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.

“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.

In secondary school, the Ovim Community League (OCL), the Ovim village’s community development unit, mandated that every kid must be exposed to shorthand. And the principal, Mr Ogbonnia, complained that no teacher was available to teach it. Within days, OCL hired shorthand teachers and sent them to the school. So, despite being a science student, I was compelled to learn basic shorthand.

Why did OCL do that? During the August meeting (a time in most Igbo communities where women return from anywhere they are to the villages to discuss the state of the villages), someone trumpeted how shorthand will guarantee 100% employment for boys and girls upon graduation. I attended a technical secondary school, built by the village, with motor vehicle technology, woodwork technology, etc offered in WAEC, and one would not have expected the shorthand to matter. But here, it was all about perception, and no one wanted to take any chances.

Good enough, Isaac Pitman shorthand had no impact; Microsoft Office destroyed it along with all the calls in typing and stenography.

And a new dawn is here: “OpenAI, has just announced a groundbreaking new project: Sora, a text to video model that can generate realistic and engaging videos from natural language inputs”. Good People, with this, all of us could become better video creators, and within months, video creators will begin to fade like typists and stenographers.

The video creators economy has a frontal attack now,  and if you are in this business, review your playbook because if Sora delivers something decent enough, not many will pay for most services. The implication of generative AI is massive as I have noted with Tekedia AI which understands me, and can summarize my speeches, with more than 98% accuracy within context. This is a new age: re-learn! 

In secondary school, the Ovim Community League (OCL), the Ovim village’s community development unit, mandated that every kid must be exposed to shorthand. And the principal, Mr Ogbonnia, complained that no teacher was available to teach it. Within days, OCL hired shorthand… pic.twitter.com/1XrWimgxS4

— Ndubuisi Ekekwe (@ndekekwe) February 17, 2024

Egypt has officially stopped using the US dollar in trade, a move that could have significant implications for the global economy and geopolitics.

On February 15th, 2024, Egypt announced that it would stop using the US dollar in all its trade transactions with other countries. Instead, it would use a basket of currencies that reflects its trade patterns and preferences.

The basket would include the euro, the Chinese yuan, the Russian ruble, the Turkish lira, the Indian rupee, and the African franc. Egypt said that this decision was based on economic rationality and sovereignty, and that it would enhance its trade competitiveness and financial stability.

Egypt is one of the largest economies in Africa and the Middle East, with a GDP of about $360 billion and a population of over 100 million. It is also a key ally of the United States in the region, receiving about $1.3 billion in military aid annually.

However, Egypt has been facing economic challenges in recent years, such as high inflation, public debt, and currency devaluation. The COVID-19 pandemic has also exacerbated these problems, as tourism and remittances, two major sources of foreign exchange, have declined sharply.

To address these issues, Egypt has been pursuing a series of reforms, including cutting subsidies, raising taxes, and liberalizing its exchange rate regime. In 2016, Egypt floated its currency, the Egyptian pound, allowing it to depreciate by about 50% against the US dollar.

This was done to attract foreign investment, boost exports, and secure a $12 billion loan from the International Monetary Fund (IMF). However, this also increased the cost of imports, especially of essential goods such as food and fuel, which are mostly denominated in US dollars.

To reduce its dependence on the US dollar and diversify its foreign reserves, Egypt has been exploring alternative currencies for trade and investment. In 2019, Egypt signed a currency swap agreement with China, allowing it to exchange Egyptian pounds for Chinese yuan.

This enabled Egypt to increase its trade with China, its largest trading partner, without using US dollars. Egypt has also been strengthening its ties with other emerging markets, such as Russia, Turkey, and India, and seeking to join regional economic blocs, such as the African Continental Free Trade Area (AfCFTA).

The move has been met with mixed reactions from other countries. Some have welcomed it as a sign of Egypt’s economic independence and diversification. Others have criticized it as a challenge to the US dollar’s dominance and a threat to the global financial system. The United States has expressed concern over Egypt’s decision and urged it to reconsider.

The US said that it would review its bilateral relations with Egypt, including its military aid and security cooperation. The US also warned that Egypt could face sanctions and isolation if it continued to defy the international monetary order.

Egypt’s decision to stop using the US dollar in trade is a bold and unprecedented one that could have far-reaching consequences for itself and the world. It could benefit Egypt by reducing its exposure to exchange rate fluctuations and enhancing its bargaining power with other countries.

It could also inspire other countries to follow suit and challenge the US dollar’s hegemony. However, it could also entail risks and costs for Egypt by alienating its traditional allies, inviting retaliation from the US, and disrupting its trade flows and financial markets.

This is one of the auxiliary effects of the Russia-Ukraine war: “The White House has confirmed that the US has intelligence on Russia’s anti-satellite capability, which could pose a threat to the security and stability of the space domain. In a press briefing on Friday, the White House press secretary said that the US was aware of Russia’s development and testing of anti-satellite weapons, which could be used to damage or destroy satellites in orbit.”

Yes, with mutual trust gone, some of these nations will begin to work to bring sci-fi to reality. Like Mike Tyson said “Everybody has a plan until they get punched in the face”. Indeed, there are things which can hit this world, and all the defensive plans will fade. And nations like the US, Russia and China have those capabilities. Interestingly, the world has ceded rights for them to “keep” the world as permanent members of the UN Security Council. But yet, they show limited mutual respect among themselves. What again do they want?

These three countries are the only nations which have capacities to make military hardware, produce them and can sustain wars for years.  Others can barely last six months due to their production capacities and population. If that is the case, why can’t they just get along, and allow peace to reign?

With the announcement of Russia’s plan to have these nuclear anti-missile satellite capabilities, the US will up its own playbook from tomorrow, and in ten  years, Russia will up its own, and the vicious circle to world destruction continues. I call on the UN Security Council to modify its ordinance with “attack on one member of the Council is an attack on all”. That is a better NATO!

“US has intelligence on Russian Anti-Satellite capability” – The White House