Forex players, there is a warning shot in the land: “Nigeria is poised to receive an anticipated $10 billion of inflows in the coming weeks, providing much-needed relief to a liquidity squeeze that has been adversely affecting the naira. Finance Minister Wale Edun affirmed at the Nigerian Economic Summit in Abuja that the government has a clear perspective on the imminent influx of funds.”
Sure, Nigeria has tools which can bring Naira back to sub-N800/$ provided there is TRUST in the system. (The black market rate now is above N1,200/$). And the government can actually get Naira back to whatever number it wants with the US dollars. The real challenge is a long-term playbook. Yes, how do you keep Naira stable over a long-term view via endogenous policies which support Naira from inside to outside.
I posit that the government will likely have a forward contract with JP Morgan Chase, Goldman Sachs, etc to give it $10 billion, with crude oil revenue used as the securities. If that happens, for a few months, oil sales will be used to pay the loan. Strategically, the real solution cannot come from this stop-gap which Buhari also used because crude oil will NEVER offer any long-term competitive stabilization of Naira; only local and indigenous productivity will do.
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I call the government to do one thing: when this $10b arrives, instead of fighting for Naira directly in the capital market, use $5 billion to make sure Nigerian cities and factories have electricity with the Constitution modified in such a way that if Nigeria does not have at least 80% electricity adequacy yearly, the incumbent president and members of National Assembly will be disqualified for future elections. Lol.
Forex players, there is a warning shot in the land: "Nigeria is poised to receive an anticipated $10 billion of inflows in the coming weeks, providing much-needed relief to a liquidity squeeze that has been adversely affecting the naira. Finance Minister Wale Edun affirmed at the… pic.twitter.com/DQ1GeLpoCK
— Ndubuisi Ekekwe (@ndekekwe) October 24, 2023
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Prof,
You are an exceptional engineer. In addition, you have unfettered access to the governor of your state. You have a solid understanding of electricity, logistics, and business. That puts you in a unique position to offer a solution to the electricity problem. The constitution now allows you, through your state governor, to generate, transmit, and distribute electricity via any initiative of your choice.
We challenge you, in a positive sense, to do this, and everyone else can copy this playbook! While they are busy copying, your state will be sending money to the bank with investor capital and a huge PAYEE sum every month!
Same old, same old. Ok, we have heard and we are waiting.
We have 20% in Dangote Refinery, can we sell off 10% of that? We do not need 20%, it serves no credible purpose, other than to keep everyone down.
We cannot find permanent solution to anything because we are only interested in the here and now.
We will keep borrowing and eating the meals meant for unborn children. You cannot find more irresponsible people elsewhere, because almost all of them are Nigerians.
We go again.