Good God was I excited when I read this news in ThisDayonline! Our Naira is going to get a face lift against the US$ and of course other currencies. It works like this: If you have N1,000.00, you simply shift the decimal points 2 spaces o the left and it becomes N10.00. So in essence, for every $1.00, the Naira equivalent will be N1.25. This is an attempt to bring the Naira close to what it was pre-1985.
In a 13-page message, the Governor of the Nigerian Central Bank, Prof. Chukwuma Soludo engaged the Nigerian press/public yesterday stressing that the time was ripe for such a change......And. I. believe him. As an economist. I can pretty much see where he is going. The indices are currently favourable: our Foreign Reserves are in $trillions; inflation is single digit; our GDP recorded a 6% growth; we have a democracy; we have carried out successful reforms; we have paid off our external debts; internal debts are being paid and so on.
So I guess this is a right time as never to carry out this landmark assignment n behalf of the Nigerian people.
Also if the micro economics can be kept right, i.e Inflation then we are on our way to seeing a strong Naira in the future.
Therefore the question is Micro-management of the economy from henceforth!
All other economics should fall in place, market prices of basic amenities and foodstuff will align if production costs are realigned, everything should fall into place, hopefully!
The Government must also try to settle outstanding issues such as the Nigerdelta problem, our ailing Refineries, Boost and encourage exports and keep Government spending low to encourage the real sector.
It is a wait and see situation!
http://www.thisdayonline.com/nview.php?id=86340
Wednesday, August 15, 2007
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3 comments:
For things in Nigeria to work the government should try to solve the problem of power generation even if they refuse to fix the refineries.I am saying this because the cost of private power generation is very high. This in turn affect the profit of companies because there are some companies in which after the cost of wages and salaries the second highest expenses is that of power generation and this leads to high cost of production and leads to high cost of goods and services
@ anonymous, You couldn't be more right. To achieve and sustain the low inflation rate the govt needs to boost the naira/dollar exchange rate on a sustainable basis, it needs to keep production costs for the real sector low!
Or it can face the danger of high costs of goods and services against disposable income of the populace which will inturn affect overall GNI (Gross National Income) which is a measure of how well a people are doing in any given economy.
Thanks for the comment!
i understand where soludo is coming from, but can my 10 naira buy and object of 1000 naira. does this plan help naira get its value back. there is a clear different between redomination and revaluation.
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