporting dollar strength, we do not export anything outside the country, weakening Naira strength.
4. Nigeria is both consuming nation and civil servant nation at the same time. This means, we do not have the capacity to consume/spend without waiting for the government to pump money into circulation. Most states of the Federation spend 85% of their monthly allocation on salary earners, who are just 15% of their respective populations.
5. It also means over 100million people wait every month for the government to feed them, clothe them, buy them cars, marry for them, bury their dead ones, celebrate their birthdays and naming ceremonies, build house for them without paying taxes or vats and without allowing the money to go back into circulation.
6. The foreign reserve is our primary source of dollar, it will keep dwindling the more we spend to sustain the populace through federal allocations and sustain importation.
7. Our currency will also continue to lose values because we will be placing it beside a stronger dollar every time. Whatever we decide to sell or raise economically will be so cheap. Imagine a TV that is being sold for $100 with the Naira rate at N400.
8. During the last dispensation, especially during the campaigns, a large amount of dollar came into circulation and are still in circulation. Naira will continue to be worthless if those dollars are allowed to come back into the economy without adequate monitoring and appropriate channeling
9. Nigerian banks benefited from free access to money in the last dispensation. In fact, governments (federal and states) are the most valued customers of banks. Now with TSA and blockage of free money, banks need to sustain their capital base through Forex. Government needs to strengthen Naira by controlling forex then there is a problem. That's why you will receive dollar from the bank at N199 official rate but pay it out via the same bank at N385 or more black market rate
9. Nigerians outside the country or all who transact with dollars via Nigerian banks actually think the problem is from the government. The banks are Hawks.
10. The only way to stop free Naira fall and strengthen our currency is to drastically minimize our dollar spending, reduce our dependency on importation/foreign products and take away the economy from being oil dependent. There is no magic button to be pressed by the government.
Culled
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