Firstly, the value of the Nigerian Naira is based on the global demand and the supply of the goods and services that Nigeria has to offer to the world. Secondly, the only product that the global market buys from Nigeria is her oil. Thirdly, the drop in the global price of this oil is an indication that Nigeria's oil is now less in demand. Fourthly, the decision to devalue the Nigerian Naira by 8% recently has not safe the Naira and has failed to prevent the rapid fall of the Naira against the American dollar. Fifthly, the periodical method of using the Nigeria's foreign reserves to support the Naira is not the answer and is not working. Sixthly, the Naira will continue to fall and the Nigeria's foreign reserves will also continue to be depleted. Seventhly, another major reason why the Naira will continue to crash is because the Nigeria's economy is almost 100% import oriented. Eighthly, all the basic things that Nigerians need and use are all imported. Ninthly, the importers need the American dollar to import those goods and services from the international markets to Nigeria. Tenthly, more Naira is now chasing fewer American dollar in the banks and the black market of Nigeria.
How then can Nigeria safe her economy and the Naira? Firstly, the government should allow the Naira to fall freely without supporting it until it founds its own level in the hands of the economic forces of demand and supply. Secondly, Nigeria must now diversify her national economy from the oil export into an economy than depends on taxation, agriculture, manufacturing, international tourism, solid mineral prospecting and export based. Thirdly, Nigeria must cut down the cost of governance that consumes about 30% of the annual federal budget to about 15%. Lastly, the leakages in the national economy must be stopped immediately, such as, official corruption, resource wastage and mismanagement, oil theft, money laundering, over-invoicing of imports, tax loopholes that corporations and wealthy Nigerians use to escape payment of their taxes and the shady import duty waivers #HowToSafeTheNigerianNaira
How then can Nigeria safe her economy and the Naira? Firstly, the government should allow the Naira to fall freely without supporting it until it founds its own level in the hands of the economic forces of demand and supply. Secondly, Nigeria must now diversify her national economy from the oil export into an economy than depends on taxation, agriculture, manufacturing, international tourism, solid mineral prospecting and export based. Thirdly, Nigeria must cut down the cost of governance that consumes about 30% of the annual federal budget to about 15%. Lastly, the leakages in the national economy must be stopped immediately, such as, official corruption, resource wastage and mismanagement, oil theft, money laundering, over-invoicing of imports, tax loopholes that corporations and wealthy Nigerians use to escape payment of their taxes and the shady import duty waivers #HowToSafeTheNigerianNaira
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