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5 WAYS NAIRA CAN GO BACK TO $1 for ₦1 (PART ONE)
There was a time where the NAIRA was worth almost twice as the dollars and equal to the British pounds.
📍 INCREASE FX FLOWS
Expanding exports with a lower value naira, Nigerian exports will be cheap compared to other countries.
Currently Nigeria gains over 85% of her FX from sale of oil and gas. The Nigerian population should consider exporting decent quality goods and services. Unfortunately despite the number of higher institutions there isn’t a vibrant software labour pool, the manufacturing base only seems to concentrate on making expensive sub standard goods for the Nigerian market eg Innoson vehicles or Gala snacks. When we have A large number of startups morphing into unicorns it will increase the country value hence its currency.
📍 STOP INFLATION (Demonization)
Now, inflation can be supply-side or demand-side. Demand-side is the classical inflation, when the Central Bank prints money when the government is broke. It can also be supply-side, which is what happens the costs of producing goods and services are high, and as such, the sellers have to increase the price of their goods.
In Nigeria is actually both. Our government is broke from time to time and prints money to make up the shortfall
And infrastructure is also low in Nigeria which will add the cost of production of goods and services over time.
To be continued…
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